TERM 2 ACTIVITY 1

TOPIC: CONTEMPORARY SOCIO-ECONOMIC ISSUES

1.1 The meaning of socio-economic issues
• Socio-economic issues are societal issues√ that may have a negative impact on
businesses. √
• They are issues that affect people √and the economy in a negative way.√
• Socio-economic issues have the potential to influence the efficiency of a
business. √ the way products are marketed and distributes.√
• Any other related answer related to the meaning of contemporary socio-economic
issues. Max (4)

1.2 Reasons why socio-economic issues pose a challenge to businesses

• Socio-economic issues affect consumer spending due to poverty and unemployment.
√√
• These issues place extra burdens and expenditure on businesses as they have to
develop policies/support systems/ informative programs to address them. √√
• Businesses are expected to create as many job opportunities as possible to
assist government address these issues which places a financial burden on them.
√√
• They must also educate employees on social issues and how to become involved
in the community to address these social issues. √√
• Any other relevant answer related to reasons why socio-economic issues pose
challenge to businesses. Max (6)

1.3 Socio-economic issues from the scenario

1.3.1 Poverty √√ (2)
1.3.2 Unproductive workforce √√ (2)

1.4 Negative impact of poverty and unproductive workforce on businesses

NEGATIVE IMPACT OF SOCIO-ECONOMIC ISSUES ON BUSINESSES
1.4.1 Negative impact of poverty on businesses
• People cannot participate√ fully in the economy. √
• Businesses spend more money on social responsibility programmes√ to address
inequality and poverty. √
• Poverty shrink the market √because people cannot afford to buy luxuries. √
• Poverty lead to crime√ such as shoplifting and robberies on businesses. √
• Increases violence √ as groups scramble for better status/social positions. √
• Businesses spend money on improving security √ due to robberies and
shoplifting. √
• More money is spent on relieving poverty √ through their social responsibility
programmes.
• Inequality results in lack of skills √ and job opportunities√
• Any other relevant answer related to the negative impact of poverty on
businesses.
Sub max (6)

Page 1 of 43
 1.4.2 Negative impact of unproductive workforce on businesses
• There is always tension between the employers and employees√ because
employees are not performing below employers’ expectations. √
• Low profits for business making it √ difficult to survive an economic recession. √
• Causes stress for both employees√ and employers. √
• Unproductive labour is a major stumbling block to economic growth√ and
sustainability.
• It pushes up production costs/make way for cost-efficient foreign competition √
who employ highly qualifies skilled and motivated people. √
• Could result in decreased employment opportunities√ if businesses switch over
to advanced technology to replace labourers. √
• Any other relevant answer related to the negative impact of unproductive
workforce on businesses
Sub max 6
Max (12)
1.5 Socio-economic issues
1.5.1 Socio-economic issue from the scenario
Unemployment√√ (2)

Motivation
She is currently sitting at home doing nothing as there are no job opportunities for
her. √ (1)
NOTE: Do not award marks for the motivation if the socio-economic issue
was incorrectly identified.
Max (3)

1.5.2 Possible solutions to unemployment

• Improvement of skills, better education and training.√√
• The government should change the labour laws to encourage small
businesses to employ workers. √√
• Businesses can provide skills development programmes through learnerships.
√√
• Offer bursaries to the community to improve the level of education.√√
• Businesses must create jobs for members of the community. √√
• Provide entrepreneurial programmes that can promote self-employment. √√
• Support existing small businesses to create more employment opportunities
√√
• Any other relevant answer related to possible solutions to unemployment
Max (6)
1.6 Socio-economic issues
1.6.1 Socio-economic issue from the scenario
Inclusivity √√ (2)

Motivation
The management of SL gives everyone job opportunities without discriminating
based on age and race.√ (1)
NOTE: Do not award marks for the motivation if the socio-economic issue
was incorrectly identified. Max (3)

Page 2 of 43
 1.6.2 Purpose of inclusivity in the workplace
• Inclusivity enables businesses to make the best use√ of all human resources.
√
• Promotes equal opportunity for every employee to obtain skills that will lead to
promotion√ and career path. √
• Promotes respect for each person√ and their contributions in the workplace. √
• Promotes healthy/happy working environments√, which in turn increase job
satisfaction and productivity. √
• Increase tolerance √ of each other’s ideas and beliefs. √
• Increase communication in the workplace√ so that business goals/objectives
are achieved. √
• Businesses are able to use a variety of talents√ and skills. √
• Inclusivity increases education/training√ resulting to a decrease in poverty. √
• Increases the number of middle-class people√ participating in the economy. √
• Any other relevant answer related purpose of inclusivity in the workplace
Max (6)
1.7 Types of gambling
• Pyramid schemes√
• Money laundering√
• Card games√
• Casino√
• National lottery √
• Scratch cards√
• Slot machines√
• Horse betting√
• Fafi/Mochina√
• Unofficial lottery type schemes√
• Bingo halls√
• Unlicensed casino’s√
• Internet gambling, as it is sometimes linked to organised crime animal
fighting. √
• Unlicensed operations offering gambling to the public. √
• Any other relevant answer related to types of gambling.
NOTE: Mark the first FOUR (4) only. (4x1) (4)

Page 3 of 43
1.8 Socio-economic issues
1.8.1 Socio-economic issues from the scenario
SOCIO ECONOMIC MOTIVATIONS
ISSUE
1 Counterfeiting√√ Jaen Manufactures sells imitations of genuine products
such as clothing/shoes that are marked with a fake
logo/trademark. √
2 Strikes √√ Some of their employees decided to embark on a go
slow due to wage increase demand. √
3 HIV/Aids√√ Nat, one of their employee’s is not productive due to an
illness that compromises his immune system. √
4. awPolitical disturbances Some community members prevented their customers
√√ to enter the business as they were protesting on a lack
of service delivery√
5 Crime √√ JM spent a lot of money on installing effective security
measures. √
Submax (10) Submax (5)
NOTE: Do not award marks for the motivations if the socio-economic issues
were incorrectly identified.
Max (15)

1.8.2 Negative impact of socio-economic issues identified in QUESTION 1.8.1 on

businesses
Negative impact of counterfeiting on businesses
Negative impact of counterfeiting Negative impact of strikes on
on businesses businesses
• Counterfeits often result in price • This could make the business to be
increases√ of original goods√ unable to meet its contractual
• Consumers are often tempted to obligation√ and the business losing
buy counterfeits √ because of the contracts. √
considerable price differences√ • The cost of making up all the working
• Counterfeits reduce the sales√ and hours√ is too high. √
profits of businesses√ • Strikes can be violent√ because
• Businesses lose money that could strikers intimidate those employees
have been used for expansion √ who do not want to go on a strike√
and the creation of job • Scares off √ potential investors. √
opportunities√ • May results in losses of production√ as
• Counterfeits often result in price employees stay absent from work
increases√ of original goods√ during strikes. √
• Consumers are often tempted to • Strike actions may lead to production
buy counterfeits√ because of the losses√ and decline in sales. √
considerable price differences√ • Businesses may be forced to close
down operations√ after strike actions.
√

Page 4 of 43
 • Counterfeits reduce the sales√ and Sub max (4)
profits of businesses. √
Sub max (4)

Negative impact of HIV/Aids on Negative impact of political

businesses
• Loss of skilled staff√ due to HIV
related illnesses. √
• Profits will be lower √ as
production decreases. √
• High absenteeism √ from illness
resulting to a decrease in
productivity. √
• Conflict can arise among staff √ if
they discover that a worker is HIV
positive. √
• Businesses find it difficult to keep
up production levels √ and to meet
deadlines because of poor staff
morale. √
• Businesses face increased costs√
of finding/recruiting/training
replacements. √. Submax
(4)
disturbances on businesses
• People in township/informal settlement
areas may block roads preventing
employed people √ from going to work
due to service delivery protests. √
• Scares off √ potential investors. √
• Businesses may be forced to close √
especially those located in townships.
√
• May results in losses of production as
employees stay absent √ from work
during political disturbances. √
• Many businesses suffer losses √ as a
result of damage to property. √
• Riots can result in increased
unemployment √ if shopkeepers are
forced to shut down. √
Sub max (4)

Negative impact of crime on businesses

• Loss of staff√ and customers. √
• Insurance/security costs√ become expensive. √
• Loss of profits√ due to stolen goods from businesses. √
• Business loose skilled people √ resulting to a decline in productivity. √
• Increased medical expenses √ as workers are injured during the break ins. √
• Loss of goods in a business can happen√ as a result of
burglaries/shoplifting/customer theft and employee theft. √
• Cost of damage to property increases√ as businesses pay higher insurance
premiums to protect themselves. √
• High rate of absenteeism√ due to affected employees having to go for trauma
counselling. √
• Loss of essential equipment √ causing temporary closure of the business. √
• Any other relevant answer related to the negative of crime on businesses.
Submax (4)
Max (20)
1.9 Meaning of bootlegging
• It is the recording of live/broadcast performance √ without the permission of
the performers/songwriters/ record company which are copied and sold. √
• The example of bootlegging is selling of illegal copied DVDs of latest movies√
on street corners.
• Criminals go to great extremes to record movies with handheld devices√
during a live cinema screening.

Page 5 of 43
 • Any other relevant answer related to the meaning of bootlegging.
Max (4)

1.10 Negative impact of gambling on businesses

• Employees may not work overtime√ at short notice. √
• High rate√ of employee absenteeism. √
• Local businesses forced out √ of business. √
• Gambling hides criminal activities √ and can lead to workplace violence. √
• Compulsive gamblers cannot focus on work √ while preoccupied with
gambling. √
• Compulsive gambling puts a strain√ on relationships in the workplace. √
• Addicted employees could also steal√ to get money for gambling. √
• Reduces productivity √ as it encourages crime and corruption. √
• When gamblers lose their money, they have less to spend on goods and
services√, which affects business negatively. √
• Decrease in savings √ leads to a decrease in future production. √
• Any other relevant answer related to the negative impact of bootlegging on
businesses. Max (6)

1.11 Socio-economic issues

1.11.1
Socio economic issue from the scenario
Piracy√√ (2)
Motivation
Colia Exclusive books illegally downloaded some of NEB’ e-books from the
internet.√ (1)
NOTE: Do not award marks for the motivation if the socio-economic
issue was not correctly identified. Max (3)

1.11.2 Negative impact of piracy on businesses

• Consumers no longer value the worth√ and quality of genuine products sold
by businesses√
• The business image/reputation √ can be damaged by inferior counterfeit
goods. √
• The businesses producing the original goods have their profits reduced √ if
piracy occurs. √
• Piracy also deprives the original artist√ of his/ her or income. √
• People who buy pirated copies contribute√ to the problem for businesses√
• Any other relevant answer related to the negative impact of piracy on
businesses

Page 6 of 43
 Max (6)
1.11.3 Solutions to piracy
Copyright√√
• The owner of intellectual property has the right to produce and copy the
intellectual property. √
• Includes literacy/musical works/artistic works etc. √
• Any other relevant answer related to copyright as a solution to piracy.
Submax (3)

Patent √√
• Exclusive right to make use of or sell the invention or a product made an invented
process for a limited period of time. √
• It is invention, someone who holds a patent has the sole right to produce and sell
in invention. √
• A discovery/scientific method/a literary etc√
• Any other relevant answer related to patent as a solution to piracy.
Submax (3)

Trademarks√√
• Registration of the use of a brand name/slogan/symbol or a combination to make
a product or services recognisable and known. √
• A unique mark that represents a business enterprise and which belongs to the
business enterprise. √
• Includes words/slogans/sign etc√
• Any other relevant answer related to trademarks as a solution to piracy. Sub
max (3)
NOTE: Mark the first THREE (3) only. Max (9)

TOPIC: SOCIAL RESPONSIBILITY

TERM 2 ACTIVITY 2
2.1 Examples of other corporate social responsibility initiatives
• Producing socially responsible goods and services √√
• Treating employees in a socially responsible way √√
• Ensuring production techniques are socially responsible √√
• Initiating community projects√√
• Any other relevant answer related to the examples of other corporate social
responsibility initiatives. Max (8)

Page 7 of 43
2.2 Initiatives that can be undertaken by businesses to address the following socio-
economic issues.
SOCIO-ECONOMIC BUSINESS INITIATIVE
ISSUES
Gambling • Offer financial literacy education√√
• Businesses must make use of organisations such as
Gamblers Anonymous and the National Council on
Problem Gambling to help gamblers fight their addiction.
√√
• Any other relevant answer related to dealing gambling as
a socio-economic issue. Sub max
(4)
HIV/Aids • Offer HIV/Aids treatment and counselling sessions√√
• Offer Voluntary HIV/Aids testing and counselling in the
workplace. √√
• Conduct workshops on HIV/Aids
programmes/campaigns. √√
• Offer Voluntary HIV/Aids testing and counselling in the
workplace. √√
• Roll out anti-retroviral (ARV) treatment programmes
(ART) for the infected employees. √√
• Encourage employees to join HIV/Aids support groups.
√√
• Any other relevant answer related to dealing with
HIV/Aids as a socio-economic issue.
Sub max (4)
Unemployment • Offer financial literacy education√√
• Offer bursaries to the community to improve the level of
education. √√
• Create jobs for members of the community. √√
• Provide entrepreneurial programmes that can promote
self-employment. √√
• Support existing small businesses to create more
employment opportunities. √√
• Any other relevant answer related to dealing with
unemployment as a socio-economic issue. Sub max
(4)
Violence • Provide an employee assistance programme (EAP) to
enable employees with personal problems to seek help.
√√
• Provide counselling facilities / refer victims to private
counsellors. √√
• Any other relevant answer related to dealing with
violence as a socio-economic issue.
Submax (4)
Mark the first TWO responses in EACH socio-economic issue.
Max (16)
2.3

Page 8 of 43
2.1 Introduction
• Businesses can grow and develop into successful enterprises if they take socio-
economic issues in consideration. √
• Businesses who ignore socio-economic issues do not contribute towards a safe
environment. √
• The business is part of the community and any problems in the community impacts
on the business as well. √
• All socio-economic issues present both challenges and opportunities for
entrepreneurs. √
• Businesses need to identify relevant CSR programmes that are aimed at
addressing some of this issue. √
• A diverse workforce allows businesses to address inequality as a socio-economic
issue.
• Any other relevant introduction relating to socio -economic issues. Any (2x1)
(2)

2.2 Differences between social responsibility and Corporate Social Responsibility

SOCIAL RESPONSIBILITY
• Each person is responsible for the
effects their behaviour and lifestyle
has on the environment and others
√√
• A person/group/organisation has a
responsibility to act in a way that
benefit society as a whole. √√
• Getting actively involved in projects
that can have a positive impact on
society in a sustainable way. √√
• Any other relevant answer related to • Any other relevant answer related to
social responsibility
Sub max (4)
Corporate Social Responsibility
• A business takes responsibility for its
impact on society and the environment.
√√
• It is an ethical way of doing business in
the interest of both the business and the
wider community. √√
• A business needs to be careful that all
its actions protect the environment and
improve the quality of life for the citizens
of the country. √√
Corporate Social Responsibility
Sub max (4)

NOTE: 1. The answer does not have to be in tabular format.

2. The differences do not have to link but must be clear.
3. Award a maximum of FOUR (4) marks if the differences are not
clear/Mark either social responsibility or Corporate Social
Responsibility
Max (8)

Page 9 of 43
2.3 Negative impact of strikes and political disturbances on businesses

2.3.1 Negative impact of strikes on businesses

• This could make the business to be unable to meet its contractual obligation√ and
the business losing contracts. √
• The cost of making up all the working hours is too high. √
• Strikes can be violent because strikers intimidate those employees√ who do not
want to go on a strike√
• Scares off potential investors. √
• May results in losses of production as employees stay absent√ from work during
strikes√.
• Strike actions may lead to production losses √and decline in sales. √
• Businesses may be forced to close down operations after strike actions. √
• May lead unhealthy working relationships √between the management and workers.
√
• May force businesses to retrench√ some of its skilled workers to recover from
losses. √
• Any other relevant answer related to the negative impact of strikes on businesses.
Sub max (6)
2.3.2 Negative impact of political disturbances on businesses.
• People in township/informal settlement areas may block roads preventing
employed people from going to work√ due to service delivery protests. √
• Scares off potential investors. √
• Businesses may be forced to close√ especially those located in townships. √
• May results in losses of production as employees stay absent√ from work during
political disturbances. √
• Many businesses suffer losses√ as a result of damage to property. √
• Riots can result in increased unemployment√ if shopkeepers are forced to shut
down. √
• Any other relevant answer related to the negative impact of political disturbances
on businesses. Sub
max (6)
Max (12)

2.4 Initiatives businesses can take to address crime and poverty

2.4.1 Initiatives businesses can take to address crime

• Offer employment√√
• Get involved in the local community on sustainable projects with community. √√
• Sponsor special sports programmes by providing finance (prize money) for
special community events√√
• Adopt a school; by providing most of its needs. √√
• Any other relevant answer related to dealing with crime as a socio-economic
issue.
Submax (6)

2.4.2 Initiatives businesses can take to address poverty

• Provide bursaries for employees’ children√√

Page 10 of 43
 • Offer learnerships for employees√√
• Develop employee’s skills√√
• Invest in a young starting SME that can be a business competitor, buyer or
supplier. √√
• Offer best volunteering programs. √√
• Support poverty alleviation programmes that are offered by the government. √√
• Donate money/food parcels to local NGO’s. √√
• Any other relevant answer related to dealing poverty as a socio-economic issue.
Sub max (6)
Max (12)

2.5 Purpose of inclusivity in the workplace

• Inclusivity enables businesses to make the best use of all human resources. √√
• Promotes equal opportunity for every employee to obtain skills that will lead to
promotion and career path. √√
• Promotes respect for each person and their contributions in the workplace. √√
• Promotes healthy/happy working environments, which in turn increase job
satisfaction and productivity. √√
• Increase tolerance of each other’s ideas and beliefs. √√
• Increase communication in the workplace so that business goals/objectives are
achieved. √√
• Businesses are able to use a variety of talents and skills. √√
• Inclusivity increases education and training resulting to a decrease in poverty. √√
• Increases the number of middle-class people participating in the economy√√
• Any other relevant answer related to the purpose of inclusivity in the businesses.
Max (12)

2.6 Conclusion
• Businesses who develop strategies to deal with socio-economic issues survive
long enough to achieve their long term-term goals. √√
• Businesses should be aware of these issues to put strategies in place to combat
them.√√
• A diverse workforce contributes creative ideas and enables businesses to stay
ahead of its competitors. √√
• Any other relevant conclusion relating to socio-economic issues and the impact
on businesses. Any (1x2)
(2
[40]
TOPIC: FORMS OF OWNERSHIP
TERM 2 ACTIVITY 3
3.1

• The size and nature of the businessÖÖ

• The way in which the business is controlled and managed/ ManagementÖÖ
• Who bears the risk/ Risk bearingÖÖ
• How capital is going to be raisedÖÖ
• How profits and losses will be dealt with/ Sharing of ProfitÖÖ

Page 11 of 43
 • Who is responsible for any debts made by the business/Liability
• Tax implications for profits earned by the business
• The life span of the business/ Continuity
• The vulnerability of the business in terms of lawsuits/ Legal person
(max 5 x2) (10)

3.2.1

FORMS OF OWNERSHIP MOTIVATION

1.Sole traderÖ Mapula Hairdressing Salon
specialises in the latest unisex
hair styles. Mapula is the only
owner of the businessÖÖ
2. PartnershipÖ Gerald, the owner of Gerald
Hairdressing salon requested
Mapula to form a joint business
venture that will be named M & G
Hairdressing salon. ÖÖ

3.2.2

Sole trader Partnership

- A sole trader is a business that is - An agreement between two or more people
owned√ and managed by one who combine labour/capital/resources√
person√ towards a common goal. √
- Quick/easy decisions√ can be - Discussion between partners can slow
made√ down decision making√, and they may
disagree on important business decisions√
- If the owner does not have - The partners able to put their knowledge√
enough√ knowledge/experience and skills together to collectively make the
the business may fail√ best decisions√
- Any other relevant answer related - Any other relevant answer related to a
to a sole trader partnership
Submax (4) Submax (4)

3.3
3.3.1 Form of ownership from the scenario
Private companyÖÖ
Motivation
Sizwile Manufacturer (PTY) Ltd specialises in the production of winter clothes
for both males and females. Ö

3.3.2 Public companyÖÖ

Page 12 of 43
3.3.3
Advantages of a public company (max 6)
• The business has its own legal identity and can own assets/property. ÖÖ
• Managed by at least one competent highly skilled director. ÖÖ
• Directors bring creative ideas which encourage innovation/high productivity
• Shareholders can sell/transfer their shares freely. ÖÖ
• Attracts small investors as shares can be transferred freely/ easily
• Strict regulatory requirements protect shareholders.
• Easy to raise funds for growth through the sale of shares.
• Additional shares can be raised by issuing more shares or debentures.
• No limitation on the number of shareholders, so growth/ expansion is not
limited
• Shareholders have a limited liability for the debt of the company/Shareholders
may only loose the amount which they invested.
• The management of the company can improve since directors are
accountable to shareholders.
• The public has access to the information, and this could motivate them to buy
shares from a company

Disadvantages of a public company (max 6)

• Difficult and expensive to establish as the company is subjected to many legal
requirementsÖÖ
• Must disclose all financial information which can be used by its competitorsÖÖ
• Directors may not be motivated to work very hard because shareholders
decide on the directors' remuneration. ÖÖ
• Directors may not have a direct interest in the company, which can hamper
growth and profit maximisation
• Directors' fees increase the company's expenses which reduces net profit.
• Some shareholders may not exercise their voting rights resulting in choosing
the wrong person as a director
• A full report must be submitted to the major shareholders each year
• Large management structure can result in decision making taking time
• Large amount of funds are spent on financial audits.
• Financial affairs must be known to publicly, this information could be used to
competitors’ advantage.
• Management may be open to legal challenges if their reports do not comply
with King Code III.
• Public companies are subject to more disclosure and transparency
requirements.

3.4
Limited liability Loses are limited to the amount that the owner invested in the
business. ÖÖ
Unlimited liability The owner’s personal assets may be seized to pay for the debts
of the business. ÖÖ

Page 13 of 43
 3.5
3.5.1 Forms of ownership from the scenario
Personal Liability CompanyÖÖ
Motivation
“They want to register a company that will make directors to be liable for the
debts of the business.” Ö

3.5.2 Memorandum of incorporation ÖÖ

3.5.3
• The company name must end with letters INC √√
• Directors have unlimited liability and they are jointly liable for the debts of the
business even if they are long out of office. √√
• The memorandum of Incorporation should state that it is a personal liability
company. √√
• They must at least have one director on their board of directors. √√
(max 6)

3.6
3.6.1 Forms of ownership from the scenario
Non profit company √√ (2)

Motivation
Khosi, the director of the company mentioned that the aim of the company is to render
a service not to make a profit. √ (1)

3.6.2 Advantages and disadvantages of a Non-profit company

Advantages of a NPO/NPC
• Profits are used solely for the primary objective of the organisation.
• They provide social services to various communities.
• Donors receive tax deductions.
• The liability of the members is limited
• Has a legal personality and continuity of existence.
• Can receive grants grants/aid
• Surplus of income is retained to further the goals of the business
• Must prepare the financial statements at the end of the year and is not compelled to
audit the financial statements.
• Non-profit companies are not compelled to attend the general annual meeting
(AGM).

Page 14 of 43
Disadvantages of a non-profit company
• Need professional assistance to set up this organisation
• Does not generate enough capital to cover their expenses.
• Donations may not always be enough to finance the company’s expenses.
• Assets are not distributed to the members upon closing down.
• Creating a non-profit company takes time/effort/money.
• Obtaining grants can be a slow and tiring process.
• Incorporators cannot take along the assets accumulated by the NPC if they decide to
leave.
• They are not allowed to pay bonuses to members
• They are compelled to prepare annual financial statements
Submax (6)

Max (12)

3.7 ESSAY
1. Introduction
• Forms of ownership is the legal position of the business and the way it is
owned. √
• Continue to exist even if a change of ownership takes place, e.g a member or
shareholder dies or retires. √
Sub max 2

2. Meaning of a state-owned company

• A state-owned company has the government as its major shareholder and
falls under the department of Public Enterprise. √√
• These companies take on the role of commercial enterprise on behalf of the
government. √√
Sub max 4

3. Characteristics of a state-owned company

• The name ends with letters SOC. √√
• SOC is listed as a public company. √√
• It is owned by the government and operated for profit. √√
• One or more persons may incorporate and there is no limit on number of
shareholders. √√
• Requires three or more directors and one or more shareholders. √√
• Register with the Registrar of Companies by drawing up Memorandum of
Incorporation. √√
• State-owned companies support private businesses by providing
infrastructure such as communication service /Post office and supply of
electricity/Eskom. √√
• A state-owned company enjoys financial autonomy because they are to
depend on the government for initial investment. √√
• The Act imposes personal liability on directors who are knowingly part of the
carrying on of the business in a reckless or fraudulent manner.
• State-owned company is compelled to have its financial statement audited.
Sub max 8

Page 15 of 43
 • A state-owned company is compelled to attend an annual general meeting
(AGM).
• A state-owned company has a separate legal personality and have limited
liability. Shareholders have limited liability

4. Disadvantages of a state-owned company

• Inefficiency due to the size of the business. √√
• Financial statements must be audited. √√
• Losses must be met by the taxpayer. √√
• Government can lose money through the business. √√
• Shares are not freely tradable making it difficult to raise capital. √√
• A lack of incentive for employees to perform if there is no absence of other
motivator such as productivity bonuses. √√
• A lack of incentive for employees to perform if there is no share in the profit.
√√
• May result to poor management as government is not always as efficient as
the private sector. √√
• Often rely on government subsidies which may not cover all the company’s
expenses. √√
• SOC must follow strict regulations for operations to raise capital.√√
• A state-owned company is compelled to attend an annual general meeting
(AGM).
• State-owned company is compelled to have its Financial statement audited
Sub max 6

5. Advantages and disadvantages of co-operatives.

Advantages of Co-operatives
• Access to resources and funding. √√
• Decision making is by a group√√
• Members have limited liability√√
• The decisions are democratic and fair
• Co-operatives have continuity of existence
• Profits are shared equally amongst members
• Each member has an equal share in the business.
• A co-operative can appoint its own management
• Members are motivated because they are working for themselves
• Can gain extra capital by asking its members to buy shares.
• Resources of many people are pooled together to achieve common objectives.
Sub max 6

Disadvantages of Co-operatives
• Difficult to grow a co-operative. √√
• Shares are not freely transferable√√
• Very few promotion positions for staff. √√
• Decisions are often difficult to reach and time consuming.
• It can be difficult to get a loan because their main objective is not always to make
a profit.

Page 16 of 43
 • The success of cooperatives depends on the support of the members.\
• All members have one vote regardless of the number of shares

6. Conclusion
A cooperative is a traditional way of a group of interested parties getting
together and sharing resources/infrastructures and costs to achieve a better
outcome.

3.8.1 Classification of profit and non-profit companies from the scenario.

PROFIT COMPANY NON-PROFIT COMPANY
Jan also established a company that ends Connie established a company that end
with the name Inc. √√ with the name NPC√√
Submax (2) Submax (2)

NOTE: Only award marks for responses quoted from the scenario.
Max (4)

3.8.2 Differences between profit and non-profit companies

Profit companies Non-Profit-making companies
• The company is established for only one • The company is established for charity
aim and that is to make profit. √√ purposes √√
• The Memorandum of Incorporation sets • The Memorandum of Incorporation
out who the directors and shareholders defines the purpose and its operations.
are as well as their rights/duties √√
responsibilities. √√
• A company incorporated for financial gain • A non-profit company is an association
for its shareholders. √√ incorporated not for gain. √√
• It also sets out the number of shares that • The company have an independent legal
the company is authorised to issue. √√ entity, but the board of trustee is
protected unless found negligent or
fraudulent. √√
• Any other relevant answer related to profit • Any other relevant answer related to
companies non-profit companies
Submax (4) Submax (4)
Max (8)
3.8.3 Advantages of a non-profit company
• Profits are used solely for the primary objective√ of the organisation. √
• They provide social services √ to various communities. √
• Donors receive √ tax deductions. √
• The liability of the members √ is limited√
• A non-profit company a legal personality√ and continuity of existence.
• Can receive grants/aid√ to finance daily operations. √
• Surplus of income is retained √ to further the goals of the business√
• Must prepare the financial statements at the end of the year √ and is not compelled
to audit the financial statements. √

Page 17 of 43
• Non-profit companies are not compelled to attend √ the general annual meeting
(AGM). √
• Any other relevant answer related to the advantages of a non-profit company.
Max (8)

3.9 Distinction between the private company and public company

PRIVATE COMPANY PUBLIC COMPANY

- May no offer shares √ to the
general public. √
- Shares are not √ freely
transferable√
- Minimum of one director. √
- Name must end with√
Proprietary Limited/(Pty) Ltd. √
- Annual financial statements
need not be audited √ and
published. √
- Does not need to publish a
prospectus √ as it cannot trade
its shares publicly. √
- The company is not required √
to raise the minimum
subscription/ issue minimum
shares. √
Submax (4)
- Trades its shares publicly√ on the
Johannesburg Securities Exchange. √
- Shares are √ freely transferable. √
- Minimum of three directors. √
- Name must end with √ Limited/Ltd. √
- Annual financial statements need to be
audited √ and published. √
- Have to register with the Companies √ and
Intellectual Property Commission/CIPC
and publish a prospectus. √
- Must raise a minimum subscription√ prior
to commencement of the company. √
Submax (4)

Max (8)
3.10 ESSAY

2.1 Introduction
• A private company is treated a separate legal entity that has to register as a
taxpayer. √
• A personal liability company has the same
characteristics/advantages/disadvantages. √
• The public company is designed for large -scale operations that require large
capital investment. √
• State owned companies are managed by the government for the benefit of the
citizen. √
• Any other relevant introduction related to the private company/personal liability
company/public company/state owned company.
Any (2x1) (2)

2.2. Differences between a personal liability company and private company

PRIVATE COMPANY PERSONAL LIABILITY COMPANY
• The name ends with (PTY) • The name ends with INC √√
Ltd√√

Page 18 of 43
 • The directors are not personally • The directors are personally liable√ for
liable for the debts of the the debts of the business. √√
business. √√
• Any other relevant answer • Any other relevant answer related to
related to the private company. the personal liability company.
Sub max (4) Sub max (4)

Max (8)

2.3 Advantages of a private company

• A company has continuity √ of existence. √
• Managed at least by one competent √ highly skilled director. √
• Information in a private company √ is only available to shareholders. √
• Not required to file annual financial statements√ with the commission. √
• The company has unlimited number of shareholders√ and its life span is
perpetual. √
• Shareholders can vote for/ appoint the most capable directors √ to manage their
company. √
• Own legal identity √ and shareholders have no direct legal implications/ limited
liability. √
• Large amount of capital can be raised√ since there is no limit on the number of
shareholders. √
• Even though shares are not freely transferable√, large private companies can
raise considerable amount of capital√
• It is possible to sell a private company √ as it is a legal entity in its own right. √
• The management of the company can improve√ since directors are accountable
to shareholders. √
• The company can access long term capital√ and therefore has good long-term
growth opportunities. √
• The company is a separate legal person√ it can buy property in its own
name√/Liabilities of the shareholders √ are limited. √
• Any other relevant answer related to the advantages of a private company.
Max (12)
2.5 Characteristics of a public company
• A minimum of one person is required √ to start a public company. √
• The company name ends √ with letters Ltd√
• Shareholders have √ a limited liability. √
• A prospectus is issued to the public √ to raise capital. √
• Has legal personality√ and therefore has unlimited continuity. √
• A public company has a separate √ legal personality. √
• Requires three or more directors √and three or more shareholders. √
• Profits are shared in the form of dividends√ in proportion to the share held. √
• A public company is required to √ hold an AGM (Annual General Meeting). √
• Register with the Registrar of Companies√ by drawing up Memorandum of
Incorporation. √
• Raises capital by issuing shares to the public √ and borrowing capital by issuing a
debenture. √

Page 19 of 43
 • Auditing of financial statements us compulsory √ and audited statements are
available to shareholders and the public. √
• The new Act forces personal liability on directors who knowingly √ participated in
carrying out business in a reckless/fraudulent manner. √
• Any other relevant answer related to the characteristics of a public company.
Max (12)

2.6 Advantages of a state-owned company

• Shareholders have √ limited liability. √
• Profits may be used to finance √ other state departments. √
• Offer essential services √ which may not be offered by the private sector. √
• Wasteful duplication of services√ is eliminated. √
• Jobs are created√ for all skills levels. √
• Generates income√ to finance social programmes. √
• Prices are kept reasonable/Create sound competition with√ the private sector to
make services affordable to more citizens. √
• Planning can be coordinated√ through central control. √
• Provides a healthy competition to private sectors √ because of government
contributions. √
• Most of the government companies run on sound business lines √ as they have
their surpluses to run their projects. √
• State-owned company can be expanded √ by means of selling its shares to the
public. √
• A state-owned company has a separate√ legal personality. √
• Any other relevant answer related to the characteristics of a public company.
Max (14)

2.7 Conclusion
• A private company has the capacity to grow into a large business. √√
• A personal liability company is usually used for firms that provide professional
services such as attorneys/ accountants/engineers etc. √√
• Smaller public companies are not listed in the JSE as they sell their shares
privately √√
• It is important that state-owned companies are well managed and make a profit.
√√
• Any other relevant conclusion related to the private company/personal liability
company/public company/state owned company.
Any (1x2) (2)
[40]
TOPIC: CONCEPT OF QUALITY

TERM 2 ACTIVITY 4
4.1 Meaning of quality
• Quality is the ability to satisfy √ customer/consumer needs. √
• It refers to the features/characteristics of a product/service √ that meets
customer’s requirements. √
• It refers to products and services that satisfy needs √ and exceeds customer
expectations on a continuous basis. √

Page 20 of 43
• Includes learning from mistakes √ and continuously improving all aspects of the
business. √

Page 21 of 43
 • It is a degree of excellence to which a product/service satisfies the required needs
of customers
• Any other relevant answer related to the meaning of quality.
Max (4)

4.2 Quality concepts from given statements

4.2.1 Quality control √√ (2)
4.2.2 Quality assurance√√ (2)

4.3 Differences between quality control and quality assurance

QUALITY CONTROL QUALITY ASSURANCE
• Includes setting targets/measuring • Ensure that every process is aimed
performance √ and taking corrective at getting the product right first time√
measures. √ and prevent mistakes from
happening again. √
• Any other relevant answer related to • Any other relevant answer related to
quality control quality assurance l
Submax (2) Submax (2)
NOTE: 1. The answer does not have to be in tabular format.
2. The difference does not have to link but must be clear.
3. Award a maximum of TWO (2) marks if the difference is not
clear/Mark either quality control or quality assurance
Max (6)
4.4 Methods of quality
4.4.1 Methods of quality from the scenario
QUALITY METHODS MOTIVATIONS
1 Trademarks √√ • NM uses special signs and marks for their products.
√
2 Samples √√ • They also give their customers a small portion of
product to test the quality of their products. √
Submax (4) Submax (2)

NOTE: 1. Award marks for methods of quality even if the quotes are
incomplete.
2. Do not award marks for the motivations if the methods of
quality were incorrectly identified.
Max (6)
4.4.2 Other methods of quality
Grades√√
• Agricultural products are classified per quality √
• Commercial Standards: the SABS approves commercial standards of products. √
• Any other relevant answer related to grades as a method to indicate quality.
Submax (3)

Commercial Standards√√
• The SABS approves commercial standards of products√
• Any other relevant answer related to commercial standards as a method to
indicate quality.

Page 22 of 43
 Submax (3)
NOTE: Mark the first TWO (2) only.
Max (6)

4.4.3 Importance of quality for businesses

• Effective customer services are rendered, resulting in increased customer
satisfaction. √√
• Time and resources are used efficiently. √√
• Productivity increases through proper time management/using high quality
resources. √√
• Products/Services are constantly improved resulting in increased levels of
customer satisfaction. √√
• Vision/Mission/Business goals may be achieved. √√
• Business has a competitive advantage over its competitors. √√
• Regular training will continuously improve the quality of employees' skills/
knowledge. √√
• Employers and employees will have a healthy working relationship resulting in
happy/productive workers. √√
• Increased market share/more customers improve profitability. √√
• Improves business image as there are less defects/returns. √√
• Any other relevant answer related to the importance of quality for businesses.
Max (8)

4.5 The relation between quality and human resource function

• Ensure quality environment for employees. √√
• Help to define employee job descriptions. √√
• Pay wages, salaries and benefits on time. √√
• Counsel employees on career developments and promotional opportunities. √√
• Keep up-t-date on industry developments that affects employees. √√
• Manage employee performance through training programmes. √√
• Any other relevant answer related to the relation between quality and human
resource function.
Max (8)

4.6 Business functions

4.6.1 Business functions from the scenario
BUSINESS FUNCTION MOTIVATIONS
1 Human Resources • Siya Enterprise (SE) appointed Odwa develop a fair
function√√ and equitable selection process √
2 Purchasing function√√ • Martha must find suitable suppliers for the business.
√
3 Production function √√ • SE provides high quality products according to
specifications. √
4 Marketing function √√ • Martha must promote the business products using
different aggressive advertising campaigns. √
5 Administration function √√ • Gerald will be responsible for making relevant
information available for quick decision-making. √

Page 23 of 43
 Submax (10) Submax (5)

NOTE: 1. Award marks for business functions even if the quotes are
incomplete.
2. Do not award marks for the motivations if the business
functions were incorrectly identified.
Max (15)

4.6.2 Other quality indicators of the business functions

BUSINESS FUNCTIONS
1 Human Resources function • Low rate of staff turnover in the business. √√
2 Purchasing function
3 Production function
4 Marketing function
OTHER QUALITY INDICATORS
• Maintain a healthy relationship between employees
and employer √√
• Provide good working conditions √√
• Motivate and reward employees√√
• Makes sure there is a good recruitment policy that
attracts best candidates. √√
Sub max (4)
• Buy raw materials in bulk at lower prices. √√
• Place orders timeously and regular follow-ups to
ensure that goods are delivered on time. √√
• Required quantities should be delivered at the right
time and place. √√
• Implement and maintain stock control systems to
ensure the security of stock. √√
• Maintain optimum stock levels to avoid
overstocking/reduce out-dated stock. √√
Sub max (4)
• Utilise machines and equipment optimally. √√
• Accurately calculate the production costs. √√
• Select the appropriate production system e.g.
mass/batch/jobbing. √√
• Products must meet customers' requirements by
being safe, reliable and durable. Businesses should
have good after-sales services and warrantees. √√
• Empower workers so that they can take pride in their
workmanship. √√
• Monitor processes and find the root causes of
production problems. √√
Sub max (4)
• Increasing their market share. √√
• Winning customers by satisfying their needs/wants.
√√
• Differentiating products in order to attract more
customers.
• Constantly reviewing value issues. √√

Page 24 of 43

5 Administration function
• Communicating effectively with customers to get
feedback about their experience of products
sold/services rendered.√√
• Using pricing techniques to ensure a competitive
advantage. √√ Sub max (4)
• Use modern technology efficiently. √√
• All systems and processes are documented√√
• Easy to recall/find information/documentation√√
• Handle complaints quickly and effectively√√
• Fast and reliable data capturing and processing
systems. √√
• All documentation is kept neatly and orderly in a
safe place. √√
• Financial documents are kept up to date and
recorded accurately. √√ Sub
max (4)

NOTE: Do not award marks for responses that were quoted in QUESTION 1.2.1.
Max (20)

4.7 The importance of quality in promoting the image of the business

4.7.1 The importance of quality in promoting the image of the business from the
scenario
• Bafana mentioned that quality enables his business to have a good reputation and
promotes brand awareness. √
NOTE: Only award marks for responses quoted from the scenario. (1)

4.7.2 Other importance of quality in promoting the image of the business

• Customers associate image of the business with quality of the product. √√
• Quality products increase sales, profits, business growth and attracts prospective
• investors. √√
• Businesses gain goodwill and support from the community. √√
• Any other relevant answer related to other importance of quality in promoting the
image of the business. √√
NOTE: Do not award marks for responses quoted in QUESTION 1.3.1. Max
(6)

4.7.3 Public relations function √√ (2)

Motivation
• Elmaree to ensure that the business maintains high standard of internal publicity and
the appearance of buildings. √ (1)
NOTE: Do not award marks for the motivation if the business function was
incorrectly identified.
Max (3)

Page 25 of 43
4.7.4 Other quality indicators of the public relations function
• Dealing quickly √ with negative publicity/less/little/no incidents of negative publicity.
√
• Providing regular/positive press releases. √
• Implement sustainable √ Corporate Social Investment (CSI) programmes. √
• Good results of/Positive feedback √ from public surveys on business image. √
• Deliver quality goods/services that promote the brand/image √ with key
stakeholders/ customers/suppliers/government/service providers√
• Any other relevant answer related to other quality indicators of the public relations
function
NOTE: Do not ward marks a response that was quoted in the scenario.
Max (6)

NOTE: 1. The answer does not have to be in tabular format.

2. The differences do not have to link but must be clear.
3. Award a maximum of FOUR (4) marks if the differences are not
clear/Mark either quality control or quality assurance
4.8 ESSAY

2.1 Introduction
• Quality is the ability of a product/service to satisfy specific needs of consumers.√
• Manufactured goods must be quality assured throughout the production cycle.√
• Total quality relates to products that totally satisfy consumers' needs and
expectations in every respect on a continuous basis.√
• Quality management should not just be an inspection process, but become part of
the culture of the business.√
• The activities of all business functions must be properly managed to ensure that all
departments adhere to the same quality standards.√
• Any other relevant introduction related to quality control/control
assurance/importance of quality/quality indicators. Any (2x1) (2)

2.2 Differences between quality control and quality assurance

QUALITY CONTROL QUALITY ASSURANCE
• Inspection of the final product to • Carried out during and after the
ensure √ that it meets the required production process√ to ensure
standards. √ required standards have been met at
every stage of the process. √
• Includes setting targets/measuring • Ensure that every process is aimed at
performance √ and taking corrective getting the product right first time√ and
measures. √ prevent mistakes from happening
again. √
• Any other relevant answer related to • Any other relevant answer related to
quality control quality assurance l
Submax (4) Submax (4)

Page 26 of 43
 Max (8)
2.3 Importance of quality for businesses
• Effective customer services are rendered√, resulting in increased customer
satisfaction.
• Time and resources are used efficiently. √
• Productivity increases √ through proper time management/using high quality
resources. √
• Products/Services are constantly improved √ resulting in increased levels of
customer satisfaction. √
• Vision/Mission/Business goals√ may be achieved. √
• Business has a competitive advantage√ over its competitors. √
• Regular training will continuously improve √ the quality of employees' skills/
knowledge. √
• Employers and employees will have a healthy working relationship√ resulting in
happy/productive workers. √
• Increased market share/more customers√ improve profitability. √
• Improves business image √ as there are less defects/returns. √
• Any other relevant answer related to the importance of quality for businesses
Max (10)

2.4 The correlation between management and the success of the business
• Management play an important role in making the correct decisions√ and
motivating employees to be productive. √
• Poor management can result in ineffective employees√ and loss in productivity. √
• Businesses requires ongoing decisions making √ and problem solving. √
• Problems that cannot be solved √ and decisions that are note made appropriately
can lead to a decrease in productivity. √
• Any other relevant answer related to the correlation between management and the
success of the business. Max
(10)

2.5 Quality indicators of the general management and financial function

2.5.1 Quality indicators of the general management function

• Develop/Implement/Monitor effective strategic plans. √√
• Set direction and establish priorities for their business. √√
• Effectively communicate shared vision, mission and values. √√
• Ensure that all departments/the business meet their deadlines/targets√√
• Learn about/understand changes in the business environment on an on-going
basis. √√
• Be prepared to set an example of the behaviour that is expected from employees in
terms of ethics as well as productivity. √√
• Any other relevant answer related to the quality indicators of the general
management function.
Submax ( 8)

Page 27 of 43
 2.5.2 Quality indicators of the financial function
• Ensuring a healthy cash flow through ensuring payments are made on time. √√
• Effective management of cash by cash budgeting. √√
• Financial records to be kept up to date. √√
• Accountability through tight financial processes. √√
• Negotiate better interest rates in order to keep financial cost down. √√
• Draw up accurate financial statements timeously/regularly. √√
• Invest surplus funds to create sources of passive income√√
• Any other relevant answer related to the quality indicators of the financial function
Submax (8)
Max (16)
2.6 Conclusion
• Quality is important for a business to be sustainable. √√
• Every business should have a quality management system that ensures that all
systems and processes are carried out correctly and safely. √√
• All the business functions contribute to the success or failure of a business and
should therefore have quality controls. √√
• Any other relevant introduction related to quality control/control
assurance/importance of quality/quality indicators.
Any (1x2) (2)
[40]
HOMEWORK: REVISION

TERM 2 ACTIVITY 5

SECTION A
QUESTION 1

1.1.1 Aüü

1.1.2 Cüü

1.1.3 Cüü

1.1.4 Düü

1.1.5 Cüü

1.2.1 resourcesüü

1.2.2 advisorsüü

1.2.3 suppliersüü

1.2.4 competitionüü

Page 28 of 43
1.2.5 regulatorsüü

1.3.1 Düü

1.3.2 Jüü

1.3.3 Aüü

1.3.4 Eüü

1.3.5 Iüü

SECTION B

QUESTION 2

2.1

CHALLENGES BUSINESS EXTENT OF

ENVIRONMENTS CONTROL
2.1.1
2.1.2 2.1.3

1. BS has hired four Micro environment ü Full control ü

unskilled skilled
assistants who need
constant supervisions to
deliver satisfactory
work.ü

2. BS has suffered a lot Market environment ü Less control ü

during COVID 19 as
they could not import
their goods from
overseas and had to
adapt by selling
products that are
produced locally.ü

3. BS profit margins has Macro environment ü No control ü

declined as customers
are not spending money
because of the high
unemployment rate that

Page 29 of 43
 occurred during
lockdown.ü

Sub max 3 Sub max 3 Sub max 3

2.2.1 Purpose of organisational culture. (any 5) (5)

• It shows who report to whom and which department fall√ under which
managers. √
• The structure shows the flow of instruction√ and feedback in the business. √
• Every business must be organised into a structure √that show each person’s
task, the level of authority and responsibility. √
• It is the hierarchy to that shows the position of management√, the
departments and its employees. √
• Every business must be organised into a structure that show each person’s
task, the level of authority and responsibility.
• The structure shows the flow of instruction and feedback in the business.
• It is the hierarchy to that shows the position of management, the departments,
and its employees.
• It shows who report to whom and which department fall under which
managers.

2.3 TWO types of civil societies.

(2x3) (6) (1 mark for naming, 1 mark for each fact explaining)

Non-government organisations (NGO’s)ü

• NGOs are non-profit organisations that do not operate under the control of
the government. ü
• They are established to fulfil important needs in the community by addressing
some socio-economic issues. ü
• NGO’s high ethical and moral standards.

Community based organisations (CBO’s)ü

• CBO’s have been established to assist the community in job creation /socio
economic development and in becoming self-sufficient.ü
• They are local organisations that operate in the community.ü
• They focus on socio-economic issues such as:
o HIV/Aids
o Unemployment
o Crime
o Illiteracy
o Substance abuse
• CBOs often rely on donations from businesses/private persons for funding.

Page 30 of 43
2.4.1

Opportunity Threat
In order to keep up with the increased The new area Caidenn wants to
number of orders and hire more staff, move to already has a popular
Caidenn decided she will need to move her Bistro specialising in various
Bakery to a larger building. √√ baked goods. √√
MAX 2 MAX 2
TOTAL MAX= 4

2.5 THREE regulators in South Africa. (3x2) (6)

o National Energy Regulator of South Africa (NERSA) üü

o National Credit Regulator (NCR)üü
o Independent Communications Authority of South Africa (ICASA)üü
o Advertising Standards Authority (ASA)üü

QUESTION 3
3.1
a) Meaning of the primary sector
• The primary sector is the first stage in the production process.ü
• This sector deals with the extraction of raw materials from nature.
• The primary sector is involved in collecting resources direct from
nature.
• These raw materials are then supplied to other businesses for further
processing.
• Exampleü
(2x1) (2)

b) Meaning of the secondary sector

• The secondary sector is responsible for converting/processing/
manufacturing of raw materials into final products.ü
• It is the link between the primary sector where raw materials are
extracted from nature.
• Deals with distribution/transportation/ retailing/services√ to other
businesses or consumers.

Page 31 of 43
 • It includes the manufacturing factories, construction and energy
generation
• Exampleü
(2x1) (2)

c) The tertiary sector

• This sector distributes goods processed in the secondary sector to
consumers.ü
• The tertiary sector aims to bring products and services within reach
of the consumer.
• Tertiary activities include all activities that distribute products from the
secondary sector.
• This industry that offer services to consumers and other businesses.
• Exampleü
(2x1) (2)

3.2 (3x2)(6)
• Competition keeps prices üdown and reduces the business profitability.ü
• It forces businesses to find new ways to produce an existing products or
develop new products/ services.
• A business may close down if it is unable to compete with other businesses.
• Competition reduces the business market share and its target market.

3.3 The relationship between micro, market and macro environments

• A change in the macro environment may cause a change in the micro
üenvironment which may in turn, create a change in the market environment
e.g. an increase in the rate of interest may lead to an increase in the
production cost which may reduce consumer spending. ü
• A change in the economic environment may lead to a change in the
technological environment and the way in which people spend money.
• The legal, political and institutional environment has a large impact on other
business environments e.g. politics and laws affect the economic
environment.
• The business has full control over all elements/features of the micro
environment.
• The business has less/little control over the market environment but it can it
can influence it.
• The business has no control over the macro environment but it must develop
strategies to adapt to the challenges that are posed by this environment.
(4x2) (8)

Page 32 of 43
 3.4

PUBLIC SECTOR PRIVATE SECTOR

• Aim is to meet the needs of the
society
• State owned/state run or
parastatals which are operated by
private company.
• Partly or wholly funded by tax
money
• Motive is to provide a service
• State ownership
• State owned businesses report to
government
• Government monitors and
oversees their performance
• SUB MAX 4
• Aim is to meet both the need and
wants of the society.
• Privately owned by entrepreneurs
• Owners raise capital to fund their
businesses
• Motive is to make a profit
• Owned by different forms of
ownership.
• Businesses in this sector do not
report to government but owners.
• Owners oversees their
performance
• SUB MAX 4

3.5
Any correct answer, e.g., ESKOM, SAL, TRANSNET, SABC etc.üü

SECTION C
QUESTION 4

4.1 Introduction

- Any other relevant introduction related to the business sectors

4.2 Differences between the formal and informal sector

FORMAL SECTOR INFORMAL SECTOR

• Industries in this sector are legally
registered.
• Fall between the mainstream of the
economy
• It is registered and pays tax.
• This sector is not legally registered
• Fall outside the mainstream economy (also
known as the second or marginalised
economy)
• It is not registered and does not pay tax.

Page 33 of 43
• Made up of small, medium and large
businesses
• Employees are protected as they receive
unemployment funds, disability funds,
injured on duty funds
• They are controlled by the laws and
regulations of the government.
• Higher capital is required in this sector.
• Output can be measured into the
country’s GDP
• Usually more labour intensive
• Usually include manufacturing, banking,
insurance and large retail companies.
• Employees have a steady income
• Not easy to enter this sector as
businesses had to be legally registered
• Higher capital is required in this sector
• Sub max 6
• Small scale operations
• Employees are not protected and can be
exploited
• They are not tracked by any form of
government.
• Low capital needed for operation.
• Estimates should be made to measure
contribution into the country’s GDP.
• Usually more skill intensive.
• Usually include street vendors, spaza shops,
hairdressers and other home based activities.
• Employees’ income is inconsistent
• Easy to enter the sector as there are no legal
formalities needed.
• Low capital needed for operation
• Sub max 6

4.3 Main purpose of the public sector. (3x2)(6)

• The public sector includes those industriesü that are controlled by the
government. ü
• Offers affordable services that the private sector.
• Aims to meet the needs of society.
• Public sector businesses do not aim to make profit.
• Provides people with job opportunities.
• Improves the general standard of living of all people.
• Controls pollution and protects/conserves natural resources such as water,
wildlife and precious stones.
• Ensures that wealth of the country is spread equally among the rich and the
poor.
• Offers valuable services such as public roads/ public hospitals/public schools
etc.
(Max 6)

4.4 Discuss any THREE types of organisational structures. (3x3)(9)

Functional organisational structureü

• Employees get instructionsü from more than one managerü
• The plan to be carried out determines who will be giving instructions
• This structure confuses employees as they report to more than one manager.

Page 34 of 43
Project Organisational structure
• This is structured around project teams
• It is a temporary structure because employees are drawn from different
departments
• Employees are then grouped together to form a project team which will carry
out a particular project.

Matrix Organisational structure

• This structure is structured around projects but employees stay in their
departments.
• A project must be completed up to a certain point
• The project is then passed on to the next team, which will carry out the next
phase of the project.

Line organisational structure

• Employees report to only one person
• Only the Director can give instructions to employees
• This structure eliminates confusion among employees as they report to one
person only

Line and staff organisational structure

• Experts act as advisors to top and middle management.
• Advisors don’t form part of the business, they merely give advice
• Advisors don’t have authority over the employees, which means they can’t
give any instruction to employees.

4.5 Explain the relationship between primary, secondary and tertiary

sectors. (max 5)
• The primary sector depends on the secondaryü sector for manufactured
goods such as machinery/equipment/fertilisers e.g. a farmer may require
seeds from another farmü
• The primary sector is dependent on the tertiary sector for its customer needs.
• The secondary sector processes the raw materials obtained from the primary
sector into more useful products.
• The secondary sector depends on the primary sector for raw materials and
products.
• The secondary sector depends on other secondary industries e.g. BMW
needs tyre from DUNLOP another secondary sector player
• Secondary sector needs the tertiary sector to sell their processed or
manufactured goods and also for services such as banks, insurance,
transport and communication
• The tertiary sector depends on the primary sector for raw materials that do not
need processing by the secondary sector.

Page 35 of 43
• The tertiary sector depends on the secondary sector for manufactured goods
such as office machines/office furniture/stationery etc.

Page 36 of 43
QUESTION 5

5.1 Introduction

- Businesses operate within the context of business environments which include the

micro, market and macro environment. √

- Each business environment is characterised by its own internal and external

features/elements/components. √

- Businesses have to develop strategies to deal with features/elements of the macro

environment. √

- Any other relevant introduction related to the macro-environment.

(2x1) (2)

5.2 Meaning of the macro environment

- The macro environment refers to the challenges and influences √ that present

themselves from outside of a business.√

- Businesses has no control over the challenges and influences√ from the macro

environment.√

- The macro-environment can influence businesses directly or indirectly√ as it

changes continuously. √

- Any other relevant answer related to the meaning of the market

environment.

Max (4)

Page 37 of 43
Page 38 of 43
5.3 Elements of the macro environment

Physical/Natural • These are forces that are present in the natural environment üsuch as the natural
environment ü resources/pollution/ increased cost of energy/ infrastructure. ü
• Businesses that use raw material to transform them into useful products such as clothing and
electricity need nature for their survival.
Economic • The economic environment includes all those factors that affect financial matters e.g. interest
/Environment rates/inflation/business cycle etc.
• Interest rates are the charges people and businesses pay for the cost of borrowing money.

• Inflation refers to the general increase in the prices of goods and services in the economy.
Social, cultural and • The social environment involves people.
demographic • The cultural and social environment can be defined as the sum total of the languages
environment /values/cultural norms/preferences/religions and beliefs.
• The demographic environment refers to the composition of a country’s inhabitants e.g. their
age/residential areas/skill level/income level etc.
Technological • These factors include the development of new technological products and services.
environment • The rise of information technology such computers and communication technology allows for a rapid
flow of large amounts of digital information/ ICT.

Page 39 of 43
 Legal environment • The legal component of the macro- environment consists of the legislation that has been passed.
and political • The government plays a large role in the development of policies and legal frameworks.
environment • The legal system through the courts, has power to oversee: employment, tax, trade mark rights,
patent rights, intellectual property.
• Government employs a large number of consumers.

International /Global • Globalisation refers to an increase in trade and investment between countries.
environment

Institutional • This refers to the three spheres of government e.g. local, provincial and national government.
environment

NOTE: 1 Do not award marks for the institutional environment.

2 Mark the first FOUR (4) only

(4X3) (12)

Page 40 of 43
5.4 Solutions a businesses can implement to deal with EACH identified
element of the macro environment.

Physical/Natural environment Any relevant solutionü

Economic /Environment Any relevant solutionü

Social, cultural and demographic environment Any relevant solutionü

Technological environment Any relevant solutionü

Legal environment and political environment Any relevant solutionü

International /Global environment Any relevant solutionü

Institutional environment Any relevant solutionü

Max 4, mark FIRST FOUR only

5.5 Inter-relationship between the micro and market environments.

5.5.1 Business and consumers√√

- Businesses market/advertise their goods and services to ensure that there is a

demand for them. √√

- Businesses determine the appropriate type of goods and services and the best

price for them. √√

- The public relations ensure that the business has a good image and that its

consumers remain loyal.√√

- Any other relevant answer related to the relationship between the business and

consumers.

Sub max (4)

5.5.2 Business and suppliers√√

- Businesses ensure use best supplier to get the best quality for the best price.√√

- Businesses and suppliers communicate about the latest developments in the

Page 41 of 43
technology and products√√

- They ensure that suppliers have enough stock to meet consumers’ demand. √√

- Businesses pay their suppliers as they are their customers too√√.

- Any other relevant answer related to the relationship between the

business and suppliers.

Sub max (4)

5.5.3 Business and intermediaries√√

- Businesses establish good relations with intermediaries in order to negotiate new

markets for the business.√√

- Intermediaries inform businesses about the demand for goods increased.√√

- Businesses choose best distribution channels such as transport

and communication companies that offer reasonable prices.√√

- Any other relevant answer related to the relationship between the

business and intermediaries.

Sub max (4)

5.5.4 Business and competitors√√

- The businesses need to be aware of its competitors’ products and prices. √

- Businesses ensure that they keep abreast of the latest market trends. √

- Business offer competitive prices and good quality products to keep customers

buying their products. √

- Businesses need to be creative in turning the challenge of the competitors into

positive changes for their companies √

Page 42 of 43
- Any other relevant answer related to the relationship between the business and

competitors.

Sub max (4)

Max (14)

5.6 Conclusion

- Businesses should have a clear understanding of the components/elements of the

macro environment to plan properly for necessary control measures.√√

- Implementing strategies to address challenges in the macro environment will

maximise productivity and effectiveness in the business.√√

- Any other relevant conclusion related to the macro environment

Max (2)

Page 43 of 43