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Business Studies Easy to Score Marks

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31 MAIN TOPIC 4: BUSINESS OPERATIONS: 1 Section A (Short type questions) 2 QUESTION 1: REVISE A WIDE VARIETY OF THIS TYPE OF QUESTIONS FROM PREVIOUS QUESTION PAPERS. QUESTION 2: PARAGRAPH TYPE QUETIONS 2.1 Explain what is meant by: 2.1.1 Total client satisfaction (4) 2.1.2 Monitoring and evaluation of quality processes. (4) 2.2 Explain the impact of a total quality management system on small and large businesses with reference to continuous skills development. (12) SECTION C: ESSAY TYPE QUESTION QUESTION 3:INSTRUCTIONS FOR THIS EXERCISE Follow the format of an essay question and do the following: e Write a proper Introduction to fit the question asked. e Draw a mind map ( Planning Grid) to analyse the way you are going to answer your essay question. (Refer to p.12 for the planning grid) e Write a proper Conclusion to summarize your answer related to the question set and to fit the topic QUESTION 3 The human resource manager wants to appoint a new receptionist and has received various applications after advertising the post Explain the human resources procedures of selecting and interviewing that the HR manager can apply in order to identify the most suitable candidate. Discuss the legalities of the employment contract that both the employer and new employees should sign. Briefly outline the contents that should appear in the employment contract. BUSINESS STUDIES SUPPORT GUIDE FOR LEARNERS {HINTS AND PRACTICE QUESTIONS AND ANSWERS)

32 1. 2016 MEMO TO CORE QUESTIONS — REVISION GR 12 BUSINESS STUDIES MAIN TOPIC 1: BUSINESS ENVIRONMENTS SECTION B: CASE STUDY AND PARAGRAPH QUESTIONS QUESTION 2 2.1.1 Identify FOUR challenges that and classify them according to the Three business environments. Loan — interest increased with 2 % macro Petrol price — increased with 66 cenwtlitre macro Recruitment of new financial manager — skills shortages micro Increase in running costs micro Competition — Sivu's transport services market increasing transportation costs macro Change to a new distributor micro Loss of customers due to high prices market (name and explain = 2, environment = 1) Any 4x 3= (12) 2.1.2 Identify the business sector in which CROCODILE TRANSPORT SERVICES operates. (2) Tertiary sector VV 2.1.3. Name TWO ways in which the petrol price can influence businesses. e Less profits « Loss of jobs e Find new distributors — to build new relationships « Makes products more expensive — increased praduction casts e Sales decrease e May lead to bankruptcy (any 2x2=4) 2.1.4 Extent to control the skills shortages in the financial industry. It is part of the micro environment — they have full control If they can't find a suitable candidate, appoint one that is not 100 % suitable and do some training. vv (2) BUSINESS STUDIES SUPPORT GUIDE FOR LEARNERS (HINTS AND PRACTICE QUESTIONS AND ANSWERS)

33 2.1.5 Discuss any two implications of EE on the business. « Business battle to find people with the necessary skills and experience. A constraint that the macro environment places on a business — buildings must be adapted to accommodate wheelchairs. Can be seen as a cost burden — procedures are time consuming. Training requirements have cost implications, but does add value. Deals are concluded because of EEA - mergers and acquisitions Time, effort and resources have to be spent to recruit and train people. Diversity in the workplace leads to creativity and innovative thinking. Any 2x2 = (4) 2.1.6 Provide them with a possible strategy to fill the vacancy. Advertising, Head-hunting,contact employment agencies, contact educational institutions and give bright students opportunities to become part of your business, or any relevant answer (2) 2.1.7 2.1.7.1 HELDERBERG TRANSPORT SERVICES is in competition with Sivu's Transport Services. THREAT vv 2.1.7.2 Some employees turn up late for work on a regular basis. WEAKNESS vV¥ 2.1.7.3 An increase in the price of petrol THREAT vv (6) 2.2.1 In the above they mentioned two of the seven pillars of the BBBEE. Explain the acronym BBBEE BROAD-BASED BLACK ECONOMIC EMPOWERMENTWY (2) Or: DEF: Creating opportunities for black owners (shareholders) and management participation. To facilitate the meaningful participation of black people in owning/managing a business. Any relevant answer (any 1 x 2 = 2) BUSINESS STUDIES SUPPORT GUIDE FOR LEARNERS (HINTS AND PRACTICE QUESTIONS AND ANSWERS)

34 Name the other FIVE pillars. e Equity Ownership — black ownership, shareholders, partners e Management — Black presentation on the Board of Directors e Employment Equity — Equal representation in all categories and levels of the workforce. e Skills development — Invest in Human resources and the training of Black people. Develop skills of black people e Enterprise development - e CSI—Invest money in communities and help with upliftment. 5x2 =(10) SECTION C - QUESTION 3 INSTRUCTIONS: Briefly explain the concepts human rights, inclusivity and environmental issues in the workplace and elaborate on criteria that businesses can evaluated with regard to these matters. INTRODUCTION: (May explain the concepts?????) HUMAN RIGHTS: Human rights are basic rights and freedoms to which all human beings are entitled. Human rights must be respected by all - employers, employees and businesses. INCLUSIVITY: Including all population groups. Discrimination is not allowed. ENVIRONMENTAL ISSUES Businesses use resources form the natural environment in their daily operations. HUMAN RIGHTS INCLUDE: e Tobe treated in a dignified manner Freedom of speech Fair remuneration (payment package) Be treated equally and fairly any 2 x 2 = 4 examples Practice your own religion Freedom of movement Security and safety Human rights are protected in the Bill of Rights, which is part of the Constitution.vV If a person is discriminating against employees in terms of age, race, gender, culture, religion, pregnancy, disability or political opinion, the business is violating that person's human rights. Trade unions help to protect the rights of employees VV BUSINESS STUDIES SUPPORT GUIDE FOR LEARNERS (HINTS AND PRACTICE QUESTIONS AND ANSWERS)

35 CONSUMER RIGHTS INCLUDE: e Right to information e Right to choose e Right to safety e Rights to healthy environment (mention consumer rights e Right to compensation arjd give 1 example) Vv e Right to be represented EMPLOYEE RIGHTS INCLUDE: e Right to fair payment e Right to fair treatment e Not to be discriminated against (mention employee e Right to be included in the decision-making rights and give process that has an influence on you. 1 example) vv INCLUSIVITY: spvemment enterprises prefer doing business with businésses that are BEE compliant. v Regulations ensure that the requirements of the different acts are complied with. vv The workforce must be representative of the population of the country.vV PURPOSE: © The right not to be discriminated against. - to address unfair discrimination To support woman and create opportunities in the workplace To ensure no discrimination against people with disabilities (physical challenged) To redress the imbalances of the past To address gender discrimination (any 2x2 =4) Complaints regarding inclusivity issues are handled by the HUMAN RIGHTS COMMISSION!!! In SA there is legislation to promote inclusivity: e Employment Equity Act / affirmative action (any2 x 2 = 4) e BBBEE Act e Skills Development Act HOW TO DEAL WITH DISCRIMINATION IN THE WORKPLACE e Inform the employees about their rights e Draw up policies and discuss it with employees (any 2/x 2 = 4) e Ensure mutual respect between employees and employ: 14 BUSINESS STUDIES SUPPORT GUIDE FOR LEARNERS (HINTS AND PRACTICE QUESTIONS AND ANSWERS)

36 ENVIRONMENTAL ISSUES: Businesses use resources form the natural environment in their daily operations WV This leads to exploitation of resources, causes pollution and global warming. vv Businesses generate a lot of commercial waste — so it is important ta protect our environment. vv (any 2x2=4) Businesses should develop policies to protect our environment: e Promote nature conservation e Ensure environmental sustainability e Find alternative sources of energy (windmilt — electricity) « Minimise pollution (any 2x2=4) Important: businesses must also comply with the laws and strategies of the government -Macro environment: legai environment CONCLUSION: Any relevant answer related to the topic not mentioned above vv Details Maximum Subtotal Total Introduction 2 Human rights: examples : explanation | Customer and employee rights Inclusivity: explanation : purpose : legislation : workplace dealing Environment: explanation : policies CONCLUSION Maximum 32 Layout Structure Analysis and Interpretation Syntheses Originality, Examples, current trends and developments 36 NHR HRD HRA HLR DE NM NIN] Ny Total | _ _ 40 BUSINESS STUDIES SUPPORT GUIDE FOR LEARNERS (HINTS AND PRACTICE QUESTIONS AND ANSWERS)

MAIN TOPIC 2: BUSINESS VENTURES (LEADERSHIP VS. MANAGERS) SECTION B Question 2 { Ordinary shares Preference shares | Founders shares ~~] Bonus shares Ordinary shares are sold to the public by companies listed on the JSEVV Shareholders of ordinary shares receives dividends after preference shareholders received their dividends Shareholders of ordinary shares have voting rights. vv \f a company is liquidated, ordinary shareholders share in proceeds after creditors and preference shareholders have been paid.vV Preference shares are sold to the public by companies listed on the JSEVV Preference shareholders receive dividends payments before ordinary shareholders vv Preference shareholders have no voting rightsv¥ if the company is liquidated , preference shareholders share in proceeds after creditors have been paid, but before ordinary shareholdersv¥ Founders shares are issued to the founders of acompanyv¥ Holders of founders shares will be the last to receive dividendsvV Bonus shares are a gift or a payment in the form of shares to shareholders. Bonus shares are not sold; shareholders are issued the shares without being required to pay for them.vV Bonus shares are compensation to shareholders when no dividend is declaredvV BUSINESS STUDIES SUPPORT GUIDE FOR LEARNERS (HINTS AND PRACTICE QUESTIONS AND ANSWERS) Max (12) 37

38 SECTION C QUESTION 3 Introduction e Good leaders are also good managers, as both can inspire/energise people and bring about change. ¥ e Leaders and managers can create opportunities and motivate people to be productive which lead to successful businesses. ¥ e Managers are also good leaders with excellent management skills. ¥ e Leadership theories guide leaders on how to address/manage certain situations. V e Any other relevant introduction related to management and leadership styles/theories. Max (2) 3.2 comparisons between leadership and management Leadership Management Influences human behaviour. vv e Guides human behaviour. Vv Communicates by means of e Communicates through management interaction/behaviour/vision/ values functions, e.g. line function. Vv charisma.vV e Innovates new ideas to increase e Administers plans/programs /tasks to productivity. vv reach targets. vv » Inspire staff to trust and support each e Controls systems and procedures ta another.vv get the job done.vV¥ Focuses on what and why.vV e Focuses on when and how.v¥ Dogs the right thingy © Does things right. VV Focuses on the tong term.vv¥ *® Focuses on short and medium eo _termvv e Leaders are born with natural e Aperson becomes a manager linstinctive leadership skills.vV because of the position in which he/she is appointed. VV e Guides /leads people to become active »* Manages the process of getting participants. VV things done/ exercises responsibility. e Leaders have power! influence e Managers have power because of because of his/ her knowledge/ skilis/ the position of authority into which intelligence. vv they are appointed. VV « Always trying to find more efficient e Enforce rules on subordinates / ways of completing tasks. VV ensure that tasks are completed.vv e Motivational inspirational approach.vV¥ ¢ Instructional approach.vV © people orientated..¥ e = Task orientated. vv «Lead by example/trustrespect.vv e Manage planning /arganising/leading and control.vv Sub max (4} Sub max (4) Note: 1. the comparison must be clear. 2. If the comparison is not clear. Then award a maximum of four (4) BUSINESS STUDIES SUPPORT GUIDE FOR LEARNERS (HINTS AND PRACTICE QUESTIONS AND ANSWERS)

BUSINESS STUDIES SUPPORT GUIDE FOR LEARNERS {HINTS AND PRACTICE QUESTIONS AND ANSWERS) 39

40 3.3. Leadership Styles: 3.3.1 Autocratic Positives Quick decisions can be taken without consulting /considering followers/ emptoyees.VV Work gets done in time/on schedule. VV Line of command/communication is clear as it is up-down/followers know exactly what to do.vv Direct supervision and strict control ensure high quality products/services. VV Provide strong leadership which makes new employees feel confident and safe.vv Works well in large companies where consultation with every employee is impractical.Vv Clear guidance can be given to low-skilled/inexperienced/new staff.v¥ Useful in a crisis/urgent situation, e.g. after an accident/meeting tight deadlines.Vvv¥ AND/OR Negatives Leaders and followers may become divided and may not agree on ways to solve problems.vV¥ Workers can be de -motivated as their opinions fideas are not considered.vV De-motivated workers impact negatively on productivity.VV New/creative/cost reducing ideas may not be used /implemented/never be considered.vV Followers may feel that they are not valued- cause high absenteeism and high employee turnover.VV Experienced and highly skilled workers will resist an autocratic !eadership style because it results in less growth, participation and creativity.VV Sub max (8) 3.3.2 Democratic Positives Leaders allow followers/employees to participate in the decision-making process. VV Staffs give a variety of ideas/inputs/feedback/viewpoints, before final decisions are made by leaders/ managers. VV Variety of ideas can lead to innovation/result in an increase in productivity.V¥¥ BUSINESS STUDIES SUPPORT GUIDE FOR LEARNERS (HINTS AND PRACTICE QUESTIONS AND ANSWERS)

41 Clear/two way communication ensures group commitment to final decisions. VV Authority is delegated which can motivate/inspire workers to be more productive.v¥ Complex decisions can be made with inputs for specialists/skilled workers. VV Workers feel empowered as they are involved in decision-making process.VV Negatives’ Incorrect decisions may be made if staff is inexperienced /not fully informed.vV Decision-making may be time consuming because stakeholders have to be consulted.vV Employees may feel discouraged if their opinions/inputs are not considered. VV Leaders can rely too much on the input of the followers and fail to make a final decision. VV Not effective in times of crisis/when quick decisions need to be made. VV Some employees only pretend to participate in decision making and their feedback may not always be accurate.vV Sub max (8) 3.3.3 Laissez-Faire Style Positives Workers are allowed to make decisions on their own policies/ methods.VV¥ Subordinates have maximum freedom and can work independently. VV Leader motivates workers by trusting them to do things on their own.v¥ Authority is delegated, which can be motivating to competent workers and increase productivity.V¥ Subordinates are experts and know what they want and can take responsibility for their actions. vv Suitable for coaching to motivate employees to achieve more/ better things. VV it can be empowering for competent followers as they are completely trusted to do their job.vv Individual team members may improve develop leadership skills.VV Individual team members may develop leadership skills. VV AND/OR Negatives Lack of clear leadership may lead to demoting to employees.vV Employees can be held responsible for their own work which may lead to underperformance.vV Could lead to conflict when some team member ask as leaders and dedicate to other team members.vV BUSINESS STUDIES SUPPORT GUIDE FOR LEARNERS (HINTS AND PRACTICE QUESTIONS AND ANSWERS)

42 ° Workers are expected to solve their own conflict situations.VV¥ « Productivity may be compromised with a lack of tight control aver workers not meeting deadlines.VV¥ e Productivity might be low, if employees lack the necessary knowledge or skills. vv Sub max (8) Max (24) 3.4 Leadership Theories 3.4.1 Situational Theory Different leadership characteristics are needed for different situations. VV e The task dictates the leadership style that should be applied, so leaders are adaptable / flexible/ self-assured.vV e Relationships between leaders and employees are based on mutuai trus¥respectloyalty/integrity/nonesty.VvV e Leaders have the ability to ‘read’ the situation and get the most suitable peopte in the right positions to complete the tasks successfully.VV e |t enables leaders to use different leadership styles to accomplish their goals.vV e Leaders analyse group members/objectives/ time constraints. Then adopt a suitable/ relevant leadership style.vV e May lead to conflict when leaders use different leadership styles when managing employees in different situations.VV e Its successes depends on the kind of relationships that exists between the leader and employees.vV¥ Sub max (4) 3.4.2 Transformational Theory The passion/vision/personality of leaders inspire employees to change their expectations/perceptions/ motivations to work towards a common goal.vV Strategic thinking leaders develop a long term vision for the organisation and sell it to subordinates/employees. VV Leaders have the trust of their subordinates. VV Leaders promote intellectual stimulation/ problem solving which result in the development /success of the business.VV Followers are coached so that they can share their ideas freely. VV Leaders will encourage followers to explore new thing an opportunities. vv Leaders lead by example and make workers interested in their work.vV¥ Leaders have strong charismatic personalities and are very good at motivating staff to achieve results.VV BUSINESS STUDIES SUPPORT GUIDE FOR LEARNERS (HINTS AND PRACTICE QUESTIONS AND ANSWERS)

43 e Enable employees to take greater ownership for their work and to know their strengths and weaknesses.VV¥ Sub Max (4) Max (8) 3.5 Application Theory 3.5.1 Situational Theory e Application of the theory depends on the particular situation that prevails within the business.vV¥ e Used when it matches the needs of the employees, e.g. inexperienced employees require a different form of leadership than more experienced employees.VV e Applied to address conflict in the workplace.vV Sub max (2) 3.5.2 Transformational Theory e May be apptied when workers have a low morale/ underperforming.vV e Applied during the strategic planning process, where vision/mission/ objectives have to be developed/ changed.vv e Whena business is restructuring and exploring new ways of doing things. VV Sub max (2) Max (4) 3.6 Conclusion e A positive leader will motivate his followers to improve themselves and achieve their own personal goais.vV e Managers can also be successful leaders if they focus on the tasks as well the workers who execute the task.vV e Leaders who understand d the various leadership styles and theories may be able to lead effectively and handle any situation.VV Max (2) [40] BUSINESS STUDIES SUPPORT GUIDE FOR LEARNERS (HINTS AND PRACTICE QUESTIONS AND ANSWERS)

44 Breakdown of Mark Allocation Details Maximum | Total Introduction 2 Leadership and management 8 Leadership styles | (3xB) 24 MAX | Leadership theories (2x4) 32 8 Application of theory 4 Conclusion 2 Insight ] ° Layout 2 e Analysis, interpretation | 2 e Synthesis 2 e Originality, Examples | 2 | | 7 Total Marks I 40 LASO for each component: Allocate 2 marks if all requirements are met. Allocate imark if some requirements are met. Allocate 0 marks where requirements are not met at all. MAIN TOPIC 3: BUSINESS ROLES QUESTION 2 2.1 Creative thinking - Emphasise the importance of creative thinking to ensure that all staff know that you want to hear their ideas. ~ Encourage staff to come up with new ideas/opinions. - Make time for brainstorming sessions to generate ideas. - Place suggestion boxes around the workplace and keep communication channels open for new ideas. - Train staff in innovative techniques/creative problem solving skills. - Encourage job swops within the organizations/studying how other businesses are doing thing . - Encourage alternative ways of working/doing things. - Reward creativity with reward schemes for teams which come up with creative ideas. Max (8) BUSINESS STUDIES SUPPORT GUIDE FOR LEARNERS (HINTS AND PRACTICE QUESTIONS AND ANSWERS)

45 2.2 Professional, ethical and effective business practices. - Treat all employees equally. - Plan properly and put preventative measures in place. - Pay fair wages/salaries which is in line with the minimum requirements of the BCEA. - Remunerate employees for working overtime and during holidays. - Refrain from starting a business using other businesses’ ideas that are protected by law. - Engage in environmental awareness programmes. - Business decisions and actions should be clear/transparent to all stakeholders. 2.3. Programmes to deal with socio-economic issues 2.3.1 HIV/Aids - Counseling programmes/train counselors to provide counseling to infected and affected persons/employees. - Roll out anti-retroviral(ARV) treatment programmes. - Encourage employees to form HIV/Aids support groups. - Conduct workshops on HIV/Aids programmes. 2.3.2 Unemployment - Provide skills development through learnership programmes. - Offer bursaries to the community to improve the level of education. - Create jobs for members of the community. - Support existing small businesses to create more employment opportunities. - Provide entrepreneurial programmes that can promote self-employment. 2.4 Differences between ethics and professionalism ETHICS PROFESSIONALISM _ - Conforms to a set of values that morally are acceptable Set of expected behaviour - Applying a code of conduct set by a profession or business Forms part of a Code of Conduct to guide employees to act professionally. - Focuses on upholding the business/profession Focuses on developing a morl compass to use in decision making. | reputation of a | - Involves following the principles of right or wrong | in business aclivities/practices/dealings | | es —t Includes guidelines on employees’ appearances/communications/attitudes/responsibilit ies. BUSINESS STUDIES SUPPORT GUIDE FOR LEARNERS {HINTS AND PRACTICE QUESTIONS AND ANSWERS)

46 SECTION C QUESTION 3 4.1 Introduction - CSlis a component of CSR , where social responsibility is the intention and social investment is the action.v - Corporate social responsibility (CSR) is the way a business conducts itself, ethically and morally, regarding their use of human resources, physical resources and their funds. v - Businesses are corporate citizens and therefore have a responsibility towards society. ¥ - Businesses should consider the importance of the wellbeing of the community in relation to profitability and productivity. ¥ - Any other relevant introduction related to CSR and CSI. Max (2) 4.2 Nature of CSR - CSR programmes are internal programmes that businesses use to comply with laws and ethics. vv - CSR aims at creating a safe working environment for workers. VV CSR programmes and activities the business undertakes have to contribute positively to the community in which the business operates. VV CSR may take the form of a monetary donation to support local organization. VV - Business operations address Triple Bottom line through CSR programmes by considering its impact on people, profit and planet. V¥ - Businesses seek to promote public interest and don away with harmful practices without the need for any formal legisiation. VV Max (10) 4.3 Benefits of CSR for businesses - The business enjoys the goodwill and support of communities/attracts consumers. - CSR helps to attract investors. VY - CSR programmes promote teamwork within businesses. VV - Gives businesses tax advantages such as tax reduction/rebates. - Assists in solving socio-economic issues like poverty . VV - It helps to retain staffflower staff turnover as employees’ health and safety are considered. VV - Promotes customer loyalty resulting in increased sales and profit. Vv - Businesses can use CSR as a marketing strategy to promote their products/services. VV - Any other relevant answer related to the benefits of CSR for businesses. Max (12) BUSINESS STUDIES SUPPORT GUIDE FOR LEARNERS {HINTS AND PRACTICE QUESTIONS AND ANSWERS)

47 4.4 Challenges of CSR for the community Distribution of scarce resources to selected beneficiaries in the community may cause problems such as discrimination. vv Less money is available for community projects during unfavourable economic conditions. VV The benefits of the programmes may not filter to the intended persons within the communityvV Businesses cannot meet the longer term needs of the saciety/Businesses cannot deliver sustainable CSR programmes. VV Spending money on CSR means the business has to recover expenses through higher prices which have a negative impact on the economy. vv Consumers are not convinced that a business is acting in the best interest of the community and the environment. VV Businesses are not always equipped to address social problems. vv Hand-out programmes discourage locals from taking their own initiatives by making them depended on CSI programmes. vV Any other relevant answer related to the challenges of CSR for the community. Max (12) 45 Recommendations on advancing the wellbeing of communities Sponsor housing/Offer free accommodation for their employees. VV Ensure that the product they supply do not harm consumers. vv Participate in community projects involving HIV/AIDS, education, counseling and other useful causes. VY Donate money to a community project/Run a project to uplift the community. Encourage people to stay fit and healthy by getting them involved in health activities to minimize substance abuse. VV Provide transport for their employees who work unusually long hours. vv Start a nutritional programme so that employees can enjoy one meal per day to keep them in a healthy condition. Vv Give time to stuff to get involved in projects they choose/Allow staff to use some of the working hours to participate in the projects of their choice. vv Any other relevant recommendations related to ways in which Phola B&8 can contribute time and efforts to advance the well being of others. Max (12) 46 Conclusion Businesses use CSR programmes and CSI projects to comply with laws and ethics. VV Corporate social responsibility is an obligation required by law and benefits both business and society. VV CSR programmes and CSI projects allow businesses to influence people's lives in many ways. Any other relevant conclusion on CSR and the wellbeing of the community. BUSINESS STUDIES SUPPORT GUIDE FOR LEARNERS (HINTS AND PRACTICE QUESTIONS AND ANSWERS)

48 Max (2) [40] BREAKDOWN OF MARK ALLOCATION Details Maximum Total Introduction 2 Nature of CSR 10 Benefits to business 12 Challenges for the community [12 32 Recommendations 112 Conclusion [2 INSIGHT | Layout 2 Analysis, interpretation 2 Synthesis 2 Originality 2 TOTAL MARKS 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. BUSINESS STUDIES SUPPORT GUIDE FOR LEARNERS (HINTS AND PRACTICE QUESTIONS AND ANSWERS)

49 MAIN TOPIC 4: BUSINESS OPERATIONS QUESTION 2: PARAGRAPH TYPE QUETIONS 2.1 2.1.1 Total client satisfaction: - takes place when the customer is happy with the product or service purchased. vv - It means that it meets all his/her requirements, and he/she had a good experience dealing with the company involved. Vv (4) 2.1.2 Monitoring and evaluation of quality processes. - Itis essential to continuously monitor the process and reflect on the effectiveness of the process of total quality management . vv - Ifnecessary changes and adaptations should be ongoing to ensure Continuous quality of the products and/or services rendered to clients. (4) 2.2 Explain the impact of a total quality management system on small and large businesses with reference to continuous skills development. (12) Small business Large businesses Positives Positives - There may be a more holistic - The human resources (bigger) approach to training department is dedicated to skills due to a limited number of training and development. vv employees. VV - Human resources experts - Promotes individual and ensure that training personal development resulting programmes are relevant to in improved productivity. Vv ensure increased customer satisfaction. Vv Negatives Negatives - Itis difficult to train employees - Poor communication system because they are often not may prevent effective training permanently in the business. VV from taking place. VV - Itis not possible for employees | - Trained employees may leave to specialise since they are for better jobs after they gained involved in various business more skills. vv activities. VV - Demotivate employees, if they - {tis expensive to use training do not receive recognition for consultants. training. VV - Any other relevant responses - Any other relevant responses related to the impact of related to the impact of continoues skills development continuous skills development on small businesses VV on large businesses. VV Submax (6) Submax (6) BUSINESS STUDIES SUPPORT GUIDE FOR LEARNERS (HINTS AND PRACTICE QUESTIONS AND ANSWERS)

50 QUESTION 3: ESSAY TYPE QUESTION 3.1 Introduction - The human resources manager is responsible for recruiting and appointing competent and skitled employees.¥ - It is important that the human resources manager follows correct and fair procedures in selecting and interviewing. V - Selection and interviewing must be properly done to be able to appoint the best candidate for the job. V - Any other relevant introduction related to the human resources function. (Any 2 x 1 = 2) 3.2 Procedures for selecting and interviewing 3.2.1 Receive documentationvY - Applicant submit the application forms, curriculum vitae and certified copies of personal documents such as ID and proof of qualifications.¥ 3.2.2 Screen applicantsvV - Candidates who obviously meet the requirements are separated from thase who do not.V 3.2.3 Evaluate CVs and create a shortlistv¥ - Applicants are evaluated against pre-set requirement. Vv - Applicants are ranked from most suitable less suitable candidates. Vv - Candidates with the highest ranked order are placed on a shortlist. v - The shortlist should contain between 3 and 5 candidates. ¥ 3.2.4 Check information supplied in CVs. VV - The candidates’ qualifications and their employment history are checked and confirmed.¥ - Referees are contacted to verify or testify to the person's character, abilities and skills. 3.2.5 Conduct interviews - Candidates whose names appear on the short list, are invited to a personal interview, usually on the premises of the business.V - Interview is a formal meeting between employer and candidate. Vv - The meeting allows the employer to get information about the candidates and to evaluate the candidates further. ¥ BUSINESS STUDIES SUPPORT GUIDE FOR LEARNERS (HINTS AND PRACTICE QUESTIONS AND ANSWERS)

- Candidates have a chance to assess their possible workplace and can get more information about the post and the business. ¥ BUSINESS STUDIES SUPPORT GUIDE FOR LEARNERS (HINTS AND PRACTICE QUESTIONS AND ANSWERS) $1

3.2.7 ‘ 52 itis possible that more than one round of interview will be conducted as part of the process. V Assess the candidatesvV It is possible that various assessments must be completed before the best candidate is chosen. ¥ Personality, interest and aptitude test may be conducted. v Shortlisted candidates may be required to take medical and skills tests. v Offer employmentv¥ (Letter of appointment) A written offer is made to the selected candidate. ¥ Candidates that are selected must accept the offer in writing. ¥ An employment contract will be negotiated and if agreed upon signed by the new employee and the employer. ¥ Candidates who are unsuccessful may be informed, unless otherwise stated in the job advertisement. ¥ Any other relevant answer related to the selection and interviewing of suitable candidates. (Max 16) 3.3 Legalities of the employment contract An employment contract is an agreement between the employer and the employee and is legally binding. VV The contract may not contain any requirements that are in conflict with the BCEA. vv Certain aspects of the employment contract can be re-negotiated during the course of employment. V¥ Employer and employee must agree to any changes to the contract. vv No party may change aspects of the employment contract unilaterally. VV The employment contract must include a code of conduct and code of ethics. vw The terms and conditions of the employment contract to the employee by the HR manager. vv The conditions of employment, duties and responsibilities of the employees must be clearly stipulated. VV Benefits must be clearly stipulated. VV All company policies, procedures and disciplinary codes/rules can form part of the employment contract. VV employers must allow the employees to thoroughly read through the contract before it is signed. Vv Any other relevant answer related to the legalities of the employment contract. (Max:12) BUSINESS STUDIES SUPPORT GUIDE FOR LEARNERS (HINTS AND PRACTICE QUESTIONS AND ANSWERS)

53 3.4 Contents of the employment contract Details of the employer ¥ - + The employment contract must contain the contact details and address of the business. V Personal details of the employee ¥ - The contract must have the physical address, contact details as well as other personal information of the employee e.g. age, full name(s) ID number. ¥ Job title and job description V - The contract must state clearly the job title and the duties and responsibilities of the employee. V Working hours ¥ - Hours of work, in line with the BCEA, must be clearly outlined in the contract. ¥ Overtime V - Overtime hours per day and per week must be clearly specified in the contract. V - Work time that will be regarded as overtime should be explained in detail, e.g. Sundays and public holidays. ¥ Remuneration packagev¥ - The contract must stipulate the amount payable to the employeev - It should state whether it is a weekly wage ar monthly salary, how the amount will be calculated, bonuses, fringe benefits (e.g. clothing allowance, car allowance, etc) and any other agreements in terms of remuneration. V Leavev - The employment contract must stipulate the different types of leave and the number of days allowed for each type of leave. V - It should also specify when leave is regarded as paid leave. v Termination of the contractV - The employment contract must stipulate the different ypes of leave and the number of days allowed for each type of leave. V - Any other answer relevant to the termination of the contract. v (Max:10) BUSINESS STUDIES SUPPORT GUIDE FOR LEARNERS (HINTS AND PRACTICE QUESTIONS AND ANSWERS)

54 3.5 Conclusion - Businesses cannot achieve their goals without suitable qualified and skilled employees. Vv - It is important that the workforce is motivated, trained and committed to their work.vv¥ - Any other relevant conclusion to related to importance of the HR function to provide an employment contract to suit both the employee and the employer. (Any 1 x 2 = 2) YOU ARE READY TO WORK OUT FULL PREVIOUS QUESTION PAPERS NOW. Previous question papers and memorandums are available on the website of the National Department of Education under: Previous examination papers for Business Studies. Practice to answer as many previous question papers as you can. REMEMBER! PRACTICE MAKES PERFECT!! NEVER EVER EVEK GIVE UP! DON T PRACTICE am UNTIL YOU GET IT. = RIGHT. PRAGTICE BUSINESS STUDIES SUPPORT GUIDE FOR LEARNERS (HINTS AND PRACTICE QUESTIONS AND ANSWERS)

55 4. EXTRA PRACTICE IN THE CALCULATIONS CALCULATE SIMPLE INTEREST AND COMPOUND INTEREST Simple interest is interest that is calculated ONLY on the initial amount that was invested. The formula for calculating simple interst is: Total simple interest = Initial investment amount X Annual rate X time period OR 1=PXIxn where P = start amount | = interest rate N = years Apply and practice this formula using the examples below: 1. First try to calculate the given question/case study without looking at the answer. 2. If you don’t find the correct answer use the amounts used with the formula to find the same solution. 3. Cover the answer again try it again by yourself. 4. \f you found the correct answer TACLE the next example in the same way. 5. Practise, practice, practice MAKES Perfect!!!! BUSINESS STUDIES SUPPORT GUIDE FOR LEARNERS (HINTS AND PRACTICE QUESTIONS AND ANSWERS)

SIMPLE AND COMPOUND INTEREST e—ee—E—E—E—r——— SIMPLE INTEREST / ENKELVOUDIGE RENTE: Example 1 Voorbeeld 1 Jane invests R20 000 with ABSA Bank for one year at a rate of 18 % per annum (pa). 1.1 What is the interest that will be paid to her? (Show ALL workings.) 1.2 What is the total amount that will be paid to her? (Show ALL workings.) Jane belé R20 000 by Absa Bank vir een jaar teen ‘n koers van 18% per jaar (p.j). 1.1 Wat is die rente wat aan haar betaal sal word? (Wys ALLE bewerkings.) 1.2 Wat is die totale bedrag wat aan haar betaal sal word? (Wys ALLE bewerkings.) 11 [=Pxixn where P=20 000 i=18% or 18 _ 9.18 100 n=1 wf=Pxixn = 20 000x0.18x1 = R3 600 1.2 Total Amount = Start amount + Interest amount = 20 000+3 600 =R23 600 11 [=Pxixn waar P=20 000 5=18% of [2 =0.18 100 n=l w= Pxixn =20 000x0.18x1 =R3 600 1.2 Totale bedrag = Begin bedrag + Rente bedrag = 20 000+3 600 = R23 600

Example 2 Voorbeeld 2 Basil invested R10 000 of his annual bonus in a fixed-deposit account at Standard Bank, earning an interest rate of 12% p.a. 2.1 Using the simple interest method, calculate the interest earned by basil over a period of 12 months. (Show ALL workings.) 2.2 What is the total amount that will be paid to him? (Show ALL workings.) Basil belé R10 000 van sy jaarlikse bonus in 'n vastedeposito rekening by Standard Bank, teen 'n rentekoers van 12% per jaar. 2.1 Deur gebruik te maak van die enkelvoudige rente metode, bereken die rente wat verdien word deur Basil oor 'n tydperk van 12 maande. (Wys ALLE bewerkings.) 2.2 Wat is die totale bedrag wat aan hom betaal sal word? (Wys ALLE bewerkings.) 2.1 2.1 [l=Pxixn Il=Pxixn where waar P=10000 P=10000 i=12% or 12 6, 12 100 n=12 months =1 year =1 i=12% of 2 0.12 100 n=12 maande=1 jaar =1 Sh =Pxben ~ Lf =PXIXA =10 000x0.12x1 =10 000x0.12x1 = RI 200 =RI 200 2.2 2.2 Total Amount = Start amount + Interest amount Totale bedrag = Begin bedrag + Rente bedrag =10 000+1 200 = 10 000 +1 200 =RII 200 =R11 200

Example 3 Voorbeeld 3 Pravin invested R40 000 in a savings account at Standard Bank for 3 years at an simple interest rate of 8% p.a. 3.1 What is the interest that will be paid to him? (Show ALL workings.) 3.2 What is the total amount that will be paid to him? (Show ALL workings.) Pravin belé R40 000 in ‘n spaarrekening by Standard Bank vir 3 jaar teen 'n enkelvoudige rentekoers van 8% p.a. 3.1 Wat is die rente wat aan hom betaal sal word? (Wys ALLE bewerkings.} 3.2 Wat is die totale bedrag wat aan hom betaal sal word? (Wys ALLE bewerkings.) 3.1 T=Pxixn where P=40 000 i=8% or 8 _o08 100 n=3 .f=Pxixn = 40 000x0.08x3 =R9 600 3.2 Total Amount = Start amount + Interest amount =40 00049 600 =R49 600 3.1 l=Pxixn waar P=40 000 i=8% or 3 _ 0.08 100 n=3 “f=Pxixn = 40 000x0.08x3 =R9 600 3.2 Totale bedrag = Begin bedrag + Rente bedrag = 40 000+9 600 = R49 600

S17 Example 4 Voorbeeld 4 Patricia won R50 000 in the Lotto draw. She invested the money in a fixed deposit account for two years, earning simple interest of 14% p.a. 4.1 What is the interest that will be paid to her? {Show ALt workings.) 4.2 What is the total amount that will be paid to her? (Show ALL workings.) Patricia het R5SO 000 in die Lotto-trekking gewen. Sy belé die geld in 'n vastedepasito tekening vir twee jaar, en verdien 14% enkelvoudige rente per jaar. 4.1 Wat is die rente wat aan haar betaal sal word? (Wys ALLE bewerkings.} 4.2 Wat is die totale bedrag wat aan haar betaal sal word? (Wys ALLE bewerkings.) 41 41 I=Pxixn [=Pxixn where waar P=50 000 P=50 000 ;=14% or 4 = 0.14 i=14% or 1 =0.14 100 100 n=2 n=2 of =Pxben T= Pxixn =R14 000 =R14 000 42 4.2. Total Amount = Start amount+ Interest amount | Totale bedrag = Begin bedrag + Rente bedrag = 50 000+14 000 = 50 000414 000 ATL) = R64 000

tbo Example S Voorbeeld 5 Anele invested RS 000 for three years, at 10% interest per year, with Capital Bank. 5.1 Calculate the amount Anele will receive after three years. (Shaw ALL workings.} 5.2 Calculate the amount of interest that Anele bel@ RS 000 vir drie jaar, teen 10% tente per jaar, by Capital Bank. 5.1 Bereken die bedrag wat Anele sal ontvang na drie jaar. (Wys ALLE bewerkings.) 5.2 Bereken die rente wat Anele sal verdien. Anele will earn. (Show ALL workings.) {Wys ALLE bewerkings.) §.1 5.1 [=Pxixn l=Pxixn where waar P=5 000 P=5 000 i=10% or 19-=0.10 | i= 10% of —~=0.10 100 100 n=3 n=3 .f=Pxixn =5 000x0.10x3 =RI1 500 5.2 Total Amount = Start amount + Interest amount =5000+1 500 = R6 500 .if=Pxixn =5 000x0.10x3 =R1500 5.2 Totale bedrag = Begin bedrag + Rente bedrag =5 000+1 500 =R6 500

él Example 6 Voorbeeld 6 Nyathi’s Ladge on Moretele farm does not generate enough profit anymore. Nyathi decided to invest R40 000 as a fixed deposit at 8.5% interest per year. 6.1 How much will he get over a period of 3 years if the interest is calculated using the simple interest method? Nyathi se Lodge op Moretele plaas genereer nie genoeg wins nie. Nyathi het besluit om R40 000 te helé as 'n vaste deposito teen 8.5% rente per jaar. 6.1 Hoeveel sal hy kry oor 'n tydperk van 3 jaar indien die rente bereken word met behulp van die enkelvoudige rente (Show ALL workings.) metode? (Wys ALLE bewerkings.} 6.1 6.1 l=Pxixn l=Pxixn where waar P=40 000 P=40 000 i=8.5% or = 0,085 | i=8.5% of 2 =0.085 100 100 n=3 n=3 - f= Pxi of=Pxixn 40 000. 0 onse3 =40 000K 0085%3 ~ ms =R10 200 = R10 200 6.2 6.2 Total Amount = Start amount + Interest amount = 40 000+10 200 =RS50 200 Totale bedrag = Begin bedrag + Rente bedrag = 40 000+10 200 = R50 200

tr COMPOUND INTEREST / SAAMGESTELDE RENTE: Example 1 Voorbeeld 1 Jane borrows R20 000 from ABSA Bank for one year at a rate of 18 % per annum ( pa} compounded annually. 1.1 What is the total amount that will be paid ta her? (Show ALL workings.) 1.2 What is the interest that will be paid to Jane leen R20 000 by Absa Bank vir een jaar teen ‘n koers van 18% per jaar (p.j) jaarliks saamgestel. 1.1 Wat is die totale bedrag wat aan haar betaal sal word? (Wys ALLE bewerkings.) 1.2 Wat is die rente wat aan haar betaal sal her? (Show ALL workings.) word? (Wys ALLE bewerkings.) 141 11 A= P(I+i)' A=P(I+i)" where waar P=20 000 P=20 000 i=18% or © =0.18 i=18%of -& =0.18 100 100 n=l n=] A=P(I+i)’ = P(I+i)" I = 20 000(1+0.18) = 20 000(1+0.18) =20 000(1.18) = 20 000(1.18)' = 20 000(1.18) = 20 000(1.18) = 23 600 = 23 600

bs 1.2 Interest amount = Total Amount - Start amount = 23 600-20 000 =R3 600 1,2 Rente bedrag = Totale bedrag — Begin bedrag = 23 600-20 000 =R3 600

by Example 2 Voorbeeld 2 Basil invested R10 000 of his annual bonus in a fixed-deposit account at Standard Bank, earning an interest rate of 12% p.a, compounded annually. 2.1 Calculate the interest earned by basil aver a period of 36 months. (Show ALL workings.) Basil belé R10 000 van sy jaarlikse bonus in ‘n vastedeposito rekening by Standard Bank, teen 'n rentekoers van 12% per jaar, jaarliks saamgestel. 2.1 Bereken die rente wat verdien word deur Basil oor 'n tydperk van 36 maande. (Wys ALLE bewerkings.} 2.1 A=P(1+i)" where A=? P=10 000 i=12% or Pe =0.12 100 = 36 months =3 years =3 A= P(1+i)’ =10 000(1+0.12)° = 10 000(1.12)' =10 000(1.404928) =R14 049.28 Interest amount = Total Amount —Start amount = 14 049,28 -10 000 R4 049.28 21 A= P(1+i)’ waar A=? P=10 000 j=12% of “= =0. 12 100 n= 36 maande =3 jaar =3 Hn = P(1+i) =10 000(1+ 0.12)" =10 000(1.1 2)" =10 000(1.404928) =RI14 049.28 Rente bedrag = Totale bedrag - Beyin bedrag = 14 049.28-10 000 = R4 049.28

ts Example 3 Voorbeeld 3 Pravin invested R40 000 in a savings account at Standard Bank for 3 years ata compounded interest rate of 8% p.a. 3.1 What is the total amount that will be paid to him? (Show ALL workings.) 3.2 What is the interest that will be paid to him? (Show ALL workings.) Pravin belé R40 000 in 'n spaarrekening by Standard Bank vir 3 jaar teen 'n saamgestelde rentekoers van 8% p.a. 3.1 Wat is die totale bedrag wat aan hom betaal sal word? (Wys ALLE bewerkings.) 3.2 Wat is die rente wat aan hom betaal sal word? (Wys ALLE bewerkings.) 3.1 A=P(I+i)’ where A=? P=40 000 i=8% or 3 _oog 100 n=3 n “A= P(1+i) = 40 000(1+0.08)" = 40 000(1.08)" = 40 000(1.259712) = R50 388.48 3.2 Interest amount = Total Amount ~ Start amount = 50 388.48-40 000 = RIO 388-48 3.1 A= P(I+i)" waar A=? P=40 000 i=8% of = 0.08 100 n=3 .A=P(I+i)’ = 40 000(1+0.08)° = 40 000(1.08)’ = 40 000(1.259712) = R50 388.48 3.2 Rente bedrag = Totale bedrag - Begin bedrag 50 388.48-40 000 = R460 388.48

be Example 4 Voorbeeld 4 Patricia wan RSO 000 in the Latto draw. She invested the money in a fixed deposit account for two years, earning compound interest of 14% p.a. 4.1 What is the total amount that will be paid to her? (Show ALL workings.) 4.2 What is the interest that will be paid to Patricia het RSO 000 in die Lotto-trekking gewen, Sy belé die geld in 'n vastedeposito rekening vir twee jaar, en verdien 14% saamegestelde rente per jaar. 4.1 Wat is die totale bedrag wat aan haar betaal sal word? (Wys ALLE bewerkings.) 4.2 Wat is die rente wat aan haar betaal sal her? (Show ALL workings.) word? (Wys ALLE bewerkings.) 4.1 41 A=P(I+i)" A=P(l+i)’ where waar A=? A=? P =50 000 P=50 000 i=14% or “4 =0.14 i=14% of + =0.14 100 100 n=2 n=2 A= P(I+i)’ A= P(i+i)’ = 50 000(1+0.14) = 50 000(1+0.14)° = 50 000(1.14)" = 50 000(1.14)" = 50 000(1.2996) = 50 000(1.2996) = R64 980 = R64 980 4.2 42 Interest amount = Total Amount - Start amount = 64 980-50 000 =RI4 980 Rente bedrag = Totale bedrag — Begin bedrag = 64 980-50 000 =Rt4 980

&7 Example 5 Voorbeeld 5 Anele invested R5 000 for three years, at 10% interest per year, compounded annually, with Capital Bank. 5.1 Calculate the amount Anele will receive after three years, (Show ALL workings.) 5.2 Calculate the amount of interest that Anele belé RS 000 vir drie jaar, teen 10% rente per jaar, jaarliks saamgestel, by Capital Bank. S.1 Bereken die bedrag wat Anele sa! ontvang na drie jaar. (Wys ALLE bewerkings.) §.2 Bereken die rente wat Anele sal verdien. i=10% or 10 ~o.10 100 n=3 A= P(1+i)’ =5 000(1+0.10) = 5 000(1.10)° = 5 000(1.331) = R6 655 $.2 Interest amount = Total Amount - Start amount =6 655-5 000 =RI655 Anele will earn. (Show ALL workings.) (Wys ALLE bewerkings.) 5.1 5.1 A= P(I+i)" A=P(I+i)’ where waar A=? A=? P=5 000 P=5 000 i=10% of -2 =0.10 100 n=3 2 A=P(1+i) =5 000(1+0.10)° =5 000(1.10)’ = 5 000(1.331) = R6 655 5.2 Rente bedrag = Totale bedrag - Begin bedrag = 6 655-5 000 = R1 685

INSURANCE / VERSEKING Lg “COMPENSATION: FORMULA VERGOEDING: FORMULA Compensation = P Market Value Insured amount . O55 Versekerde bedrag Mark waarde Vergoeding = x Verlies

bf i Example 1 Voorbeeld 1 | Peter bought a house with a market value of | R750 000 at Malalane Estates. He insured his | house for R500 000, A Year later his house burnt down and the damages were estimated at R650 000. 1.1 Calculate how much the insurance company will pay Peter for the fire Peter koop 'n huis met 'n markwaarde van R750 000 op Malalane Landgoed. Hy verseker sy huis vir R500 000. ‘n Jaar later het sy huis afgebrand en die skade was geskat op R650 000. 1.1 Bereken hoeveel die versekeringsmaatskappy Peter sal betaal = 433 333.33 damages. vir die yuur skade. 1.1 1.1 Compensation = nstihed amount Loss Vergoeding = nerekerde being x Verlies Market Value Mark waarde = 500 000 650 000 = 300 000 «650 000 750 000 750 000 = 0.66666666667 x 650 000 = 0,66666666667 x 650 000 = 433 333.33

yo Example 2 Voorbeeld 2 Karen Jones owns a retail outlet at the Century City Shopping Centre in Cape Town. She sells imparted ladies‘ garments. The business is insured against fire for R800 000. The market value of her business enterprise is R1 000 000 (one million rand). Fire caused damage to her business, which was assessed at R300 000. 2.1 Calculate the compensation that Karen Jones will receive from the insurance company. Karen Jones hesit 'n kleinhandelsbesigheid by die Century City Inkopiesentrum in Kaapstad. Sy verkoop ingevoerde damesuitrustings. Die besigheid is teen brand verseker vir R800 000, Die markwaarde van haar besigheidsonderneming is R1 000 000 (een miljoen rand). Brandskade aan haar besigheid is vasgestel op R300 000. 2.1 Bereken die vergoeding wat Karen Jones van die versekeringsmaatskappy sal ontvang. 2.2 Insured amount | » i = L Compensation Marker Value OSS = 500.000 300 000 1 000 000 = 0.8 «300 000 = 240 000 21 Versekerde bedrag » Verlies Mark waarde _ 800 000 ~ 1000 000 = 0,8 «300 000 = 240 000 Vergoeding = x 300 000

“U Example 3 Voorbeeld 3 The property of Turbo Distillers has a current market value of R300 million, The warehouse was partly damaged by fire. Damages were assessed at R60 million. The insurance company is not prepared to pay the full amount of the claim because Turbo Distillers insured the property for only R200 million. 3.1 Calculate the compensation that Turbo Distillers will receive from the insurance company. Show ALL the calculations. Die eiendam van Turbo Distilleerders het 'n huidige markwaarde van R300 miljoen. Die pakhuis is gedeeltelik deur brand beskadig. Skade is op R60 miljoen geraam. Die versekeringsmaatskappy is nie bereid om die volle bedrag van die eis te betaal nie omdat Turbo Distilleerders die eiendom vir slegs R200 miljoen verseker het. 3.1 Bereken die vergoeding wat Turbo Distilleerders van die versekeringsmaatskappy sal ontvang. Toon AL die berekeninge. 3.1 Insured amount Market Value a] = 200 000 000 60 000 00 300 000 000 = 0.66666666667 < 60 000 00 = 40 000 000 Compensation = x Loss 3.1 Versekerde bedraz Mark waarde 5 = 200 000 000 . 60 000 000 300 000 000 = 0.66666666667 = 60 000 000 = 40 000 000 Vergoeding = x Verlies

72 6. DEVELOP A GLOSSARY OF BUSINESS STUDIES TERMINOLOGY GLOSSARY SOME BUSINESS STUDIES CONCEPTS AND TERMS PER MAIN TOPIC: The list given below is not exhaustive (there are many more concepts). This can assist you to make a list of concepts when studying to help you to remember the different concepts and terms used in Business Studies. If you want to look up a word quickly and you have access to the internet you will find the Business Studies concepts below and many more on the following website: www.thutong.doe.qov.za and refer to Business Studies. MAIN TOPIC 1: BUSINESS ENVIRONMENT includes the people who work in the business, the equipment and technology they use, and the systems they have developed to manage their work and how they function from within the business environment WORD/PHRASE DEFINITION/EXPLANATION PRINCIPLES/EXAMPLES MLLUSTRATIONS/APPLI CATION Micro This refers to the internal environment which is__| Vision and mission environment the environment within the business. This statements and business objectives; organizational resources, organizational culture and the Eight business functions namely — General management - Praduction - Purchasing, - Marketing, - Financial, - Human Resources - Administration and - Public Relations Vision statement A vivid idealized description of a desired outcome that inspires, energized and helps you create a mental picture of your target, The best vision statements for result areas describe outcomes that are five (medium term) to ten years(long term) Mission statement A statement of the purpose of a company. The missions statement should guide the actions of the organization, spell out its overall goal, provide a path and guide decision-making. In writing missions statements, you are creating a brief description of what you want to focus on and what you want to accomplish in a particular area of your life over a period. BUSINESS STUDIES SUPPORT GUIDE FOR LEARNERS (HINTS AND PRACTICE QUESTIONS AND ANSWERS}

73 A mission statement sets out the business vision and values and that enables employees, managers, custormers and even suppliers to undertand the underlying bais for the actions of the business. Aims and goals A aim is where the business wants to go in the future, its goals. It is a statement of purpose Example of the aim of a business: “We want to grow the business into Europe and America”. Business objectives These are the stated, measureable targets of how to achieve business aims. For instance, we want to achieve sales of R10 milion in European markets in 2015. Objectives give the business a clearly defined target. Plans can then be made to achieve these targets. This can motivate the employees. It also enables the business to measure the progress towards its stated aims. Market environment The Market environment influences the organization directly. it includes sectors with which the organization interacts directly and that have a direct impact on the organizations ability to achieve its goals. Suppliers, Customers/consumers/clie nts, intermediaries, Competitors, Civil society (e.g. community based organizations (CBOs) and non-governmental organizations (NGOs), Regulators, strategic allies and unions give rise to particular opportunities and threats. Business has limited control over the factors. Macro Business Environment or ihe Macro Environment The major external and uncontrollable factors that influences an organization's decision making, and affect its performance and strategies. Natural/physical environment, economic environment, social, cultural and demographic environment, the political and legal, the technological and the international. (PESTLE) Examples of macro BUSINESS STUDIES SUPPORT GUIDE FOR LEARNERS (HINTS AND PRACTICE QUESTIONS AND ANSWERS)

74 A mission statement sets out the business vision and values and that enables employees, | managers, custormers and even suppliers to | undertand the underlying | bais for the actions of the business. | Aims and goals A aim is where the business wants to go in the future, its goals. It is a statement of purpose Example of the aim of a business: | “We want to grow the } business into Europe and America”. | Business objectives | These are the stated, measureable targets of | how to achieve business aims. For instance, we want to achieve sales of R10 million in European markets in 2015. Objectives give the business a clearly defined target. Plans can then be made to achieve these targets. This can motivate the employees. It also enables the business to measure the progress towards its stated aims. Market environment The Market environment influences the organization directly. It includes sectors with which the organization interacts directly and that have a direct impact on the organizations ability to achieve its goals. Suppliers, Customers/consumers/clie nts, intermediaries, | Competitors, Civil society (e.g. community based organizations (CBOs) and non-governmental organizations (NGOs), Regulators, strategic allies and unions give rise to particular opportunities and threats. Business has limited control over the factors. Macro Business Environment or the Macro Environment The major external and uncontrollable factors that influences an organization's decision making, and affect its performance and strategies. Natural/physical environment, economic environment, social, | cultural and demographic environment, the political and legal, the technological and the international. (PESTLE) Examples of macro BUSINESS STUDIES SUPPORT GUIDE FOR LEARNERS (HINTS AND PRACTICE QUESTIONS AND ANSWERS)

75 A mission statement sets out the business vision and values and that enables employees, managers, custormers and even suppliers to i undertand the undertying bais for the actions of the business. | Aims and goals A aim is where the business wants to go in the future, its goals. It is a statement of purpose Example of the aim of a business: “We want to grow the business into Europe and America”. Business objectives These are the stated, measureable targets of how to achieve business aims. For instance, we want to achieve sales of R10 million in European markets in 2015. Objectives give the business a clearly defined target. Plans can then be made to achieve these targets. This can motivate the employees. It also enables the business to measure the progress towards its stated aims. | Market | environment The Market environment influences the organization directly. It includes sectors with which the organization interacts directly and that have a direct impact on the organizations ability to achieve its goals. Suppliers, Customers/consumers/clie ats, intermediaries, Competitors, Civil society (e.g. community based organizations (CBOs) and non-governmental } organizations (NGOs), Regulators, strategic allies and unions give rise to Particular opportunities and threats. Business has | limited control over the factors. Macro Business Environment or the Macro Environment The major external and uncontrollable factors that influences an organization's decision making, and affect its performance and strategies. Natural/physical environment, economic environment, social, cultural and demographic environment, the political and legal, the technological and the international. (PESTLE) Examples of macro BUSINESS STUDIES SUPPORT GUIDE FOR LEARNERS {HINTS AND PRACTICE QUESTIONS AND ANSWERS)

‘| Amission statement sets 76 out the business vision and values and that enables employees, managers, custormers and even suppliers to undertand the underlying bais for the actions of the business. A aim is where the business wants to go in the future, its goals. It is a statement of purpose Example of the aim of a business: “We want to grow the business into Europe and America”. Business objectives These are the stated, measureable targets of how to achieve business aims. For instance, we want to achieve sales of R10 million in European markets in 2015. | Objectives give the business a clearly defined target. Plans can then be made to achieve these targets. This can motivate the employees. It also enables the business to measure the progress towards its stated aims. { | Market environment The Market environment influences the organization directly. It includes sectors with which the organization interacts directly and that have a direct impact on the organizations ability to achieve its goals. Suppliers, Customers/consumers/clie nts, intermediaries, Competitors, Civil society (e.g. community based organizations (CBOs) and | non-governmental organizations (NGOs), Regulators, strategic allies and unions give rise to particular opportunities and threats. Business has limited control over the factors. Macro Business Environment or the Macro Environment The major external and uncontrollable factors that influences an organization's decision making, and affect its performance and strategies. | Examples of macro Natural/physical environment, economic environment, social, cultural and demographic environment, the political and legal, the technological and the international. (PESTLE) BUSINESS STUDIES SUPPORT GUIDE FOR LEARNERS (HINTS AND PRACTICE QUESTIONS AND ANSWERS)

| Backward | vertical | integration Ty Integration strategy — where one business _ further forward in the chain of production buys another business which is further back in the chain 78 A newspaper company buying a printing company Conglomerate merger Where two businesses merge which have no common business interests A newspaper company merging with a food beverage company External growth An increase in the size of a business achieved through the purchase of other businesses A newspaper company buying other media companies for growth or taking over other companies Forward vertical Integration strategy ~ where one business A newspaper company integration further back in the chain of production buys buying newsagents another business which is further forward in the chain Horizontal Integration strategy — where two businesses A textile company merges integration join together thorough merger or takeover which | with another textile is at the the same stage in the chain of company i 1 production | Internal growth | An increase in the size if a business which is For example: | not achieved through a take-over of the business but due to the existing business's increasing profits, sales and employment 2010/11 Shoprite showed an increased growth through profits from increased sales Merger When two or more businesses join together to For example: form a large business WalMart acquire 51% stake in Massmart — | controlling shareholding Take-over When one business buys another business and | The acquisition of one takes it over company by another, sometimes a hostile situation, by a large creditors a the objection of the current owner Private sector enterprise A business owned and controlled by private individuals and businesses e Sole proprietors e Partnerships © Public companies e Private companies Public sector i enterprise A business owned and controlled by the state or goverment State-owned companies: © SA Post office e Transnet ° Sasol «Eskom Primary industry Activities which mine, grow, collect or cut down raw materials, such as in mining or agriculture e Mining, e Forestry Fishing e Agriculture | Investment In finance, the purchase of a financial product In business, the purchase _ * BUSINESS STUDIES SUPPORT GUIDE FOR LEARNERS {MINTS AND PRACTICE QUESTIONS AND ANSWERS)

79 | or other item of value with an expectation of by a producer of a | favorable future returns. In general terms, physical good, such as investment means the use of money in the hope | durable equipment or of making more money. inventory, in the hope of improving future business. Dividend A payment made to shareholders out of the A share of the profits of a profits that a firm makes, in return for their company received by investment in the company. people who own shares. Equity or equity | The monetary value of a business which Refers to the difference capital belongs to the business owners. Ina company | between the total assets this would be the value of their shares, and the total liabilities of a | Equity comes from investment in the business company. It essentially by the owners, plus accumulated net profits of | represents amounts owed the business that have not been paid out to the | to the owners. Equity owners. accounts are balance sheet accounts. Relates to the funds raised through =| the selling of shares. Often | referred to as share | | a capital. | Bond | A debt instrument issued for a period of more Some bonds do not pay | than one year with the purpose of raising capital | interest, but all bonds | | by borrowing. The central government, states, require a repayment of cities, corporations, and many other types of principal. When an institutions sell bonds, e.g. RSA retail bonds. investor buys a bond, Generally a bond is a promise to repay the he/she becomes aa principal along with interest (coupons) on a creditor of the issuer. specified date (maturity). However, the buyer does not gain any kind of ownership rights to the issuer, unlike in the case of equities. On the other hand, a bond holder has a greater claim on an issuer's income than a shareholder in the case of | financial distress (this is true for all creditors). Bonds are often divided | into different categories | based on tax status, credit | quality, issuer type, j maturity and ree eee secured/unsecured. | Unit trusts | A.unit trust is a form ofcollective investment Stokvels, mutual funds, | | constituted under a trust deed. A unit trust is the | equity funds, unit trusts — pooled money of many investors that is to thousands of South invested in the financial markets through a African investors all of _| single collective investment scheme ~ called a__| these are more or less the BUSINESS STUDIES SUPPORT GUIDE FOR LEARNERS {HINTS AND PRACTICE QUESTIONS AND ANSWERS)

80 Unit Trust. Unit trusts invest in different markets and market sectors, while some invest across markets. You can make or lose money in unit trust funds, but the risk of losing money depends on where and how the furd invests. same thing. To a certain extent they are quite right. Mangy individual cannot accumulate large enough pools of money to give them access to an expensive service of product. In the case of Stokvels — the individual then uses the poled money to buy goods in bulk at a lower price, or to negotiate better returns or loans at low rate of interest. Unit trusts work in very much the same way. They obtain something that is almost impossible for individual — blue chop shares. ! Interest Interest is the cost of borrowing money. Interest is a fee paid on borrowed assets. It is the price paid for the use of borrowed money, or, money earned by deposited funds. When you take a loan out from a bank, or wherever, they will expect you to pay interest. It is a percentage charged on the principle amount for a period of a year — usually. This means that you pay back what you took out on a loan, plus extra money. For example, if you took a loan out for R500, and let/s say you have to pay it back with 15% interest, you would pay back R575, that is: R500 x 15 divide by 100% = RR75 R500 + R75 = R575 Simple interest It is the money charged on the fixed amount by the lender for lending the money to the borrower for the certain period of time. The interest charged in case of simple interest remains fixed for all the year. The formulae for simple interest = p*i*n Where: Pp = principal (original amount borrowed or loaned) | = interest rate for one period n =number of periods Compound | interest Compound interest is calculated each period on the original principal and all interest accumulated during past periods. Compound interest is the concept of adding accumulated interest back to the principal, so that interest is earned on interest from that moment on. The act of declaring interest to be principal is called compounding (i.e. interest is compounded. Formulae for Compound Interest = Principal x (1 + Rate/N)°(N x Time) - Principal. Where N is the Number of times within one year that the Principal should be reinvested. Add your own words and a a” BUSINESS STUDIES SUPPORT GUIDE FOR LEARNERS (HINTS AND PRACTICE QUESTIONS AND ANSWERS)

81 Unit Trust. Unit trusts invest in different markets and market sectors, while some invest across markets. You can make or lose money in unit trust funds, but the risk of losing money depends on where and how the fund invests. same thing. Toacertain | extent they are quite right. Mangy individual cannot accumulate large enough pools of money to give them access to an | expensive service of i product. In the case of Stokvels ~ the individual then uses the poled money to buy goods in bulk at a lower price, or to negotiate better returns or loans at low rate of interest. Unit trusts work in very much the same way. They obtain something that is almost impossible for individual — blue chop shares. Interest Interest is the cost of borrowing maney. Interest is a fee paid on borrowed assets. It is the price paid for the use of borrowed money, or, money earned by deposited funds. When you take a loan out from a bank, or wherever, they will expect you to pay interest. It is a percentage charged on the principle amount for a period of a year ~ usually. This means that you pay back what you took out on a loan, plus extra money. For example, if you took a loan out for R500, and let/s say you have to pay it back with 15% interest, you would pay back R575, that is: R500 x 15 divide by 100% = RR75 R500 + R75 = R575 | Simple interest It is the money charged on the fixed amount by the lender for lending the money to the borrower for the certain period of time. The interest charged in case of simple interest remains fixed for all the year. The formulae for simple interest = p*i*n Where: P = principal (original amount borrowed or =| loaned) | = interest rate for one period n =number of periods Compound interest Compound interest is calculated each period on the original principal and all interest accumulated during past periods. Compound interest is the concept of adding accumulated interest back to the principal, so that interest is earned on interest from that moment on. The act of declaring interest to be principal is called compounding (i.e. interest is Formulae for Compound Interest = Principal x (1 + Rate/N}(N x Time) - | Principal. ' Where N is the Number of times within one year that the Principal should be reinvested. Add your own words and compounded. BUSINESS STUDIES SUPPORT GUIDE FOR LEARNERS (HINTS AND PRACTICE QUESTIONS AND ANSWERS)

82 BUSINESS STUDIES SUPPORT GUIDE FOR LEARNERS (HINTS AND PRACTICE QUESTIONS AND ANSWERS)