business management (new syllabus) · pdf filebusiness management (new syllabus) ... define...

Business Mgmt New May 2016 1

st Year Paper

of 20 S2016 Business Management (BM)

Business Management (New Syllabus) 1

st Year Examination

May 2016

Solutions & Marking Scheme & Examiner’s Comments

1st

Year Paper Business Mgmt May 2016


NOTES TO USERS ABOUT THESE SOLUTIONS

The solutions in this document are published by Accounting Technicians Ireland. They are intended to provide

guidance to students and their teachers regarding possible answers to questions in our examinations.

Although they are published by us, we do not necessarily endorse these solutions or agree with the views

expressed by their authors.

There are often many possible approaches to the solution of questions in professional examinations. It should not

be assumed that the approach adopted in these solutions is the ideal or the one preferred by us. Alternative

answers will be marked on their own merits.

This publication is intended to serve as an educational aid. For this reason, the published solutions will often be

significantly longer than would be expected of a candidate in an examination. This will be particularly the case

where discursive answers are involved.

This publication is copyright 2016 and may not be reproduced without permission of Accounting Technicians

Ireland.

© Accounting Technicians Ireland, 2016.

1st



Accounting Technicians Ireland

1st

Year Examination: Summer 2016

Paper: BUSINESS MANAGEMENT

(NEW SYLLABUS)

Thursday 12th May 2016

9.30 a.m. to 12.30 p.m.

INSTRUCTIONS TO CANDIDATES

Answer FOUR questions in total.

Answer at least ONE question from Section A.

Answer at least ONE question from Section B.

Answer at least ONE question from Section C.

Answer ONE additional question from ANY section (A, B or C).

Candidates should allocate their time carefully.

Answers should be illustrated with examples, where appropriate.

Question 1 begins on page 2 overleaf.

1st



SECTION A

Question 1

(a) Define Human Resource Management (HRM).

5 Marks

(b) Explain the concept of Performance Appraisal.

5 Marks

(c) ‘Resistance to change by people may be addressed using several strategies / techniques’.

Describe any THREE (3) techniques organisations may adopt in reducing resistance to change.

15 Marks

Total 25 Marks

Question 2

(a) List any THREE (3) of the FIVE (5) main stages through which marketing has evolved.

5 Marks

(b) ‘Ansoff’s growth matrix assists organisations in analysing alternative growth strategies for their products

and markets’.

Using the matrix as an illustration, outline any TWO (2) of the FOUR (4) strategies available to an

organisation.

12 Marks

(c) Write a short explanatory note on any TWO (2) of the following;

8 Marks

i. Social Media marketing.

ii. Search Engine Optimization (SEO):

iii. Search Engine Marketing (SEM):

iv. Content marketing.

v. Email marketing.

vi. SMS marketing.

vii. Video marketing/video infographics.

Total 25 Marks

1st



SECTION B

Question 3

(a) Describe any THREE (3) of Frederick Taylor’s FOUR (4) principles of effective management.

10 Marks

(b) Explain any THREE (3) of the following business concepts, using examples where appropriate;

i. SWOT Analysis.

ii. PESTLE Analysis.

iii. Micro Environment.

iv. Environmental scanning.

15 Marks

Total 25 Marks

Question 4

(a) Explain what is meant by the term Content Theories of Motivation. List any TWO (2) of these theories.

5 Marks

(b) Describe the Equity Theory of motivation and discuss its relevance in today’s economic environment.

10 Marks

(c) Explain in detail your understanding of the ‘Charismatic approach' to leadership.

10 Marks

Total 25 Marks

1st



SECTION C

Question 5

(a) Explain the term ‘Stakeholder'.

5 Marks

(b) Write a detailed note on any TWO (2) of the following;

i. The role of demographics in management today.

ii. The impact of Globalisation on business.

iii. How society’s expectations are influencing managers and organisations.

iv. How the workforce is changing and its impact on the way organisations are managed.

20 Marks

Total 25 Marks

Question 6

(a) Explain the term ‘Corporate Governance’.

8 Marks

(b) Outline the advantages and disadvantages of any TWO (2) governance models (namely the shareholder

and stakeholder models).

(c) Write a brief note on the Combined Code of Corporate Governance.

12 Marks

5 Marks

Total 25 Marks

1st



1st

Year Examination: May 2016

Business Management (New Syllabus)

Suggested Solutions

and

Examiner’s Comments

Students please note: These are suggested solutions only; alternative answers may also be deemed to be correct

and will be marked on their own merits.

Statistical Analysis – By Question

Question No. 1 2 3 4 5 6

Average Mark (%) 61% 56% 56% 53% 59% 58%

Nos. Attempting 914 705 892 347 829 423

Statistical Analysis - Overall

Pass Rate 76% Average Mark 57% Range of Marks Nos. of Students 0-39 157

40-49 93

50-59 273

60-69 230

70 and over 281

Total No. Sitting Exam 1034 Total Absent 276 Total Approved Absent 52 Total No. Applied for Exam 1362

General Comments:

GENERAL COMMENTS ON THE PAPER AS A WHOLE

Appears to be a well received paper. Pass rates are within normal limits. Dublin had a notably lower

pass rate than other centres. The failures recorded, in the main, were what I would deem 'bad' failures

where candidates showed little knowledge of the core material and chose to either write very little or a

lot about what they thought was the answer, without addressing meaningful theory/course content.

1st



Examiner’s Comments on Question One

A very popular question; the definition question was answered well by most however some candidates

delved into an unnecessarily long description of HRM, wasting time.

Part b was answered well by most.

Part c; addressed well by most candidates; some candidates gave details of the three categories of

change (structure, technology & people) instead of addressing the techniques under examination

Question 1

(a) Define Human resource Management (HRM). 5 Marks

Boddy (2008) defines HRM simply as ‘the effective use of human resources in order to enhance organisational

performance.’

Dessler (2013) provides a more comprehensive definition, as follows:

‘The policies and practices involved in carrying out the “people” or human resource aspects of a management

position, including recruiting, screening, training, rewarding, and appraising’.

Or any other referenced definition.

(b) Explain the concept of Performance Appraisal. 5 Marks

Performance appraisal involves a periodic assessment of the performance of the individual’s future potential. It

is concerned with:

• Establishing performance objectives and standards

• Measuring employee performance against those standards

• Providing feedback to employees

Gunnigle et al (2011) define performance appraisal as ‘a systematic approach to evaluating employee

performance, characteristics and/or potential, with a view to assisting decisions in a wide range of areas such as

pay, promotion, employee development and motivation’. (5 x 1 mark)

(c) ‘Resistance to change by people may be addressed using several strategies / techniques’.

Describe any THREE (3) techniques organisations may adopt in reducing resistance to change.

15 Marks

Some Techniques for Reducing Resistance to Organisational Change;

Dysfunctional resistance to change can be addressed with several strategies.

1.

Education and communication help employees see the logic of the change effort. It assumes that much

of the resistance lies in misinformation or poor communication.

2.

Participation involves bringing those individuals directly affected by the proposed change into the

1st



decision-making process. It allows for expression of feelings, increases the quality of the process, and

increases employee commitment to the final decision.

3.

Facilitation and support involve helping employees deal with the fear and anxiety associated with the

change effort. It may include employee counselling, therapy, new skills training, or a short paid leave of

absence.

4.

Negotiation involves a bargain: exchanging something of value for an agreement to lessen the

resistance to the change effort. This technique may be quite useful when the resistance comes from a

powerful source.

5.

Manipulation and co-optation refers to covert attempts to influence others about the change. It may

involve twisting or distorting facts to make the change appear more attractive.

6. Coercion involves the use of direct threats or force against the resisters.

3 x 5 Marks

Examiner’s Comments on Question Two

Part (a) was weakly answered by most; some provided a tour of recent development s in media

marketing etc

Part (b) was answered well by most; they illustrated the matrix appropriately and were competently

able to provide meaningful descriptions of the strategies.

Part (c) was very well answered by most;

Question 2

(a)

List the THREE (3) of the FIVE (5) main stages through which marketing has evolved.

5 Marks

Production concept

Product concept

Selling concept

Marketing concept

Societal marketing concept

(b) ‘Ansoff’s growth matrix assists organisations in analysing alternative growth strategies for their

products and markets’.

Using the matrix as an illustration, outline any TWO (2) of the FOUR (4) strategies available to an

organisation: 12 Marks

The Ansoff Matrix also known as the Ansoff product and market growth matrix is a marketing planning tool

which usually aids a business in determining its product and market growth. This is usually determined by

focusing on whether the products are new or existing and whether the market is new or existing. The model was

invented by H. Igor Ansoff. Ansoff was primarily a mathematician with an expert insight into business

management. It is believed that the concept of strategic management is widely attributed to the great man.

The Ansoff Matrix has four alternatives of marketing strategies; Market Penetration, product development,

market development and diversification.

1st



4 Marks

(2 x 4 Marks for explain two of the 4 listed below)

Market Penetration

When we look at market penetration, it usually covers products that are existence and that are also existent in an

existing market. In this strategy, there can be further exploitation of the products without necessarily changing

the product or the outlook of the product. This will be possible through the use of promotional methods, putting

various pricing policies that may attract more clientele, or one can make the distribution more extensive. In

Market Penetration, the risk involved in its marketing strategies is usually the least since the products are already

familiar to the consumers and so is the established market. Another way in which market penetration can be

increased is by coming up with various initiatives that will encourage increased usage of the product. A good

example is the usage of toothpaste. Research has shown that the toothbrush head influences the amount of tooth

paste that one will use. Thus if the head of the toothbrush is bigger it will mean that more toothpaste will be used

thus promoting the usage of the toothpaste and eventually leading to more purchase of the toothpaste.

Product Development

In product development growth strategy, new products are introduced into existing markets. Product

development can differ from the introduction of a new product in an existing market or it can involve the

modification of an existing product. By modifying the product one would probably change its outlook or

presentation, increase the products performance or quality. By doing so, it can appeal more to the already

existing market. A good example is car manufacturers who offer a range of car parts so as to target the car

owners in purchasing a replica of the models, clothing and pens.

Market Development

The third marketing strategy is Market Development. It may also be known as Market Extension. In this strategy,

the business sells its existing products to new markets. This can be made possible through further market

segmentation to aid in identifying a new clientele base. This strategy assumes that the existing markets have been

fully exploited thus the need to venture into new markets. There are various approaches to this strategy, which

include: New geographical markets, new distribution channels, new product packaging, and different pricing

policies. In New geographical markets, the business can expound by exporting their products to other new

countries. It would also mean setting up other branches of the business in other areas that the business had not

ventured yet. Various businesses have adopted the franchise method as a way of setting up other branches in new

markets. A good example is Guinness. This beer had originally been made to be sold in countries that have a

colder climate, but now it is also being sold in African countries. The other method is via new distribution

1st



channels. This would entail selling the products via e-commerce or mail order. Selling through e-commerce will

capture a larger clientele base since we are in a digital era where most people access the internet often. In New

Product packaging, it means repacking the product in another method or dimension. That way it may attract a

different customer base. In Different pricing policies, the business could change its prices so as to attract a

different customer base or so create a new market segment. Market Development is a far much risky strategy as

compared to Market Penetration. This is so as it is targeting a new market and one may not quit tell how the

outcome may

Diversification

The last strategy is Diversification. This growth strategy involves an organization marketing or selling new

products to new markets at the same time. It is the most risky strategy among the others as it involves two

unknowns, new products being created and the business does not know the development problems that may

occur in the process. There is also the fact that there is a new market being targeted, which will bring the

problem of having unknown characteristics. For a business to take a step into diversification, they need to have

their facts right regarding what it expects to gain from the strategy and have a clear assessment of the risks

involved. There are two types of diversification. There is related diversification and unrelated diversification. In

related diversification, this means that the business remains in the same industry in which it is familiar with. For

example,a cake manufacturer diversifies into a fresh juice manufacturer.

This diversification is in the same industry which is the food industry. In unrelated diversification, there are

usually no previous industry relations or market experiences. One can diversify from a food industry to a

mechanical industry for instance. A good example of the unrelated diversification is Richard Branson. He took

advantage of the virgin brand and diversified into various fields such as entertainment, air and rail travel foods

etc. Another example is the easy jet which has diversified into car rentals, gyms, fast foods and hotels. Though

diversification may be risky, with an equal balance between risk and reward, then the strategy can be highly

rewarding. Another advantage of diversification is that in case one business suffers from adverse circumstances

the other line of businesses may not be affected.

(c) Write a short explanatory note on any TWO (2) of the following; 8 Marks

i.

Social media marketing

ii.

Search Engine Optimization (SEO):

iii.

Search Engine marketing (SEM):

iv.

Content marketing

v.

Email marketing

vi.

SMS marketing

vii.

Video marketing/video infographics

2 x 4 Marks

1st



Social media marketing: this has risen hugely in popularity and are now countless dedicated agencies scattered

around the web which promise to help with it. Facebook, Twitter, Pinterest and LinkedIn are all examples of

social networks which can be used as a part of your marketing efforts, although they are far from the only ones.

Social media marketing allows two-way communication between a company and consumer in a way that wasn’t

previously seen and it’s safe to say that it has changed business approach to marketing as now, the consumer

holds the power. It’s also based on one of the most effective forms of advertising; word of mouth. Social media

means that communication can be a lot more targeted and personalized than other forms of marketing, as

companies get the chance to receive feedback from customers daily. It’s also useful for making content ‘go

viral’, something which can help to strengthen a brand very quickly. It’s brand personality that makes social

work so well, as if this is done correctly, across the board, then it can boost engagement considerably.

Search Engine Optimisation

is a means of optimizing the content of a website in order to gain better

placement on the Search Engine Results Page (SERPS). A variety of techniques are employed to achieve this

and it’s not a job for amateurs really as there are many pitfalls that could have Google frowning on your site.

SEO includes:

i.

Keyword research and usage, on-page and off (within HTML)

ii.

Link building /outreach blogging

iii.

Content delivery

iv.

Site structure

v.

Analytics

This is not an exhaustive list, but it does give an indication of how much work is necessary in order to optimize a

site.

Search Engine Marketing

is similar to, but incorporates, SEO and uses many of the same techniques as

a part of that. The main difference between the two terms is that SEM also includes paid online advertising

models, such as pay-per-click (PPC).PPC advertising models are those such as Google Adwords and Bing,

which only require payment when the ad is clicked through to the target website. SEM also requires keyword

analysis as the words and phrases used in the ad and site and these need to be monitored carefully to reflect the

market and current search engine rules. Whilst it can be said that SEM encompasses all kinds of digital

marketing, it’s more commonly thought of in a narrower niche, to describe paid models.

Content Marketing

is a technique where content is produced and distributed with the intention of providing

relevant, interesting content to attract and engage a particular audience that a business is targeting. The creation

of useful content is a way of developing communication with the customer in order to drive engagement and

customer action. Content can mean anything from blogs to videos and whitepapers tend to work well using

content marketing techniques too. The goal is to win customer loyalty and retain it.

1st



Email Marketing

remains a very effective tool, despite claims that it isn’t as important as social these days.

Modern email marketing is just beginning to evolve so that it can be linked to a database in order to

personalise it, so that individual groups of customers can be sent mail based on previous purchases and interests.

is also highly effective and rising in popularity, due to the fact that many of us no longer go

anywhere without our cell phones. This ‘always-on’ aspect means that when SMS marketing is used, it’s highly

likely that the customer will at least read the text.

is again becoming hugely popular and it’s likely that we’ll see an even

bigger move in its direction this year as more and more businesses begin to recognise the potential it has. People

take in more information when watching video and are more likely to engage, so it’s certainly worth looking at.

Whilst image-based infographics are already hugely popular, making these in the form of a series of frames for

video is beginning to really take off in the digital marketing space too. 2 x 4 Marks

Examiner’s Comments on Question Three

Total 25 Marks

Part (a) was disappointing across all centres. A number of candidates either provided details of

planning, leading, organising and controlling or merely left this section blank; letting go of 10 marks.

Part (b) was very well answered; candidates had obviously prepared well for SWOT & PEST; this led

to them providing too much info in a lot of cases for the 5 marks on offer.

SECTION B

Question 3

(a) Describe any THREE (3) of Frederick Taylor’ FOUR (4) principles of effective management.

10 Marks

Taylor’s Principles to Effective Management

Principle 1 Determine the one best way to do each job through accurate, objective measurement.

Principle 2 Select the ‘best person’ for the job.

Principle 3 Train the ‘best person’ in the ‘best way’ of doing each job. If possible, each job should be

reduced to a series of routine, predictable tasks. Training of those employees selected should pursue

procedures which were designed scientifically.

Principle 4 Provide employees with financial incentives for following procedures and reaching

objectives.

(3 x 3.33 Marks for above plus examples)

(b) Explain any THREE (3) of the following business concepts, using examples where appropriate;

i. SWOT Analysis

ii. PESTLE Analysis

iii. Micro Environment

iv. Environmental Scanning 15 Marks

1st



SWOT Analysis

SWOT analysis is a strategic planning tool used to assess the Strengths, Weaknesses, Opportunities and

Threats of a business. Strengths and weaknesses are internal to the organisation while opportunities and

threats are external. It involves specifying the objective of the business venture or project and

identifying the internal and external factors that are favourable and unfavourable to achieving that

objective. The usefulness of a SWOT analysis applies to all organisations, public and private, profit and

non profit. In that way, it is a powerful tool that is widely used in business.

STRENGTHS: These can be competences, valuable resources, or characteristics that a firm uses to

manipulate opportunities in the external environment or help to offset threats within its internal

environment. Companies should focus in particular on whether they have the relevant strengths to build

on their opportunities. Nokia, as but one example, would widely be regarded as having strong

competency in mobile telephony; equally Apple Inc. has huge strengths in the ability to bring

innovative products to the marketplace.

WEAKNESSES: These can be identified when an organisation lacks a competitive advantage, resource

or characteristic and is therefore not performing as well as its competitor. Prior to assessing its

weaknesses, a company needs to decide whether correcting its weaknesses is more critical than building

on its strengths to exploit opportunities.

OPPORTUNITIES: These are possibilities or chances that an organisation may pursue to obtain

advantages in the marketplace. They can include emerging market opportunities, potential alliances

with other companies and capitalising on new technologies. The emergence of new markets in Asia, for

example, provides opportunities for international businesses to expand into new markets.

THREATS: These have the potential to impact negatively on the organisation and often arise from

factors beyond the control of the firm. The current economic downturn which affects customer

Micro Environment

The Micro-Environment focuses on the kind of market structure that an organisation finds itself

competing in and includes the company itself, suppliers, distributors, competitors and publics. These

factors have a direct impact on the company’s strategy.

Customers Organisations survive on the basis of meeting the needs and wants of their customers and

providing them with benefits.

Employees This includes the employment, training, motivation and development of human resources.

People are the lifeblood of the business and this is particularly true in the service industry where

personal interaction is critical.

Suppliers The development and maintenance of close relationships with various suppliers is highly

beneficial and helps combat against rises in raw material costs and subsequent rises in prices.

Shareholders Shareholders own the company. They have rights to certain privileges such as voting

rights, appointment of directors, purchase of new shares, and the right to assets of the company during

liquidation. They have the right to share in the company’s profits through dividends.

Media Positive or negative media attention in an organisation and/or its businesses can limit

performance and impact on public perception. A good public relations strategy is vital.

Competitors In free markets, it is essential that companies monitor their competitors closely and

develop ways to differentiate themselves from rivals.


Business Mgmt New

May 2016 1st Year Paper

PESTLE

The Macro-Environment refers to the external factors that affect an organisation’s performance, many

of which are beyond the control of the business. It encompasses many dynamic and continuously-

evolving variables including political, economic, social, technological, legal and

environmental issues, reflected in the acronym ‘PESTLE’.

Political Companies must monitor political changes at both domestic and

international levels. Issues of importance include political orientation

(capitalist, communist) and government attitudes to foreign investors, taxation and international policy.

Economic ;Economic factors dictate prices, production costs, demand and profits. The current

economic recession is global and thus impacts markets around the world.

Socio-Cultural Companies must consider changing tastes, purchasing behaviour and changing priorities

which are dynamic and hard to evaluate. Religion, attitudes, beliefs, education and social systems all

fall under this category.

Technological Technology is a major macro-environmental variable which influences many products

and services that we are familiar with. It can also be used to gather, analyse and use market research

information to create

specific selling strategies and aid the promotion effort.

Legal Organisations must be aware of the legal parameters in the markets in which they operate. They

are vast and often complex. Among the most

important legal considerations are taxation, employment laws, safety regulations and contract law.

Environmental ;Many companies have adopted approaches to minimize the impact of their operations

on ecological systems and are developing strategies and initiatives to help combat climate change.

International and domestic environmental laws must be adhered to.

Environmental scanning is the process of collecting information to carry out a systematic analysis of

the forces affecting the company and identifying potential threats and opportunities with a view to

generating future strategies. This can include an industry and competitor analysis, consumer analysis,

and an analysis of product innovations and the company’s internal environment.

What is the benefit?

This information should assist management in planning the organisation’s future course of action. To

achieve a competitive advantage, the company must also respond to the information gathered from

environmental scanning by altering its strategies and plans when the need arises.

Key techniques of environmental scanning:

1. Ad-hoc scanning – short-term, infrequent examinations usually initiated by a crisis.

2. Regular scanning - studies done on a regular basis.

3. Continuous scanning – continuous structured data collection and processing on a broad range of

environmental factors.

3 x 5 Marks

Total 25 Marks


Business Mgmt New


Examiner’s Comments on Question Four

Mixed answers for part (a); a number of candidates mistaking content theorists for process theorists.

Part (b) was answered adequately.

Part (c) was answered adequately.

Question 4

(a) Explain what is meant by the term Content Theories of Motivation. List any TWO (2) of these

theories.

3 Marks

Content theories assume that needs are the most important determinant of an individual’s levels of

motivation. These theories focus on the following question: ‘what initiates or stimulates behaviour?

(2 x 1 Mark)

The following content theories are examined:

a) Hierarchy of Needs (Abraham Maslow)

b) Existence-Relatedness-Growth (ERG) Theory (Clayton Alderfer)

c) Achievement Theory (David McClelland)

d) Two-Factor Theory (Fredrick Herzberg) (2 x 1 Mark)

(b) Describe the Equity Theory of motivation and discuss its relevance in today’s economic

environment.

10 Marks

Adam’s equity theory (sometimes also referred to as ‘Justice Theory’) is built on the belief that employees

become de-motivated both in relation to their job and their employer, if they feel as though their inputs are

greater than the outputs. Employees can be expected to respond to this in different ways, including: de-

motivation, reduced effort and eventually becoming disgruntled.

Inputs include all of the elements an individual puts into their job and includes: effort, loyalty, hard work,

commitment, skill, ability and enthusiasm.

Outputs, on the other hand, are what the individual receives as an outcome of their inputs. They include

variables such as financial rewards, recognition, reputation, responsibility, praise and job security.

Equity theory asserts that positive outcomes and high levels of motivation can be expected only when

employees perceive their treatment to be fair. If the balance lies too far in favour of the employer, some

employees may work to bring balance between inputs and outputs on their own, by asking for more

compensation or recognition.

Benefits:

Can help managers identify whether employees are generally satisfied or dissatisfied in job situations;

Managers can analyse inputs against outputs and so implement strategies to increase motivation.

Limitations:

Model may be too simplistic in its delivery; Doesn’t consider cultural or socio-economic variables.


Business Mgmt New


(c) Explain in detail your understanding of the ‘Charismatic approach’ to leadership.

10 Marks

An important approach to the study of leadership is the Charismatic approach. Charisma is a very strong form of

referent power possessed by relatively few individuals. It is based on an individual’s ability to influence others

through their own inspirational qualities rather than through any formal position of power.

This approach attempts to identify behaviours that differentiate charismatic leaders from their non-charismatic

counterparts. Studies indicate that charismatic leaders display specific traits such as a strong need for power, high

levels of self-confidence, an astute ability to ‘scan’ and ‘read’ their environment, and strong beliefs in their own

ideas and self-sacrifice. They are visionaries and can communicate their vision effectively. They are good at

cultivating a certain image and in taking innovative actions to achieve goals. They tend to have a dominant

personality and have a strong desire to influence others. There are many examples of leaders with charisma in the

political field including former John F. Kennedy, Martin Luther King. In the management field, it might be argued

that Richard Branson (Virgin) has charismatic tendencies.

.

Total 25 Marks


Business Mgmt New


Examiner’s Comments on Question Five

Part (a) was answered well by most; with the lesser confusing shareholder and stakeholder.

Part (b) was well answered by candidates; the most popular choices being demographics, changing

workforce and globalisation.

SECTION C

Question 5

(c) Explain the term ‘Stakeholder’ 5 Marks

Stakeholders are any constituencies in the organisation’s external environment that are affected by the

organisation’s decisions and actions. Examples; customers, unions, employees, shareholders,

communities suppliers, media, competitors. Governments…

(d) Write a note on any TWO (2) of the following;

i. The role of demographics in management today.

ii. The impact of globalization on business.

iii. How society’s expectations are influencing managers and organisations.

iv. How the workforce is changing and its impact on the way organisations are managed.

20 Marks

- The role of demographics in management today.

The size and characteristics of a country’s population can have a significant effect on what it’s able to

achieve. 2. Demographics, the characteristics of a population used for purposes of social studies, can

and do have a significant impact on how managers manage. 3. Demographic characteristics of concern

to organisations include: age, income, sex, race, education level, ethnic makeup, employment status,

and geographic location. 4. Age is a particularly important demographic for managers since the

workplace often has different age groups all working together. a) Baby Boomers are those individuals

born between 1946 and 1964. The sheer numbers of people in that cohort means they’ve had a

significant impact on every aspect of the external environment – including Social Security System b)

Gen X is used to describe those individuals born between 1965 and 1977. This age group has been

called the baby bust generation since it followed the baby boom and is one of the smaller age cohorts.

c) Gen Y (or the “Millennials”) is an age group typically considered to encompass those individuals

born between 1978 and 1994. As the children of the Baby Boomers, this age group is large in number

and making its imprint on external environmental conditions as well. d) Post-Millennials—the youngest

identified age group, basically teens and middle-schoolers. One thing that characterises this group is

that “many of their social interactions take place on the Internet, where they feel free to express their

opinions and attitudes.”

- The impact of globalisation on business

Management is no longer constrained by national borders. a) Major events such as catastrophic natural

disasters and the global economic meltdown of the past few years have created challenges for managers

doing business globally. b) BMW, a German-owned firm, builds cars in South Carolina. c) McDonald’s

sells hamburgers in China. d) The world has become a global village, a boundaryless world where

goods and services are produced and marketed worldwide. 2. To be effective in this boundaryless

world, managers need to adapt.

Organisations are considered global if they exchange goods and services with consumers in other

countries, if they use managerial and technical employee talent from other countries, or if they use

financial sources and resources outside their home country. Businesses going global are usually referred

to as multinational corporations (MNCs). As an MNC, they may operate as a multidomestic

corporation, a global corporation, or a transnational or borderless organisation. When a business goes


Business Mgmt New


global, it may start with global sourcing, move to exporting or importing, use licensing or franchising,

pursue a global strategic alliance, or set up a foreign subsidiary. In doing business globally, managers

need to be aware of different laws and political and economic systems. But the biggest challenge is in

understanding the different country cultures. Two cross-cultural frameworks that managers can use are

Hofstede’s and GLOBE. 4

Discuss how society’s expectations are influencing managers and organisations. Society expects

organisations and managers to be responsible and ethical. An organisation’s social involvement can be

from the perspective of social obligation, social responsiveness, or social responsibility. After much

analysis, researchers have concluded that managers can afford to be (and should be) socially

responsible. Sustainability has become an important societal issue for managers and organisations.

Describe how the workforce is changing and its impact on the way organisations are managed. The

workforce continues to reflect increasing diversity. Types of workforce diversity include age, gender,

race, ethnicity, disability/abilities, religion, sexual orientation, and gender identity. Organisations and

managers are responding to the changing workforce with work-life balance programs, contingent jobs,

and recognition of generational differences.

2 x 10 Marks

Total 25 Marks

Examiner’s Comments on Question Six

Part (a) was answered strongly by most

Part (b) was either answered in full to a high level ort the compete contrast

Part (c) was answered well.

Question 6

(a) Explain the term ‘Corporate Governance’. 8 Marks

Corporate governance is concerned with the structures and systems of control by which managers are

held accountable to those who have a legitimate stake in an organisation. It is the system of rules,

practices and processes by which a company is directed and controlled. Corporate governance

essentially involves balancing the interests of the many stakeholders in a company - these include its

shareholders, management, customers, suppliers, financiers, government and the community.

(b) Outline the advantages and disadvantages of TWO (2) governance models (namely the

shareholder and stakeholder models).

(a) Different Governance models’;

Shareholder model

Stakeholder model Advantages

• Higher rates of return

• Reduced risk

• Increased innovation and entrepreneurship

• Better decision making

• Long term horizons

12 Marks


Business Mgmt New


• Less reckless risk-taking

• Better management

Disadvantages

• Diluted monitoring

• Vulnerable minority shareholders

• Short termism

• Weaker decision-making

• Uneconomic investments

• Reduced innovation and entrepreneurship (Johnson et al, 2010)

2 x 6 Marks

Total 25 Marks

(c) Write a brief note on the Combined Code of Corporate Governance.

5 Marks

The combined code on corporate governance is published by the UK Financial Reporting Council. The report set

down standards of corporate governance for companies listed on the stock exchanges in the UK & Ireland. Its

contents have become generally accepted statement of best practice for companies in Ireland & Britain. The

combined code draws to a significant degree on two other reviews published in 2003, the Higgs Report – review

and role and effectiveness of Non-executive directors and the Smith Report – Audit Committees, Combined code

Guidance.

It is sets out as a series of principles for companies and institutional shareholders. The key principles for

companies are presented on (1) directors, (2) remuneration, (3) accountability and audit, (4) relations with

shareholders EU perspective April 2014.

Total 25 Marks

business management (new syllabus) · pdf filebusiness management (new syllabus) ... define...

Documents