ANSWERS TEST 3

INTRODUCTION TO BUSINESS & MANAGEMENT

TEST 3          Corporate Responsibility                                                  MARKS
Organizational Structure and
Planning      

1          What does the term ‘governance’ mean in relation to                           2
            managing a business?

            Corporate governance is a system of rules, practices and
            processes by which a company is directed and controlled
            with the aim of balancing the interests of the different
            stakeholders and helping to achieve the company’s objectives.

2          There are 4 elements of Corporate Social Responsibility.                   4
            State each one and briefly describe how its relationship with
            CSR. 

            Economic – Friedman’s view was that a company would be
            fulfilling its CSR simply by employing staff

            Legal  -  a company may be said to be socially responsible if
            it obeys laws relating to business, such as paying corporate tax
            and maintaining health and safety regulations

            Ethical – a company may be said to be fulfilling its CSR if it
            treats employees fairly and takes care to protect the environment
            in its businesses practices, eg recycling and reducing pollution

            Discretionary – a company could be said to be fulfilling its CSR
            if it donates part of its profits to charity, aiding health programs or
            making bequest to educational foundations

3          Describe in as much details as possible the ‘Anthony Model’             4

            The Anthony Model is a triangle that classifies applications used
            at different levels of the organization:
           
            Strategic Planning is at the top of the pyramid and identifies
            future planning (5 years ahead) by senior management

            Tactical is the middle tier of the pyramid and identifies how a
            strategic plan is implemented (1-year time frame) department-by
            -department by middle management

            Operational is the largest and lowest level of the pyramid where
            staff  carry out the plan on a day-t-day basis.

4          Apart from using a SWOT or a PESTLE analysis to plan a                 4
            company’s objective, what other methods of analysis could a
            business employ, and why would it be useful? 

            Either: Porter’s 5 Forces because it considers the prevailing level
            of competition and the type of market structure, eg monopolistic,
            and the likelihood of new rivals, or substitute products

            Or: Assessing a company’s ‘Core Values’ as the basis upon
            which to plan a future strategy     

5          State the meaning of each of the letters in the acronym ‘SMART’    4

            and explain the purpose of this business tool

            SPECIFIC -               What, where, why, when ?

            MEASURABLE -      Can progress towards the goal be assessed?

            ACHIEVABLE -        Is the goal or objective achievable?

RELEVANT -            Does it align with the overall objective?

TIME-BOUND -        What is the time schedule for achieving the goal
                                                 or objective?

6          Explain why Tesco failed in either the USA or China? In either          6
            case, the answer should focus either on entry strategy or
            business model, or both

 Answers will vary

7          What are the 4 main functions of an HR Manager?                               2

            Hiring, Developing, Retaining and Terminating
            (Other answers may also be valid)

8          HR Managers are responsible for ensuring that the company            4
            complies with legislation regarding employment. Give 4 examples
            of relevant legislation. You do not have to state the laws
            themselves, just the subject of the laws (UK or US).

            Equal employment opportunity

            Non-discrimination because of: age, gender, race

            Non-discrimination of the disabled

            Maximum working hours and allowance for breaks

            Minimum age of employment

            Health and safety regulations
            (other answers are possible)
           

9          Briefly describe the functional Advantages and Disadvantages          5
            of a Matrix Structure?

 
            Advantages

·      Co-ordination of different resources

·      Permits specialization

·      Communication with staff from different departments

Disadvantages

·      Psychologically stressful due to more complex relationships

·      Conflict over reporting lines and authority (dual management)

·      Inefficiency if cross-functional managers are not in agreement
– a challenge to loyalty

·      Can lead to operational inefficiencies and additional staff costs

WK 9 The Assessment Centre

WK 9 Why use Personality Tests?

WK 9 Types of Employment Interviews

ANSWERS to Combined Test 1 & 2

INTRODUCTION TO BUSINESS MANAGEMENT

Combined tests 1 & 2

 Marks                                    

1          Define the management process                                                                   2

            The process of transforming (or adding value to) inputs                  
            (resources) into outputs (products and services)

2          Define the meanings of: MNE and SME                                                         2

            Multinational Enterprise – a large organization with subsidiary
            offices in other countries.
            Europe: 250> staff and $50m> ; USA: 500> staff and $100m>

            Small to Medium Enterprises

            Small (<50 staff and <$10m)
            Medium (<250 staff and <$50m)

3          Describe the stages the management process                                              2

            Plan > Organize > Lead > Control

4          Draw a traditional management hierarchy and a flatter management         4
            hierarchy and describe the advantages and disadvantages of each

            Traditional ;  

Formal and centralised management with clear lines of authority and
responsibility, but poor communication between departments and
through  multiple levels of management; decision-making is slow and
prone to bureaucracy

            Flatter :          

Less formal and decentralised with less levels of management.

Knowledgeable and skilled staff are involved in decision-making.

Cost efficient because there are less managers, but they may have
too many staff to supervise effectively. The fewer the number of
managers and the more open the lines of communication, the
more likely are office politics and power struggles.

5          Mintzberg classifies management roles into 3 categories and                      6
            10 roles. State and briefly describe the 3 categories and name
             as many roles as you can

Informational
Obtaining, analyzing and disseminating information
(monitor, disseminator, spokesperson)

Interpersonal 

Personal communication with subordinates
            (authority figure, leader (motivator) and liaison
             (external communicator)

Decisional

Making business decisions and resolving problems
            (entrepreneurial, disturbance handler, resource
            allocator and negotiator)

6          Describe one of the following management models:                               4
            Frank Gilbreth, Max Weber, Henri Fayol or Mary Follett
           

            See Boddy, pp 43 - 53

7          What was the difference in management focus between                       2
            classical and neo-classical management models? Give
            examples of proponents of each                                                                    

            Classical management models focus on manufacturing process
            efficiency, eg Taylor and F. Gilbreth;

            Neo-classical models focus on the role, efficiency and motivation
            of employees

8          Quinn et al (2003) suggested that there were 4 cultural types              4
that could be defined as being flexible or controlled, and
being focused either internally or externally. Name and position
the 4 types in the relevant quadrant on the chart.   

      Flexibility

            Human relations                                 Open Systems



Internal   ______________________________________  External

            Internal process                                  Rational goal

                                                        Control

9          Handy (1993) identified and defined 4 cultural types.                        4
            What were they?

            Power: dominant, charismatic, entrepreneurial leader
            with implicit rules of behaviour

            Role :   typically, characterised by a detailed job description
                          containing specific responsibilities and requirements

            Task:   focuses on job completion rather than general role;
                        each person is valued for what they contribute; typically,
                        staff work in teams

Person: structure is designed to suit the individual. Typical of
            small, professional practices, eg doctors and lawyers,
            rather than an organization

10        Name and define the 4 market structures, and write them              5
            from left (Buyer Power) to right (Supplier Power)

             Perfect  competition   -   Buyer Power
             Monopolistic               -  Some Buyer Power
             Oligopoly                    -   Mostly Supplier Power
            Monopoly                   -  Complete Supplier Power

11        Michael Porter (1985) identified 5 ‘Forces’ that could be                 5
used to analyse the competitive environment of an
industry. Draw the 5 Forces diagram, name and describe
each of the forces, and the 6^th factor that he did not include.

            See Boddy, P 89