Essential
Principles
of Business
for CSEC
®
Fourth Edition
SAMPLE
MATERIAL
Dr Alan Whitcomb
Also available for CSEC ® Business Studies
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Contents
Preface
How to use this book
UNIT 1
Organisational principles
SECTION 1 The nature of business
Chapter 1 Background to business
1.1
The development of barter
1.2 The role of money
1.3 Instruments of exchange and payment
1.4 Choice of methods of payment
Chapter 2 Types of businesses and economic systems
2.1
The public sector
2.2 The private sector
2.3 Setting up a limited company
2.4 Franchises
2.5 Multinationals
2.6 Economic systems
Chapter 3 Business organisation
3.1
The functional areas of business
3.2 Stakeholders of a business
Chapter 4 Legal aspects of business
4.1
Ethical and legal issues
4.2 Principles related to forming a business
4.3 Consequences of unethical or illegal practices
4.4 Careers in business
SECTION 2 Internal organisational environment
Chapter 5 Business management
5.1
The functions of management
5.2 Management responsibilities
5.3 Organisational charts
5.4 Chain of command and span of control
5.5 Leadership
5.6 Conflicts within an organisation
5.7 Establishing good employer/employee relations
5.8 Motivating employees
5.9 Teamwork
5.10 Effective organisational communication
SECTION 3 Establishing a business
Chapter 6 Entrepreneurship
6.1
Entrepreneur functions
6.2 Characteristics of entrepreneurs
6.3 Entrepreneurs and decision making
6.4 Entrepreneurs and economic development
Chapter 7 Establishment of a business
7.1
Reasons for establishing a business
7.2
Steps in setting up a business
7.3 Preparing a business plan
2
3
4
8
13
14
19
21
22
22
28
31
35
36
39
42
48
49
51
53
55
57
60
61
62
63
67
68
70
73
77
78
79
CONTENTS
SECTION 4
Chapter 8
Chapter 9
Chapter 10
UNIT 2
7.4 Research and feasibility
7.5
Planning ahead
7.6 Government regulatory practices
7.7
Location of a business
7.8 Collateral
Legal aspects of business
Contracts
8.1
Concept of contracts
8.2 Characteristics of contracts
8.3 Offer and acceptance
8.4 Discharge or termination
8.5 Simple contracts in practice
Business documents
9.1
Importance of business documents
9.2 Making enquiries
9.3 Purchasing
9.4 Dispatch and delivery
9.5 Charging
9.6 Stock records
9.7 Business documents in practice
Insurance
10.1 The principles of insurance
10.2 Types of insurance policy
10.3 Insurance promoting trade
Unit summary
Case study
Exam type questions
91
92
93
97
99
102
103
105
106
107
111
114
118
121
123
127
128
129
Promotion and logistics
SECTION 5 Production
Chapter 11 Production
11.1 The factors of production
11.2 Development of production
11.3 Production and productivity
11.4 Capital for production
11.5 Types and levels of production
11.6 Small businesses
11.7 Business growth
11.8 Linkage industries
11.9 The effects of growth on a business
SECTION 6 Marketing
Chapter 12 Marketing
12.1 Market and marketing
12.2 Marketing activities
12.3 The marketing mix
12.4 Consumer behaviour
12.5 Packaging
12.6 Sales promotion
iv
81
82
82
84
87
132
134
135
136
136
139
141
145
146
151
152
157
159
164
164
Contents
12.7 Selling techniques
12.8 Terms of sale
12.9 Consumer organisations
12.10 Customer service
12.11 Property rights
SECTION 7 Logistics and supply chain
Chapter 13 Logistics and supply chain
13.1 Logistics and supply chain
13.2 Chain of distribution
13.3 Modes of transport
13.4 Transport documentation
13.5 Transport and marketing
13.6 Supply chain advantages and challenges
13.7 The impact of logistics
13.8 Information technology and logistics and supply
Unit summary
Case study
Exam type questions
UNIT 3
166
169
169
172
173
177
179
180
185
188
189
191
196
202
203
204
Finance, government and technology
SECTION 8 Business finance
Chapter 14 Business finance
14.1 Financial institutions
14.2 Functions and services of financial institutions
14.3 Financial regulatory bodies
14.4 Managing personal incomes
14.5 Savings and investment
14.6 Short-term and long-term financing
14.7 Capital for setting up a business
14.8 Financial records for sole traders
SECTION 9 Role of government in an economy
Chapter 15 Role of government
15.1 Responsibilities of government
15.2 Government and environmental issues
15.3 Purposes of taxation
15.4 Direct and indirect taxes
15.5 Government assistance to business
15.6 Social services
SECTION 10 Technology and the global business environment
Chapter 16 Business technology
16.1 Concept of business technology
16.2 Role of technology in business
16.3 Technology and banking and commerce
16.4 Types of technology
16.5 E-commerce and e-business
16.6 Technology improving business
16.7 Unethical use of technology
206
210
216
218
220
222
225
226
239
242
245
246
247
249
254
255
256
258
259
260
261
v
CONTENTS
Chapter 17 Standard of living
17.1 Determining the standard of living
17.2 National income
17.3 Economic growth and development
17.4 Role of education
17.5 Reasons why countries trade
17.6 Economic institutions
17.7 Economic institutions and the Caribbean
17.8 Caribbean economic problems
17.9 Solutions to economic problems
17.10 Impact of foreign investment
Unit summary
Case study
Exam type questions
UNIT 4
The ‘business’ of sitting examinations
SECTION 11 Assessment
Chapter 18 School Based Assessment
18.1 The basis of the assessment
18.2 The SBA requirements
18.3 Starting off the project
18.4 Carrying out your research
18.5 Data collection
18.6 Questionnaire
18.7 Interview
18.8 Observation and participation
18.9 Documents and reports
18.10 Analysing the data collected
18.11 The report
18.12 Mark scheme for research projects
Chapter 19 Examination preparations
19.1 Assessment objectives
19.2 Format of the examinations
19.3 Prior to the examination
19.4 Examination technique
19.5 Examination terminology
Index
vi
266
266
268
269
270
272
275
276
279
280
283
284
285
287
287
287
289
289
290
291
291
292
292
292
293
295
295
297
299
300
302
3 Business organisation
3.1 The functional areas of business
Syllabus reference:
Section 1;
objectives 8–10
Think about it
Now that you are armed with knowledge from Chapter 2, let us take it a bit further to
explore the functional areas of a business. Imagine for a moment that you have decided
that you want to go into business. You already know what type of business it is, you have
the capital and you even know the product you want to sell. Would that be enough to put
you on the path to success? Before reading the next section, think about the following
questions and see if you can determine the operational areas of a business.
• How or where will your goods or services be created?
• Will potential customers know about your product or service?
• How will you know that the product meets the needs of the customers and will not harm
them? Will you be using the most efficient methods?
• Do you need to account for how the capital is used to create the product or for the dayto-day running of the business?
• Do you have all the staff you need? Are you in compliance with the labour laws?
• How many areas did you come up with? Are they the same as the ones below?
The term functional area, in the sense of business, refers to grouping individuals on the
basis of the role or purpose each performs in the organisation. For example, a company’s
marketing department is a functional area that is focused on making potential
customers aware of the products or services it offers (advertising personnel) and selling
to them (sales personnel).
Because functional area personnel work in a relatively narrow aspect of the
overall organisation, they become specialists. As such they become more skilled,
knowledgeable, effective and useful to the business.
There are five functional areas of a business: production, marketing, finance, human
resources, research and development. Each of these will be defined and summarised
here but they are all addressed in greater depth at other places in this book.
Production
Production is the processes and methods used by producers to transform inputs such
as raw materials, semi-produced goods and even ideas, information or knowledge into
goods and services. As an example of this process, take a look at Figure 3.1:
A farmer prepares the ground, plants seeds,
harvests the crops and sells this output to others.
A manufacturer may buy the harvest of the farmer, process it in some way
(for example, put it into cans) and then sell it . . .
to someone else who will market the end product that eventually
reaches the consumer (the purchaser of goods or services).
▲ Figure 3.1 The functional areas of a business
28
3 Business organisation
This ‘journey’ is sometimes referred to as the chain of production and you will learn
more about this later in Chapter 11.
A word of warning! Do not think of production only in terms of creating physical
things. Even the creating of a service is an aspect of production. After all, even a service
is ‘produced’.
Marketing
Marketing refers to all the processes involved in promoting and selling goods or
services in the most profitable and efficient manner. It includes market research and
advertising, as well as the actual selling to the customer. It includes co-ordinating four
elements, sometimes referred to as the four Ps of marketing (see Figure 3.2):
d
an a
nt of gy
me ion ate
lop tat tr
ve en N s
De m IO
ple T
im MO
O
PR
a d
of min
n
a
io n
at ar i also
c
e
fi
i
nt T (b e is
Ide UC rvic ct)
e
u
OD a s od
PR hat pr
t
Marketing
n
tio
ina E
rm IC
te PR
De of a
n
tio
u
b
tri the
s
i
d ch E
f a rea LAC
o
n to P
tio nel er’s
c
e
n
l
Se cha stom
cu
▲ Figure 3.2 The four Ps
Marketing is investigated in much more depth later in Chapter 12.
Finance
Finance is possibly the most important resource of all business functional areas; it is
the lifeblood of any business activity. It plays a vital role in that it provides access to
all the resources employed in the production and marketing of products or services.
The success of any organisation depends essentially on the efficient management of
its finance.
A business needs sufficient capital to get started (start-up capital), and once the
business is established it needs continuous further finance to keep trading or to meet
29
UNIT 1 ORGANISATIONAL PRINCIPLES
the costs of expansion. Finance is needed to meet expenses, such as wages and raw
materials, or to buy machinery or premises. A business must be able to use money
so as to create a regular flow of revenue (income). Revenue creates continuity for
the business so that it can pay the bills and other costs associated with its continued
existence; it also funds the growth of the business.
Business finance is examined in greater depth later in Chapter 14.
Human resources
Human resources (HR) are concerned with managing people within an organisation.
This has been referred to as the glue that holds the organisation together. It includes
six areas:
■
■
■
■
■
■
Recruitment: Staff have to be recruited with the appropriate skills and experience to
meet the needs of the organisation. Typically, a firm creates a job description and a
person specification for a post they want to fill, then the HR department is charged
with selecting an appropriate person from those who apply for the vacancy.
Safety: Injuries and ill health caused by poor working conditions can prove very
expensive for the organisation. It is a HR responsibility to guard against this occurring
by ensuring provision of safe and comfortable working conditions.
Employee relations: Creating and maintaining a strong employer/employee
relationship can be the key to the success of an organisation. Employees tend to be
more productive, efficient and loyal if a strong and positive relationship exists. HR
plays an important role in creating and maintaining such a relationship.
Compensation and benefits: For HR, compensation refers to the many ways employers
‘feed back’ for the work an employee carries out. Obviously, paying a fair wage is the
normal way of feeding back to employees, but there are other ways that benefit the
employee, including medical insurance, private pensions, profit sharing, bonuses,
company cars, discounts on company products and so on.
Compliance: This is a priority for reputable companies and is concerned with ensuring
that the business conforms to all the labour and employment laws of the area in
which it operates. Failure to meet this obligation can be very expensive, whether in
the form of declining revenue from under-performing and dissatisfied employees or
prosecution for violation of laws.
Training and development: This should begin from the time that an employee is
first recruited. Training refers to adapting and improving employee skills for their
current role, whereas development is concerned with developing skills for a future
role. Investment in people in this way not only meets the current needs of the
organisation, but also motivates the employee through recognition of the value of
their future development.
Research and development (R&D)
R&D is the investigative activity a business carries out with the aim of getting new
knowledge that it can use to create new products or systems. Basic research identifies
new knowledge that may or may not be used at some future time. Applied research
is carried out with a predetermined aim, for example to create a new product or to
improve an existing one. The research may be done ‘in-house’ by the organisation’s own
personnel, or outsourced to other specialists, for example university researchers.
30
3 Business organisation
Finance
Marketing
Business
functional areas
Production
Human
resources
Research &
development
▲ Figure 3.3 The functional areas of an organisation
3.2 Stakeholders of a business
The role of stakeholders
You’ve probably heard the word ‘stakeholder’ being used in many instances; you may
have even used the term yourself. Have you ever stopped to think about what it really
means, and how the interests of stakeholders in any situation may overlap?
In business, for example, although the main aim of the managers is to run the firm
and make a profit for its owners, they are also expected to have regard for all the other
stakeholders. A stakeholder is any person or group of people that has an interest in the
business and its activities. Although the owners are obvious stakeholders, many others
have an interest in the firm too. Here is a list of the main stakeholders of a business.
31
UNIT 1 ORGANISATIONAL PRINCIPLES
■
■
■
■
■
■
■
■
Owners or shareholders are the main stakeholders. They have invested money in the
business (their ‘stake’) and they look for a return on their investment in the form of
dividends and an increase in the value (appreciation) of their shares in the business.
But they have an important role to play, including providing the resources that are
needed, employing suitable workers and ensuring those workers are provided with
safe working conditions and are paid a fair wage.
Customers of the business are also stakeholders. They are dependent on the business
for their supplies of finished goods, raw materials or services, and rely on them to
supply them at an economic price, on time and in good condition. And the business,
of course, relies on their customers to buy from them as this is what they are in
business for.
Suppliers to the business are stakeholders because they will want the business to be
successful and continue to buy from them as this increases their own potential to
survive and make a profit. Their role is also to provide good quality supplies to the
business at the right time and at the right price.
Employees are stakeholders because they are dependent on the business for their
jobs and incomes. Their role is to work efficiently to carry out tasks to achieve the
business’ objectives. When spending their wages, employees are contributing to the
economy, and so their stakeholding has even wider implications.
The local community has several interests in businesses; it sees the firm as a local
employer, thus adding to the wealth of the community both locally and nationally.
The community also hopes that the business will help to develop and protect the
local environment.
Government is also a stakeholder in a business, as the business pays both local
and central taxes. The fact that the business employs people also further supports
government aims by reducing unemployment and creating income tax. Many
businesses also sell goods and services to other countries through overseas trade
(exports). This contributes to the whole country’s balance of payments and it brings
in foreign currency that adds to the national wealth. Government also has a role to
play in exerting influence that regulates the ethical behaviour of business activities, if
necessary creating legislation.
Pressure groups refer to a section of society that has an interest in what the firm
does and who may want to influence the firm in some way. For example, a union
will want to influence the firm to gain the best wages it can for its members. Other
pressure groups may want to influence the business in relation to protection of the
environment, or to support animal welfare issues.
Your school is a stakeholder of local businesses too. Schools may be supported by
local businesses in some way; businesses sometimes make generous donations
of gifts or money to schools. Schools may send their students to them for work
experience or SBA research, and they would hope that in due course their pupils
will be rewarded for their studies by obtaining employment with them. Schools
also have an interest in local firms because businesses bring prosperity to the area,
perhaps employing the parents of their students, but businesses may also cause local
pollution and educators will want to discourage this.
The above list is far from comprehensive but it gives a sound overview of some of
those who can be affected by the actions of an organisation or its policies, as well as the
ways that those affected by business also have influence. Which of them would you say
32
3 Business organisation
are internal to an organisation and which are external? How many other examples can
you add to those we have explored in this chapter? We have said that your school is a
stakeholder in local business, but who are the stakeholders of your school?
Owners/
shareholders
Customers
Local community
The stakeholders
of a business
Suppliers
Government
Pressure groups
Schools
Employees
▲ Figure 3.4 Many groups are stakeholders of a business
Challenge
Your parents have decided to open a stationery supplies store in an area of the city where
there are many offices and a few secondary schools. Create a graphic organiser showing at
least six stakeholders of the business. Remember to include a description of the relationship
each stakeholder will have with the business.
Multiple choice questions
The following multiple choice questions should be completed in no more than five minutes.
Four possible answers are given and in each case you have to choose the most appropriate answer.
1 The main stakeholders of a business are its:
a) customers
b) employees
c) suppliers
2 The legal obligation of a business to provide safe working conditions is called:
a) benefits
b) compliance
c) employee relations
3 In order to recruit a specialist employee a firm creates a:
a) vacancy
b) compensation
agreement
c) job description
d) owners
d) development
d) benefits statement
4 Those who transform raw materials into products are best described as:
a) stakeholders
b) producers
c) consumers
d) suppliers
5 Identifying new knowledge particularly contributes to:
a) product development
b) employee training
d) reducing conflicts
c) raising new finance
33
UNIT 1 ORGANISATIONAL PRINCIPLES
Make a note of it
1
2
3
4
5
6
7
8
Define the term 'functional area'.
Identify the five functional areas of a business.
Briefly summarise the functions of each of the five functional areas of a business.
Explain why it is useful to identify workers within a specialist area.
Describe ways that the human resource factor can be seen in effect in your school.
Finance is said to be the ‘lifeblood’ of business. Comment on this statement.
Explain why the customers of a business are its ‘lifeblood’.
Identify three contrasting ways that pressure groups exert their role as stakeholders
of businesses.
9 Justify why a school can be said to be a stakeholder in local business.
10 Explain ways that you can be said to be a stakeholder.
11 Stakeholders are any people or organisations with an interest in a business and who
are affected by its activities. Stakeholders include owners/shareholders and the
community. Create a Venn diagram to show how the influence of stakeholders in a
business is similar to or different from the influence of stakeholders on a cricket or
football team.
What do you know?
Copy and complete the following sentences by inserting the missing words from the list
below.
training
revenue
influence
recruited
society
producers
continuity
safeguard
finance
stakeholder
resource
research
marketing
selling
1 Making customers aware of products or services is called
.
transforms raw materials into end products.
2
.
3 The lifeblood of any business is
.
4 A business needs a regular flow of revenue to create
with the appropriate skills.
5 Workers have to be
for an employee.
6 Medical insurance is an example of a
improves an employee’s skills.
7
is carried out with a pre-determined aim.
8 Applied
because they rely on their employer for their job.
9 Employees are
a business in some way.
10 Pressure groups want to
34
UNIT 2 PROMOTION AND LOGISTICS
Unit summary
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
202
Land, labour, capital and enterprise are the four factors of production and each is rewarded
for its contribution to the business.
One way to increase profit is to increase productivity through methods such as new
equipment and training.
The chain of production includes primary production (the harnessing of raw materials
from nature), secondary production (the conversion of raw materials into end products)
and tertiary production (all the stakeholders who enable the transfer of products to
consumers). All three together not only show the interdependent nature of business
activities but often result in the development of linkage industries.
A country’s level of production – whether subsistence, domestic or surplus – helps to
determine its wealth and the quality of life of its citizens.
Individually, small businesses employ relatively small numbers of persons, but collectively
they ease a country’s level of unemployment.
Internal growth, external growth, joint ventures, mergers, takeovers and acquisitions are
among the methods of growing businesses.
Growth in a business has both a positive and negative impact on organisational structure,
labour, capital, technology and the potential to export its products or services.
A market facilitates the chain of supply between seller and buyer. Marketing is conducted
to ensure that sellers have the products to satisfy buyers’ needs.
There are several types of marketing activities, ranging from research to advertisement,
all designed so that sellers can understand what consumers want and how much they are
willing to pay in order to get it. Sellers sometimes combine several marketing activities to
best promote their goods and services to their target market.
Logistics refers to the process of how goods are stored and transported until they get
to either the wholesaler or retailer or the final consumer. While logistics can improve
competitiveness and achieve comparative cost advantage, it can also have a negative
impact owing to uncontrollable variables such as delayed shipments, poor security at
ports, misdirection of goods and industrial unrest.
Forward and reverse flow, warehousing, insurance, information flow and trading
documents are all components of logistics.
Transportation, which relates to the modes and methods by which products get to their
destination, is not only important to the chain of distribution, but also plays a role in
marketing, as well as domestic, regional and foreign trade.
Improved quality of life, economic growth and employment are among the advantages
attached to supply chain while the disadvantages range from effects of globalisation,
counterfeiting and changing market conditions.
Government intervention, communication network, insurance, proper labelling and
documentation, careful selection of distribution channel, security measures and managing
stock levels are among the methods of mitigating distribution challenges.
Advances in the digital age have impacted logistics and supply. More efficiency is achieved
with features such as GPS, GIS and Portnet.
13 Logistics and supply chain
Case study
Justine and Trevor have just completed a course in hospitality and tourism, but neither is
interested in working for hotel chains. While completing the course, they noted that many of
the tourists to their country are becoming more interested in cultural and heritage tourism.
Their tourist town has three sites of historical and cultural value nearby and Justine and
Trevor believe that they can offer a more authentic and eco-friendly experience by renting
out bicycles for tourists to ride around these sites. They opened a bicycle rental shop on the
historical site closest to them and within a year were doing brisk business. They plan to open
shops at the two other historical sites, but now face competition from a company offering
tourist motorbikes in the same areas.
How will you advise Justine and Martin to increase consumer awareness of their bicycle
rental business in order to remain competitive?
Use a diagram to outline the steps you would recommend to them.
203
UNIT 2 PROMOTION AND LOGISTICS
Exam-style questions
1 Marshall Penn inherited a fish farm from his parents and with improved productivity expanded it to include fish
canning on the same property.
a) i) Define the TWO types of production evident in Marshall’s business.
(2 marks)
ii) Explain TWO ways which Marshall most likely used to increase productivity on his fish farm.
(4 marks)
b) Describe how the expansion of Marshall’s business affects
i) his labour force
(2 marks)
ii) capital.
(2 marks)
c) i) Outline the FOUR operations in a typical distribution chain.
(4 marks)
ii) Explain how the consumer benefits from Marshall’s fish canning business being on the same property as
the fish farm.
(6 marks)
Total: 20 marks
2 Kate Johnson runs a small business which specialises in importing, warehousing and distributing beauty supplies
and equipment. When she started operations ten years ago, she was one of only two distributors in that market.
Over the last four years more beauty supplies distributors have entered the market.
a) i) Suggest TWO ways in which Kate’s small business benefits her country.
(2 marks)
ii) State TWO advantages and TWO disadvantages of a small business which Kate may experience. (4 marks)
b) i) What effect does more competition have on Kate’s:
• profit
(2 marks)
• labour force.
(2 marks)
ii) Name FOUR marketing activities which Kate could use to retain or grow her market share.
(4 marks)
c) Explain THREE ways in which Kate’s business can benefit from more efficient management of stocks. (6 marks)
Total: 20 marks
3 J Fruits Ltd is a major producer of and distributor of fresh fruits and vegetables. The company sells both imported
products as well as home grown produce. The company’s own fleet of delivery vehicles plays an important part in
distributing its products around the country within 24 hours.
a) i) What type of production is J Fruit Ltd involved in and how does it help to satisfy a basic human need?
(3 marks)
ii) Briefly explain why it is important for J Fruits Ltd to distribute its products within 24 hours.
(3 marks)
iii) Explain FOUR ways in which the company benefits from having its own fleet of delivery vehicles. (4 marks)
b) i) Why would a supermarket chain be able to sell J Fruits Ltd products at a lower price than an independent
trader?
(2 marks)
ii) Suggest the FOUR variables of the marketing mix that a supermarket chain would be able to employ that a
sole trader could not.
(4 marks)
iii) Explain how TWO variables identified in b) ii) benefit both the business and the consumer.
(4 marks)
Total: 20 marks
204
Section 11
18 School Based Assessment
18.1 The basis of the assessment
The School Based Assessment (SBA) is a very important part of your overall assessment.
The SBA covers the course work followed in the Principles of Business (POB) syllabus.
The syllabus will aid or help you in acquiring certain knowledge and skills associated
with the POB course work.
Your SBA component of your exam is worth 40 marks, whereas Paper 01, which is
a multiple choice test, is 60 marks and Paper 02, the structured essay paper, is worth
100 marks.
There are separate arrangements of a case study for private students.
18.2 The SBA requirements
The SBA is more or less a research paper where you will be expected to research and
gather information to analyse and interpret.
From the foregoing, you will have recognised the importance of the SBA component
as part of your overall assessment. It is intended to help you acquire certain knowledge,
skills and attitudes that are associated with principles of business. The activities for
the SBA are linked to the syllabus and will form a part of your learning activities. Your
teacher will guide you so that your research work will help you to achieve the objectives
of the syllabus.
During the course of your study for the subject, you will be able to obtain marks
for competence that you develop and demonstrate in undertaking SBA assignments
negotiated with your teacher. The marks you are awarded contribute to the final grade
awarded to you for your performance in the examination. For this reason, it is important
that you follow your teacher’s guidance and that you complete any work assigned to
you thoroughly and carefully. Your teacher’s assessment mark will be moderated by
the examiners.
Each candidate who enters for the CSEC Principles of Business examination must
submit a report on a project. You may work individually or in groups. If you choose to
work in a group, each candidate must be identified on the report.
The report must not exceed 1,000 words (not including appendices). You should note
that wherever the report exceeds 1,000 words, 10 (ten) per cent will be deducted by
your teacher.
18.3 Starting off the project
With your teacher's help, you will select and choose a topic or problem. This may
include problems identified at the school canteen or stationery/tuck shop.
1 Once the topic is confirmed, formulate purpose/problem statements – what are you
going to investigate and why?
2 Choose the business or organisation that you will be doing your research on. You also
need to decide how you are going to collect your data (methodology). Your data may
be collected from one or a combination of any of the following:
■ questionnaire
■ observation
■ interview
■ experiments
■ reports
■ documents/records.
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UNIT 4 THE 'BUSINESS' OF SITTING EXAMINATIONS
3 Clearly state why you have chosen the particular topic or problem to be investigated:
■ Identify the issue, topic or problem to be investigated.
■ State the objective of the investigation.
■ Describe the methodology and instruments used to collect data.
■ Present and analyse the data.
Example (area of investigation: marketing firm)
■
■
■
Purpose statement: The purpose of this part of the research is to determine whether there
is a relationship between the advertising medium(s) used by a firm and its income.
Problem statement: What is the difference, if any, between the income generated
from electronic media advertising and the income generated from other forms of
advertising used by a firm?
Hypothesis: A greater amount of revenue is generated by a firm from advertising
through electronic media than by a firm using other advertising media.
Once you have completed the above exercises of creating your purpose statement,
problem statement and hypothesis related to your topic, you are ready to begin
your research.
THE SBA ‘STEPS’
Select a
business
to study
State the
purpose of
the study*
Decide on a
data-collection
strategy
Collect
the data
Analyse
the data
Interpret
the data
Present findings
in SBA Report
7
6
5
4
3
2
1
*in relation to the three ‘Profiles’
▲ Figure 18.1 The SBA ‘steps’
The investigation should be a business-related topic where the following points
should be addressed:
1 Identify the issue, topic or problem to be investigated. Choose a topic and state what
it is that you intend to investigate. For example: ‘an investigation into the high cost
of food at the school’s canteen’.
2 Discuss the background of the issue, topic or problem. Here you will clearly give a
broad overview of the topic. Details should also be given about what the research
problem is.
3 State the objectives of the investigation. Say what it is you hope to discover and learn
when carrying out your investigation.
4 Describe the methodology and instruments you used to collect data. How, when and
from whom did you gather your information? For example, questionnaires, interviews
and so on.
5 Present and analyse the data. Having collected the data, write a report on it stating
the facts you have identified.
288
18 School Based Assessment
6 State the conclusions you have come to, based on your findings. Discuss what you
discovered in respect to the objectives you listed earlier. Here you will also state your
limitations or any challenges you may have encountered while working on the topic.
7 Make recommendations (at least one) on what you would do to change things based
on your findings.
8 Acknowledge sources (bibliography). State the sources where you acquired the
information you are presenting.
9 Include appendices. For example, present a copy of your questionnaire, source
documents, diagrams, charts, interview questions and statistical data.
18.4 Carrying out your research
Identify the issue, topic or problem to be investigated
With the aid of your teacher you will select and choose a topic or problem.
Examples of possible organisations and areas for research:
■
■
■
■
■
■
■
■
■
■
■
the school canteen and stationery/snack shop
a small business association, telephone companies, banks, a supermarket chain and
so on.
the snack shop at school events
school projects (for Agriculture, Science, Home Economics, TVET and Junior
Achievement programmes. If you are also studying Economics and/or Accounts where
you are expected to complete only one SBA including POB, you may consider one of
these areas).
income and expenditure statements
business plans
published financial reports such as those found in the business section of local
newspapers; statistical reports including national income statistics, balance of
payments statistics, surveys of living conditions, household budgetary surveys;
annual economic reports of Central Banks, Ministries of Finance and Planning Units;
annual reports of firms in the region; budget speeches of Ministers of Finance or
reviews of estimates of income and expenditure for Ministries of Finance
economic information available on the internet (for example, e-commerce)
events co-ordinated by students such as commerce events (perhaps your graduating
class has a series of fundraisers)
events co-ordinated by students such as concerts and fashion shows
sporting and other cultural clubs at school or in the community.
The essential tasks you will need to undertake to complete your research are:
1 Decide what data you will need to
undertake to complete your research.
2 Collect the data.
3 Analyse the data.
4 Draw conclusions based on the data.
5 Plan the report.
6 Write the report.
To help with your project, these six important steps are described in more detail below.
18.5 Data collection
This is a fundamental part of the project. If data is not collected, then your research
questions and hypothesis cannot be adequately answered and confirmed.
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UNIT 4 THE 'BUSINESS' OF SITTING EXAMINATIONS
Data can basically be defined as:
1 Primary data: This means that no other researcher has collected this data before you.
2 Secondary data: This means that in the past a researcher collected and used data for
for some purpose, but that the data can still be reused (by you) in a different way. In
other words, you can examine the data from a different perspective.
Data consists of such things as:
■
■
■
responses to a questionnaire or an interview or both
reporting on events observed or experiments observed
documents or records or physical materials.
In your study of the organisation, you may use a combination of the various datacollection methods outlined above. However, it is important to ensure that the data is
relevant to your study. Never collect data just for the sake of collecting data.
Let us now examine in more detail some of the data-collection methods just
described. It is up to you to decide (possibly with guidance from your teacher) which of
the following instruments will be useful to your particular research.
18.6 Questionnaire
290
A questionnaire is a list of research or survey questions put to those who responded to
your questionnaire (the respondents). It is one of the most common instruments used
in the collection of data for research projects. A questionnaire is a method of collecting
data and information from a sample of people. These people are often representative of
a particular segment of society.
For example, a sample of shoppers in a supermarket could be questioned to
determine their opinion of its products and services. The questions to be posed must be
pre-formulated, put into a certain order and written down, so that each shopper is faced
with exactly the same questionnaire. This makes your analysis of their responses easier.
You need to be clear in advance about what you are trying to find out. Target your
questions to obtain the information you want. Avoid leading questions. These are
questions that suggest answers, an example being, ‘This is a good supermarket, isn’t it?’
The questions you ask may be either ‘open-ended’ or ‘closed’. If they are closed,
the person responding gives a simple answer without making comments. Thus, the
answer could be a straightforward ‘yes’ or ‘no’ (to a question like, ‘Do you think the
service in this supermarket is good?’). The answer could also be given by ticking a box
(for example, if you are rating the service of the supermarket as ‘good’, ‘fair’ or ‘poor’).
Closed questions invite a limited response, but they make the questionnaire easier to
complete. If, on the other hand, the question is open-ended (for example, ‘What aspects
of the service in this supermarket appeal to you?), then the person is asked to give a full
answer. This allows them to explain themselves more, but at the same time, it makes
your analysis of their response less straightforward.
A questionnaire is easy to use if carefully formulated. People can complete it
themselves, or you, as the researcher, can ask questions and fill in the appropriate
sections yourself. However, you may find that some people do not like to answer
questionnaires that are too long. For this reason, you must ensure that the instructions
and questions are clear, simple and precise. They should only have one possible
meaning. Also, make the questionnaire itself as short as possible.
Often the questionnaire has to be left for the respondent to fill out, so you may need
to visit the respondents or call them by phone in order to retrieve it.
Once you have developed your questionnaire, ask your teacher or supervisor to
check it.
18 School Based Assessment
18.7 Interview
An interview is a meeting of people where the person asking the questions is the
interviewer and the person answering the questions is the interviewee. In this sense, it
is very similar to a questionnaire. Again, the questions put to the interviewee must be
carefully formulated so the information gained is unambiguous.
The interview is a common method used to collect data. This involves questioning
people about their opinions of certain topics or issues. But there is a subtle difference
– an interview is less formally structured than a questionnaire, taking the form of
questions and discussion with the person being interviewed encouraged to respond in
a more natural way. The interviewer, in turn, may ask a more varied range of questions.
The questions asked need not necessarily be the same for all interviewees, but instead
can be formulated to suit the person being interviewed. This allows the interviewer to
investigate more deeply the interviewee’s particular views. The questions asked will
also probably change as the interviewer goes on, for example if the interviewee raises
an interesting point and the interviewer decides that they would like to investigate that
point further.
The interviewer may need to audio-record the interview in order to transcribe and
analyse the responses later. Before any attempt is made to audio-record an interview,
always seek the permission of the interviewee. In the absence of an audio recorder,
the interviewer will need to make full notes of the interviewer’s responses. This can be
demanding, but is worthwhile.
18.8 Observation and participation
Some researchers find that observing an event taking place, or actually participating in
an event, is also a useful way of collecting data.
Observation is designed to help the observer get information about an organisation
or a group of people, by simply watching how they go about their business and listening
to their conversations and interactions. The observer records what they see and hear
by carefully choosing a particular location in order to monitor events. Audio-recording
and video-recording are, therefore, useful observation tools, if they are available. The
essence of observation is that the observer does not interfere in events – they watch and
listen from the sidelines.
The advantages of observation are that you can make judgements about how an
organisation or group works based on what you see. The conclusions you draw will be
entirely your own – whereas with an interview or a questionnaire, your conclusions are
based on what other people said to you.
Participation is another way of observing but this time you observe the actions and
behaviour of a group or organisation from within. In other words, the observer assumes
a role inside the group or organisation being observed. Participation gives the researcher
the opportunity to learn, from practical experience and a ‘hands-on’ approach, the
working methods and behaviour of those being studied.
Points to remember when undertaking an observation or participation:
■
■
■
Record as much as possible of what you see and hear.
If you do not clearly understand what you have observed or participated in, seek
clarification from someone within the group or organisation.
In participatory observation, the observer could become so involved that they forget
the aim of the exercise. Be alert if you choose to gather data in this way.
291
18 School Based Assessment
Introductory section
It is important to keep this as clear but as precise as possible, bearing in mind the need
to keep within the prescribed overall word limit.
Title Page
This page should include your name, registration number, the name of the subject and
the date presented, and of course the title of your chosen theme.
Methodology
This is a brief summary of the report. It gives the busy reader information on what
was investigated and how the study was carried out, as well as the main findings,
conclusions and recommendations.
Acknowledgements
This is where you show gratitude and say ‘thank you’ to those who provided assistance
with the research.
Table of Contents
This gives clear and straightforward information on what the report contains rather
similar to the contents section of this text.
Other sections
Your final report must be typed and presented electronically. It should also comprise the
following in the order prescribed by the syllabus. Your teacher will offer you guidance
on this.
■
■
■
■
■
■
■
■
■
Topic, issue or problem being investigated.
Objective of the project – the objective should be related to the project topic, issue
or problem.
Background to or overview of the topic, issue or problem.
Methodology – data collection and instrumentation.
Presentation and analysis of data.
Conclusion.
Recommendations.
Bibliography.
Appendices.
18.12 Mark scheme for research projects
Your project will be marked out of 40 and weighted as follows:
Knowledge and Comprehension (KC): 10 marks
Application (A): 20 marks
Interpretation and Analysis (IA): 10 marks
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UNIT 4 THE 'BUSINESS' OF SITTING EXAMINATIONS
Table of contents
Total
Interpretation
and Analysis
Application
Profile
distribution
Knowledge and
Comprehension
Project areas
1
1
2
2
• Table of contents accurately links pages to content – 1 mark (KC)
Topic/issue/problem
• Topic/issue/problem is clearly stated – 1 mark (KC)
• Topic/issue/problem accurately describes the project – 1 mark (KC)
Objectives
2
2
2
2
4
2
6
2
10
2
4
4
10
• Objectives are clearly stated and linked to the topic/issue/problem – 1 mark (A)
• Objectives are realistic – 1 mark (A)
Background/overview
• Includes a description of the topic/issue/problem, including its history – 1 mark (KC)
• Description includes the development – 1 mark (KC)
• Establishes the need for research: why/how the topic/issue/problem is important to the student
– 1 mark (A)
• An overview of the impact of the topic/issue/problem on society – 1 mark (A)
Methodology
• Data collection instrument clearly described – 1–2 marks (KC)
• Data collection instrument appropriate for the type of data – 1 mark (A)
• Includes at least two instruments of data collection – 1 mark (A)
• Method of data collection clearly described – 1–2 marks (A)
• Method of data collection adequately justified – 1–2 marks (A)
• Limitations of data collection method clearly stated – 1–2 marks (A)
Presentation and analysis of data
• Data are presented in an appropriate form using tables, charts, graphs – 1–2 marks (KC)
• Data presented are relevant to the objectives of the project – 1–2 marks (A)
• Data are adequately analysed – 1–2 marks (A)
• Data are analysed using appropriate statistics, e.g. mean, median, mode – 1–2 marks (A)
• Findings are consistent with analyses – 1–2 marks (A)
Conclusion
4
4
• Conclusion succinctly summarises the project –1–2 marks (A)
• Conclusion is logical and based on findings –1–2 marks (A)
Recommendation(s)
2
2
• Recommendations are realistic and informed by findings – 1–2 marks (IA)
• Recommendations contribute to a better understanding of the topic/issue/problem
Bibliography
1
1
• Bibliography contains the names of authors, name of publisher(s) and names and dates of
publication, and are written in alphabetical order – 1 mark (KC)
Overall presentation
2
2
• Consistently uses correct spelling and grammar – 1 mark (A)
• Expression of ideas is logical and unambiguous – 1 mark (A)
TOTAL
294
10
20
10
40
Discover Principles of Business as a real-world subject through
thought-provoking case studies and prepare effectively for the
CSEC® examinations.
n
Develop knowledge systematically with each section focusing on
a specific aspect of the syllabus, and syllabus references
throughout.
n
Revise for the exam with unit summaries, in-chapter challenges
and MCQs.
n
Increase confidence with exam-type questions at the end of each
unit and a full section dedicated to exam preparation and the
School Based Assessment.
n
Ensure all three examined profile dimensions are developed with
contextualised structured response questions.
Dr. Alan Whitcomb likes to travel and is internationally known as
the author of several business studies resources. His textbooks
contain practical information based on his vast experience as a
teacher and lecturer coupled with his time in commerce and
industry at the management level.
Avon Banfield’s passion for business studies is exceeded only by her
passion for teaching. This has garnered respect not only from her
students in Barbados but also from her colleagues across the region.
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