BUSINESS MANAGEMENT (BM) BUSINESS MANAGEMENT 1 (BM101) PILOT EXAMINATION MEMORANDUM MAY 2011

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1 Page 1 of 6 BUSINESS MANAGEMENT (BM) BUSINESS MANAGEMENT 1 (BM101) PILOT EXAMINATION MEMORANDUM MAY 2011 GENERAL This memorandum is prepared to assist in the marking process as it indicates (a) the correct answer and (b) how marks should be allocated. In evaluating answers, markers must keep in mind that the IMM GSM examinations are set on a higher education level and that the student should therefore not only illustrate an adequate understanding of theory, but also insight into the application of knowledge. In addition, the student should illustrate independent critical thinking. The marker accepts that the student should be familiar with the contents of the learner guide and the prescribed textbook. If, however, factual and correct information is included from other valid academic sources besides the learner guide and the prescribed textbook, such knowledge and insights also qualify for the allocation of marks. When answering questions the student is required to: Read each question carefully and thoroughly before attempting the answer, in order to determine exactly what is required. Allocate sufficient time to answer each question in proportion to the marks indicated on the examination paper. Number answers clearly and correctly. Provide answers in a legible handwritten format. Set out the answers in a structured format and formulate statements in full and coherent sentences. In most papers one mark is normally allocated for each factual statement. This memorandum should also assist students and student support centres in preparing for future examinations. As the memorandum accompanies the examination paper and is prepared prior to the examination session, it is not able to include areas where the students provided incorrect answers. The memorandum is also central to the moderating team when performing moderation of examination scripts. After the release of marks for any examination session, the memorandum becomes public knowledge and is available to students.

2 Page 2 of 6 SECTION A (40 MARKS) COMPULSORY Answer ALL the questions The prescribed textbook is Nieuwenhuizen, C., and Rossouw, R Business Management: A Contemporary Approach. 1 st edn. Juta. QUESTION 1 (MULTIPLE CHOICE) [40] 1.1 D Chapter B Chapter D Chapter C Chapter A Chapter C Chapter D Chapter B Chapter C Chapter C Chapter B Chapter C Chapter A Chapter D Chapter B Chapter B Chapter A Chapter B Chapter D Chapter D Chapter B Chapter C Chapter D Chapter A Chapter C Chapter B Chapter D Chapter C Chapter D Chapter B Chapter D Chapter D Chapter D Chapter B Chapter C Chapter D Chapter D Chapter C Chapter A Chapter B Chapter 12

3 Page 3 of 6 SECTION B (60 MARKS) Answer ALL the questions QUESTION 2 [15] (See Nieuwenhuizen & Rossouw 2008: Chapter 1, pp. 8-9) Step 1: Assign each establishment factor a weight, based on the factor s importance to a specific business. In other words, arrange the establishment factors from 1-4 (depending on how many factors you have identified). Label the factor that will have the greatest influence on the place of establishment as number one and the factor with the least influence as number four. In the food industry, for example, the proximity of the market is very important because food can deteriorate if it does not reach the consumer immediately. Next in importance is the proximity of raw materials. Take bread, for example. Firstly, it is important for the bakery to be near the market, as bread should be delivered to the market as fresh as possible. Secondly, the proximity of the raw material (namely flour) is very important. The availability of labour is not quite as important because the food industry is highly mechanised, for instance it is not necessary for people to knead dough because this function has been mechanised. Step 2: Calculate, as far as possible, the quantifiable cost and amounts for each establishment factor of each place of establishment. Give an example of how the value is calculated for, for example, market proximity, availability of labour, etc. Step 3: Allocate points in accordance with a sliding scale to the nonquantifiable establishment factors of the different places of establishment. Identify and consider non-quantifiable factors that should be considered for your bakery. Step 4: Draw up a list of the information collected. Summarise your data relevant to your findings on your bakery in table or written format. Step 5: Determine the disadvantages associated with each place of establishment. The information gathered from these steps should give you an indication of a place of establishment that you can choose. Indicate your choice. (5 marks for each step identified; 5 marks for each step briefly explained and 5 marks for the application of each step = 15)

4 Page 4 of 6 QUESTION 3 [15] (See Nieuwenhuizen & Rossouw 2008: Chapter 2, pp ; 50-82) Management can be defined as a process of planning, organising, leading and controlling the resources of the business to achieve stated business goals as efficiently and effectively as possible. (3) Planning (1) means determining the future position of the business and deciding on the strategies needed to reach that position. During the planning phase, the vision, mission and goals are determined, as well as the resources needed for the task. (2) Organising (1) can be defined as the process of delegating and coordinating tasks and allocating resources to achieve goals and objectives. Organising also involves developing a framework or organisational structure to indicate how and when people and other resources should be deployed in order to achieve goals. (2) Leading (1) is the process of influencing employees to work willingly toward achieving goals. Managers must communicate the goals to employees and motivate them to achieve those objectives. (2) Controlling (1) is the process of establishing and implementing mechanisms to ensure that goals are achieved. An important part of controlling is measuring progress towards the achievement of an objective and taking corrective action when necessary. Feeding back results is an important aspect of control and serves as an input for the planning process. (2) QUESTION 4 [10] (See Nieuwenhuizen & Rossouw 2008: Chapter 5, pp ) Space gap. South African Breweries produces Castle Lager mainly in one centre, but beer drinkers are spread throughout southern Africa, leaving a geographical space (distance) between the manufacturer and the consumer. Time gap. Mealies are harvested in North West Province in winter, but consumers want mealie meal porridge throughout the year. Information gap. A first time, uninformed computer buyer may not have enough knowledge to make an appropriate purchase. Ownership gap. When a new car is purchased, the consumer becomes the owner only when it is registered in his or her name and this happens only once the car has been paid for. Value gap. Seller and buyer must agree on an acceptable exchange rate (price of the product). If buyers perceive a price to be unacceptably high, they will not buy; if sellers cannot get the price they want, they will not offer to sell. The value the buyer attaches to the product should ideally be the same as that attached by the seller.

5 Page 5 of 6 QUESTION 5 [10] (See Nieuwenhuizen & Rossouw 2008: Chapter 10, pp ) Physical and technical management components (½) Planning and control methods (1) Work flow/activity structure(1) Organisational structure (1) Product flow structure (1) Information flow structure (1). Managerial and behavioural management components (½) Management methods (1) Power and leadership structure (1) Risk and reward structure (1) Culture and attitude (1). QUESTION 6 [10] (See Nieuwenhuizen & Rossouw 2008: Chapter 9, pp ) (1) Cut flow time (lead time, waiting time, etc.), distance and inventory (subassemblies and idle work-in-process) along the chains of customers. (2) Cut set-up, changeover, get-ready and start-up lead times. (3) Know and team up with the next and final customer. This principle implies breaking barriers (even through cross-functional improvement teams) and building relationships. It refers to the customer as the next process. (4) The entire company must become dedicated to continual and rapid improvement in quality, cost, response time, flexibility, variability and service. (5) The entire company must achieve a unified purpose via shared information and team involvement in the planning and implementation of change. (6) Reduce the number of product or service components and operations (processes) and the number of suppliers, to a few good ones. (7) Operations design entails organising resources into multiple chains of customers, each focused on a product or service (or customer family); create workflow teams, cells and plants in a plant. (8) Capacity involves utilising human resource potential and creativity by investing in human capital (as the internal customer), and QWL (quality of work life). It specifically means investing in cross-training for mastery of multiple skills. (9) Capacity entails maintaining and improving present equipment and human capital before considering new resources; automating incrementally when process variability cannot be reduced by other means. (10) Process management entails aiming for streamlining and simplicity by making it easy to provide goods or services without error or any process variation. (11) Work just-in-time or at the customer s rate of use; decrease cycle intervals and lot size.

6 Page 6 of 6 (12) Quality means recording and processing one s own problem data at the workplace and ensuring that front-line improvement teams have the first chance at problem solving before staff experts come in. (13) Cut administration and reporting; control causes, not symptoms. (1 mark for each principle briefly explained = 10)