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