2016 business...

This trial examination produced by Insight Publications is NOT an official VCAA paper for the 2016 Business Management written examination. The Publishers assume no legal liability for the opinions, ideas or statements contained in this trial exam. This examination paper is licensed to be printed, photocopied or placed on the school intranet and used only within the confines of the purchasing school for examining their students. No trial examination or part thereof may be issued or passed on to any other party including other schools, practising or non-practising teachers, tutors, parents, websites or publishing agencies without the written consent of Insight Publications.

Copyright © Insight Publications 2016

YEAR 12 Trial Exam Paper

2016

BUSINESS MANAGEMENT

Written examination

Sample responses

This book presents:

¾ high-level sample responses ¾ mark allocations ¾ tips & guidelines

2016 BUSMAN EXAM 2


Question 1a. Sample response Social responsibility can be defined as the obligations an organisation has to its employees and their wellbeing, customers, shareholders, and the wider community and environment that go over and above minimum legal requirements.

Mark allocation: 1 mark x Your response should include key words and phrases such as ‘obligation’, ‘over and

above minimum legal requirements’ and ‘to employees and some other stakeholders’. x Exact words do not need to be used but the sentiment of the terminology must be

present.

Tip x VCAA examinations do not allow for half marks to be awarded. You must

ensure that you write a full response – as much information as possible should be provided to avoid assessors not awarding the mark.

Question 1b. Sample response Organisations that demonstrate a commitment to social responsibility gain a positive reputation for that demonstration. The community and others in the industry recognise the organisation’s commitment and either frequent the organisation (customers) or attempt to match the organisation’s commitment (competitors).

This can result in improved sales, increased market share and greater profit, as more people are interested in doing business with the organisation.

Mark allocation: 2 marks x 1 mark for improved reputation x 1 mark for increased sales, market share and profit

Tip x Having defined social responsibility in part a, you should not redefine this

term. The emphasis is on how social responsibility can benefit a large-scale organisation (LSO).

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Question 1c. Sample response Demonstrating a commitment to social responsibility will help to create a positive public perception of Eustace Holdings. As a result of this positive reputation, the organisation may become recognised as a market leader in this area and be able to expand internationally. Expanding internationally would mean that Eustace Holdings would gain export earnings for the Australian economy and therefore contribute positively to Australia’s balance of trade.

If Eustace Holdings is able to become a supplier of choice, increasing its market share, sales revenue and ultimately its profit, then the increased demand for products would lead to an increase in employment opportunities at the company. This would benefit the Australian economy because providing employment reduces the number of people relying on the government for welfare payments.

Mark allocation: 2 marks x 1 mark for each benefit to the Australian economy x You may reference other positive contributions, such as the increased tax revenue

being paid to the government (providing additional funding for essential services such as education) by additional workers at the organisation.

Tip x On first glance this question is similar to Question 1b. above; however,

links need to be made between the organisation and benefits to the Australian economy.

2016 BUSMAN EXAM 4


Question 1d. Sample response The CEO has used the persuasive management style to inform stakeholders (such as shareholders, employees and the community) of the new policy. This style involves the CEO announcing the board’s decision and then attempting to convince stakeholders that this decision was in their best interest. When adopting this management style, the CEO does not seek any input in the decision-making process; instead, they rely on their own experience to make the decision and then persuade all stakeholders (and, in particular, their shareholders) that this decision is the correct approach.

This management style relies on centralisation of authority and control, and the use of top-down, one-way communication. Providing stakeholders with a reason for the decision – in this case, growing concern over climate change and environmental damage – is intended to illicit their support.

Mark allocation: 3 marks x 1 mark for each feature of the management style described x You may also describe the autocratic, persuasive and consultative styles. It is not

possible to describe the participative or laissez-faire styles, because there is no evidence to be drawn from the scenario that these styles were used.

Tip x When asked to describe a style, you must read the scenario carefully – not

all styles will be accepted as a correct response. This was identified in the 2014 and 2015 VCAA examination reports. (It also applies to other areas of the course, such as management structures.)

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Question 1e. Sample response The general community that lives and works around the Illara mine will be impacted by the decision to invest profits into repairing the environment. The community will have a more pleasant environment to live and work in and regenerating the area may lead to increased tourism.

The area will be a better place to live and pride in the local environment will be restored, improving the satisfaction levels of people in the community.

Mark allocation: 3 marks x 1 mark for identifying one stakeholder and how they will be affected x The remaining 2 marks are awarded for the depth of the description.

Tip x You should use the mark allocation provided as a guide to how much detail

is required in your response – to attain the full 3 marks for this question, your response must provide detail beyond simply stating the impact of the decision.

2016 BUSMAN EXAM 6


Question 2a. Sample response A performance indicator is a measurement tool used by management to assess the success of an LSO in achieving one or more of its specified objectives.

Mark allocation: 1 mark x Your response should include key phrases such as ‘measurement tool’ and ‘achieving

objective(s)’ – exact words do not need to be used but the sentiment of the terminology must be present.

x You may also refer to efficiency and effectiveness.

Tip x It is important that you not use the terms you are asked to define in the

actual definition; that is, for ‘performance indicator’, you should avoid using the words ‘performance’ or ‘indicator’ in your response.

Question 2b. Sample response One performance indicator that could be used in this instance is the number of workplace accidents (or the number of workers who are injured at work). If the number of workplace accidents is low, this suggests that the organisation provides appropriate ongoing training and adheres to all OH&S laws and conditions. In turn, workers feel safe at work and are therefore motivated and satisfied.

Another indicator that could be used is the level of staff turnover. Staff turnover refers to the number of staff who leave the organisation during a period of time and have to be replaced. Low staff turnover indicates that staff are happy and satisfied at the workplace and are likely to be motivated. In contrast, a level of staff turnover that is higher than the industry average suggests that employees in that workplace experience a considerable level of dissatisfaction.

Mark allocation: 4 marks x 1 mark for each of the performance indicators described (up to 2 marks) x 1 mark for explaining how each indicator shows the business is performing well in the

human resources area (up to 2 marks)

Other performance indicators that could be used:

x Results of staff satisfaction survey x Level of staff absenteeism

Tip x When asked to provide performance indicators for a specific area, it is

important to use indicators linked to that area. Some indicators, such as net profit figures, are not appropriate in this instance and would not be awarded marks.

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Question 2c. Sample response Performance appraisal is a practice of assessing (either formally or informally) how efficiently and effectively an employee is performing their role in the organisation. A formal assessment involves monitoring the employee and assessing their performance against set criteria. These criteria are set between the employee and management at the commencement of the appraisal period and are determined co-operatively, which means that the employee has some input.

Regular feedback on performance, with regard to the employee’s achievement of these goals/targets, is important as it allows for additional training to be provided if needed, or other corrective action to be taken if performance suggests. It also means that goals and targets can be reset if they are being too easily achieved and are not providing a challenge for the employee.

By working together to provide criteria for performance measurement, the manager and employee can set targets that will result in improved performance; if employees have a target that is achievable and have the support of management, it is likely that their performance will improve as a result.

Mark allocation: 5 marks x 1 mark for identifying a performance management practice or process (systems other

than performance appraisal are available) x 2 marks for an explanation of the performance management practice or process

selected x 2 marks for explaining how implementing such a system can lead to improved

employee performance

Tip x Questions such as this are good ‘discriminators’ – the majority of students

will be able to describe a performance management system, but more advanced students will be able to apply their knowledge to explain how it can be used.

2016 BUSMAN EXAM 8


Question 2d. Sample response Locke’s theory of motivation is known as the goal setting theory. Locke believed that employees were motivated by sitting with management and setting job-related goals to be achieved over a set period of time. These goals should be achievable and realistic as well as challenging – if there is a challenge, employees will be motivated to work hard to achieve their goals.

Employees must also demonstrate a commitment to the achievement of the goals, so their input in goal setting is important.

A second component to Locke’s theory is the provision of feedback to the employee. Periodically, the employee and manager should meet to discuss progress on the achievement of goals set, for example, not enough progress or progress that exceeds expectations. This can result in goals being reassessed or additional training needs being identified.

In setting goals, the human resources management team can ensure that goals are aligned with broader organisational objectives (which also serves to clarify the organisational objectives for the employee).

Locke’s theory is appropriate to use to improve employee performance as the setting of goals is collaborative and, because goals are manageable and realistic, there will be a sense of achievement when they are reached. Employees will feel a sense of ownership throughout the process and this will build commitment to the LSO and improve staff morale and motivation.

Mark allocation: 6 marks x 4 marks for the description of Locke’s theory of motivation. Responses should include

the following points:

¾ involves setting goals between management and employees ¾ goals should be clear, specific and challenging but not overwhelming ¾ feedback on performance is a key component as it will assist in the timely

achievement of goals. x 2 marks for a justification of this theory to improve employee performance. Responses

may include the following points:

¾ employees are involved in setting goals ¾ employees have ownership of goals ¾ improved morale.

Tip x You must justify your answer; that is, outline why this theory is appropriate

or will be successful in achieving improved employee performance. A description of the theory alone is not adequate to attain full marks.

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Question 3a. Sample response Both a public and a privately owned company are similar in that their incorporation has created them under law as separate legal entities and given them perpetuity (an ongoing life). They are both owned by shareholders. A public company is listed on the Australian Securities Exchange (ASX) and raises funds to establish or expand the company by selling shares to the public. It requires a minimum of 50 shareholders and can have an unlimited number as a maximum. It is run by people hired by the shareholders and is profit-driven, that is, always seeking to maximise profit.

On the other hand, a privately owned company is not listed on the ASX and does not have to publish financial reports for potential shareholders or other parties. Individuals cannot freely buy shares in these companies; they must be invited to become a shareholder. This ownership format requires a minimum of two shareholders and has a maximum of 50 shareholders. Similar to public companies, many privately owned companies seek to maximise profit.

Mark allocation: 4 marks x 2 marks for describing each type of ownership structure x 1 mark for describing a similarity between the two businesses – profit-driven,

managed by a board x 1 mark for describing a difference between the two businesses – listed or not listed on

ASX, able or not able to buy shares freely

Tip x Comparing requires students to outline similarities and differences between

two items. You must look at both of these requirements or else you will forfeit half the marks available.

2016 BUSMAN EXAM 10


Question 3b. Sample response A planning process or model is a series of steps that provide a structure to a business attempting to set and achieve an objective. A typical planning model involves the following steps:

x Define the objective: what management want to achieve and where they believe the organisation is headed. In this case, the business wishes to incorporate and so the objective is to determine the most suitable form of incorporation.

x Analyse the environment: identify exactly where the organisation currently stands, or what position it is in. It is common for an organisation to undertake a SWOT analysis (an acronym for strengths, weaknesses, opportunities and threats) at this point. This process seeks to identify and analyse the organisation’s internal strengths and weaknesses, and also identify any opportunities in or threats from its external environment. Hansard & Lewis could examine what other law firms in their position have done, whether those changes have been successful and whether those types of changes would suit this business.

x Develop alternative strategies: in determining an objective the organisation should consider and develop several strategies that will assist it to achieve the objective. In this case, there are two types of company structures and the business should investigate both options.

x Implement one of the alternatives: from the alternatives identified above, management should implement the most appropriate and agreed upon strategy. It will be the strategy that best assists the business to achieve the objective.

x Monitor and seek feedback on the implemented strategy: once a strategy is selected from a range of alternatives, management must set targets and then check to determine whether they are met. If objectives are not met, then the planning process would need to be reviewed, as the appropriate alternative on paper may not be the best alternative when put into effect.

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Mark allocation: 5 marks x 1 mark for each step in the planning process/model x You may provide fewer than five steps; marks are awarded for the depth of

explanation of the steps provided. x It is a requirement of this question that reference is made to the organisation and the

issue identified in the question.

Tips x When describing a process, avoid writing formulaic responses: the first step

is …, the second step is …, etc. or providing dot points. Assessors are looking for a description, not a list, and marks will be awarded accordingly.

x When the question refers to the case study or scenario provided, it is important that the response refers to or directly addresses the case study material.

x Not all five steps of the process/model need to refer to Hansard & Lewis, but it is better to link as many steps as possible.

2016 BUSMAN EXAM 12


Question 3c. Sample response Kotter’s theory provides a series of steps that can be followed to manage the change effectively. If Hansard & Lewis were to adopt Kotter’s theory, this would allow them to manage the change in a planned, incremental and steady manner. By adopting this theory, the communication process would be open and there would be greater opportunity for consultation between affected stakeholders, thus reducing the level of resistance that may occur due to the proposed change. By involving many parties in the change process the likelihood of resistance, particularly from employees, is lowered.

Kotter’s theory encourages the establishment of a guiding group to lead the change from being a partnership to becoming a company. This group would be responsible for investigating options for incorporation, such as being publicly listed or privately owned, and setting the timeline for implementing the change.

The guiding group would also be responsible for establishing and communicating the vision for the organisation to all stakeholders – particularly as now there may be additional stakeholders (who would become the new owners of the company).

It is important to ensure that the change from being a partnership to a company occurs smoothly. Obstacles and resistance to change are commonplace; ensuring communication is open and providing opportunities for support to and participation from stakeholders helps to overcome these problems.

Mark allocation: 5 marks x 1 mark for a statement identifying a benefit or advantage for an organisation using

Kotter’s theory to manage change x 4 marks for an explanation of the steps in Kotter’s theory and linking those steps to the

specific change in the scenario x You do not need to refer to all eight steps of Kotter’s theory; marks will not be

awarded based on the number of steps included in the response.

Tips x You may identify steps in Kotter’s theory other than those discussed in the

sample response. x In questions that ask you to refer to Kotter’s theory, you do not need to refer

to all eight steps of the theory – be selective and use the most appropriate steps to link to the scenario.

x Avoid simply listing the steps in the theory – this is not what the question requires.

13 2016 BUSMAN EXAM


Question 4 Sample response An operations management system comprises three elements:

x Inputs: the resources used in the process of producing the good or providing the service, such as materials (raw and component parts), human resources, technology, capital, plant and equipment, information, knowledge and time.

x Transformation/processing: the conversion of those inputs into outputs, or the finished goods or services. This process is responsible for adding value.

x Outputs: the products or results of the process in the form of goods or services. For Malview Hospital, as a service business, the inputs generally focus on human resources, such as medical and administrative staff and information (medical and administrative), as well as the buildings, supplies and equipment used to treat patients. Those involved in operations will need to sit with patients to determine what their symptoms are and what needs to be done to rectify their issue. On the other hand, a manufacturer relies on physical and natural resources that will be processed into a finished product. Where the hospital requires medical supplies to assist an individual patient, a car manufacturer for instance requires component parts for assembling a car on an assembly line.

The transformation process in a hospital will be very labour intensive, and will involve a lot of interaction with the patient to ensure treatment occurs. The manufacturing transformation process will be less labour intensive. As customers do not need to be present during the making of a car (for example), the business can rely on capital equipment and technology to produce the product. The transformation process for the hospital and the manufacturer are similar in that each organisation will focus on ensuring the process is carried out with a focus on quality.

The result will be that a hospital will provide an output that is individualised (to meet each patient’s needs) and intangible; that is, the output (the service) can’t be physically touched, although a record of the service can be stored in the patient’s medical history. On the other hand, a manufacturing firm will produce homogenous outputs, such as cars or chocolate bars produced on an assembly line, which can then be stored for future use or sale.

Mark allocation: 6 marks x 3 marks for describing the operations system of Malview Hospital (1 mark for each

element of the operations system) x 3 marks for describing the operations system of a manufacturing firm (1 mark for each

element) x The response must highlight the differences between each element.

Tip x The key to this question is to provide the similarities as general information

and then specifically identify the differences between each element.

2016 BUSMAN EXAM 14


Question 5 Sample response The Study Design identifies a number of change issues that students can draw upon, such as social responsibility, business ethics, globalisation, mergers and acquisitions, technological development, legislative compliance or privatisation. This sample response discusses technological development. Technology is continually changing – it allows businesses to improve their practices and processes so as to increase productivity. Technology can be used to enhance many areas of a business, for example, it can allow sales to occur more quickly through the use of self-service checkouts, scanning and product barcoding. Similarly, operations can improve because technology allows for automated assembly lines and the use of robotics to complete complex, precision tasks, such as those used in car manufacturing plants. Technology also allows for the creation of websites and online stores, increasing the customer base of a business and enabling the marketing department to better promote the business to the world.

Businesses that don’t keep pace with these technological developments will find they face increasing costs and lower productivity, making it more difficult for them to compete.

Businesses that introduce new technologies will undergo change, which will affect the internal environment of the business. One area that is likely to be affected is the management structure; the business may need to reorganise its facilities and staff, moving to a more functional or divisional structure to deal with the new technology.

A second area that may change is the corporate culture of the organisation. Technology can create job losses and this can negatively impact the culture of the organisation. Staff may become fearful that their jobs may be lost in the future as further technological developments occur. Management will need to ensure that they are able to maintain a positive culture, or productivity gains made through technology may be lost through poor staff morale.

A third area of the environment that may be affected is the policies of the business. The management team may need to rewrite policies to recognise the new technology and to deal with training programs, maintenance and breakdowns.

Mark allocation: 8 marks x This question is marked globally – assessors read the response from start to finish and

award a mark based on the marking criteria.

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A possible marking descriptor guide is:

Mark range Descriptor: typical performance in each range

7–8 marks Very high

x very high level of explanation that addresses all elements of the question

x shows in-depth understanding of key terms and concepts x clearly identifies change issue x includes explanation of three elements of the internal

environment x clearly links the change issue to the three elements of the

internal environment.

5–6 marks High

x high level of explanation that addresses all elements of the question

x shows understanding of key terms and concepts x identifies change issue but with a limited description x includes explanation of three elements of the internal

environment x links between the change issue and the three elements of the

internal environment are made but are superficial in places.

3–4 marks Medium

x explanation is good and addresses most of the elements of the question

x shows some understanding of key terms and concepts x identifies change issue but with a limited description x includes explanation of two elements of the internal

environment x links between the change issue and the two elements of the

internal environment are made but are superficial in places.

1–2 marks

Low

x satisfactory levels of explanation – not all elements of the question are addressed

x shows only basic understanding of key terms and concepts x identifies change issue but with no description x includes explanation of one element of the internal

environment x no links between the change issue and elements of the

internal environment are made x focus is on LSO rather than issue.

0 marks x no attempt at response

x response addresses none of the concepts/issues identified in the question or suggested marking guide.

2016 BUSMAN EXAM 16


Tips x Because the question is marked globally, you must make sure that you don’t

just ‘check off’ points. You need to write one integrated response, rather than dot points or separate short answers.

x Avoid referring to a specific LSO in your response – the question requires you to focus on an issue, not an LSO.

17 2016 BUSMAN EXAM


Question 6 Sample response A management structure is the formal arrangement of the various levels of management throughout an organisation. They tend to be hierarchical in nature: they outline the chain of command within an organisation, specify positions of authority and responsibility, and provide lines of communication. There are different types of management structure; a functional structure is one example.

A functional structure groups employees into areas based on common skills and tasks. This structure allows for a high degree of task specialisation because staff are performing frequent, similar tasks. Staff then become experts in their area and productivity improves. New staff members are offered good opportunities for skill and knowledge development, as they will be working with experts in the area. Staff also have access to a well-defined career path. In addition, the established expertise and skill may lead to more efficient use of resources, thereby improving productivity even further.

In a functional structure, the most common function areas are Operations, Finance, Human Resources, Marketing and Research and Development (R&D). Management of each of these functional areas should be able to devise and implement strategies from within their area to assist in improving the performance of the organisation.

The Human Resources Manager should evaluate the training programs that exist within the organisation. Poor training can lead to poor performance – either through an increase in the number of faulty products made, due to employees having poor knowledge of correct construction techniques, or a decrease in sales as customers become frustrated by employees with poor product knowledge. By improving training programs, staff will feel supported and valued within the organisation, and commitment to the LSO and improved performance should result.

The Finance Manager also has a role to play. If revenue and profit are falling, there may be issues with the pricing of the product being sold or the costs involved in operating the organisation. The Finance Manager will need to review the costs charged by suppliers, perhaps sourcing cheaper suppliers, while keeping in mind that this may impact the quality of the supplies and the finished product. Wage costs should also be reviewed as these represent a large proportion of the costs of any LSO and could possibly be reduced in an effort to improve profit.

The Operations Manager will also need to review the way the operations system is working. If inputs are changed (on advice from the Finance Manager), then processing should also be reviewed. If defective products are an issue, the Operations Manager may consider introducing a new quality management system; a quality control system, for example, can randomly check product samples from the production line and identify those that don’t meet set standards, thus identifying problems with production. This type of system will reduce defective products, waste and costs and help to improve profit.

Mark allocation: 10 marks x This question is marked globally – assessors read the response from start to finish and

award a mark based on the marking criteria.

2016 BUSMAN EXAM 18


An example of a possible marking descriptor guide is:

Mark range Descriptor: typical performance in each range

9–10 marks

Very high

x very high level of explanation that addresses all elements of the question

x shows in-depth understanding of key terms and concepts x includes definitions of management structure and functional

management structure x clearly identifies three functional areas x clearly links a strategy from each functional area to

improving performance and refers to the performance indicators provided in the scenario.

7–8 marks

High

x high level of explanation that addresses all elements of the question

x shows understanding of key terms and concepts x includes definitions of management structure and functional

management structure x clearly identifies three functional areas x link between a strategy from each functional area to

improving performance and a link to the performance indicators provided in the scenario is not completely made.

5–6 marks Medium

x explanation is good and addresses most of the elements of the question

x shows some understanding of key terms and concepts x includes definitions of management structure and functional

management structure x identifies functional areas to some degree x provides a strategy from each functional area for improving

performance but the link to the performance indicators provided in the scenario is not substantial.

3–4 marks

Low

x satisfactory levels of explanation – not all elements of the question are addressed

x shows only basic understanding of key terms and concepts x includes definitions of management structure and functional

management structure x identifies functional areas but with no description x strategies from each functional area are identified but with no

links to improving performance or the performance indicators provided in the scenario.

1–2 marks

Very low

x basic/limited level of explanation – limited elements of the question are addressed

x shows very limited understanding of key terms and concepts

19 2016 BUSMAN EXAM


x includes definitions of management structure and functional management structure

x no clear identification of functional areas x strategies identified but with no explanation, description or

link.

0 marks x no attempt at response x response addresses none of the concepts/issues identified in

the question or suggested marking guide.

Tips x Other strategies could be referenced in your response. For example, you

can describe strategies from Marketing or R&D in place of Operations or Finance.

x Because the question is marked globally, you must make sure that you don’t just ‘check off’ points. You need to write one integrated response, rather than dot points or separate short answers.

END OF SAMPLE RESPONSES

2016 business...

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