word - kinross high school · web viewdistinguish between delayering and downsizing. command...

Business Management

Sample Answers by Command Word

©KINROSS HIGH SCHOOL BUSINESS MANAGEMENT PAGE 1

Word

Compare Identify similarities and differences between two or more factors. Each comparison should be made in one sentence

Define Give a clear meaning

Describe Provide a thorough description

Discuss Examine closely taking account of strengths and weaknesses in an argument; offer reasons for and against

Distinguish Identify the differences between two or more factors

Explain Give a detailed response (definition and explanation) as to how/why something may benefit/hinder

The impact on the organisation

Justify Give reasons to support suggestions, conclusions

Name, state, identify, list X State the factors (with no explanation or elaboration)

Outline State the main features

Suggest Give reasons to support suggestions, conclusions


DISCUSS

Discuss the advantages and disadvantages of empowering staff within an organisation.

You have to have at least 2 viewpoints: When looking at advantages/disadvantages so discuss these with reference TO at least 2 stakeholders. This question implies: Employees, Management

Employees ManagementAdvantagesEmployees will be more motivated and will produce moreDecisions are made quicker as the employees doing the work make the decisionsEmployees should come up with better ideas on how to solve problems

Managers may not trust lower level employees to make correct decisions – management styleSenior managers are freed up for strategic decision making – types of decision

Employees gain more skills Employees are better prepared for promotionDisadvantagesemployees may not want the responsibility of making decisions

Can mean increased cost of wages to employ appropriate staff

Discuss the effects of ICT on an organisation.

You have to have at least 2 viewpoints:Look at the pros an cons of ICT: with reference TO at least 2 stakeholders. This question implies: Employees, Organisation/Management

Employees ManagementAdvantagesTeleworking will be possible for staff within the organisation as the ICT will exist to allow them to work from home

Increased productivity for the organisation as more is produced using CAM and robotic machineryImproved communications should exist both internally and externally with EMAILThe organisation will gain a competitive edge over its rivals who do not fully use ICTMore professional documentation will be produced using WP and PUBLISHING software

DisadvantagesMay lose job as firm moves from labour to capital intensive methods of production – increased mechanisation

Increased initial costs – the initial financial costs will be high to install the ICTStaff training may be required in order that staff fully utilise the ICTResistance to the technology by staff


Discuss the effects of becoming part of a franchise.)

You have to have at least 2 viewpoints: This question implies: Franchiser & Franchisee

Franchiser (Firm selling the franchise) Franchisee (Firm buying the franchise)AdvantagesRoyalties are paid to the franchiser from profits Franchiser can demand exactly how a business operates Bad publicity can affect the whole franchise

Using an established name/brand Reduces the risk of failure in the marketplace Franchiser will provide training Franchiser will advertise nationally Business idea is already successful Product innovation is shared

DisadvantagesNone listed because they are opposites of the above

Discuss methods that an organisation could use to ensure their stay motivated.

You have to have at least 2 viewpoints: This question implies: Management/Organisation & Employee

Method of Motivating Staff Positives and Negativesstaff training May encourage staff to stay with firm to

develop self and it may encourage loyalty to the firmCost of training may be high and the employee could leave and take that training/knowledge to competitor firms

financial rewards like bonuses or pay rises or profit sharing schemes

May be linked to performance – eg sales commission so the cost is covered by the employees’ effortsProfit Sharing may keep employees in the firm and only costs money in the form of dividends if firm is doing wellNot all employees are motivated by money – Maslow’s Hierarchy of needs

team building days or social events Helps to promote strong corporate cultureMay result in unhelpful competition between different sections of the firm

staff involvement in works councils/quality circles

Staff may have sense of self-worth as a result of theseManagement style may not be conducive to these – new/failing firm may require strong autocratic leadership

regular consultation with staff


Many organisations group their activities by function. Discuss other methods an organisation could use to group their activities.

Look at the pros an cons of other ways of grouping activities: with reference TO organisation. This question implies: Employees Organisation/Management

Product/service grouping - Each division will be grouped according to a product or product rangeAdvantages DisadvantagesAllows for an organisation to be more responsive to changes in that market Expertise is developed within each specialised divisionAllows management to identify poor performing products

There can be duplication of resources and personnel across group Divisions may find themselves competing against each other.

Geographical - Grouping of resources is carried out across a geographical area, ie,Midlands, Scottish, South-East Division, etc.Allows to cater closer for the needs of different area Can become familiar with local customs and cultures

Is expensive with regards to administration and staffing costs.

Technological - Organisations group their activities according to technological process.Suitable for large organisations with different production processes

Again duplication of resources occurs

Customer - • Resources are organised around groups of customers with similar needs.

Allows for services to be tailored to each group of customers or a specific customer Builds up customer loyalty due to the personal service they receive

There can be large staffing costs with this type of grouping Also duplication of resources in administration, finance


Wholesalers buy goods in large quantities directly from manufacturers. Discuss the advantages and disadvantages to a manufacturer of using a wholesaler.)

The question asks you to discuss the “advantages and disadvantages”. However, the word “Discuss” implies looking at the advantages/disadvantages – or pros/cons, benefit/drawbacks.

Offer reasons for and against - In this question imagine you are a large manufacturer selling your product to a wholesaler rather than directly to your final customers

What happens Positives and Negatives about Manufacturer delivers larger amounts to wholesalers than if selling to individual customers, therefore

Fewer deliveries are made so save cost of petrol, van, driver etc Less profits as wholesaler makes profit, ie using middle men

Administration – Invoicing and Labelling products

Administration costs are reduced – one invoice sent to wholesaler rather than thousands sent to individual customersWholesalers may label the product Wholesalers break product down into smaller more saleable size Wholesalers can give market research direct to manufacturerLoss of control of how the product is presentedCosts involved in producing point of sale merchandising for wholesalers

Opportunity Cost (Money tied up in stock)

Less money tied up in stock – because once items are produced they can be shipped in bulk to wholesalers rather than waiting on each individual customer ordering one item from a mass/batch production runLess stock goes obsolete – same reason as above


JUSTIFYING (usually with Identifying or Describing)

Describe and justify 4 methods of direct selling that could be used by an organisation. (A different justification must be used to support each description but do not use any disadvantages).

Command Words: Describe; JustifyThere are 2 parts to this question:1 Describing methods of direct selling (not just identifying them2 Justifying why you would use the methods of direct sellingHere you will get some marks for describing and some for justifying

Describing JustifyingPersonal sellingproducts are sold by experienced sales personnel

Direct contact can be made to the retailer or consumer encouraging salesCan be tailor-made to customer requirements therefore customer more likely to buyDemonstrations of the product or service can be shown which may persuade an uncertain customer

Mail order goods sold via catalogues

Offers credit facilities therefore customer can spread paymentsNo need for High Street stores which reduces costs to the organiation

Internet selling making use of websites to sell products

• Consumers can order online from offices or homes meaning 24/7 sales for the organisation• Consumers can order online from offices or homes which means they are relaxed when browsing and may order more than if they were in a shop• Is available worldwide allowing access to a far wider market than a shop front, resulting in more customers

Specialist magazines used to describe and sell specialised products or services

Customers who are sent or purchase the magazine are directly interested and will buyConsumers can phone in orders or speak to specialists gaining personal advice which can persuade them to purchase


Organisations use various forms of advertising media to bring their products to the attention of consumers. Describe and justify different forms of advertising media)

Command Words: Describe; Justify

There are 2 parts to this question:1 Describing forms of advertising media (not just identifying them)2 Justifying why you would use the form of advertising mediaHere you will get some marks for describing and some for justifying

Describing JustifyingTelevisionLarge audiences can be targetedProducts can appear appealing High profile can be maintained with regular advertising

allows it to cover all market segments which will attract more customerswhich will keep the product in the consumer’s mind encouraging impulse buys

Newspapers/Magazines National or local exposure can be obtainedTechnical information can be given to customers

Customers can refer back to the advert

Large national circulations

necessary for some products or situations such as high specification cars as a picture can be photoshopped to improve the lookallowing consumers to keep the advert which allows them to refer to it constantly and reminds them that the product existsallow for a large exposure of the product or service over wide geographical locations at a relatively inexpensive cost compared to TV

Radio Cheaper than televisionlisteners tend not to change channelsParticular radio shows

therefore saves the organisation’s costs captive audience allow for specific market segments to betargeted which means money is not wasted advertising to the masses

Billboards/Postersexcellent visual impact frequently seen

will last in the consumer’s mind and remind them of the productwill enhance the impact

Internet Websites use of links easy to change adverts

allow exact markets to be targeted which should increase the effectiveness of the advert allows for them to be constantly changed quite cheaply


Describe and justify 3 sources of finance that could be used to expand a business.

Describing JustifyingGovernment GrantFunds given to an organisation for a particular purpose – ie – for training young people; unemployed people or locating in an area of special need

does not need to be paid back if criteria for giving grant is carried out Can be fairly large – and may help provide training from which the firm gets benefit

Bank loanFunds borrowed from a bank usually over a lengthy period ie 6 months to 15/20 years – it may or may not be secured on particular assets of a business. In limited companies directors may have to be guarantors for the loan – ie if the firm is wound up – directors have to repay the loan personally.

paid back over a number of years with interest Can be fairly easily obtained – if business has good ideas supported by a well-researched business plan can supply large amounts of funds for growth – may finance building of new factory/equipment etc

Share issues shares are sold to raise finance either privately or publicly on stock market

can raise large amounts of finance that does not need to be paid back – esp if PLCReturns are only paid if the business is successful and making (high) profits therefore capital is gained without an immediate payback required

Venture CapitalistLike the Dragons on Dragons DenMoney given in exchange for shares usually – ie the business is a Limited Company which minimises risk of investors/DragonsThe investors may specialise in your line of business – ie manufacturing; IT etc

Can raise finance for risky ventures which are unlikely to obtain finance through normal avenuesNo return has to be paid unless business is successful

DebentureThis is a loan of funds but the lenders are issued a certificate.

Same as Bank Loan, thenThe “loan” may be sold to more than one lender which will spread their riskYou may be able to raise the finance from many sources whereas one bank may not be willing to lend all this money

Retained ProfitsThese are the profits the business has made over many years – which have not been paid to the owners as Dividends/Drawings

No return is paid on these – ie no interest – thus this is a cheaper source of finance than some of the others

Sale of assetsThis is where unwanted/unused assets in the firm are sold off for cash

You get some benefit out of the unproductive assets rather than letting them rust awayThere may be no charges on selling the assets – although you may have to advertise


EXPLAINING

Explain the effects that poor employee relations could have on an organisation.

Command Word: ExplainWhat are you explaining: The Effects or Impact.There are 2 parts to this type of question1 Identify what happens when there is “poor employee relations”; and2 The effect/impact on the organisation

What Happens Effect on OrganisationDe-motivated workforce which will result in ….

Increased staff turnover costing the organisation lack of continuity/more money for recruitmentIncreased staff absenteeism leading to lower productivityImpact on the quality of output leading to poor customer service/loss of customLess co-operation of staff during periods of change could make it harder to introduce new policies or procedures

Increased industrial action may result in ….. Reduced productivity which impacts on customer sales /has a long-lasting effects on sales

Poor image of the organisation might mean potential customers and investors go elsewhere


Some organisations still sell their original product a number of years after it was first launched. Explain how extension strategies can prolong the life of a product.

Command Word: ExplainWhat are you explaining: how the life of the product can be extendedThere are 2 parts to this question:

1 “extension strategies” should be described briefly to show you know what it: Think: 4Ps2 The Reasons why... use because

Description of Extension Strategy ExplanationIncreased advertising or persuasive advertising techniques Use promotional techniques to stimulate demand

will increase awareness, might mean consumers may purchase more of the product or service

Reduce the price to increase sales therefore people will buy more frequently/in larger volumethis might result in changing the market for the product

Re-launch the product: Alter the products packaging; • Change the products name; Find a new use for the product; Develop a range of the same product in different sizes or shapes

This might result in the product appealing to different market segments

Explain the factors that would affect the choice of production method used.

Command Word: ExplainWhat are you explaining: the reasonsThere are 2 parts to this question:

1 “factors” should be described briefly to show you know what it is 2 The Reasons why... use because

Description of Factors which affect choice of production method

Explanation

The skills of the workforce where low skilled labour is employed, a mechanised process may prove more effective

The finance that the organisation has available The size of the business

The more finance available then the more the firm will be able to afford large scale mass production equipment – mass production usually requires a whole factory for one product.

technology available Advance technology is now used to run/control the mechanisation process to ensure consistent quality for each of the thousands of products

The actual product being made Is the product to be a one-off or a one of


many? Custom-made/bespoke items require job production – school, bridge etc – but batch production allows some degree of being bespoke using mass production techniques – especially when CAD/CAM technologies are available

The number of the product If the market is huge then mass productionStandard of quality Quality man mean hand-made couture

clothing – which would be job production – ie one-off high quality items – especially the designQuality man mean consistently good quality of exactly the same items – mass/batch production

Explain possible effects that prolonged industrial action could have on an organisation.

Command Word: ExplainWhat are you explaining: the reasonsThere are 2 parts to this question:

1 “industrial action” should be described briefly to show you know what it 2 The Reasons why... use because

Effect of Prolonged Industrial Action ExplanationLoss in production will lead to possible shortages in stock for

customersLoss in sales revenue may lead to liquidationLong term loss of customers may now shop at competitors

May result in redundancies.Image of organisation/Damage to long term reputation of organisation

is tarnished

Share price can fall May be difficult to raise finance for future business opportunities

Facilitates change Improves working practices

Explain the role of the finance department in an organisation.

Command Word: ExplainThere are 2 parts to this question:

1 “Role of Finance Department” should be identified – ie what does it do2 The Reasons why... use because

What does it do Why does it do thatControl costs Because it will help it be more profitableMonitor cash flow Because it will help it take corrective action if

any problems arise to ensure proper liquidity


Plan for the future by analysing past and future trends the department will hopefully make decisions which will improve the organisation’s efficiency

Monitor performance – use the final accounts

to analyse how the organisation has performed and help improve any areas of weakness identified

Make decisions the department will make use of the information it has to plan budgets and make financial decisions, this should help an organisation’s performance and profitability


Many companies are now classed as multinationals. Explain the advantages and disadvantages of operating as a multinational.

There are 2 parts to this question:1 “Advantage/Disadvantage” should be identified – mainly TO management/organisation

but perhaps employees too 2 The Reasons why it is an advantage or disadvantage..

What is the advantage or disadvantage Why is it an advantage or disadvantageAdvantages Explanation given grants from governments to locate in that country

will not require to be paid back improving their financial position

will become large may result in them being safer from takeovers meaning an increase in market share and sales

advantage of economies of scale as they will be purchasing in bulk

should increase their overall profits

employ cheaper staff as they can locate in areas of lower wages

reduce unit costs of products

avoid restrictions on imports which avoids expensive import costs

will result in greater profitability

DisadvantagesLegislation may be different in other countries Legislation may exist on how a product/service is marketed

requiring adaptions to normal working practices

Cultural differences - have to be sensitive to different countries cultures

can lead to difficulties with other Governments and locals/can affect reputation

Different languages which means they need to employ translators/have document translated

may mean that organisations have to employ specialist linguists to work with the organisation


Explain the advantages to an organisation of having a strong corporate culture

What is the advantage or disadvantage Why is it an advantage or disadvantageAdvantagesImproved customer satisfaction and loyalty consumers associate with that organisation

due to brand/logos, etcsingle corporate identity is given to customers

who will thenassociate with that organisation

organisation can be easily recognised anywhere in the world

will allow customers to feel comfortable with products/services wherever they are

Increased staff motivation as they can associate with the organisationStaff can move between branches/departments

aware of the practices and policies

Staff will form an identity with the organis result in reduced absences or lower staff turnover

DisadvatageTried to be positive in this question

COMPARECompare the objectives of a private sector organisation with those of a public sector organisation)

Command Word: CompareThis means look at similarities and differencesYou must compare DIFFERENCES directly: use “whereas” if done in one sentenceuse: “however”, “on the other hand” – if done with 2 sentences

Private Publicfocus on profit maximisation

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require to operate within a specific budget

on sales maximisationIncrease market share

will focus on provision of a specific product or service

will be responsive to shareholders’ opinions

will have local or national government priorities and objectives

To expand globally operate on a local or national basis

Then:You must compare SIMILARITIES:Both will look to provide a quality serviceBoth will look to be socially responsibleBoth will try to be as efficient as possible

DISTINGUISH©KINROSS HIGH SCHOOL BUSINESS MANAGEMENT PAGE 15

Like COMPARE but only looking at differences

Distinguish between delayering and downsizing.

Command Word: Distinguish - This means look at differences only

Delayering Downsizinginvolves removing a whole level of management to flatten an organisation’s structure

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involves closing specific areas of the organisation to cut costs.

Purpose: to reduce the lines of communication between top and bottom levels:

Purpose: to remove a particular function that may be outsourced or production line closed

Cost: reduces the wages of management

Cost: Wages of all levels are reduced in the area that has been closed

Span of Control: results in wider spans of control so that managers are dealing with more people

Span of Control: not affected directly

EfficiencyCompetitiveness.Empowerment

DESCRIBINGDescribe the role of the Human Resource department in employee relations.

Hr must be linked with employee relationsIdentification DescribingRecognition of trade unions works councils ACAS

Trade Unions will help with:Written) procedures for dealing with staff complaints(Written) terms and conditions for all staffMake use of worker directors Work with and take part in collective bargaining processTake part in conciliation processTake part in arbitration process

The role of appraisal Ensure employees are aware of the goals and objectives of the organisation and have the skill to help meet these

Describe the factors that would result in a quality decision being made.)Identification DescribingManagers that have the ability and experience

to make good decisions from past experience using up-to-date knowledge

Managers who are properly trained

have skills in their functional area; supported with good ICT skills or communication/negotiating skills

The quality of the information available on which to base the decision (max 1 for any characteristic of information)

Use of decision-making models

accept any stage(s) but must be qualified asto how it makes a quality decision

Motivation of staff to properly implement the decision


FinanceTechnology

Describe the different interests 5 stakeholders may have in an organisation.)Identification DescribingCustomers are interested in the best price for high quality productsEmployees are interested in job security, rate of pay,Managers are interested in future promotion prospect, the strategic and tactical

decision being madeSuppliers are interested in receiving payment for supplies on time, and future

orders from a businessBanks are interested in the stability of the organisation – so that

loans/overdrafts can be repaid in the futureLocal community are interested in the social responsibility of the organisationOwners/shareholders are interested in the profits that the organisation makes so that they get

dividends; or can sell shares on stock exchange at a high priceGovernment interested in the firm complying with laws and paying taxes


Describe the main features of a matrix structure.Identification DescribingReason Normally set up to carry out a specific project

Structure Will consist of different specialists from functional areasEach team will have a project leader

Benefits Can be motivational to the staff concernedIs a good method of solving complex problemsGives staff increased experience in different situations

Problems Is a relatively costly structure if many different teams are requiredCan be difficult to co-ordinate staff from different areasEach staff can have two managers, the project manager and their own functional manager which can cause confusion and conflict

Describe 5 factors an organisation might take into account before choosing a supplier of raw materials.Identification DescribingCost/Price Is the price competitive with rivals/best/value

Do they offer any discounts for bulk buyingDo they offer credit payment terms or do they demand cash up front – this will have an impact on cash flow

Quality Do they supply appropriate quality raw materials – lower quality may result in more material wasted

Delivery/Deadlines Will they deliver on time and meet deadlines Can they supply the quantity needed

Reliability the supplier a reliable business – will the business continue into the futureLocation Is the location of the supplier close – social responsibility may result in

sourcing local materials

Describe the main characteristics of high quality information. Identification DescribingTimely information must be available when needed and be up-to-dateObjective should be free from biasAccurate the information must be correctAppropriate the information should be for the purpose requiredAvailable should be easily obtainedComplete nothing should be missingConcise should be short and to the pointCost effective value gained from information must be greater than the cost of obtaining

it

Describe the factors an organisation would take into account before choosing a channel of distribution.)Identification DescribingThe product being sold if the product is flowers it needs to be a fast method with appropriate facility

to transport flowersfinance available within the organisation

is limited finance available then this will affect the choice of channels eg air is normally more expensive than sea but it is much quicker

The image of the product the image is of a high quality productthis will affect the channel that the organisation chooses

reliability of the other Expensive items may need more careful handling and this will help you chose


companies in the chain the methodDurability Durable goods may shipped from one country to another in bulk carriers over

long distances whereas flowers need to be transported much more quickly


word - kinross high school · web viewdistinguish between delayering and downsizing. command...

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