Business Studies Grade 11 March Test 2017 Paper & Memo

f j Downloaded from hlayiso.com KZN DEPARTMENT OF EDUCATION GREENBURY SECONDARY SCHOOL FIRST QUARTERLY TEST- 2017 BUSINESS STUDIES- GRADE 11 EXAMINERS: S.DHOODHANATH/R.NAIDOO/R.GOVENDER MODERATORS: S.DHOODHANATH/R.NAIDOO/R.GOVENDER DATE: 23/03/17 | DURATION: 1 HOUR MARKS: 100 NAME/SURNAME GRADE/DIV: INSTRUCTIONS TO LEARNERS: 1. This paper consists of __4__ printed pages There are 3 sections: e SECTION A: Compulsory ° SECTION B: Consists of 3 questions. CHOOSE ANY TWO QUESTIONS ® SECTION C: Essay. Consists of 2 questions. CHOOSE ANY ONE QUESTION, Use the special answer sheet for SECTION A , Write neatly‘and legibly Start each question on a new page oe we SECTION A: COMPULSORY QUESTION ONE: (20 MARKS) 1,1, SELECT A TERM FOR EACH OF THE FOLLOWING DEFINITIONS BY CHOOSING THE CORRECT WORD FROM THE TEXTBOX BELOW: REDUNDANCY ECONOMIC DILEMMA SCARCITY MERGER FRANCHISEE DUMPING _ OBSELTE 1.1.1. The person who buys the franchise. 1.1.2, When two or more companies combine to forma new company. 1.1.3. A lack of natural resources. 1.1.4, The problem of balancing the unlimited needs and wants of society with limited resources available to satisfy them. 1.1.5. A product or process is no longer required and therefore does not have any use. (5x2=10) 1.2, STATE WHETHER THE FOLLOWING STATEMENTS ARE TRUE OR FALSE. IF FALSE CORRECT THE UNDERLINED WORD /S TO MAKE IT TRUE. 1.2.1, Demographics is issues relating to a group and individuals cutture and social background. 1.2.2. When an enterprise sells goods and services to the same sector or to other sectors, it is known as forward links. 1.2.3. The tertiary sector converts raw materials into finished goods. 1.2.4, Hedging is where you try to invest your money in such a way that its value grows at a faster rate than inflation. 1.2.5, The chamber of commerce is a local group that settles disputes, keeps a blacklist for members to reference and promote trade in the area. (5x2=10) P.T.O/SECTION B...

Downloaded from hlayiso.com SECTION B ANSWER ANY TWO QUESTIONS FROM THIS SECTION QUESTION TWO :BUSINESS ENVIRONMENTS 2.1 Read the case study below and answer the questions that follow Noni Mokwase is a potato farmer with a contract to McCain. Noni’s business is situated in the Magaliesberg area in the Wesrand, where farming is the main business activity. She experiences a high rate of absenteeism. Productivity has declined due to employees suffering from HIV/AIDS related illnesses. The company is expected to comply with the minimum wage requirements of the government. Noni’s farm business is situated next to Shimmy’s potato farm. Both farms buy expensive fertilizer from Magalies CC. Maintenance of farming equipment is expensive. Sharp increases in fuel prices have forced an increase in delivery expenses to McCain. 2.1.1 Noni’s business falls under the primary sector. Define the primary sector (1) 2.1.2 Identify, from the case study above, one challenge from each of the business environments (micro; market; macro) (3) 2.1.3 Suggest THREE(3) ways in which Noni’s business can deal with the challenges identified in 2.1.2. (6) 2.2 State the PESTLE elements illustrated in each scenario below 2.2.1 Businesses are promoting online trading to reduce paperwork. 2.2.2 The government introduced the affirmative action policy to address past imbalances. 2.2.3 The introduction of the Consumer Protection Act eliminates consumer exploitation by businesses. 2.2.4 The South African Reserve Bank decided to keep the repo rate unchanged. 2.2.5 Governmental incentives given to companies that sponsor nature conservation programmes. (10) TOTAL = 20 QUESTION THREE :BUSINESS VENTURES 3.1 Study the following advertisement and then answer the questions that follow FINANCIAL MANAGER REQUIREDFOR FRANCHISOR =” Retail group requires well-spoken financial manager. Candidates should have relevant FET qualification and a proven track record. Fax a 4-page CV to; (041) 555 1234 i or email: accounts@diamondgroup.co.za : P.T.O/..0.3.44 Page 2

Downloaded from hlayiso.com 3.1.1 Tabulate the difference between a franchisor and a franchisee? (4) 3.1.2 Discuss THREE(3) contractual obligations that the financial manager will have to deal with in the franchise agreement (6) 3.2 Copy and complete the table below ' PARTNERSHIP CLOSE CORPORATION No. of owners Name ending Establishing documents Liability Continuity (10) TOTAL = 20 QUESTION FOUR : MISCELLANEOUS 4.1 Read the case study and answer the questions that follow Southfork Ranch is a cattle farm near Ifafa. Southfork Ranch recently opened the Ewings Meat Butchery which is popular for manufacturing sausages and biltong. John Ross Stores sells a wide range of veterinary products for use on Southfork Ranch, as well as on other cattle farms across the country. Social issues may be impacting business. Employees feel that its time to join a trade union. BUSINESS ENVIRONMENTS 4.1.1 Identify the business sectors which the various business enterprises mentioned above belong to. Use the template below to structure your answer. (3) BUSINESS SECTOR SOUTHFORK RANCH EWINGS MEAT BUTCHERY JOHN ROSS STORES BUSINESS VENTURES 4.1.2 John Ross Stores has decided to use another company to transport their products. 4.1.2.1 Identify the term used for this avenue of business. (1) 4.1.2.2 State ONE(1) advantage of this avenue of business. ; (2) BUSINESS ROLES 4.1.3 Explain how a ‘Lack of skills’ may affect the : . 4.1.3.1 Operations of a business : (2) 4.1.3.2 Productivity of a business (2) 4.1.4 Discuss TWO(2) functions of a Trade Union (4) 4.1.5 John Ross Stores has come up with a new invention with regards to the health of the animals. They are afraid that someone will steal their idea. 4.1.5.1 List and explain THREE(3) solutions to piracy. (6) TOTAL = 20 P.T.O/...SECTION C Page 3

Downloaded from hlayiso.com SECTION C [ANSWER ANY 1 ESSAY] QUESTION 5 — [BUSINESS ENVIRONMENTS] Texan Manufacturers has been in operation for the past 10 years. Over the past year the owner, Dillon, has noticed the following challenges: VV VVV WV His workers have become very difficult Competition on the market has increased. Constant industrial action by trade unions Shortage of supply of raw materials Lack of management skills from his manager. A change in consumers tastes and habits You are required to assist Dillon by doing the following: List and explain Porter’s Five Forces. Identify THREE (3) Micro Environment challenges from the above scenario, and discuss the impact each challenge, would have on Dillon’s business. . Identify THREE (3) Market Environment challenges from the above scenario, and discuss the impact that each challenge, would have on Dillon’s business. Explain how Dillon can solve the problem/challenge of: > Difficult workers » Lack of management skills > Shortage of supply {40 marks] QUESTION 6 — [BUSINESS VENTURES] Jeremiah wants to start a company. One of his friend’s suggested that he should consider starting a public company. In order for Jeremiah to decide on a Public company, he requires the following information: Identify the characteristics of a Public Company Explain the similarities of a Private and Public company Discuss the differences between a Private and Public Company Discuss the advantages and disadvantages of a Public Company [40 marks] ~ ToTALaRKs:10002«CO”~"C"”~C~CSC<CS ST ALL THE BEST!!! Page 4 of GRHENBURY SECONDARY SCHOOL DEPARTMENT OF COMMERCE ee

Downloaded from hlayiso.com KZN DEPARTMENT OF EDUCATION GREENBURY SECONDARY SCHOOL FIRST QUARTERLY TEST- 2017 BUSINESS STUDIES- GRADE 11 BUSINESS STUDIES- GRADE 11 MEMORANDUM EXAMINERS: S.DHOODHANATH/R.NAIDOO/R.GOVENDER MODERATORS: S.DHOODHANATH/R.NAIDOO/R.GOVENDER DATE: 23/03/17 | DURATION: 1 HOUR [ MARKS: 100 FOR EDUCATORS USE ONLY: QUESTION 1 | QUESTION 2 QUESTION 3_| QUESTION 4 | QUESTIONS QUESTION 6 TOTAL LEARNERS MARK SECTION A: COMPULSORY QUESTION ONE: (20 MARKS) 1.1, PROVIDE A TERM FOR EACH OF THE FOLLOWING DEFINITIONS BY CHOOSING THE CORRECT WORD FROM THE TEXTBOX BELOW: 1.4.1, FRANCHISEE // 1.1.2.MERGER J4/ 1.1.3, scarcity V/ 1.1.4. ECONOMIC DILEMMA W/ 1.1.5. OBSELETE M/ 10 1.2.STATE WHETHER THE FOLLOWING STATEMENTS ARE TRUE OR FALSE. IF FALSE CORRECT THE UNDERLINED WORD /S TO MAKE IT TRUE. VA 1.2.1, FALSE’ PHYSCOGRAPHICS / 1.2.2. TRUE A 1.2.3. raise,’ MARY S 1.2.4. TRUE uf 1.2.5.TRuE </ 10 20

Downloaded from hlayiso.com SECTION B QUESTION TWO wale 2.1.1 Primary Sector. ~ Response. fer ‘pre ertraction Of revo wate rm 2.1.2 ° frown “the. arene MICRO - High absenteeism; Productivity has declined MARKET - Shimmy’s potato farm, a competitor TOTAL = 20 Page 4 of 5 * MACRO - Increase in fuel prices; complying with minimum wage requirements 2B 2.1.3 STRATEGIES 1. Give verbal warnings = -W 2. Provide medical care for employees W 3, Improve product quality v/ 4. Aggressive advertising 5. Reduce the amount of deliveries done 3X2 = & 2.2 2.2.1 TECHNOLOGICAL W 2.2.2 POLITICAL v/ 2.2.3 LEGAL WW 2.2.4 ECONOMIC W 2.2.5 ENVIRONMENTAL v//SieciAL ig TOTAL = 20 QUESTION THREE 3.1.1 FRANCHISOR FRANCHISEE * The person who sells the right to trade in * The person who purchases the right to use the products or services. wW the idea. 3.1.2 CONTRACTUAL OBLIGATIONS * The obligations of the franchisor and franchisee W ¢ The training and operational support the franchisor will provide W ¢ Initial duration of the franchise WwW © Total investment ¢ What royalties and services fees will be payed ¢ Tax requirements ¢ Advertising policies & * Settlement of disputs - 3.2 PARTNERSHIP “CLOSE CORPORATION No. of owners 2- unlimited v¥ [1-10 v Name ending | No name restriction ¥_ | Ends with CC v Establishing documents Partnership Agreement v_| Founding Statement (Moz Liability Unlimited v_| Limited vv Continuity Lacks continuity [Limited v | Has continuity [Unhwbey eo

Downloaded from hlayiso.com QUESTION FOUR 4.1 4.1.1 BUSINESS SECTOR SOUTHFORK RANCH Primary sector v EWINGS MEAT BUTCHERY Secondary sector v 3 JOHN ROSS STORES Tertiary sector Vv ae 4.1.2 4.1.2.1 Outsourcing Vv L 4.1.2.2 ADVANTAGES OF OUTSOURCING J ¢ Allows you to focus’on important business activities ¢ Staffing flexibility is possible 2 4.1.3 4.4.3.1 ® 4.13.2 Provides continuity during periods of high staff turnover orenanie OF A BUSINESS ¥ Slows dowk the development of new products, technologies and employees. Less competitive. 2. PRODUCTIVITY OFA BUSINESS WA Makes employees slower, less responsible, less capable of making decisions and less productive. 2 we 4.14 FUNCTIONS OF A TRADE UNION 4.1.5 To enter into collective bargaining agreements To advise’emp|oyers on human resoutce policies To formulate&’and represent Workers rights at statutory level To promote greater participatiok of workers in management deCisions To organist’ ikes and other industMal action To represen¥workers in disputes and grievances 10 2.4 SOLUTIONS TO PIRACY COPYRIGHT ¥ v Protects IP so that artistic creations and written, recorded or filmed ideas cannot be copied or pirated. Vv PATENT V v A certificate that verifies that an invention is new or novel and is protected from piracy. Vv * TRADEMARK / v Isa sign, logo or graphic representation that is used to distinguish one brand from another. / {o TOTAL = 20 Page 5 of 5

Downloaded from hlayiso.com ; SECTION C QUESTION 5 ~ [BUSINESS ENVIRONMENT INTRODUCTION The Micro environment of the business is known has the internal business environment and therefore, the business has full control. V The Market environment exists directly outside of the business and therefore, the business has partial control over the components. V In order to be successful it is important for a business to identify challenges of these environments and find ways to overcome and adapt to these challenges. (max. 2) 6.4 PORTER’S FIVE FORCES ; FORCES . EXPLANATION POWER OF SUPPLIERSV Ability of suppliers to influence potential buyers. V Tend to drive up prices, V POWER OF BUYERSV Ability of buyers of the product/services in an industry to influence suppliers. V Tend to drive down prices, V THREAT OF NEW ENTRYV The extent to which a new competitor can enter the market. V THREAT OF SUBSTITUTIONV | The extent to which alternative products/services may diminish the for existing products, V COMPETITIVE RIVALRYV The competitive relationship between dominant companies in the industry. Businesses selling the same/similar goods and services. V Identification of forces (1x5 = 5) Explanation (1x5=5) Maximum (10) 6,2 MICRO ENVIRONMENT CHALLENGES 6.2.1 HIS WORKERS HAVE BECOME VERY DIFFICULT/DIFFICULT WORKERS/EMPLOVEESV (max. 1) Difficult workers tend to démoralizeV co-workers, ¥ They will create tensionV in the workplace Vand hamper productivity. V (ax. 4) ACCEPT ANY OTHER RELEVANT ANSWER/S 6.2.2 CONSTANT INDUSTRIAL ACTION BY TRADE UNIONS/UNIONS/STRIKEV (max. 1) Corrupt union officialsV could influence workers negativelyv into taking part in strikesV and other industrial actions. V This will leadv to loss in productionv, tensionv and stressv in the workplace. Strikes Vnot only cost the business moneyV, but also affectV the workers negatively. V (max. 4) ACCEPT ANY OTHER RELEVANT ANSWER/S 6.2.3. LACK OF MANAGEMENT SKILLS FROM HIS MANAGER/LACK OF MANAGEMENT SKILLSV (max. 1) This usually is the reasonv why many businesses close down, V This also leadsV to a business having no sensevV of direction Vand workers often become demoralizedV because of poor management. V Business procedures and processes Vcould be inefficient. V (max, 4) ACCEPT ANY OTHER RELEVANT ANSWER/S

| Downloaded from hlayiso.com 6.3 MARKET ENVIRONMENT CHALLENGES 6.3.1 6.3.2 6.3.3 6.4 COMPETITION ON THE MARKET HAS INCREASED/COMPETITIONV (max. 1) They are businessesv that sell the same or similar goods and services. V There will be direct competitionV when goods and services are identical and similar. V They try to captureV the same target market Vand market share Vas the business. They lower prices Vand have promotional salesv to attract customers. V (max. 4) ACCEPT ANY OTHER RELEVANT ANSWER/S SHORTAGE OF SUPPLY OF RAW MATERIALS/SHORTAGE OF SUPPLYV (max. 1) Suppliers provide a businessV with goods and services Vand raw materialsV so that the business will have the means to trade. V Suppliers have the tendency to drive up/increase pricesV, especially if they are the sole provider of a particular raw material. V if suppliers are unable to supply raw materialsV on timev, it will hamperv the production processV and décrease business profits. V (max. 4) ACCEPT ANY OTHER RELEVANT ANSWER/S A CHANGE IN CONSUMERS TASTES AND HABITS/CHANGE IN.CONSUMER TASTES AND HABITSV (max. 1) NEGATIVE IMPACT This will cause businesses to incur more expensesvV, has a business will have to develop new products¥ that consumers would want to buy. V This could result in the business having obsolete productsV, which could lead to loses. V POSITIVE IMPACT Such as the rise of new businesses. V ExpansionV of current businesses. V (max. 4) ACCEPT ANY OTHER RELEVANT ANSWER/S SOLUTIONS TO CHALLENGES 6.4.1 6.4.2 DIFFICULT WORKERS These peoplev have to be dealt with by the book. V Issue verbal warningsV, letters of warning Vand disciplinary hearings. V Have team building activities/sessionsV to address certain issues. V (max. 2) ACCEPT ANY OTHER RELEVANT ANSWER/S LACK OF MANAGEMENT SKILLS Send managersv for skills development training to build management skills. V When choosing managers, check experienceV and skills before recruitment and selection. V Have a meetingV with the manager and explain to him/her the business vision/missionV, and explain all policies and proceduresVthat need to be followed in the business. V (max. 2) ACCEPT ANY OTHER RELEVANT ANSWER/S

Downloaded from hlayiso.com mo 6.4.3 SHORTAGE OF SUPPLY Business should look for new suppliersV on the market, so that they can buy raw materialsV at reasonable prices. V Be in constant contactV with suppliersV to ensure that the correct quantity of goodsV are ordered and delivered on timeV, so that production is not delayed. V (max. 2} ACCEPT ANY OTHER RELEVANT ANSWER/S Ci USION If a business is able to implement these solutions to the above challenges, this will allow for the business to be successful and sustainable in the future. V Being able to apply Porter’s forces will help a business eliminate its competition on the market and capture the most of the market share. V (max. 2) BREAKDOWN OF MARK ALLOCATION Details _ Maximum Total Introduction 2 Porter’s forces 10 Challenges and impact of difficult workers/employees 5 Challenges and impact of trade unions 5 Challenges and impact of lack of management 5 Challenges and irnpact of competition 5 Max 32 Challenges and impact of shortage of supply 5 Challenges and impact of changes in consumer taste and habits 5 Solutions to difficult workers 2 Solutions to lack of management skills 2 Solutions to shortage of supply 2 Conclusion 2 INSIGHT Layout 2 Analysis, interpretation 2 Synthesis 2: | Originality/Examples 2 TOTAL MARKS j 40 LASO - FOR EACH COMPONENT: * Allocate 2 marks if all requirements are met. ¢ Allocate 1 mark if some requirements are met. * Allocate 0 marks where requirements are not met at all.

Downloaded from hlayiso.com QUESTION 6 — [BUSINESS VENTURES 6.1 INTRODUCTION When considering a form of ownership some of the aspects that one should look at is, continuity of the business, liability, cost to establish, taxation etc. V Companies are generally able to generate a lot of capital, and it is therefore for Jeremiah to consider the advantages and disadvantages of the form of ownership he is deciding to use. V (max. 2) 6.2 CHARACTERISTICS OF A PUBLIC COMPANY The name of the company must end with “Ltd”. VV The liabilities are limited in a public company. This means that shareholders will only lose their initial capital contributed in the event of a loss. VW A public company has continuity. WV Must have the memorandum of incorporation and prospectus. VV This company invites the public to buy shares. VV Able to raise a lot of capital. VV Financial statements must be publishedVV Requirés 3. or more directorsVV The minimum number of shareholders is 1 and the maximum is unlimited. VV It is a separate legal entity. VV Company pays taxes, VV (max. 10) ACCEPT ANY OTHER RELEVANT CHARACTERISTICS 6.3 SIMILARITIES BETWEEN A PRIVATE AND PUBLIC COMPANY Both companiesvV have continuityV, if a shareholder diesV company still functionsV Both companies¥V have limited tiabilityV, shareholders lose Vonly initial capital contributed. V Both companiesV have name restrictionsV Is has legal entity/legal statusv. if the company is sued, the shareholders cannot be sued. V Capitalv is easily raised, invite private individuals and public to buy sharesV Managed Vby directors, 1 or more in private, and 3 and more in public ShareholdersV are owners of the companyV RequiresV the memorandum of incorporationv and in public prospectus as well¥ Must be registeredV with the Companies and Intellectual Property Commission (CIPC) V Company¥ pays taxes at a fixed rateV (max. 10) ACCEPT ANY OTHER RELEVANT SIMILARITIES

Downloaded from hlayiso.com . 6.4 ___ DIFFERENCES BETWEEN A PRIVATE AND PUBLIC COMPANY PRIVATE COMPANY PUBLIC COMPANY Name must end with (Pty)Ltdv Name must end with LtdV¥ Requires 1 or more directorsV Requires 3 or more directorsV Requires memorandum of incorporationV Requires memorandum of incorporation and ; prospectusV ; Doés not invite public to buy sharesV Invites public to buy sharesV Financial staternents do not have to be publishedV Financial statements have to be publishedV Shares are not freely transferrableV Shares are freely transferrablev ACCEPT ANY OTHER RELEVANT DIFFERENCES Mark any 5 differences Differences must complement one another, if not no marks awarded. (max. 10) 6.5.1 ADVANTAGES OF A PUBLIC COMPANY Limited liability applies to the companyV. This means that if the companyV becomes insolventV each shareholder loses only the amount that he/she paid for the shares they bought. V Company has continuityV. The death or retirementv of a shareholder Vdoesn’t terminate the company. V It is easier to raise capital¥. Shares can be sold to the public. V Companies ActV makes provisionV for a rescue schemeV, forcing creditors to wait for the company to be fully operational before they apply for liquidation. V Shareholdersv can participate in the running of a company and at meetings. V It has legal statusV. If the company gets suedV, the shareholders cannot be sued and vice versa. V ACCEPT ANY OTHER RELEVANT ADVANTAGES (max. 8) 6.5.2__ DISADVANTAGES OF A PUBLIC COMPANY Companiesv have to comply Vwith many legal requirements Vwhen they are established and during the company’s lifetime, V The tax burdenvV may be greaterv than in the case of the other forms of ownership. ¥ There is little personal contact Vbetween shareholders and customers. ¥ Registration procedureV can be time consumingV and costly. V Directors Vdo not have a personal interest Vin the company, could lead to inadequate management. V Financial statementsv will have to be publishedV, which can sometimes work to the negativev of a public company. V (max. 8) ACCEPT ANY OTHER RELEVANT DISADVANTAGES CONCLUSION Based on the information supplied above, Jeremiah should be able to comfortably start a public company. V The prospects of expansion of the company is also very evident in the near future. Therefore, this form of ownership should be suited. V (max. 2)

' Downloaded from hlayiso.com BREAKDOWN OF MARK ALLOCATION Details Maximum Total Introduction ; 2 Characteristics of Public company 10 Similarities between Private and Public company 10 Differences between Private and Public company 10 Max 32 Advantages of a Public company 8 Disadvantages of a Public company 8 Conclusion 2 INSIGHT Layout 2 Analysis, interpretation 2 Synthesis 2 Originality/Examples 2 TOTAL MARKS 40 LASO - FOR EACH COMPONENT: e Allocate 2 marks if all requirements are met. e Allocate 1 mark if some requirements are met. e Allocate 0 marks where requirements are not met at all. . | | | | GREENBURY SECONDARY SCHOU: | DEPART VEN OF GOMNEREE

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