CARIBBEAN E XAM I NAT I O N S COUNCIL

CARIBBEAN SECONDARY EDUCATION CERTIFICATE®

EXAMINATION
‘‘*’’Barcode Area”*”
Front Page Bar Code
23 MAY 2019 (a.m.)

FILL IN ALL THE INFORMATION REQUESTED CLEARLY IN CAPITAL LETTERS.

TEST CODE 0 1 2 4 0 0 2 0

SUBJECT PRINCIPLES OF BUSINESS – Paper 02

PROFICIENCY GENERAL

REGISTRATION NUMBER

SCHOOL/CENTRE NUMBER

NAME OF SCHOOL/CENTRE

CANDIDATE’S FULL NAME (FIRST, MIDDLE, LAST)

‘‘*’’Barcode Area”*”

D D M M Y Y Y Y
Current Bar Code

DATE OF BIRTH

SIGNATURE __________________________________________________

‘‘*’’Barcode Area”*”
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FORM TP 2019109 MAY/JUNE 2019

CARIBBEAN E XAM I NAT I O N S COUNCIL

CARIBBEAN SECONDARY EDUCATION CERTIFICATE®

EXAMINATION

PRINCIPLES OF BUSINESS

Paper 02 – General Proficiency

2 hours

READ THE FOLLOWING INSTRUCTIONS CAREFULLY.

1. This paper consists of FIVE questions. Answer ALL questions.

2. Write your answers in the spaces provided in this answer booklet.

3. Do NOT write in the margins.

4. You are advised to take some time to read through the paper and plan your answers.

5. If you need to rewrite any answer and there is not enough space to do so on the
original page, you must use the extra lined page(s) provided at the back of this
booklet. Remember to draw a line through your original answer.

6. If you use the extra page(s) you MUST write the question number clearly in
the box provided at the top of the extra page(s) and, where relevant, include
the question part beside the answer.

DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO.

Copyright © 2018 Caribbean Examinations Council

All rights reserved.
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ANSWER ALL QUESTIONS

1. (a) (i) Define the term ‘stakeholder’ as it relates to a business.

A stakeholder is a person or group who has an interest in the business because they
..................................................................................................................................
impact or are impacted by the business in one way or another.
..................................................................................................................................

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(2 marks)

(ii) Identify TWO stakeholders who are involved in a business.

1. Owners 2. Employees
..................................................................................................................................
Others: consumers, suppliers, government, the environment, future generation,

.................................................................................................................................
communication.
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(2 marks)

(b) Outline ONE function of EACH of the stakeholders identified in (a) (ii).
1. Owners - ensure that the business has all the resources such as equipment and the people
..............................................................................................................................................
that it needs to successful operate.
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2. Employees - must carry out their work to the best of their ability without wasting time

and resources.
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(4 marks)

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(c) Describe ONE activity that may be carried out in EACH of the following functional areas
of a business.

(i) Marketing

Marketing - promote the goods and services such as advertise on social media.
..................................................................................................................................
Others - distribute product, conduct market research.
..................................................................................................................................

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(ii) Finance
Finance - pay workers by ensuring that they are compensated for the job.
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Others- keep track of all monies coming in and out of the business, do the budget,
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prepare financial records.
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(iii) Personnel/human resources (HR)

Hire workers with the relevant skill and qualification.
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Others- fire workers, care for workers' welfare, provide training for workers.
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(6 marks)

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(d) Explain TWO legal or ethical principles that business owners should adopt in the
establishment and operation of a business. In your explanation, include relevant examples
of EACH priniciple.
1. Make sure that the type of material the business claims to use to make its products is actually
..............................................................................................................................................
what is used for eg. you do not want to say that genuine leather is used to make the bags when
..............................................................................................................................................
another inferior materials is used.
.............................................................................................................................................

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2. Make sure that relevant taxes are paid to the government such as corporation tax and pay
..............................................................................................................................................
over national insurance and income tax as well.
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(6 marks)

Total 20 marks

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2. (a) (i) State TWO functions of management in a business organization.

Directing, Organising, Planning, Controlling, Co-ordination, Delegating,
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Motivating.
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(2 marks)

(ii) Describe EACH function stated in (a) (i).

1. Directing - ensure that workers fully understand what they are to do by giving
..................................................................................................................................
clear instructions and proper guidance.
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..................................................................................................................................

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2. Controlling - managers must see to it that the tasks done by employees are properly

carried by ensuring what is done against acceptable standards and making necessary
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recommendations to correct what is not done properly.
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(4 marks)

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(b) State TWO responsibilities of management to EACH of the following groups.

(i) Employees
Employees - to treat all employees fairly and pay them fair wages.
.................................................................................................................................
Others - provide suitable working environment, provide equipment and necessary
.................................................................................................................................
material for workers to carry out their jobs, listen to employees and provide training.
.................................................................................................................................

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(ii) Government
Government - abide by government rules and provide government with necessary
.................................................................................................................................
required information.
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(4 marks)

(c) (i) Define the term ‘teamwork’.

Teamwork is when two or more persons work together to achieve the goals
..................................................................................................................................
of the organization.
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..................................................................................................................................

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(2 marks)

(ii) State ONE advantage and ONE disadvantage of teamwork within an organization.

Advantage- more ideas can be explored as a solution to a problem.

..................................................................................................................................
Others: a sense of belonging, the workload is shared.
..................................................................................................................................
Disadvantage - it may take a longer time to arrive at a decision.
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Others: some team members may not make meaningful contributions and conflict can
..................................................................................................................................
arise.

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(2 marks)

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(d) For some time now, there has been a breakdown in communication between the managers
and employees of ABC Plastic Co. Ltd.

Explain TWO strategies the management of ABC Plastic Co. Ltd. could implement to
improve communication within the organization.

..............................................................................................................................................
1. Select the most appropriate channel of communication as one channel may not be

effective in reaching all the workers eg. verbal communication may not be enough but following
..............................................................................................................................................
up with written communication will help. Eg. after a meeting management can ensure that
..............................................................................................................................................
everyone will have access to the minutes to ensure that everyone remembers what was
..............................................................................................................................................
discussed.
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2. Can use notices and bulletins to ensures that everyone is kept up to date with what is
..............................................................................................................................................
happening in the business.
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Others: get feedback from workers.

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(6 marks)

Total 20 marks

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3. (a) (i) Define the term ‘production’.

This is the process of converting input (raw materials) to finished output

.................................................................................................................................
(goods and services).
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(2 marks)

(ii) Identify TWO factors of production, other than capital, used in the manufacture
of goods and provision of services.

1. Land 2. Labour 3. Enterprise

.................................................................................................................................

.................................................................................................................................

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(2 marks)

(b) (i) Define the term ‘capital’.

This is resources put in the business to be used in the production process
.................................................................................................................................
such as building and equipment.
................................................................................................................................

................................................................................................................................
(2 marks)

(ii) Differentiate between ‘fixed capital’ and ‘working capital’ and give an example of
EACH type.

.................................................................................................................................
1. Fixed capital - are those assets that are not used up during the production of goods

and services eg. equipment and plant.

.................................................................................................................................

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2. Working capital - is needed for the day to day operation of the business.
.................................................................................................................................

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eg. purchase of raw materials.

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(4 marks)

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(c) Outline ONE benefit of the growth of a company to EACH of the following groups.

(i)
Customers
The customers will be able to receive more efficient service because the business may
.................................................................................................................................
now be able to acquire the necessary machine or equipment to provide better service.
.................................................................................................................................

.................................................................................................................................

(ii) Shareholders
When the company growing it means the business is likely to be more profitable.
.................................................................................................................................

.................................................................................................................................

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(4 marks)

(d) Explain TWO ways in which increased productivity may be advantageous to a business.

1. Greater profit for the business when the business is very productive it may be able to increase
..............................................................................................................................................
its level of output resulting in more sales and more profit for the business.
..............................................................................................................................................

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2. Greater opportunity for export - with increase output the business is in a position to other
..............................................................................................................................................
countries.
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Other: More competitive.
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(6 marks)

Total 20 marks
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4. (a) Outline TWO functions of consumer organizations.
1. Lobby government to bring in laws to protect consumers such as laws to do with the
..............................................................................................................................................
safety of children's toys.
.............................................................................................................................................
2. Create information to better inform the public about buying decisions and choices they can
..............................................................................................................................................
make.

..............................................................................................................................................
3. Seek to enforce consumer rights.

4. Raise awareness of consumer issues and concerns.

..............................................................................................................................................
Others: Provide surveys so consumers can compare products including their features,
..............................................................................................................................................
effectiveness and price.
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(4 marks)

(b) Outline TWO benefits of good customer service.

1. Build relationship with consumers - when consumers are able to interact with persons
..............................................................................................................................................
from the business often and are able to get their problems quickly resolved it will help to
..............................................................................................................................................
build good relationship with them.
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2. Increase Sales - when consumers are treated well they will be inclined to tell others about
..............................................................................................................................................
the business which will help to boost the sales of the business.
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Others: Builds brand loyalty and promote the company and its products.
(4 marks)

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(c) Describe EACH of the following forms of customer service.

(i) Warranties
These are types of guarantee that a manufacturer makes regarding the
.................................................................................................................................
condition of its product. It also refers to the terms and situations in which repairs or
.................................................................................................................................
exchanges will be made in the event that the product does not function as it is suppose to.
.................................................................................................................................

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(ii) Toll free numbers/toll free call centres

.................................................................................................................................
A system that allows consumers to call and obtain assistance in solving a problem.

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(iii) Suggestion boxes

Is a device for obtaining additional comments, questions and requests from customers. It
.................................................................................................................................
is usually shared like a box where consumers can put their feedback in that they have
.................................................................................................................................
written on a paper etc.
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(6 marks)

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(d) A trademark is a firm’s brand that allows it certain benefits in the marketplace.

Explain TWO ways in which trademarks are beneficial in the conduct of a business.
1. It offer protection where it prevents other businesses from profiting off the name or
..............................................................................................................................................
brand of the business. Other businesses may want to pretend to be the business by using their
..............................................................................................................................................
brand or name and this would cut into the business profit.
..............................................................................................................................................

..............................................................................................................................................
2. Trademarks make it easy for customers to find your business. There will be a lot of similar
..............................................................................................................................................
businesses out there in the world and so the trademark is what will separate your business from
..............................................................................................................................................
others and will help consumers to find the business easily.
..............................................................................................................................................

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(6 marks)

Total 20 marks

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5. (a) Define the term ‘information and communications technology’ (ICT).

This refers to a diverse set of technological tools and resources used to transmit, store, create,
..............................................................................................................................................
share or exchange information. These tools and resources include computers, the internet
..............................................................................................................................................
(websites, emails) and live broadcasting technologies (radio, television).
..............................................................................................................................................

..............................................................................................................................................
(2 marks)

(b) Describe ONE way in which computer-aided design (CAD) is used in a business
organization.
It is used to help designers, architect and engineers to design new products eg. an
..............................................................................................................................................
architect may need to design a building and so may use CAD to help with the
..............................................................................................................................................
designing of it in 2D or 3D so that they can visualize it.
..............................................................................................................................................

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(2 marks)

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(c) Outline THREE ways in which the use of automatic teller machines (ATMs) or
automated banking machines (ABMs) could assist a business.
1. It can lessen the number of consumers that may need to go into a bank to do simple
..............................................................................................................................................
transactions such as to make a withdrawal or deposit.
..............................................................................................................................................

..............................................................................................................................................

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2. It will help the business to operate more efficiently so that consumers can get through

quickly with their financial transactions without waiting in long lines.

..............................................................................................................................................

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3. The close proximity of ATMs to businesses will help for consumers to get necessary cash
..............................................................................................................................................

..............................................................................................................................................
to conduct transactions rather than consumers walking around with large amounts of cash.

..............................................................................................................................................

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(6 marks)

(d) Outline TWO ways in which electronic commerce (e-commerce) can improve the
performance of a business.
1. Get more customers as they will be able to provide their goods and services
..............................................................................................................................................
worldwide.
..............................................................................................................................................

..............................................................................................................................................
2. They can improve customer service by becoming more efficient and effective in delivering
..............................................................................................................................................
goods and service on time at a faster pace.
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(4 marks)

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(e) Explain TWO ways in which businesses can demonstrate the ethical use of ICT in the
conduct of their operations.
1. Ensure that customer records are kept confidential where they do not give out
..............................................................................................................................................
customers' data to anyone without permission.
..............................................................................................................................................

..............................................................................................................................................

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2. Ensure that the business website is secure for persons to conduct business so that

it is not easily hacked and customer information stolen.

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(6 marks)

Total 20 marks

END OF TEST

IF YOU FINISH BEFORE TIME IS CALLED, CHECK YOUR WORK ON THIS TEST.

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EXTRA SPACE

If you use this extra page, you MUST write the question number clearly in the box provided.

Question No.

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 CANDIDATE’S RECEIPT

INSTRUCTIONS TO CANDIDATE:

1. Fill in all the information requested clearly in capital letters.

TEST CODE: 0 1 2 4 0 0 2 0

SUBJECT: PRINCIPLES OF BUSINESS – Paper 02

PROFICIENCY: GENERAL

REGISTRATION NUMBER:

FULL NAME: ________________________________________________________________

(BLOCK LETTERS)

Signature: ____________________________________________________________________

Date: ________________________________________________________________________

2. Ensure that this slip is detached by the Supervisor or Invigilator and given to you when you
hand in this booklet.

3. Keep it in a safe place until you have received your results.

INSTRUCTION TO SUPERVISOR/INVIGILATOR:

Sign the declaration below, detach this slip and hand it to the candidate as his/her receipt for this booklet
collected by you.

I hereby acknowledge receipt of the candidate’s booklet for the examination stated above.

Signature: _____________________________
Supervisor/Invigilator

Date: _________________________________