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MNB1501 201 2019
MNB1501 201 2019
BUSINESS MANAGEMENT 1A
MNB1501
Semester 1
IMPORTANT INFORMATION
Please register on myUnisa, activate your myLife e-mail addresses and
make sure that you have regular access to the myUnisa module
website, MNB1501-2019-S1, as well as your group website.
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1. THE ASSIGNMENTS
Assignment 01 covers chapters 1 to 4 in the 10th edition of the prescribed book Introduction to
Business Management (ITBM), while Assignment 02 covers chapters 5-10 in the 10th edition of
the prescribed book Introduction to Business Management.
Some of you sent your answers directly to the Department of Business Management. Please
do not do this! If you did, we had no choice but to return them to you unmarked. Mark-reading
sheets have to be sent to the Assignment Section. Others of you submitted your answers on a
sheet of paper and these were also returned unmarked. You should have submitted your
answers on a mark reading sheet.
We suggest that you do not mark the correct answers on the actual assignment in Tutorial
Letter 101. A very useful method of revision towards the end of the semester is to work through
your assignments again. If you see the correct answer before you even read the question, your
revision will be less effective. It is best to record your own answers separately from the correct
answers.
The following explanations form the most vital part of the teaching process. Go through the
answers now – do not wait until just before the examination. Study the comments carefully and
compare them with the reasoning in your answers. Make sure that you understand our reasons
for the answers.
3. ASSIGNMENT 01
STUDY UNIT 1: THE BUSINESS WORLD AND BUSINESS MANAGEMENT
QUESTION 1
Society is confronted with a fundamental problem namely, how to ensure the highest possible
satisfaction of needs with scarce resources. Economics or the economic principle is
essentially about satisfying unlimited consumer wants with limited resources. The correct
answer is therefore option 4.
If your answer was wrong, refer to section 1.3.3 in the 10th edition of Introduction to Business
Management (ITBM).
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QUESTION 2
If your answer was wrong, refer to section 1.5.3 in the 10th edition of ITBM.
QUESTION 3
Sipho’s tuck shop forms part of the informal sector. His business is a micro-enterprise that is
not part of the formal economy because such businesses are not registered. People involved in
these enterprises primarily live on a subsistence or survival basis and thus do not contribute to
rates and taxes.
If your answer was wrong, refer to section 1.2 in the 10th edition of ITBM.
QUESTION 4
Option 1 and option 2 are disadvantages of a market economy and not a command economy
therefore these options are both incorrect.
If your answer was wrong, refer to Table 1.2 in the 10th edition of ITBM.
QUESTION 5
This question dealt with the various economic systems that exist.
In the socialistic economic system, one of the advantages is the possibility of full
employment. The correct answer is therefore option 2.
If your answer was wrong, refer to table 1.2 in the 10th edition of ITBM.
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STUDY UNIT 2: ENTREPRENEURSHIP
QUESTION 6
This question dealt with the various traits associated with entrepreneurs and tests your ability
to apply what you have learned in a practical situation.
True entrepreneurs have a high need for achievement, a trait known as achievement
motivation. This also includes the need to be personally responsible for solving problems.
Therefore, option b is correct.
Another significant trait of an entrepreneur is a strong internal locus of control which indicates a
person’s need to be in charge of his or her own destiny. Therefore, option c is correct and
option d is incorrect.
If your answer was wrong, please refer to section 2.6.1 in the 10th edition of ITBM.
QUESTION 7
This question dealt with the various management skills that entrepreneurs need within the
particular environment that they operate.
Strategy skills involves the ability to consider the business as a whole and to understand how
it fits within its marketplace, how it can organise itself to deliver value to its customers and the
ways in which it does this more effectively and efficiently than its competitors.
If your answer was wrong, refer to section 2.7.1 in the 10th edition of ITBM.
QUESTION 8
This was a straightforward question, as it merely required you to know the definition of the
entrepreneurial trait, achievement motivation.
If your answer was wrong, refer to section 2.6.1.1 in the 10th edition of ITBM.
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QUESTION 9
Outsourcing occurs when people other than the company’s full-time employees do work for a
company. In the scenario, the major law firm has hired an outside company, Healthy Eats, to
provide a meal delivery service to the company. Thus, the provision of daily meals to employees
and visitors has been outsourced.
If your answer was wrong, refer to section 2.6.3 in the 10th edition of ITBM.
QUESTION 10
There are several advantages and disadvantages to buying an existing business. Below is a
summary of the disadvantages of buying an existing business:
Disadvantages
The business location may be undesirable or
threatened with becoming undesirable.
The image of the business will be difficult to
change.
Employees are inherited rather than chosen
There may be liabilities for past business
contracts.
The inventory and equipment may be
obsolete.
Financing costs could drain the cash flow and
threaten the survival of the business.
The correct answer is therefore option 3. All the other options are advantages and not
disadvantages of buying an existing business.
If your answer was wrong, refer to table 2.1 in the 10th edition of ITBM.
QUESTION 11
The name of a private company must end with the words ‘(Pty) Ltd.’ Herman Heunis’s company
is therefore classified as a private company.
If your answer was wrong, refer to section 3.2.6 in the 10th edition of ITBM.
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QUESTION 12
In the management plan of the business plan, Herman Heunis will identify the “key role
players” (the active investors, management team and directors) and cite the experience and
competencies they possess.
If your answer was wrong, refer to section 3.3.5 and Table 3.2 in the 10th edition of ITBM.
QUESTION 13
Red Square’s description of their target market will appear in the marketing plan of the
business plan as this is the section that shows the business’s customers and what type of
competition the business will face.
If your answer was wrong, refer to section 3.3.5 and table 3.3 in the 10th edition of ITBM.
QUESTION 14
There is an error in question 14 as both statements 1 and 2 are correct with regard to a
partnership. Students will therefore all receive a mark for this question.
QUESTION 15
This question dealt with the four C’s that banks use to evaluate a loan application: capital,
collateral, character and conditions.
Collateral includes any assets the owner pledges to a bank as security for repayment of the
loan. Collateral can consist of either personal or business assets.
If your answer is incorrect, refer to section 3.3.3 in the 10th edition of ITBM.
QUESTION 16
This question dealt with the market environment and the variables that make up this
environment, namely: the market, suppliers, intermediaries and competitors.
In the scenario, the travel agency is an intermediary, as it plays a decisive role in bridging the
gap between the manufacturer (airline industry) and the consumer (Christopher). The travel
agency is involved in transferring a service/product (flying Christopher to Italy) as the travel
agency books his flight and his accommodation for him. An intermediary such as a travel
agency is part of the market environment.
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If your answer was wrong, refer to section 4.5.4 in the 10th edition of ITBM.
QUESTION 17
This question dealt with the market environment and the variables that make up this
environment, namely: the market, suppliers, intermediaries and competitors.
Competitors, such as Mango and FlySafair form part of the market environment.
If your answer was wrong, please refer to section 4.5.4 in the 10th edition of ITBM.
QUESTION 18
The market environment is encountered immediately outside the business organisation. The
variables within this environment become relevant for every organisation because they
determine the nature and strength of competition in any industry. These variables include
consumers, competitors, the labour market and labour unions, intermediaries and suppliers.
While management may influence the variables through its strategy, management has no
control over the components of the market environment. The management of Kulula.com
therefore has no control over the components of the market environment.
If your answer was wrong, refer to section 4.3.1.2 in the 10th edition of ITBM.
QUESTION 19
This question dealt with the various forms of environmental scanning used within businesses.
The most elementary form of scanning involves the updating of relevant secondary or
published information obtainable from sources such as the media, statistics or banks. The
correct option is therefore 4. All the other options are more advanced forms of scanning.
If your answer was wrong, refer to section 4.8 in the 10th edition of ITBM.
QUESTION 20
This was a straightforward question and required you to know the definition for purchasing
power.
If your answer was wrong, refer to section 4.6.4.5 in the 10th edition of ITBM.
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4. ASSIGNMENT 02
QUESTION 1
A company’s CSR policy should be aligned with the company’s own vision, mission, values and
guiding principles and therefore the correct answer is option 4.
If your answer was wrong, please refer to section 5.3.3 in the 10th edition of ITBM.
QUESTION 2
The stakeholder-engagement process consists of six steps: prepare, plan, design, engage,
evaluate and apply. The third step, namely design involves co-developing the engagement
plan, including the agenda and logistics, and meeting the engagement objectives. Therefore,
the correct answer is option 2.
If your answer was wrong, please refer to section 5.4.4 in the 10th edition of ITBM.
QUESTION 3
There are three ways in which the board and the CSR committee can determine how to
establish the corporate policy for CSR. One way is in a proactive manner, via a value-based
system. Here the CSR policy is aligned with the company’s own vision, mission, values and
guiding principles. Therefore, option 3 is correct.
The risk-management process and profit-based system are not approaches used in establishing
the corporate policy for CSR within a company. Therefore, options 2 and 4 are both incorrect.
If your answer was wrong, please refer to section 5.3.3 in the 10th edition of ITBM.
QUESTION 4
Corporate social investment is primarily a South African term that refers to companies’
philanthropic initiatives. In the northern hemisphere, it is also called corporate philanthropy. The
correct answer is therefore option 3.
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Corporate social investment does NOT refer to a company’s contribution to society through its
core business activities or local business development. Rather it involves spending a small part
of the companies’ profits on good causes. Therefore, option 1 is incorrect.
Corporate social investment does NOT refer to a company’s contribution through its
engagement in public policy; therefore, option 2 is also incorrect.
Corporate social investment is not synonymous with corporate social responsibility. CSI is only
one component of corporate social responsibility (also known as corporate citizenship).
Therefore, option 4 is also incorrect.
If your answer was wrong, please refer to section 5.2 in the 10th edition of ITBM and section 5.2
in your study guide.
QUESTION 5
This question dealt with the basic functions of management, namely planning, organising,
leading and control; and tests your ability to apply what you have learned in a practical situation.
Organising involves the allocation of resources and defining the specific duties and procedures
to enable the business to reach its goals. Joanne was therefore involved in the organising
phase when she was allocating the different resources to the various sections of the bakery and
defining the duties of the employees and the procedures to follow, within the bakery. The
correct answer is therefore option 2.
Planning involves viewing the business holistically and determining the long-term goals of the
business. It also includes determining the mission of the business as well as the strategic goals
of the business. Here, Joanna will be involved in determining the mission of her bakery
business, and setting the long-term goals of the business.
Leading entails directing the human resources of the business and motivating them. Here
Joanna will be involved in motivating and influencing her staff through good communication and
relations between management and staff.
Control means that managers should constantly establish whether the business is on a proper
course towards the accomplishment of its goals. Here Joanna will ensure that activities and
performance conform to the plans for reaching predetermined goals.
If your answer was wrong, please refer to section 6.3 in the 10th edition of ITBM.
QUESTION 6
This question required you to know the various skills needed at different managerial levels, and
tests your ability to apply what you have learned in a practical situation.
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Conceptual skills involve the mental capacity to view the business and its parts in a holistic
manner. Top managers require sufficient conceptual skills as they need to be able to view the
business as a whole in order to make long-term strategic decisions. As a CEO, Jurgen
Schreiber, will therefore require sufficient conceptual skills in order to view his business
holistically and be able to make strategic decisions to benefit the business. The correct answer
is therefore option 3.
If your answer was wrong, please refer to table 6.5 in the 10th edition of ITBM.
QUESTION 7
This question required you to know the various skills needed at the different managerial levels,
and tests your ability to apply what you have learned in a practical situation.
Lower-level managers require sufficient knowledge of technical activity they have to supervise,
as they are more involved in the technical aspects rather than the strategic aspects of the
business. The lower-level managers at Edcon therefore require sufficient technical skills.
If your answer was wrong, please refer to section 6.5 in the 10th edition of ITBM.
QUESTION 8
This question required you to know the different schools of thought and approaches to
management.
The strategic management approach focuses on the threats and opportunities in the
environment
If your answer was wrong, please refer to section 6.7.1 in the 10th edition of ITBM.
QUESTION 9
There are various benefits associated with planning. One such benefit is that planning ensures
cohesion. This means that planning enables top managers to see the organisation as a total
system in which the goals of all the different parts of the organisation are reconcilable with each
other as well as with the primary goals of the organisation as a whole. By planning
appropriately, Marcel von Aulock will ensure that his company functions in such a way that there
is cohesion across all the parts of the organisation.
If your answer was wrong, please refer to section 7.2.1 in the 10th edition of ITBM.
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QUESTION 10
This question dealt with the SMART (specific, measurable, attainable, relevant and time
bound) framework. This framework lists criteria for setting effective goals.
In the scenario, if Marcel von Aulock sets goals that provide a challenge, but at the same time
are realistic, he is setting goals that are attainable.
If your answer was wrong, please refer to section 7.3.3 in the 10th edition of ITBM.
QUESTION 11
This question dealt with the various operational plans that are developed by middle-level and
lower-level managers. Operational plans refer to a period of no longer than one year. Two basic
forms of operational plans are single-use plans and standing plans. Single-use plans are
developed to achieve a set of goals that are not likely to be repeated in the future, for example a
programme (e.g. the building of a new office block); a project (e.g. the installation of an air-
conditioning system); and a budget.
The scenario describes a project (also considered as a single-use plan), as the one-time
organisational goal is to set up the primary school as a WiFi hot spot. The scenario also
explains that this goal is part of a bigger set of plans to make the school technologically more
advanced.
If your answer was wrong, please refer to section 7.4.5.2 in the 10th edition of ITBM.
QUESTION 12
The scenario in the question describes a horizontal integration strategy adopted by Shoprite.
When a company adopts this type of strategy, they take over organisations similar to
themselves. In the scenario, Shoprite took over grocery retailers similar to themselves. This
strategy gives access to new markets and gets rid of competition.
If your answer was wrong, please refer to section 7.4.3.2 in the 10th edition of ITBM.
QUESTION 13
This question dealt with the second step in establishing reporting lines, namely to determine
how many people will report to one manager, and tests your ability to apply what you have
learned in a practical situation.
The scenario refers to the span of management (also known as the span of control) as it
indicates how many people (four subordinates) report to Justin, the manager at Big Bang
Technologies.
If your answer was wrong, please refer to section 8.3.3 in the 10th edition of ITBM.
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QUESTION 14
This question deals with the various forms of departmentalisation; and tests your ability to
apply what you have learned in a practical situation.
If your answer was wrong, please refer to section 8.3.2.3 in the 10th edition of ITBM.
QUESTION 15
Nike made use of the matrix organisational structure. This structure is particularly suited to
ad hoc and complex projects and a large complex organisation such as Nike. This structure
incorporates the advantages of both functional and divisional structures.
If your answer was wrong, please refer to section 8.3.2.5 in the 10th edition of ITBM.
QUESTION 16
Line authority is authority delegated down through the line of command. Therefore, as
managing director of an IT company, Jenny will have line authority, which gives her the right to
give orders down the line of command.
If your answer was wrong, please refer to section 8.3.4.1 in the 10th edition of ITBM.
QUESTION 17
This was a straightforward question, as it merely required you to know the definition of
responsibility.
Authority denotes the right of a manager to give commands to, and demand actions from,
employees and therefore option 1 is incorrect.
Power refers to a manager’s ability to influence his or her employees’ behaviour and therefore
option 2 is incorrect.
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Accountability is the evaluation of how well individuals meet their responsibilities. Therefore,
option 3 is also incorrect.
If your answer was wrong, please refer to section 8.3.4 in the 10th edition of ITBM.
QUESTION 18
lf your answer was wrong, please refer to section 8.3.4 in the 10th edition of ITBM.
QUESTION 19
This was a straightforward question, as it merely required you to know the definition of
influencing.
Influencing is the process leaders follow when communicating ideas, gaining acceptance of
them, and inspiring followers to support and implement the ideas through change.
If your answer was wrong, please refer to section 9.2.1 in the 10th edition of ITBM.
QUESTION 20
This question dealt with the different types of power a leader can have, and tests your ability
to apply what you have learned in a practical situation.
Managers have two types of power: position and personal power. As CEO of Tesla Motors, Elon
Musk has positional power as his position gives him the right to insist that employees do their
work and he has the right to discipline or dismiss them if they fail to comply. This type of
positional power is known as legitimate power and is granted to a particular position such as a
CEO.
If your answer was wrong, please refer to section 9.2.2.2 in the 10th edition of ITBM.
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QUESTION 21
Reward power is based on the manager’s ability to influence employees with something of
value to them. Thus by rewarding executives at Tesla Motors for meeting their performance
goals, management is exercising reward power.
If your answer was wrong, please refer to section 9.2.2.2 in the 10th edition of ITBM.
QUESTION 22
This question deals with the various informal and formal groups that exist within an
organisation; and tests your ability to apply what you have learned in a practical situation.
An interest group consists of a group of members that usually share a common interest. The
group will disband once the group has achieved what they set out to do. An example would be if
UNISA employees decide to arrange a fun walk around the campus to raise money for charity.
Once the desired amount is raised for the charity, then the group will disband. This is a type of
informal group. Therefore (a) is linked to (iii).
A command group appears on the organisational chart, and indicates their line of authority.
This involves allocated work assignments that determine tasks and the formation of work
groups. An example would be if the marketing manager assigns a group of employees to work
together in a group for a new marketing campaign. Therefore, b is linked to (i).
A task group is created to complete a specific task or project in the organisation, after
completion of the task, the group disbands. An example of such a task would be a research
group assigned to investigate a specific issue. Once the group has done the research, then it
will disband. Therefore, c is linked to (ii).
If your answer was wrong, please refer to section 9.5.1 in the 10th edition of ITBM.
QUESTION 23
The three variables that determine performance are motivation, ability such as training and
knowledge, and the opportunity to perform (resources).
If your answer was wrong, please refer to section 9.4 in the 10th edition of ITBM.
QUESTION 24
This question dealt with the five dimensions of trust namely: integrity, competence,
consistency, loyalty and openness.
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If your answer was wrong, please refer to section 9.3.1 in the 10th edition of ITBM.
QUESTION 25
This question dealt with the five dimensions of trust namely: integrity, competence,
consistency, loyalty and openness.
Accuracy refers to a system that is designed in such a way that it provides an objective and
accurate picture of the situation within a company.
If your answer was wrong, please refer to section 10.5.3 in the 10th edition of ITBM.
QUESTION 26
This question required you to understand the different instruments used in the various areas of
control. It is important that you are able to distinguish between the different control systems.
If your answer was wrong, please refer to section 10.4.1.4 in the 10th edition of ITBM.
QUESTION 27
This question required you to understand the different instruments used in the various areas of
control, specifically the control of human resources.
A human resource instrument that can be applied in respect of both labour turnover and
absenteeism is specific ratio analysis.
If your answer was wrong, please refer to section 10.4.1.4 in the 10th edition of ITBM.
QUESTION 28
This question required you to know the steps in the control process, and tests your ability to
apply what you have learned in a practical situation.
In the scenario, when Sam gathers all the relevant information and compiles a report on the
actual performance, then he is busy with step 2 of the control process “measure actual
performance.” The step directly after this is to evaluate deviations (step 3). Here Sam will be
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able to determine the performance gap between the performance standard and actual
performance. The correct answer is therefore option 2 “evaluating deviations.”
If your answer was wrong, please refer to section 10.3 in the 10th edition of ITBM.
QUESTION 29
An organisation’s physical resources comprise of their tangible assets (resources that you can
feel and touch) such as buildings, office equipment, furniture, vehicles, machinery and
equipment, trading stock, raw materials and finished products. Therefore, options 1,2 and 3 are
all correct as they are all physical resources.
A company’s trademark is not part of the physical resources of a company but is an intangible
asset (it is not physical in nature). Therefore, the correct answer is option 4.
If your answer was wrong, please refer to section 10.4.1.1 in the 10th edition of ITBM.
QUESTION 30
This question required you to understand the different instruments used in the various areas of
control, and tests your ability to apply what you have learned in a practical situation.
If Sophie would like to control her inventory to keep costs as low as possible, provided the
methods she uses do not cause shortages or delay the manufacturing process, then she would
need to make use of the Just-in-time (JIT) system. This system is a refinement of the MRP
system and is based on the premise that actual orders for finished products are converted into
orders for raw materials and components, which arrive just in time for the manufacturing
process.
If your answer was wrong, please refer to section 10.4.1.1 in the 10th edition of ITBM.
5. EXAMINATION
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PREPARING FOR THE EXAMINATION
Study all the chapters prescribed for this module: chapters 1-10 in the 10th edition of the
Introduction to Business Management book in conjunction with all the study units in the
study guide.
The Multiple-choice questions for Introduction to Business Management book provides
good exercise over and above your official study material and can come in handy when you
revise for the examination. The book is available at your nearest academic bookstore.
Your examination will cover the full MNB1501 syllabus. The questions will be of a similar nature
to those in the assignments. Please note that fake ‘old’ examination papers are in circulation
among students. Please be aware of the risk of placing too much value on such papers.
The Department of Examinations will notify you of your examination results and you
are requested not to contact the lecturers in this regard.
There are a number of previous examination papers available on MyUnisa for revision
purposes. We do not supply memorandums to these papers under ANY
circumstances. We also do not mark any attempts to answer these question papers.
These question papers are used exclusively for revision. Should you not be sure of the
answer to a question, you are welcome to contact your lecturer for assistance. However,
you should have an answer and reason for it available, when you do so. Furthermore, we
would like to remind you that the module content is based on the prescribed material and
not previous examination papers. For this reason, study the module content rather than
previous papers. We would like to highlight that some of the previous papers are based
on outdated prescribed material, which could cause confusion. The lecturers are not
responsible for the uploading of these papers. For this reason those old papers based on
outdated material cannot be removed. The onus rests on you how you use these papers.
6. CONCLUDING REMARKS
We trust that you are finding this module interesting and stimulating. We wish you everything of
the best for the examination. The Department looks forward to having you back again for
module MNB1601.
Kind regards
Mrs N de Metz: (012) 429-4935
Mrs N da Silva-Esclana: (012) 429-4554
UNISA 2019
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