KWAZULU NATAL PROVINCE 2019€¦ · KWAZULU NATAL PROVINCE 2019 MATRIC INTERVENTION Business...

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KWAZULU NATAL PROVINCE

2019

MATRIC INTERVENTION

Business

Studies

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SADTU Metric Intervention & Revision Document

Preface

This document has three parts.

Part one starts from page 1 to page 34 (aiming at achieving 30% pass)

Part two starts from page 34 to page 55 (aiming at achieving 60% pass)

Part three from page 55 to the last page (aiming at achieving up to 90%)

Acknowledgements and information about this document

This document contains the structure and weightings of the Examination Paper and Examination

Guidelines.

It aims at assisting all learners from level one to level seven

It is divided into three main parts (part one 30%, two 60% and three 90%)

It is not designed following the Annual Teaching Plan (ATP) but examination paper; however, all chapters

are indicated the terms where each chapter belongs. E.g Human Rights (term 2 chapter)

It uses a variety of ‘bullet patterns’ just to emphasise to both educators and learners that Business Studies

is NOT written in paragraphs but in points/facts.

The document can be used for teaching and also for revision purposes.

Inputs are encouraged to develop the document and make it more relevant.

The document will be improved on yearly bases to accommodate changes in the Examination Guidelines.

In 2020, it will be revised to address Paper 1 and Paper 2 since papers are will be Paper one and two

approach.

Paper allocations for 2020 are, (Business Environment and Business Operations =P1) (Business Roles

and Business Ventures = P2)

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How to get 30% in Business Studies? PART 1

NOTES TO EDUCATORS

Take note of the allocation of Business Studies FOUR topics(Business Operations, Business Roles Business

Environments & Business Ventures

Select only ONE topic and drill your learners in it.

Analyze the weighing of these topics across all September Trial and November Examinations for all the

years since 2014.

Observe the trend in the following breakdown and identify which topic your learners like in the following

breakdown.

Please note that each topic carries 10 Marks in Section A, 60 Marks in Sections B1, 15 Marks in Section

B2 (miscellaneous) and 40 Marks in Section C (essays) NB: this equals to 125 Marks per topic, out of 300

This therefore means that a learner can get 90 out of 300 just by doing just one topic thoroughly.

Doing any two topics therefore means that a learner can get +/_ 150 out of 300 if done these topics

thoroughly. This means the learner can get 50% when done TWO topics very well.

Doing three topics thoroughly means getting up to 70% in business studies, while doing all four topics

means a learner can get a distinction.

This document seeks to focus therefore to all these four categories then you select responding to the needs

of your learners.

Teaching all topics to an average leaner can disadvantage the learner, while it also disadvantaging an ACE

learner.

It is therefore important to first know your learners very well before deciding whether you take just

One/Two/Three or All Four topics

It is also advisable to divide your learners according to their capabilities if the environment can allow that.

Try conducting your lessons in English while having not more than 20% of code switching as these further

disadvantaging learners.

Also try helping learners to answer in English and try to express themselves in writing more than simply

conducting whole class discussion, barring in mind that learners have to write at the end of the year.

Using the exam guidelines is key as it gives learners 80% scope of the paper.

It is an excellent idea to use previous question papers as revision NOT just copying documents to learners

as this act would be classified as blame shifting.

It motivates learners to do all work, revision and other activities with them other than simply loading them

with work to do at home as they will not do it if there is no evidence of motivation to them.

NB: this document only take learners to just 30% pass, therefore, other contents may not be included


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NOTES TO LEARNERS to get 30% In Business Studies

Why worry about passing Business Studies when you have this document?

Just by doing one topic in the subject, you can get 30% and pass at the end of the year.

Going through this document leaving no word no content unknown can therefore put you at risk for not

getting this 30% pass mark.

Time yourself during your study timetable.

Practice the following preselected topic using previous question papers.

You will realize that questions, essays will be repeated in most question papers as they will be set from

one topic from identified chapters.

How Business Studies Topics Are Separated? See below

Business Roles Business

Operations

Business Ventures Business Environments

Creative

Thinking

Human

Resources

Function

Leadership

and

Management

Legislations

Team

Performance

Total

Quality

Management

Investment

and Securities

Business

Strategies

Professionalism

and Ethics

Insurance Sectors

Human Rights Forms Of

Ownership

Presentation

CSR /CSI

In the above table, each topic is set to cover 10 marks in section A, 75 marks in section B and 40 marks

in section C.

Learners can just choose any topic above.

ANALYSIS ON WHAT INFLUENCES A CHOICE OF TOPIC

It must be observed that it is not simply choosing on the bases of liking the topic but choosing on the

bases of merit for learners in the topic.

Several testing can be done by the educator to influence the choice.

LOOKING INTO BUSINESS ROLES

o This topic has more common knowledge as it talks about applicable chapters, e.g human rights and team

performance.

o Most learners find it easy to comprehend this topic than other topics.

o Essays are easy to write to the maximum marks

o Most learners tend to choose this topic in most classes.

LOOKING INTO BUSINESS OPERATIONS

This has only TWO chapters, meaning, just by doing these only two chapters, a learner is at liberty to find

125 marks in all papers in September and November

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These chapters have specific knowledge which cannot be altered as learners may do in business roles, e.g

Elements of TQM.

It is guaranteed that if section B is mostly based on TQM, it is more likely that an essay will be on Human

Resource Function

TQM is relatively harder than Human resource Function, which makes it less interesting for learners

LOOKING INTO BUSINESS VENTURES

This topic is too diverse for average learners to comprehend

There are also calculations, and forms of ownership, yet most learners are often annoyed by forms of

ownership and Mathematics.

Leadership and management have terminology that may be formidable for learners to comprehend, thus

hindering the success of learners to pass in flying colours.

It is most suitable for learners who are also good in Mathematics and calculations. E.g simple / compound

interest and calculating insurance.

LOOKING INTO BUSINESS ENVIRONMENTS

There are around TEN essays in this topic; therefore, the choice is too wide for learners.

These chapters are done early in the year and most learners have long forgotten these at the end of the

year, therefore, most learners don’t like it.

Some learners confuse these legislations and strategies, e.g they confuse EEA with RLA while confusing

Intensive strategies with Diversification strategies

Terminology also becomes a challenge in most learners who are not so fluent in English.

It is therefore less likely that learners put this topic at the top of the list in their choice.

BUSINESS ROLES (GUIDELINES)

CSI / CSR PROFESSIONALIS

M & ETHICS

HUMAN RIGHTS CREATIVE

THINKING

TEAM

PERFORMANC

E Differentiat

e between

CSI /CSR

Differentiate

between

professionalism and

ethics

Define Types of

rights,

inclusivity,

environmental

issues

Distinguish

between

problem

solving and

decision

making

Define team

and team

dynamics

benefits of

CSR/CSI to

businesses

Factors that

challenge

professionalism of a

business

How to address

human rights in

the work place

(social, cultural,

human rights)

Steps in

problem

solving

Stages of

forming a

team

Benefits of

CSR/CSI to

the

community

Principles of

professionalism o How to

embrac

e

diversit

y in a

busines

s

Problem

solving

techniques

Criteria of a

team

Challenges of CSR/CSI to the community

Principles of ethics How can a

business protect

the environment

Applicatio

n and

evaluation

Causes of

conflict

Challenges of CSI/CSR to the business

King code How

business

create an

environme

nt that

Conflict

resolution

steps


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stimulates

creativity

How businesses can enhance the wellbeing of its employees

Ethical,

professional,

responsible and

accountable

businesses

Advantage

s of

creative

thinking in

the

workplace

Grievance

procedure

How businesses can enhance the wellbeing of the community

Dealing with

difficult

employees

How a business can apply CSR/ CSI

Dealing with

different

personalities.

Link between triple bottom line and CSR/CSI

BUSINESS ROLES {MAIN TOPIC}

Corporate Social Responsibility (CSR) (TERM 2 CHAPTER) Corporate Social Responsibility (CSR)

Corporate social investment (CSI):

Refers to the obligation of an organisation

towards uplifting the welfare and interest of

the society

CSR encourages business enterprises to

consider the interests of society, by taking

responsibility for the impact of the

business’s activities on customers,

employees, shareholders, communities and

the environment.

As a corporate citizen, businesses must

assist communities to deal with

socioeconomic issues

refers to the contribution that the company

makes to uplift or develop and solve problems

in the community

Actual financial contribution to the projects

Businesses give back to the community the

things they do not sell on daily bases as they

invest in the community

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Social Responsibility Programme (nature):

Corporate business engages the local community with, amongst others, the following programs:

HIV/Aids awareness- by sponsoring NGO’s

Education and training -by providing bursaries to learners

Conservation of the environment and pollution -by sponsoring projects that preserve the environment

Poverty alleviation- by job creation

Pensioners, deprived children and orphans-by sponsoring housing projects

Empowerment of women- by sponsoring conferences

Rural development-by forming partnerships with government

Components of CSI

Environment/Environmental awareness

Ethical corporate social investment

Health and safety

Corporate governance

Business ethics

Employment equity

Supply chain

Customers

Community

Characteristics/Features of Corporate Social Investment (process)

CSI (Corporate social investment) is mainly implemented by big business.

CSI is enforced by legislation.

CSI is seen as a political expectation.

CSI is seen as part of the business operations and is sustainable.

Business organizations choose the programs for the community e.g. support for education.

Business organizations support the community with the product that they manufacture e.g. a paper

manufacturing company may donate duplicating paper to the local schools in the community.

Partnerships are formed with local communities, the government and nonprofit organizations.

Benefits (or Positives) of corporate social investment

BUSINESSES

Benefits/Positives/Advantage

Helps to recruit the best candidates.

Helps to improve the perception of the business enterprise among staff members.

Helps to build customer loyalty.

Helps to create a positive image of the business among consumers.

Helps to attract investors who want to invest in a business that is socially responsible.

Increase profitability in the long term

Company may have competitive advantage

Problems/ Negatives/Disadvantage

Businesses do not always have the skills to solve societal problems.

Costs money which a business could have invested more profitably.

Requires a lot of time


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Community may not support the business

Difficult to judge the success of CSR programmes

Businesses pay a lot of tax to government so that social issues can be addressed. If a business is

involved in CSR, it makes a double contribution.

Businesses need to prepare detailed reports on their CSI programmes

COMMUNITIES

Benefits/Positive/Advantages

Improves the quality of life/welfare of communities.

Programmes generate employment.

Education and training can be provided by CSR programmes.

Programmes contribute towards social development.

Programmes can change the future of employees and their families by providing bursaries.

Programmes often help to improve infrastructure which is used by all members of the community.

Problems/Negatives

Communities may avoid taking responsibility for their own actions

Some businesses only participate in CSR for the commercial benefit and not to help the community.

Programmes are often undertaken to distract the public from other ethical issues.

Some programmes only last for a short term.

A community may become dependent on CSR initiatives.

Community feel that CSI programmes are imposed on them

Triple Bottom Line

Measure of Economic, Social and Environmental results of the business

Compliance is strongly encouraged

Link between triple bottom line and the social responsibility

Profit/Economic

Businesses should not only focus on profits but should also invest in CSI projects.

Businesses should not make profit at the expense of the community.

People/Social

Business should not have a negative impact on people.

Business should invest in sustainable community projects.

Businesses should ensure they uplift the quality of life of their employees.

Planet/Environment

Business should not exhaust resources and harm the environment for production purposes.

Businesses should encourage reuse/recycle of packaging material.

JOHANNESBURG SECURITIES EXCHANGE (JSE) Social Responsibility Index

Businesses, especially those listed on JSE are obliged to take part in CSI projects

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ETHICS AND PROFESSIONALISM (TERM 1 CHAPTER) Terms to understand

Business ethics:

Refers to rules and principles which influence best business practice.

Businesses develop their own code of ethics for best practice

Ethics:

Refers to a set of values that are morally acceptable in society, which defines right, good and fair

actions

Professionalism:

A set of standards of expected practices

E.g. teachers developed their own code of professional conduct which lay out expected practice and it’s

governed by SACE

Corporate governance:

Refers to the way in which a company is governed.

It also explains the relationship between the company and its stakeholders (e.g. shareholders, customers,

directors, managers).

Relationship between ethical and professional behavior

Ethical Professional

Set of standards of expected

behaviour.

Set of values that are morally

acceptable.

Knowledge and skills of a profession.

Acceptable to society/group/

community.

Used for the good of the

employees/individuals.

Forms part of the employees'

code of conduct.

Apply a code of conduct set by the

profession or business.

Focus is on developing a moral

compass to use in decision

making.

Focus is on upholding the reputation of the

business/profession.

Seeks to avoid harm while

promoting benefit to others.

Conforms to a specific standard in terms of

quality and competence while also being

legal and ethical.

Business Ethics Business ethics involve:

Corporate social responsibility.

Issues regarding the rights and duties of a company and its shareholders.

Issues concerning relations between different companies, e.g. hostile.

Takeovers and industrial espionage.

Leadership issues, e.g. corporate governance.

Political contributions made by business enterprises.

The misuse of corporate ethics policies as marketing instruments.


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ETHICAL CONDUCT/PRACTISE INVOLVES:

Objectivity Looking at a situation based on merit

without becoming emotionally, or

personally, involved.

Transparency Disclose information without hiding any

facts.

Confidentiality Not sharing any personal information to a

third party.

Due Care Take all the necessary steps to ensure

nothing goes wrong.

Avoiding Conflict of Interest Personal interest of people should never

interfere with Corporate interest of the

business.

Environmental Care Not damage the environment through

business decisions and activities

Law Abiding Comply with nationals and international

laws

UNETHICAL CONDUCT/PRACTISE INVOLVES:

Dishonesty, Trickery and

Deception

Selling second hand goods as new

Distorted Facts to mislead/confuse False figures in financial records

Manipulating people emotionally Buy “before it is too late”

Creating false documentation Creative accounting to mislead

SARS or shareholders

Harming the Environment Polluting the air

Pumping toxic waste into rivers

Invasion of Privacy Sharing customer information with

third parties

Professionalism Being professional includes:

Demonstrating appropriate behavior towards colleagues, superiors, subordinates and the public at large.

Fulfilling the job requirements while giving the employer’s interests high priority.

Avoid pursuing personal agendas at the company’s expense.

Representing your employer, coworkers and yourself with dignity.

Avoiding over promising.

Emphasizing disclosure.

Difference between professionalism and unprofessionalism

Aspect /principles of

professionalism

Professionalism Unprofessionalism

1 .Respect

Use polite language towards

colleagues.

Help others and listen to advice

from others.

Acknowledge differences in

back ground/culture/religion.

Use rude/impolite language

Swearing at a colleague

Nasty remarks about other

people's ideas/opinions

Ridiculing differences in

language, culture or religion

Inappropriate, offensive

clothing

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2 .Integrity

Looking after equipment.

Keep to the working hours.

Not bending the law to suit

oneself.

Engage in open dealings.

Use business's resources for

private purposes.

Take without permission/Steal

business resources.

Make feeble excuses for work

not done.

Accept bribery.

3 .Competency

Doing the best possible job.

Work overtime if necessary.

Going beyond job descriptions.

Coach and mentor colleagues.

Take shortcuts with tasks.

Not meeting deadlines.

Refuse to work overtime

although colleagues are doing it.

Not taking pride In completing

tasks thoroughly

4 .Confidentiality

Keep clients' information

private and confidential.

Refrain from criticising clients

in front of colleagues and vice

versa.

Not using clients' information

to own advantage.

Gossip about clients.

Discuss confidential client

information with colleagues.

Use client information for own

advantage

5 .Objectivity

Treat people equally.

Apply laws/rules consistently

and properly.

Remain objective at all times.

Have special preferences for

own benefit.

Have one-sided views.

Support destructive ideas.

6 .Development

Attend skills development

programmes

Learn from senior/experienced

colleagues

Improve knowledge through

reading and conducting

research

Refuse to attend skills

development programmes.

Have a 'know it all' attitude.

Refuse to work in teams.

Disregard the experience of

senior workers.

Ways in which professional, responsible, ethical and effective business practice should be conducted

Protection of the environment

All laws and regulations applicable to environmental protection should be taken seriously.

Laws and regulations should be adhered to so that profits are not generated at the expense of the

environment.

Pollution and other environmental issues should always be considered in all business activities, e.g. safe

disposal of waste/ dumping of toxic waste, etc.

Become involved in environmental awareness programs.

Businesses should not be started at the expense of someone else

The aim should never be profit at all cost, as it will always be to the disadvantage of others.


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Businesses should not use other's ideas to enrich themselves.

Putting someone else out of business for own gain, is unethical and a poor moral choice.

Payment of fair wages/salaries

Workers must not be exploited with low salaries just because it is difficult to find a job.

Workers' rights and dignity should be respected.

Employees make a contribution to the success and profitability of the business, therefore they must be

remunerated fairly.

Remunerate workers for working overtime and on public holidays.

Regular payment of taxes

Businesses should complete tax returns in detail and on time.

Businesses should not evade tax and honestly declare all income earned.

Business should pay tax to avoid government penalties and fines.

Transparent processes and procedures

Staffing and other processes should be open and transparent.

Employees should be aware of the employment policy of the business.

All laws that govern employment should be communicated to workers.

Draw up a code of ethics

Ethical codes of conduct should be communicated to workers, so that they know what is expected and

what the company stands for.

Employees should buy into the expectations for ethical norms/conduct as set out in company's code of

ethics.

Ongoing development and training for all employees

Continuous and regular training is necessary to explain the importance of ethical and professional

conduct.

Employees should understand that certain conduct/actions have certain consequences.

Employees should be encouraged to attend training courses and upgrade their skills.

Employees promote their own career development and also contribute to an increase in productivity.

Performance management system should be in place

Business should evaluate employees' performance against the job description.

Employees should be acknowledged for good performance.

Training needs can be based on the results obtained from conducting performance appraisals.

Management systems should ensure that employees are treated equally to prevent conflict.

Workers' rights should also be considered when management systems are introduced.

Issues that could challenge ethical and professional behaviour (unethical conduct)

Taxation

The government needs revenue from taxation to provide essential services such as housing, education,

infrastructure development and medical care.

Professional behaviour for businesses in this regard would be for businesses not to evade tax by

falsifying financial records.

Company tax, VAT and personal income tax are some of the main sources of income for the

government.

Tax evasion is illegal in South Africa and is regarded as a crime punishable with a fine or even a prison

sentence.

Recommendations/Strategies

Employees should report any tax evasion or avoidance in a business

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Consumers, suppliers and buyers should ensure that all products are correctly invoiced and recorded

Businesses should be aware and up to date with latest SARS regulations and tax laws

Businesses should pay their taxes to avoid penalties and interest

Sexual harassment

This is any sexual advance, gesture or remark that causes a person to feel intimidated and threatened.

Sexual harassment is prohibited by labour legislation and companies must educate its employees on this

issue.

Sexual harassment is a basic violation of human rights which usually happens when someone has power

over another person and abuses his/her position.

Sexual harassment occurs when a superior offers a promotion or a raise in salary in return for sexual

favours from the subordinate.


Implement internal complaints and disciplinary procedures.

Educate employers on sexual harassment matters.

Formulate a policy regarding sexual harassment.

Create a good working environment where all employees' rights and dignity are respected.

Internal investigation should be made in order to determine the seriousness of the harassment.

Pricing of goods in rural areas

It is good business practice and professional behaviour to have the same price for goods in urban and

rural areas.

Big businesses are reluctant to open outlets in rural areas because of poor returns on their investment.

It is common practice for people in rural areas to pay higher prices for goods which in most cases are of

inferior quality.


Businesses should be fair and apply reasonable pricing.

Access to rural areas should be increased, so that more products and a bigger variety is available.

Consumers in rural areas should insist on prices being fair and report any unfair pricing.

Entrepreneurship should be encouraged in these areas.

Cost effective ways of transporting the products can be investigated.

Unfair/Unethical advertising

The Advertising Standards Authority (ASA) regulates advertising and protects the interests of the

public.

Advertisements should be honest and should not abuse consumers' trust or lack of knowledge.

Some businesses use misleading advertising to consumers so that they can get more value for their

money by supporting their products.

Consumers are encouraged to lodge written complaints to the ASA regarding unethical advertising

practices.

Example: advertising secondhand goods as new.


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Business must know, understand and apply the code of advertising as determined by ASA

The consumer has the right to complain against any misleading or unfair advertising

4.5 Unauthorised of funds

Fraud is the theft or misuse of money that belongs to the employer.

Fraud increases the cost of doing business, affects competition and discourages investors by adjusting

prices upwards to absorb the losses.

Business must conduct educational work amongst employees about the impact of fraud and understand

that fraud prevention is a collective responsibility.

Systems must be in place to reduce fraud, for e.g. by internal audit and risk management.

Recommendations

Limit the number of employees having access to business funds/assets.

Identify risk areas/ vulnerable areas.

Implement/Introduce fraud prevention strategies.

Conduct regular audits.

Businesses must educate employees about the impact of fraud.

4.6 Abuse of working time

Many businesses are faced with the dilemma where employees are using working time for their personal

activities.

It is unethical to use working time to do personal things

It increase the expenses of the business as the workers are not productive.


The business must have a policy in place for employees on the abuse of work time e.g. making personal

calls, sending personal emails and browsing through websites, unrelated to their work duties during

work time.

Businesses must implement time monitoring systems and time recording procedures.

There should be some flexibility when dealing with workers who are conscientious, work long hours,

and miss official work breaks when there is urgent work to be done.

Bait and Switch AS AN EXAMPLE OF UNFAIR ADVERTISING

It is when product is advertised at lower pricing and

when the buyer buys it the seller paints out a disadvantage of the product

Then encourage the buyer to buy expensive item.

Bad mouthing as an example of unfair advertising

It is when a business is talking bad of competitors just to get an unfair advantage of its

competitors

Businesses must avoid negative talks about the products/ businesses/ competitors

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4.7 Tenderpreneurs

Individuals enriching themselves through government tenders as a result of personal relations and

corrupt relationships.


Government audits should occur more regularly.

Government should lay down clear policies and procedures for the selection process to avoid this.

Penalties should apply to guilty parties.

4.8 Nepotism

Employing friends and family only, or giving unfair advantage to friends and family when

recruiting/promoting.

Example: Someone gets the job because he/she is related to management.

Recommendations/ Strategies

The Human Resources Manager (HR) should implement clear selection standards.

Implement a NO Nepotism policy by NOT recruiting family members, or very close friends.

1. KING CODE

The King Code is a groundbreaking code of corporate governance in South Africa issued by the

King Committee on Corporate Governance.

Four reports were issued in 1994 (King I), 2002 (King II), 2009 (King III) and 2016 (King IV).

Compliance with the King Reports is a requirement for companies listed on the Johannesburg Stock

Exchange (JSE).

The King Report on Corporate Governance has been cited as "the most effective summary of the

best international practices in corporate governance".

Summary of King Code

Transparency – the business must disclose all its functions

Accountability – the business must be held accountable if there is anything that happened against the law

Responsibility – the business must use its resources safely and should take care of the environment

King Code on ethics and professionalism with ethical business practice.

1 Ethical leadership and

corporate citizenship

• The Board should ensure that the Company’s

ethics are managed effectively.

2 Board of Directors • Companies should remunerate directors and

executives fairly and responsibly.

3 Audit Committees • Audit Committee members should be suitably

skilled and experienced independent

nonexecutive directors.

4 Governance of Risk • The Board should delegate to management the

responsibility to design, implement and monitor

the risk management plan


15

5 Governance of Information

technology

• The Board should ensure that information assets

are managed effectively.

6 Compliance with laws, rules,

codes and standards

• The Board should delegate to management the

implementation of an effective compliance

framework and processes.

7 Internal audit • Internal Audit should provide a written

assessment of the effectiveness of the

Company’s system of internal controls and risk

management

8 Governing stakeholder

relations

• Companies should ensure the equitable

treatment of shareholders.

9 Integrated reporting and

disclosure

• The Board should ensure the integrity of the

Company’s integrated report.

KING CODE PRINCIPLES

Transparency

Decisions must be clear to all stakeholders

Business should give details of shareholders’ voting rights to them before/ at the Annual General

Meeting.

Business dealings must be honest

Business policies and processes must be clear and understood by all stakeholders

The board of directors must report on both the negative and positive impact of the business

Accountability

Business should be accountable for all their actions

Business should present accurate annual reports

Top management should ensure that all other levels of management are clear about their roles and

responsibilities.

Ethical, responsible and effective business practices

Not starting a venture at the expense of someone else

Business should not be conducted at the detriment of employees, the community or the environment

The enterprise should make a positive contribution towards alleviating poverty, creating employment

and uplifting society.

Payment of fair wages

Employees must be compensated for their contribution towards the enterprise.

The efforts of employee’s contributions to the enterprise profit should be compensated accordingly.

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Regular payment of tax

Law compels businesses to pay tax on the income they generate.

If businesses evade tax, it is unfair to all people businesses who pay tax.

Being environmentally responsible

Business should ensure that they use natural resources in a sustainable manner.

Treating all employees equally

If the business treats employees unfairly, the business is violating the employee human rights.

Unequal treatment of employees is not only unethical, but it will create a conflict in the workplace.

HUMAN RIGHTS, INCLUSIVITY AND ENVIRONMENTAL

ISSUES (TERM 2 CHAPTER)

Terms

Human Rights Refers to basic rights and freedoms to which all human beings are entitled

Inclusivity Means that no one should be discriminated against and everyone is given equal

opportunities

Diversity refers to the variety of people employed based on age/race/ gender/ethnic groups/peoplewith

disabilities/material wealth/ personalities/ how employees see themselves and others.

HUMAN RIGHTS

Contained in the Bill of right chapter 2 of SA constitution

Violated when they are ignored or abused

Example : person treated differently because of race, gender, disability, HIV status

Human rights include:

The right to be treated in a dignified manner

The right to practice one’s religion

The right to freedom of speech

The right to fair remuneration

The right to be treated equally and fairly

Economic rights of employees

Free from forced labour.

Free to accept or choose work.

Fair wages/Equal pay.

Reasonable limitation of working hours.

Safe and healthy working conditions.

Join/form trade unions.

Right to participate in a legal strike


17

How CAN BUSINESSES ADDRESS HUMAN RIGHTS

By ensuring that:

Workers are treated fairly

Workers are not discriminated against

Workers are allowed to join trade unions

Workers are paid fairly

Nepotism is not allowed

OTHER MEASURES (NOT LIMITED TO THE FOLLOWING)

Human Right Strategy to address/how to address

Privacy • They should not provide personal information about employees to anyone

else.

• Information on employees who have disclosed their HIV/Aids status or any

chronic illness must be kept confidential.

Respect/Dignity • BUSINESSES must treat all employees with respect/dignity regardless of

their socioeconomic status.

• They should not force workers to do embarrassing or degrading work.

Equity • Equal pay for work of equal value.

• They should apply relevant legislation fairly on all levels.

• Managers should ensure that no employee suffers because of discrimination.

Freedom of

speech and

expression

• BUSINESSES should allow open communication channels between

management and employees.

• They should give employees a platform to raise their grievance without any

victimisation.

• An employee should not be punished/discriminated against for voicing their

opinion.

Safety/Security

and

Protection/Life

• Employees must work in a safe working environment free from hazardous

areas/products.

• Businesses should provide workers with protective clothing e.g. gloves and

footwear.

• They should comply with legislation such as the OHSA/COIDA, etc.

Freedom of

slavery,

servitude or

forced labour

• Businesses should comply with legislation such as BCEA/Labour Relations

Act.

• No business should threaten/apply pressure on/intimidate an employee, to

perform a specific act.

INCLUSIVITY

Including all type of employees’ in opportunities so that they do not feel like they are left out.

Business should ensure that no one is discriminated

No one should be excluded because of disability, language, race, gender etc

Inclusivity aims to:

Redress the imbalances of the past.

Address gender discrimination

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Address discrimination against people who are physically challenged.

Address unfair discrimination.

Complaints regarding inclusivity issues are handled by the Human Rights Commission.

In SA there is legislation to promote inclusivity:

Affirmative action

Skills Development Act

Employment equity Act

Black Economic Empowerment and Broad Based Black Economic Empowerment

DIVERSITY

Refers to the variety of people employed based on age/race/gender/ ethnic groups/people with

disabilities/material wealth/personalities/how employees see themselves and others.

All employees should be empowered/developed to improve personal performance which ultimately will

improve the performance of the whole business.

Leads to creative ideas/different viewpoints, which support problem solving.

Leads to conflict situations, if not properly managed.

Diversity issues in the workplace

Poverty

Inequality

Race

Gender

Language

Age

Disability

Religion/Faith

Culture

Benefits/Advantages of a diverse workforce

Improves the ability of a business to solve problems

Employees value each other's diversity and learn to connect/communicate across lines of difference.

Improve productivity and profitability

Diversity in the workforce improves morale/motivation.

Employees demonstrate greater loyalty to the business

Can give businesses a competitive advantage as they can render better services.

Diverse businesses ensure that its policies/practices empower every employee

Employees from different backgrounds can bring different perspectives to the business.

Stimulates debate on new and improved ways of getting things done.

Improve a good public image and attract more customers.

Negatives/Disadvantages of diversity:

Some employees won’t accept other people differences

A diverse work force may increase conflict, because of different attitudes towards work ethics.

It is expensive to implement, as special provisions must be made, e.g. wheelchair ramps/translating

business documents into more languages.

It may be time consuming to coach/mentor/train the previously disadvantaged individuals.

Problem solving prolonged


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ADDRESSING DIVERSITY ISSUES IN THE WORK PLACE

Promote inclusivity and treat everyone equal

Create a diverse workforce by employing people from different workforce

Target customers and suppliers from a diverse group

Comply with laws governing equity

Gender

Males and females should be offered equal employment opportunities.

Business directors should promote both men and women in managerial positions.

Women should be employed to comply with EEA.

Targets may be set for gender equity in the business.

New appointments should be based on skills and ability.

Introduce affirmative action by ensuring that male and female employees are remunerated fairly/equally

Disability/Physically challenged/People living with disability

Business should provide employment opportunities for people who are physically challenged.

Accommodate people who are physically challenged by providing facilities/ ramps for wheelchairs, etc.

Ensure that workers with special needs are not marginalized /feel excluded from workplace activities.

Business should be well informed on how to deal with disabled employees.

Policies and programs should accommodate the needs of people with disabilities.

Create an organisational culture and climate that is conducive for people with disabilities.

Employees should be trained on how to deal with colleagues with disabilities.

Business should bring in external experts to help with disability and accommodation issues.

Ensure that employees with disabilities are treated fairly.

Focus on skills/work performance of the disabled worker, rather than his/her disability/possible

problems he/she may pose in future.

Language

Business may specify that all communications must be in one specific language only and would expect

employees to have a certain level of fluency in that language.

Provide training in the official language of the business.

Employ an interpreter so that everyone can fully understand what is being said in a meeting.

All business contracts should be in easy to understand language and should be available in the language

of choice for the relevant parties signing the contract.

No worker should feel excluded in meetings conducted in one language only.

Poverty

Business should employ people from different socioeconomic backgrounds.

Give previously disadvantaged individuals a chance to be educated by incorporating Adult Basic

Education and Training (ABET) into training programmes of the business.

Train all employees so that they will be able to deal with retrenchment.

Reward employees for services well rendered

Ensure that the prices of products are affordable for the identified consumer market.

Sponsor learnerships for unemployed people/use grants received from SETAs to train more unemployed

people from local communities.

Train some unemployed people from local communities as part of a business's

CSI projects.

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Offer subsidised meals/canteen facilities on the premises.

Supply free uniforms to employees for safety purposes.

Race

Implement affirmative action policies as required by law.

No discrimination should be made based on skin colour.

Comply with the Employment Equity Act and BBBEE when appointing people.

Ensure that the workplace is diverse by employing people from different race groups.

When appointments are made, previously disadvantaged people should get preferential treatment.

Age

Promotions should not be linked to age, but rather to a specific set of skills.

A business may not employ children aged 15 or younger.

The ages of permanent workers should vary from 18 to 65 to include all age groups.

A business may employ a person who is older than the normal retirement age, provided that person is

the most suitable candidate.

Businesses must encourage older employees to help young employees to develop their potential.

Young employees must be advised to respect and learn from older employees.

The business should encourage employees to be sensitive to different perspectives of various age

groups.

Culture/Religion

Business must be sensitive to special requests from different cultural groups, e.g. allow day(s) off for

cultural holidays/festivals.

Cater for special food/preparation methods in the workers' canteen.

Businesses should acknowledge/respectcultural differences of employees.

The business may not discriminate against employees on the grounds of their cultural background.

Business must not force employees to do work that could be against their religion.

ENVIRONMENTAL ISSUES

Businesses use resources from the natural environment in their daily operations.

This leads to exploitation of natural resources, pollution and global warming.

Businesses generate a lot of commercial waste through their daily operations.

Environmental issues are serious can lead to the destruction of the earth.

Businesses should not compromise the ability of future generations to meet their own needs, but instead

they must focus on sustainability.

How SA businesses should address environmental issues

Comply with laws and regulations put in place by SA government such as National Environmental

Management Act, Environment Conservation Act and other strategies.

Promote environmental sustainability through minimising pollution.

Use alternative sources of energy with minimum impact on the environment.

Take an active role in environmental sustainability initiatives organised by government or communities,

e.g. by funding those initiatives.

Dispose toxic waste in a safe way

Business should reduce, reuse, and recycle where possible


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Benefits for business FOR ADDRESSING ENVIRONMENTAL ISSUES

A higher rating/scores in terms BBBEE compliance may be obtained.

By complying with the Johannesburg Security Index (JSI), they will be allowed to be listed on the JSE,

Market share and profitability may increase

Can attract more investors

Image of the business can improve

CREATIVE THINKING (TERM 1 CHAPTER) 1.1 Distinguish between problem solving and decision making

Decision making Problem solving

It is often done by one person/a

member of senior management

who makes it authoritarian.

Problems can be solved by a group/

team or an individual team

member.

Various alternatives are considered

before deciding on the best one.

Alternative solutions are generated/

identified and critically evaluated.

It is part of the problem solving

cycle as decisions need to be taken

in each step.

Process of analysing a situation to

identify strategies to bring about

change.

Barriers to creative thinking

Lack of creativity.

Financial barriers.

Physical barriers, e.g. noise, poor working conditions.

Lack of resources/infrastructure.

Social barriers.

Lack of motivation/low morale.

Lack of skilled employees/managers.

Not easy to supervise staff working flexible hours.

Flexible working hours can cause delays/missing of deadlines.

Fear for rejection may result in good ideas/solutions not being given.

1.2 Steps in problem solving

Step 1Identify the problem

Step 2Define the problem

Step 3 Identify alternatives

Step 4 Evaluate alternatives

Step 5 Choose the best alternative

Step 6 Implement the decision

Step 7 Monitor the decision

Step 8 Evaluate the decision

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1.3 Creative thinking skills/Problem solving techniques

Delphi technique

Forcefield analysis

Brainstorming

Mindmapping

Nominal group technique

SCAMPER

Forced combination

Empty chair technique Advanced

problem

Solving skills

Explanation

1 Delphi

Technique

• The Delphi technique has been described as ‘a method for structuring a

group communication process so that the process is effective in allowing

a group of individuals, as a whole, to deal with a complex problem.

• Steps

1. Panel of anonymous experts are invited;

2. Questionnaire is distributed and completed

3. Anonymous responses are summarized and given to panel members

4. a second set of questions is completed based on answers;

5. Final summary and feedback report is compiled

6. Process can be reported until agreement is reached

Advantages Disadvantages

Experts will give clear ideas and solutions

Panel members/Experts can give new

information on problems.

Information received from experts can be

kept confidential.

Panel members/Experts need to reach

consensus, so that the best solution is

found.

All experts are given an equal opportunity

to give their opinions, so noone dominates

the process.

It reduces the noise levels in offices as

experts does not work in groups

It is an expensive technique to use due to high

administrative costs.

May be time consuming and complicated to analyse

data received from experts.

Not all experts are willing/interested to give

feedback/complete questionnaires.

Some experts might not have an indepth knowledge

of certain topics.

Questionnaires may be completed by experts without

giving it much thought, so solutions might not be

suitable

This technique may not be suitable to all types of

business problems and may not always be reliable.

Advanced

problem

Solving skills

Explanation

2 Force Field

Analysis

• Decision making technique, that analyses the forces for and

against change

• Used to facilitate change in an organisation.

Steps

1. Describe present situation

2. Consider what may happen if no change take place


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3. List forces for and against change

4. Analyse the opposing forces(those against change)

5. Analyse the supporting forces (those for the change)

6. Draw up a list with supporting forces on the left and opposing

forces on the right

7. Give a score out of 10 for each force and add the scores on the

list

8. Side with high score is used as a decision direction

Advantages

Helps to overcome any opposition to change

Helps the business to plan ahead

Disadvantages

Time consuming

Advanced

problem

Solving skills

Explanation

3 Brainstorming • Used to generate creative ideas and solutions through group

discussions

Steps 1. Participants suggest as many ideas and solutions

2. All ideas are written on a chart

3. Ideas are discussed and grouped together

4. Ideas are refined and evaluated

5. The group rate the ideas according how successful they think each

one will be

6. Plan of action is discussed to put the best idea into practice


Noncritical discussion takes place,

where all ideas are considered.

Team members can build on each

other's ideas.

Stimulates creative thinking.

Allows team members to look at the

problem in a different perspective.

Discussions can be dominated by one strong

team member.

Shy people may not give their inputs.

The team may lose out on brilliant ideas

from shy people.

Advanced problem

Solving skills

Explanation

4 Mindmapping • Mind maps are diagrams that represent ideas or tasks that

are linked and arranged in branches around a central key

idea.

• Useful for generating ideas and problem solving.

Steps • Decide on a central problem or topic that forms a central

theme

• Break down the central theme into main ideas or points

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• Put the main points or ideas on the main branches

• Break the ideas further down into subpoints

SCAMPER

Meaning Example

S-Substitute Replace part of the problem with something new Sell pens instead of paper

C-Combine Arrange parts of the problem in a creative way to cancel

out the problem

Sell pens and pencils

A-Adapt Look at the existing solution and adapt them solve your

current problem

Sell pen and pencil as

offered by competitors and

add writing paper

M-Modify Change the situation or distort the problem Use existing machinery to

manufacture trailers

instead of card

Advanced problem

Solving skills

EXPLAINATION

5 Nominal Group

Technique [NTG] decision making method for use among groups of many sizes,

who want to make their decision quickly, as by a vote, but want

everyone's opinions taken into account

group members give opinions and the solutions are ranked

according to the support received each time

STEPS 1. Problem identification

2. Solution generation

3. Decision Making

ADVANTAGES DISADVANTAGES

Each team member/director

has a chance to participate

without interference from

other team members.

Voting on the ideas is

anonymous and may be more

reliable/honest.

Ideas/Inputs made by members

may not converge and cannot

lead to the same solution(s).

Suggestions may not be as

creative as when a group

throws ideas around.

It is time consuming, as each

member must make a

presentation.


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P-Put to

other uses

Use part of the product for something else Sunscreen can be used as a

moisturiser

E-Eliminate Try to get rid of some parts of the product Sell a pen that has no

pocket clip to reduce cost

R-Rearrange Push the idea around and rearrange it to help you think

differently so that you can come up with creative ways

to solve the problem

Offer free use of internet

for the first 15 minutes and

charge only after the use of

the first 15 minutes

Advanced

problem

Solving skills

Explanation

7 Forced

combinations

• Technique in which combinations of different ideas are put together

in order to stimulate the development of new ideas

• METHOD

• In a group define and understand the problem

• Brainstorm key words to do with the problem

• Combine words to make new combinations

• Use creative ideas to combine ideas

• Select the best idea and use them to create a strategy

ADVANTAGES DISADVANTAGES

Interesting new ideas can be generated Good ideas do not always result in this technique

Advanced

problem

Solving skills

Example

8 Empty chair

technique

• Used when you've got to make a decision on your own.

• Someone explain the problem to an imaginary person and consider

possible solutions

STEPS • Place an empty chair in the room.

• Imagine someone you respect is sitting on the chair.

• Explain the problem to him / her aloud and in detail.

• Tell him / her what you think the possible solutions are.

• Tell him / her how you think the possible solutions will work out.

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Benefits / Advantages of creative thinking in the work place

It improves the quality of solutions to business problems

It stimulates profitable new ideas for products, marketing campaigns and public relations

Motivates workers and improves their skills

Improves productivity and the profitability and the business

Creates a market for new products that never existed before

Improves the quality of life of the consumers

How businesses can promote an environment that promotes creative thinking

Place suggestion boxes for employees to have their suggestions

Giving positive feedback on ideas that workers share

Providing opportunities for creative problem solving

Encourage employees to have group problem solving sessions

Training staff in creative thinking & problem solving techniques

Recognising and rewarding achievement

Allowing employees to express their ideas and take risk in a safe environment

Team performance assessment, Conflict management and problem

solving (TERM 2 CHAPTER)

1. Criteria for successful teams/ team performance

1.1 Interpersonal attitudes and behaviour

Has a positive attitude of support and motivation towards team members.

Has a positive attitude and passion to achieve team objectives.

There must be clear objectives and agreed goal.

Terms

Grievance: It is a formal complaint laid by an employee when he/she feels that he/she has been ill-

treated by the employer.

Dispute: Takes place when the employee disagrees with the resolution taken on the grievance, then

he/she can lodge a dispute.

Team: Group of individuals working towards same goal

Team dynamics: Anything that disturb or hinder team harmony, e.g. gossiping


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Team members must be committed to achieve the team objectives.

1.2 Shared values

Shows loyalty and respect towards team members despite differences.

Perform team tasks with integrity, responsibility and meeting team deadlines with the necessary

commitment to team goals.

1.3 Communication

Speaks clearly and listens attentively.

Communicates with team members and allows for feedback.

Encourage discussions about problems so that solutions can be found.

1.4 Cooperation

Willing to cooperate in the team to achieve team objectives.

Willingness to cooperate with management to achieve team and business objectives.

All members take part in decision making.

2. Stages in Team development

Forming

Storming

Norming

Performing

2.1 Forming

• A team is formed consisting of different individuals, who will have to work together towards a

common goal.

• Team members volunteer to work together.

• Formed to solve a problem/challenge.

• Individuals are driven by the desire to be accepted by the other team members.

• Team members gather information about each other/the objectives of the team.

• This is a good opportunity to see how each member performs as an individual and how he/she

responds to pressure.

2.2 Storming

• After the team has been formed, it goes through a period of uneasiness known as storming.

• Different ideas are stormed for consideration.

• Team members open up to each other and confront each other's ideas/perspectives.

• This stage is necessary/important for the growth of the team.

• Team members should be tolerant of/patient with each other to survive this stage.

2.3 Norming

Team members:

• Agree on a mutual/common plan for the team.

• Consider their own ideas, but agree with others to make the team perform well.

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• Take the responsibility/have the ambition to work towards the success of the team.

• May focus too much on preventing conflict that they become reluctant to share controversial ideas.

2.4 Performing

Team members:

• Know each other and can function as a unit.

• Find ways to get the job done smoothly without conflict/external supervision.

• Are knowledgeable and able to handle the decision making process in the team.

• Will make the most of necessary decisions to work towards a common goal.

• Will go through all four stages many times as they encounter changing circumstances.

3. How to effectively perform a specific role within a team

Team members need to understand each other’s role and how it contributes to the team’s performance.

Each person’s behavioral strengths and weaknesses need to be identified so that they can be given a

suitable team role.

The role of each member in the team needs to be well defined and have clear boundaries and

instructions, to minimise conflict related to role ambiguity.

Role overload needs to be avoided to ensure effective performance.

Team members must take responsibility for their roles and work to cocorporate with other team

members to achieve the team’s objectives.

Use resources wisely and effectively to achieve higher and better quality outputs.

Team dynamics theories

Belbin Role theory

Jungian theory

MTRI approach

Group consensus

MargerisonMcCann profiles

3.1 Belbin Role theory

A team is a group of individuals with each individual having a role that is understood by other

members

Each team member has his/her own role and performs most effective in this role

Dr Meredith Belbin classified 9 team roles in 3 categories

Action Orientated Roles

Shapers Challenges the team

Can be aggressive

Implementers Plans effectively

Can resist change

Finishers Finds errors in work

Wants a perfect job

People Orientated Roles

Coordinators Focuses on Team objectives

May delegate too much work

Team Workers Help team to work together


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Cannot take decisions when there is

conflict

Resource Investigators Aware of outside world

Does not always follow up on leads

Thought Orientated Roles

Planter Highly Creative

Forgets and Ignores aspects

MonitorEvaluator Logical

Does not motivate the team

Specialist Has in-depth knowledge

May be too concerned with

technical aspects.

4.2 Jungian Theory

When a team member is assigned, his or her personality must be considered to ensure effectiveness and

efficiency of that team member

Carl Jung was a psychologist who believed in the importance of Balance and Harmony in one’s life.

According to him, people adopt one of two attitudes in life across 4 levels:

Extrovert: Focus on external world OR Introvert: Focus on internal world

Sensing: Information from external world Intuition: Information from imagination

Thinking: Decisions made through logic Feeling: Decisions made through emotions

Judging: Implement information through plans Perceiving: Implement information after

innovation/seeking alternatives

4.3 Management Team Roles Indicator (MTRI) Approach Team dynamics is a method of improving team development and performance

Different teams need to demonstrate different roles to succeed.

The role a person take on at work is designed to the contributions made by each team member:

Innovators Present new ideas and solutions

Sculptors Wants to get things done urgently

Conductors Good at organising the team

Scientists Provide information as to why things

happen and how things happen

Coach Builds relationships and create a

positive atmosphere in the team

Curator Listen, ask and gather information.

Crusader Focus on important issues and are

value driven

Explorer Explore new possibilities

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4.4 MargerisonMcCann Profiles

Well known management tool for discovering preferred team roles

Uses 64 questions to discover where a person will work in a team

The Margerison McCann Team Management Profile explains how people’s references influence their

approach to their job and performance of team members.

A strong correlation exist between the characteristic and personality type of the team members

9 essential team activities can be described:

Role Characteristic General Personality

Reported Adviser Supporter/ Helper/ Tolerant

Flexible

Not Aggressive

Enjoys finding out

Creator Innovator Imaginative

Creative

Independent

May miss deadlines

Explorer Promoter Seller

Easily Bored

High Energy

Good Communicator

Assessor Developer Analytical

Developer of ideas

Dislike Routine

Likes plans

Thruster Organiser Result Orientated

Sets up Systems

Impatient

Makes things happen

Concluder Practical Prefers routine

Producer Likes schedules and plans Follows through to the end

Controller Inspector Strong on Control

Detail Orientated

Meticulous

Enforce regulations

Upholder Maintainer Conservative

Loyal

Negotiate well

Has Strong Feelings

4.5 Group Consensus

The group can only perform if they have a common goal and agree to a common approach.

This process in time consuming yet very effective.

It revolves around a number of decision making processes, each calling for consensus. Should

consensus not be reached, a new proposal will be made for the group to consider.

Often requires voting

Problems arising from working with others or in teams

• Pressure to conform to group standards

A team member may be isolated from the team for being more productive than his/her coworkers.

• Social loafing

This means that people does not work as hard if they are not individually accountable for their work.

• Groupthink

When members of a group tend to agree on a decision because they are scared of rejection for questioning a

majority viewpoint.

• Slow to achieve goals

Teams may take longer to achieve a goal than an individual would, because members must agree upon issues

before a decision can be made.

• Lack of interest


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Some team members may lack interest, skills, capabilities or motivation. Such group members will not work to

the best of their abilities.

• Conflict Where people are together, there will always be a difference of opinion. Conflict has a negative influence on

employee morale, team morale and productivity.

CONFLICT

Conflict:

Is a situation in which there are opposing ideas, opinions, feelings between two people

Conflict cannot always be resolved/avoided/eliminated, therefore people need to learn how to manage

conflict within a team so that they continue to work harmoniously.

4. CAUSES OF CONFLICT

6.1 Personal differences/Different personalities

When employees fail to understand or accept the differences in each other's personalities, problems arise

in the workplace.

Humor and sarcasm may be perceived as insulting behaviour by employees of other

cultures/backgrounds.

Different personality types within a group can cause conflicts because some employees' may be

introverts while others are extroverts resulting in different perceptions.

Different opinions may make it difficult to reach agreements.

6.2 Poor communication

Poor communication can lead to all types of misunderstanding and can become very destructive.

If employees or management decide to sidestep each other's opinions, team members may become

unhappy.

6.3 Competition

Although competition may be a good motivator, it can become negative if the focus is on competition

only, as team members may lose their team spirit.

Team members who always loose when competing, may feel incompetent/ demotivated and may not

complete their tasks/reach deadlines.

Unhealthy workplace competition may spark conflict as it demoralises employees who cannot always

meet targets.

6.4 Ignoring rules/procedures

Employees who do not follow the rules/procedures can cause conflict as tasks may not be performed according

to the business specification.

Team members who ignore/disobey rules/procedures may delay the completion of tasks.

6.5 Unclear responsibilities

Employees who are not clear about their responsibilities are more likely to avoid and blame others for work not

done.

They may not effectively perform their task as expected.

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6.6 Distracted by personal objectives

Some employees may pursue their own personal objectives and they will try to force their own desires onto the

team.

They may lose focus of the task at hand and distract others from performing their tasks effectively.

6.7 Lack of/ insufficient resources

Limited resources may cause conflict, because employees may all want to use the resources at the same time.

Team members may fight over the limited resources available to accomplish their/the team's tasks.

5. Conflict resolution procedure/steps

Identify/Acknowledge that there is conflict.

Analyse the cause(s) of conflict by breaking it down into different parts.

Prenegotiations may be arranged where members will be allowed to state their case/views separately.

Arrange a meeting between conflicting team members.

Each member has the opportunity to express his/her own opinions/ feelings/Conflicting members may

recognise that their views are different.

Devise/Brainstorm possible ways of resolving the conflict.

Conflicting members agree on criteria to evaluate the alternatives.

The best possible solution(s) is/are selected and implemented.

Evaluate/Follow up on the implementation of the solution(s).

Monitor progress to ensure that the conflict has been resolved.

OR

o Approach the conflict directly

o Bargaining

o Mediation

o Arbitration

o Right to appeal

7.1 SKILLS TO RESOLVE DIFFERENCES (CONFLICT)

Communication skills

o People need to feel that they are being listened to and understood

o Everyone must be given an opportunity to calmly, simple and clearly and express their own view in an

open (Nonaggressive) manner

Setting up Forum Skills

o Provide a place where people can express their feelings, views and frustrations

o Workplace forums allow workers to be empowered

Focus on Conflict, not a person skills

o Discussions should not be personal as this makes it difficult for people to back down

Neutral Ground skills

o Is place or situation that is nonthreatening to both parties involved in conflict

o Makes it easier to establish and work towards a common goal

Know when a mediator is needed Skills


33

o A person who settle disputes between others

o Mediator is objective and skilled in negotiation process

7.2 Role of Workplace Forums in resolving Conflict

Is an elected organisation consisting of employees in a particular workplace.

Ensure that workers now have a say in most decisions that affect their working conditions.

May be formed when there are more than 100 workers at a workplace.

The members of a workplace forum have to be representative of the employees at a particular

workplace.

The purpose of workplace forums

• Prevent decision making by employers only, especially in matters that affect employees directly

• Encourage worker participation in decision making

The functions of a workplace forum

• Promoting the interests of all workers (not only trade union members)

• Enhancing workplace efficiency

• Consulting with employers

• Taking part in decision making

6. Dealing with difficult employees

Get perspective from others who have experienced the same kind of situation to be able to understand the

difficult employee.

Ask someone in authority for their input into the situation.

Identify the type of personality which is creating the problem.

Make your intentions and reasons for your actions known so that they will feel at ease.

A deadline should be set for improving bad/difficult behaviour.

Guidelines for improvement should be given.

Do not judge the employee, but try to understand him/her/Understand the person's intentions and why they

react in a certain way.

Help difficult employees to be realistic about the task at hand.

Remain calm and in control of the situation to get the person(s) to collaborate.

Treat people with respect, irrespective of whether they are capable/competent or not.

9. Dealing with different Personalities

Type of personality Strategy to deal with personality

Complainer

Listen to the complaints but do not acknowledge them.

Interrupt the situation and move to the problemsolving

process as soon as possible.

Indecisive

Guide them through alternatives.

Stay in control and emphasise the importance of making a

decision.

Help them make the decision or solve the problem.

34

Over agree

Be firm and do not let them make promises that they

cannot keep.

Follow up on their actions.

Negativity

Be firm with them and do not let them draw you into their

negativity.

Listen to them but do not agree with them.

Expert

Be firm and assertive.

Do not accuse them of being incorrect and do not get

caught in their game.

Know your facts.

Quiet

Do not fill their silence with words.

Wait for their response.

Prompt them through the process so that they give input.

Restrict the time of the discussion.

Aggressive

Allow them time to speak and blow off.

Be firm, but do not attack them.

Do not allow them to be hostile towards others.

10 Steps/ Procedures in handling grievances

Verbal complaint the employee states his problem to his supervisor.

Investigation-the supervisor listens, investigates the problem and suggests solutions.

Formal written complaint if the employee is not satisfied with the suggested solution(s), he/she can make a

formal written complaint to the next level of management.

Further investigation by next management level-this level investigates the problem again, suggests a

solution and makes a recommendation.

Resolution of problem/grievance-grievance is solved and the employee is happy.

If employee is not satisfied, he/she declares a dispute-the matter is referred for mediation and

arbitration/CCMA/Labour court.

11. IMPROVING WELL BEING OF EMPLOYEES

Pay fair wage/salary to the workers

The working conditions must not only consider safety, medical and canteen facilities but also benefits like

housing, leave and retirement etc.

BARGAINING COUNCIL

Organisation which is formed by one or more trade unions and one or more employer

organisation

Deal with collective agreements, solve labour disputes

Facilitates negotiation process between employer and employees on matters such as wages,

working conditions

COLLECTIVE BARGAINING

Negotiation of wages and other conditions of employment by organised body of employees and

employers (BARGAINING COUNCIL)


35

Give fair bonuses based on the business earnings.

Allows for employees' participation in decision making.

Provide recreational facilities for employees.

Offer trauma debriefing/counselling or assistance to any employee who

requires these services.

Give financial assistance in the case of any hardship caused by unexpected costs, e.g. unforeseen medical

costs.

Offer flexible working hours to enhance productivity.

Organise support programmes for employees infected and affected by HIV/Aids.

Offer childcare facilities at its premises.

How to get 60% + in Business Studies

PART 2

NOTES TO EDUCATORS

Select only TWO topics and drill your learners in it.

Please note that these topics carries 20 Marks in Section A, 120 Marks in Sections B1, 30 Marks in Section

B2 (miscellaneous) and 80 Marks in Section C (essays) NB: this equals to 250 Marks per topic, out of 300

This therefore means that a learner can get 180 out of 300 just by doing just two topics thoroughly.

Doing any two topics therefore means that a learner can get +/_ 150 out of 300 if done these topics

thoroughly. This means the learner can get 50% when done TWO topics very well.

Doing three topics thoroughly means getting up to 70% in business studies, while doing all four topics

means a learner can get a distinction.

This document seeks to focus therefore to all these four categories then you select responding to the needs

of your learners.

Teaching all topics to an average leaner can disadvantage the learner, while it also disadvantaging an ACE

learner.

NB: this part of the document only take learners to just 60% pass, therefore, other contents may not be

included

NOTES TO LEARNERS to get 60% In Business Studies

Why worry about passing Business Studies when you have this document?

Just by doing one topic in the subject, you can get 60% and pass at the end of the year.

Going through this document leaving no word no content unknown can therefore put you at risk for not

getting this 60% pass mark.

Time yourself during your study timetable.

Practice the following preselected topic using previous question papers.

You will realize that questions, essays will be repeated in most question papers as they will be set from

one topic from identified chapters.

PART 1 PLUS PART 2 = 60 % AND ABOVE PASS

Ensure that part one is done thoroughly

36

Ensure that part two is also done thoroughly

Do all necessary observations in all topics to qualify for 60% and above

Business operations examination guidelines

Human Resources Function Total Quality Management (TQM)

Human resource activities Definitions of TQM Concepts

Job description & job specification Benefits of good management system

Employment contract (content) Negative impact if TQM is poorly

implemented

Termination of contract Elements of TQM

Fringe benefits (evaluation) Impact of TQM element on small and

large businesses

Impact of ACTS in HR Quality indicators of business functions

Legalities of employment contract PDCA model and Quality Cycles

o How to reduce cost of production

BUSINESS OPERATIONS (MAIN TOPIC)

Human Resource Management (TERM 1 CHAPTER)

Human resource activities

JOB ANALYSIS

Systematic gathering of all relevant information about the tasks, skills and responsibilities

Includes job description and job specification

JOB DESCRIPTION VS JOB SPECIFICATION

Job description Job specification

Describe duties/ responsibilities

of a specific job/Summary of

the nature/type of the job.

Specifies the minimum

acceptable personal

qualities/skills/qualifications

needed for the job.

Written description of the job

and its requirements.

Written description of specific

qualifications/skills/experience

needed for the job.

1) Recruitment 4) Induction 7) Retrenchment

2) Selection 5) Placement 8) Employment contracts

3) Interviews 6) Training & Skills Development 9) Salary determination


37

Describe key performance

areas/tasks for a specific job.

e.g. job title/working

conditions/relationship of the

job with other jobs in the

business,

Describes key requirements for

the person who will fill the

position, e.g. formal

qualifications/willingness to

travel/work unusual hours,

Remuneration/Salary determination

Piecemeal/Piecerate/Piecework Timerelated

Remunerated for a specific piece of

work, regardless of hours worked/

time taken to produce items.

Remunerated for the time/ period

worked, usually monthly or weekly.

Calculation based on the piece of

work/number of items produced.

Calculation based on an agreed

hourly rate.

Link between salary determination and the Basic Conditions of Employment

Act (BCEA)

The BCEA sets out conditions that ensure fair labour and human resources practices.

According to the BCEA, businesses may use different remuneration methods to pay their employees.

Payment of salaries should be based on whether the employee is permanent or employed on a fixed

contract.

Businesses are supposed to deduct income tax (PAYE) from the employees' taxable salaries.

BCEA outlines legalities, such as the employment contract, which may affect salary determination.

CORE HR PROCESS

1. RECRUITMENT

Tool used to attract applicants to apply for a specific job.

Ensure that a sufficient number of applicants apply for various jobs in the business

All recruitment procedures should be conducted within the framework of the Employment Equity Act (EEA)

to ensure fairness.

RECRUITMENT SELECTION INDUCTION PLACEMENT

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Types: Internal Recruitment

: External Recruitment

1.1 Internal Recruitment

When we employ workers within the business

Promote workers who are already employed

Position is advertised via internal mails, and notice boards

Positives/Advantages

Opportunities for promotion motivate current employees.

Staff morale and productivity increases if suitable staff members are promoted

Current employees understand how the business operates.

The business knows the candidate, his/her personality, strengths and weaknesses.

Reliable/Key staff members are retained if they are promoted/ transferred within the business.

Reliable information on candidates can be obtained from supervisors/employee records.

Recruitment process is faster and less expensive.

Negatives/ Disadvantages

Current employees may not bring new ideas into the business.

Promoting a current employee may cause resentment amongst other employees.

The number of applicants is limited to current staff only.

Employees who do not really have the required skills for the new job may be promoted.

Current employees may need to be trained/developed before they can be promoted, which can be

expensive.

Staff that is not promoted may feel demotivated.

1.2 External Recruitment

When the suitable candidate is appointed outside the business

Via, newspapers, internet, employment agencies, head hunting,


New candidates bring new talents/ideas/experiences/skills into the business.

It may help the business to meet affirmative action and BBBEE plans.

There is a larger pool of candidates to choose from.

There is a better chance of getting a suitable candidate

Minimises conflict amongst current employees who may have applied for the post.

Negatives/Disadvantages

External sources can be expensive,

The selection process may not be effective and an incompetent candidate may be chosen.

Information on CV's or from references may not be reliable.

Recruitment process takes longer/is more expensive as background checks must be conducted.

New candidates generally take longer to adjust to a new work environment.


39

Many unsuitable applications can slow down the selection process.

2. SELECTION/SHORT LISTING

Is the process in which organisation chooses the best suited individual for a particular job from a group

of applicants

Eliminate applicants who do not meet the requirements

It is important that the HRM follows correct/fair procedures in selecting and interviewing.

The HRM can appoint the best candidate if the selection and interviewing procedures are properly

applied.

Verify information supplied by candidates e.g. by calling references

2.1 Selection procedure

Receive documentation

Applicants submit the application forms, curriculum vitae and certified copies of personal documents,

e.g.ID, proof of qualifications, etc.

Sort the applications received according to the criteria for the job

Evaluate CVs and create a shortlist/Screen applicants

Make a list of all applicants who qualify for a job

Applicants are evaluated against preset criteria.

Applicants are ranked from the most suitable to less suitable candidates

Check information in the CVs/Contact references

The candidates' qualifications/employment history are checked and confirmed.

Referees are contacted to verify/testify to the person's character/abilities/ skills.

Check the criminal records and credit history of the applicant.

Conduct preliminary interviews

Preliminary interviews are conducted if many good applicants were received.

The main purpose is to sift out applicants who qualify for the job but who might not be suitable for a

business environment.

Assess/Test candidates

Various assessments may need to be completed before the best candidate is chosen.

Candidates who have applied for senior positions could be given personality/ interest/aptitude tests.

Some businesses require candidates to take medical screening/skills tests.

Conduct interviews

Candidates whose names appear on the shortlist are invited to a personal interview, usually on

the premises of the business.

The interviewing team has a list of preset questions to be able to compare the candidates on

equal criteria.

Business may hold more than one round of interviews, depending on the nature of the vacancy.

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Offer employment/Letter of appointment

A written offer is made to the selected candidate.

The selected candidate must accept the offer in writing.

An employment contract will be negotiated and signed by the new employee and employer.

2.1.2 Interview

Purpose

Obtains information about the strengths and weaknesses of each candidate.

Helps the employer in choosing/making an informed decision about the most suitable candidate.

Matches information provided by the applicant to the job requirements.

Creates an opportunity where information about the business and applicant can be exchanged.

Role of the Interviewer (BEFORE AND DURING INTERVIEW)

Before the interview

Develop a core set of questions based on the required skills, knowledge and ability required.

(before)

Check the application and verify the CV for anything that may need to be explained. (before)

Book and prepare the venue for the interview. (before)

Set the interview date and ensure that all interviews take place on the same date, if possible.

(before)

Inform all shortlisted candidates about the date/place of the interview. (before)

Allocate the same amount of time to each candidate. (before)

During the interview

Introduce members of the interviewing panel to each candidate/interviewee. (during)

Make the interviewee feel at ease. (during)

Explain the purpose of the interview to the panel and the interviewee. (during)

Do not misinform/mislead the interviewee. (during)

Provide an opportunity for the interviewee to ask questions. (during)

Close the interview by thanking the interviewee for attending the interview. (during)

Role of the interviewee during the interviewee

Greet the interviewer by name with a solid handshake and a friendly smile.

Listen carefully to the questions before responding.

Make eye contact and have good posture/body language.

Show confidence and have a positive attitude.

Be inquisitive and show interest in the business.

Ask clarity seeking questions/be assertive.

Show respect and treat the interview with its due importance.

Be honest about mistakes and explain how you dealt with it.

Know your strengths and weaknesses and be prepared to discuss it.


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3 INDUCTION

Process of introducing new employees to their job and working environment

Involve introducing new employee to : goals of the organisation

: Its policies and procedures

: Its values and the coworkers

Purpose /Aim:

Familiarise new employees with job procedures

Establish relationship with coworkers

Identify the basic responsibilities for the job

Indicate the required behaviour patterns for effective job performance

Benefits/Importance of the induction programme

New employees are introduced to the company's policies and procedures.

New employees learn more about the business.

Increase productivity and quality.

Minimises the need for ongoing training and development.

New employees will know where everything is and who the supervisors/lowlevel managers are.

New employees will have basic knowledge of what is expected in the job.

New employees may feel part of the team resulting in positive morale and motivation.

Induction programme

Safety regulations and rules

Overview of the business

Information about the business product and services

Tour of the premises and introduction to key people and close colleagues

Conditions of the employment including working hours etc.

4. PLACEMENT

Process of placing the worker where he will be productive in terms of his abilities and skills.

He/she must be able to contribute positively to the company.

He/she will be put through a placement program such as his/her place of work, work times,

expectations from him/her for the day etc.

Important aspects in placement procedures

Determine the strengths, weakness, interests and skills of the employee

Define the specific responsibilities of the position

Determine the relationship between the position and the characteristics and competences of the

employee.

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5 Training / Skills Development

• Refers to the acquisition of new skills and knowledge

• Investment by the employer in the employees

• Development needs of the employees must be determined

• Acquire a suitable service provider

• HR determines if the training needs have been met

• Increase the efficiency of the workforce

6 Retrenchment

Process whereby an organisation reduces the number of employees for operational reasons.

• Influenced by worsening of economic conditions

• Mechanisation of the production process

• Competition from foreign suppliers

• Employers must be transparent with employees regarding the actual reasons

• Employees must be part of the discussions regarding retrenchments

• Must be used as a last resort

7 Employment contract

Is the written agreement between the employer and the employee.

It is a legally binding document even though certain aspects of the contract are

negotiable.

Legal requirements of the employment contract

It may not contain any requirements that are in conflict with the BCEA.

Parties involved must have contractual capacity.

The employer and the employee must both be satisfied with the conditions in

the employment contract.

It should include a code of conduct and/or a code of ethics for employees.

Specific details of the job/remuneration package should be clearly explained to

employees/stipulated in the contract.

The human resources manager must explain the terms and conditions of the

employment contract to employees if deemed necessary.

It should set out clearly the conditions of employment/duties/responsibilities of

the employees.

It must stipulate what employee would receive in terms of benefits and labour

legislation.


43

Contents of employment contract (i.e. what must be included)

Name/Address/Contact details of Employer.

Personal details/Address of Employee.

Job title.

Job description.

Working hours.

Overtime.

Salary/Remuneration package.

Normal place of work.

Leave.

Date of commencement of employment/Starting date.

Probation period.

Code of conduct and/or Code of ethics.

Termination of the contract.

Disciplinary policy.

Conditions for termination of Employment contract

Dismissal

Contract terminated for valid reason(s), e.g. unsatisfactory job performance.

Redundancy/Restructuring

Employer no longer has work for employees and cannot fulfil the contract.

Retrenchment

Job stated in the contract is no longer necessary, as the employer has become insolvent and may not be

able to pay the employees.

Resignation

Employees decided to leave and resign voluntarily.

8 FRINGE BENEFITS

Additional benefits given to employees as a result of being employed

Not paid out as cash to employees

Examples: Discount on company products, Use of company car, Travel allowances, Canteens where

employees can have free or low cost meals

IMPACT ON BUSINESSES


May result in higher employee retention/ reduces employee turnover.

It increases employee satisfaction/loyalty

Leads to higher productivity, as workers work for longer hours/more days.

Attracts good/qualified employees who do not always need extra training.

44


Additional costs for businesses, which may result in cash flow problems.

Administrative costs increase as payments need to be correctly allocated and recorded for tax purposes.

Decreases business profits, as remuneration costs are increasing.

It may create conflict/lead to corruption if allocated unfairly.

Workers only stay with the business because of fringe benefits, and may not be committed to their

tasks/loyal to the business.

9 LEGAL VS IILEGAL STRIKE

Legal Illegal

•The Labour Relations Act (LRA) affords

striking

Employees the opportunity to participate in a

strike action, that is regarded as procedural.

•Provide striking workers with some form of

protection.

•Employees may not be dismissed

•No work no pay principle is applied

•Refers to striking workers participating in

action that is regarded as unprocedural.

•Provides workers with no protection

•May be regarded as a form of misconduct,

justifying dismissal

•No work no pay principle is applied

10 DEDUCTIONS

amounts that are taken from gross salary before an employee gets it, thus receiving net pay (after deductions).

Types: Compulsory Deductions

Voluntary Deductions

Compulsory deductions

Deductions as prescribed by law to be deducted from the employees' salaries.

Examples: UIF/personal income tax/ (SITE/PAYE)/Pension funds, Membership of professional

bodies/Garnishee order/Court order.

Voluntary

Not prescribed by law

Employees can choose not to pay such deductions

Can instruct HR department to deduct certain amounts for specific reasons

IMPLICATIONS OF RESCENT LEGISLATIONS ON HR (Acts which link to HR)

Labour Relations Act, 1995 (Act 66 of 1995),

Employees may not be easily dismissed, even if they were wrong

It allows employees to form trade unions in the workplace

It promotes participation of employees in decision making b

It protects the rights of employees as appear in the Constitution

Basic Conditions of Employment Act, 1997 (Act 75 of 1997),

It compels all employees to have employment contract signed before commencement of work


45

It encourages employees to know the terms of employment and termination of contract

It protects all the rights of workers in the work environment

It makes it easy to work as all contract details are explained before working

Employment Equity Act, (Act 55 of 1998),

It provide equal opportunities in the workplace

Ensures affirmative action in the workplace

There has to be equal pay for equal value of work done

Compensation for Occupational Injuries and Diseases Act, 1993 (Act 130 of 1993)

It promotes safety in the workplace

It encourages registration of employees with the trust fund

Employees are going to be compensated if injured or inherited diseases while performing their duties

Skills development act

It identifies the need for training of employees and provides training

It uses NQF to assess levels of employees

It allows SETAs to implement designated sector skills development

It implements National Skills Development Strategy

QUALITY OF PERFOMANCE (TERM 2 CHAPTER)

Total Quality Management (TQM)

Important Terms:

Quality:

Refers to the ability of goods and services to satisfy a specific need.

The focus should be on total client satisfaction

In SA the NRCS/SABS allocate quality standards to products

Quality assurance

Is the process carrying carried out during and after the production process

• A good or service being developed is meeting specified requirements.

• Control measurements are in place.

• Control measurements are implemented properly.

• Ways of improving control measurements are identified.

Quality control

Is the inspection (checking) of the final product to ensure it meets the required standards

The process of ensuring that products or services are made to consistently high standards.

Quality control involves control of the material, workmanship and machinery that is used in the production

process.

Quality Management Systems:

Frameworks used by management to measure quality standards in the production process.

Quality Performance: Refers to the total performance of each department measured against the specified

standards.

Quality Management: The techniques and tools to design and improve the quality of a product, a service or a

system, to ensure that the end user will be guaranteed a reliable product and an efficient service

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OTHER TERMS/CONCEPTS

ISO • International Standards Organisation

• Used by TQM

ISO 9000 • Set of quality management system standards

ISO 9001 • States the requirements of a quality management

system

Quality circles • Regular meetings between a manager and employees

to solve quality problems and identify ways to

improve quality

SABS • South African Bureau of Standards (SABS)

• Promotes and maintains standards in South Africa

1. The benefits/advantages of quality management systems

Increased customer satisfaction.

Time and resources are used efficiently.

Productivity increase through proper time management and using high quality resources.

Products and services are constantly improved, resulting in greater customer satisfaction.

Vision and mission may be achieved.

The business may achieve a competitive advantage over its competitors.

Continuous training will continuously improve the quality of employees’ skills and knowledge.

Employers and employees will have a healthy working relationship which results in happy workers.

Increased market share and profitability.

2. Quality/Effective quality of performance in relation to the various business functions

2.1 Purchasing Function

Ensuring that the business buys its raw materials/goods:

From the right supplier

At the right price

At the right time

In the right quantities

In the right place

To regularly do stock control

Ensuring that the business always has sufficient levels of stock

Minimise losses due to theft and obsolescence

2.2 Production Function

Choosing a suitable production system

Doing quality control

Maintaining equipment

Adhering to all safety procedures and regulations

Determining tolerance levels and to regularly carry out inspections and tests

Products must meet customers' requirements by being safe, reliable and durable.

The business should have good aftersales services and warrantees.

Get accreditation from the SABS/ISO 9001 to ensure that quality products are being produced.


47

2.3 Public relations Function

Creating a favorable image of the business.

Shape the public's opinion through:

Being involved in corporate social investment programmes

By making sure that phones are answered promptly and that phone operators act professionally

Ensuring that internal publicity (appearance of the buildings, way in which the telephone is

answered, appearance of correspondence) is up to standard

Management deals quickly with negative publicity.

Less/Little/No incidents of negative publicity.

Regular positive press releases.

2.4 General management Function

• Creating a suitable mission and vision for the business

• Organising employees in the most efficient way

• Demonstrating effective leadership

• Controlling all processes

• Communicating with employees

• Involving employees in decision making processes

• Disciplinary action if needed

• Effective decision making

2.5 Marketing Function

• Effective product development

• Good pricing strategy

• Designing effective packaging

• Most suitable distribution strategy

• Effective marketing communication policy

2.6 Human Resources Function

• Effective recruitment to attract the best candidates

• Fair selection processes

• Employee development to keep up with changes in technology and in the industry

• Employee retention and training

• Fair remuneration

2.7 Administration Function

• Applying technology efficiently

• Collecting data and information

• Ensure that captured data or information is accurate

• Processing the data and information

• Making information available to management so that management can react to opportunities and

threats

2.8 Financial Function

• Obtaining capital from the most suitable source available

• Drawing up budgets

• Ensuring that financial records are up to date

• Investigating strategies to increase profitability

• Investing surplus funds effectively

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3. Three Basic Principles of TQM

3.1 Satisfy the

customer

• The first and major TQM principle is to satisfy the customer.

• The person who pays for the product or service.

• Customers want to get their money's worth from a product or service

they purchase.

3.2 Satisfy the

supplier

• The person or organization from whom you are purchasing goods or

services.

• Satisfy their external suppliers by providing them with clear instructions

and requirements and then paying them fairly and on time.

3.3 Continuously

improve the

business processes

• You can never be satisfied with the method used, because there always

can be improvements.

• The competitors are always improving, so it is very necessary to strive to

keep ahead of the game.

• Continuously improve processes by working smarter and using special

quality methods

4. Elements of TQM

4.1 Top management involvement/Commitment of top management. .

Top management should support all TQM activities.

Appoint managers/supervisors to control and oversee all stages of TQM processes.

Act on customer feedback and complaints.

Ensure that quality reviews are regularly conducted.

Ensure that shareholders are totally satisfied with the standards of quality.

4.2 Total client satisfaction/Total customer satisfaction

The business should understand current and future customer needs.

Quality products and services satisfy customer's needs and expectations.

Customers will be satisfied if products and services meet their needs, requirements and expectations.

Businesses need to conduct effective market research to determine customer's needs and to develop

products and services that will meet or exceed those needs.

Businesses need to implement efficient, friendly customer services and customer care systems.

4.3 Continuous improvement to systems and processes

Businesses that have quality processes and systems in place will produce good quality products and can

provide excellent customer services.

Employees need to understand the operating system and the service delivery system.

Identify the problem areas of the business.

Give details and specific instructions on the improvement of systems and processes.

Encourage team work and delegate responsibilities.

4.4 Involvement of all employees/People Based Management

Management should ensure that all employees are involved in quality management.

Management should ensure that employees are totally satisfied with the standards of quality.


49

Effective meetings should be encouraged at all times.

Effective communication tools will ensure high quality standards.

Regular internal quality audits may maintain high quality standards.

4.5 Continuous skills development/Education and training

A skills audit should be conducted to determine the qualifications and competence of staff that can

influence the quality of products/processes.

Employees who lack skills should be trained in line with their job descriptions.

Regularly evaluate the effectiveness of the training.

Suitable induction programmes that promote quality should be implemented.

Quality guidelines for managers should be used to monitor continuous skills development.

4.6 Adequate financing and capacity

There should be enough funds available for proper quality management processes, e.g. systems to

prevent errors in the process/detect defects in raw materials.

Funds should be available for market and product research to gather information on quality

improvement.

Suitable equipment should be available for testing and maintaining high quality standards.

Funds should only be used to buy the best quality raw materials to avoid/prevent faulty products.

Funds should be available for regular internal/external testing of products and processes to maintain

high quality.

4.7 Planning

Proper planning for quality assurance of processes should be in place before production commences.

Enough staff/Quality assurers should be available at key production points to quality assure products

and processes.

4.8 Monitoring and Evaluation

Monitoring/Evaluation systems and quality assurance processes should be in place to prevent product

defects and wastages.

Allow for quality control checks and procedures at key production points.

4.9 Management by facts

Management should be kept informed about all quality processes.

Facts should be measurable/based on observation and experiments.

Analysis of data and information should be accurate.

Accurate data and information would assist the management to make informed decisions.

Regular quality feedback meetings between management and employees should be held to discuss ways

of improving quality.

4.10 Teamwork

TQM requires everyone to work effectively as an individual and as a team member within a department

of a business or across departments.

An initiative that works well within teamwork to improve quality is the use of quality circles.

A quality circle is a group of employees with a variety of skills and experience coming together to solve

problems related to quality and to implement improvements.

They give/suggest solutions to top management.

5. Reducing the cost of quality/Strategy to reduce cost quality

Introduce quality circles/small teams of five to ten employees, who meet regularly to discuss ways of

improving the quality of their work.

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Schedule activities to eliminate duplication of tasks/activities.

Share responsibility for quality output amongst management and workers.

Train employees at all levels, so that everyone understands their role in quality management.

Develop work systems that empower employees to find new ways of improving quality.

Work closely with suppliers to improve the quality of raw materials/inputs.

Improve communication about quality challenges/deviations, so that everyone can learn from

experiences.

Reduce investment on expensive, but ineffective inspection procedures in the production process.

Implement proactive maintenance programmes for equipment/machinery to reduce/eliminate

breakdowns.

7. Negative Impact of Poor TQM

Setting unrealistic deadlines that may not be achieved.

Employees may not be adequately trained resulting in poor quality products.

Decline in productivity, because of stoppages.

Businesses may not be able to make necessary changes to satisfy the needs of customers.

The reputation of the business may suffer because of faulty goods.

Customers will have many alternatives to choose from and the impact could be devastating to

businesses.

Investors might withdraw investment, if there is a decline in profits.

Bad publicity due to poor quality products supplied.

Decline in sales, as returns from unhappy customers' increase.

High staff turnover, because of poor skills development.


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7. Impact of TQM elements on small and large businesses

ELEMENT Small Businesses e.g. sole trader Large Businesses e.g. companies

Continuous skills

Development Don’t have a dedicated Human Resource

Function that focus on skills development

It is not always easy to develop skills as

everyone is involved in different aspects of the

business

There may be more holistic approach to the

training as there is few employees

Employees employed in smaller businesses are

often required to perform wide range of tasks

Have Human resource function dedicated to skills

development and training

Human resource function must ensure that the training is

relevant and it improve customer satisfaction

It is very difficult to send same message out to everyone in

large business

Trained employees may leave for better jobs after they

gained more skills

Total Client

Satisfaction Often have a closer and more personal

relationships with customers

Often have more contact with the client and

able to determine ongoing customer satisfaction

Do not have enough staff to justify a customer

service department

Find it difficult to find employees to run

business and give full attention to Total

Customer Satisfaction

Very seldom to come into contact with their customers and

often do not have a very clear idea of what will satisfy their

needs

Market research and customer surveys are essential and

should be made available to all employees to see how

customers felt about the product

Business needs total involvement and commitment to TQM

system from all employees

Continuous

improvements to

systems and

processes

Improving systems and processes can become

costly especially if it involves the purchasing of

new machinery and equipment

Employees are often required to multitask

It is easier for the employees to buy into the

idea of a change in systems or processes as

compared to large businesses

Often have a person dedicated to the improvement of

systems and processes

Systems and processes take time and effort to implement in

large businesses

Have the capital for new equipment required for systems and

processes

Often more willing to take the risk or trying new processes

and systems

Adequate financing

and capacity Financing often difficult and it is not always

possible to test everything before testing

Have to work on trial and error as they do not

have large product research departments

Have sufficient financing to test everything before

implementing

They should have systems in place to prevent errors in the

process and defects in materials and products

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Don’t have correct equipment or best quality

material and this can lead to faulty products

Should ensure that they buy correct equipment and the best

quality materials to avoid faulty products

Have the capital to purchase the best quality machinery that

suits the process and improve quality

Planning,

Monitoring and

evaluation

Not enough people to put monitoring and

evaluation systems and processes in place to

prevent product defects

Must make sure that they take time to put

correct systems in place to prevent product

defects , poor productivity and customer

dissatisfaction

Monitoring and evaluation system and quality assurance

process should be put in place to prevent product defects

Should have quality control checks and procedures that

ensure that they don’t have to replace items and machinery

Better equipped to get things right the first time with no

defects

Involvement of all

and employee

responsibility

Generally easier to get all of the employees on

board as they are all involved in the process in a

handson way

Easy communication

All employees strive and take responsibility for

quality

Difficult to get everyone to communicate

Have a very wellconstructed systems and processes that

include everyone in quality control and management process

Leadership and management must ensure customer

satisfaction through creation of high quality products and

services

Specific measures that encourage responsibility for quality

by everyone must be in place.

IN SUMMARY

Small business structures Large business structures

Smaller businesses should deliver quality goods and services,

because the owner supervises all processes and the owner

knows that mistakes can be costly.

Smaller businesses have fewer employees to do quality

control.

• You can reason that larger businesses deliver better goods and

services because employees specialise in what they are good at.

• However, larger business structures can become ineffective, and

employees can become less motivated which will impact negatively

on quality.


53

Small business managers must ensure that quality control

remains high priority.

• Because larger businesses produce on such a large scale, quality

control becomes more difficult.

• It is impossible to check the quality of all goods.

• Large businesses must establish reliable and efficient inspection

methods to minimise the production of goods of poor quality.

54

8 PDCA Model

Continuous improvement to processes and systems cycle

P - Plan

Identify the problem.

Develop a plan for improvement to processes and systems.

Answer questions such as 'what to do' and 'how to do it'.

Plan the method and approach.

D - Do

Implement the change on a small scale.

Implement the processes and systems.

C - Check/Analyse

Use data to analyse the results of change.

Determine whether it made a difference.

Check whether the processes are working effectively.

Assess, plan and establish if it is working/if things are going according to plan.

A - Act as needed

Institutionalise the improvement.

Devise strategies on how to continually improve.

If the change was successful, implement it on a wider scale.

Continuously revise the process.

Application of a PDCA model/cycle

Businesses should identify the opportunity for improvement.

Plan the method and approach.

Decide whether new processes/changes are necessary.

Implement the change on a small scale.

Check whether the processes are working effectively.

Use data to analyse results to determine whether change(s) made a difference.

If the change was successful, implement it on a wider scale and continuously assess

results.

Revise the process/Take necessary actions if new systems are not working.


55

Possibilities of even getting a Distinction just for having done ONLY two topics thoroughly

INSIGHT

If a learner and the teacher do these topics honestly, they will get 20 sec A, 150 sec B and

80 in sec C. this therefore means that a learner can get 250/300 yet getting a distinction is

239/300.

This document can be used to get all percentage, except 90% and above using only this

document.

It is risky to only do two topics as other learners may lay a complain to the teacher for not

teaching other chapters if they have failed.

This document is safer to get pass mark but not recommended for high fliers.

Other two chapters (Business Ventures & Business Environments) are still important to

do as the coverage of the contents of the subject.

All four topics are catered for in the third document meant for learners wants to get even

90% and 100%, which is the initial wish for every Business Studies educator and the

Department of Education.

A complete document at a one go can be scare learners and some educators; it is therefore

for this reason that these topics are broken down to the level of learners and their needs,

according to the passing requirements.

How to get 90% in Business Studies? PART 3

This part aims at uplifting all learners to get all the marks in the paper out of 500

marks

If a learner can combine part 1, part 2 and part 3; learners will be at liberty to get

90 % in the exam paper.

Teachers are bound to thoroughly do this part as well thoroughly so that we

guarantee this pledge of getting 90%.

In part 1, we dealt with one topic, dealt with two topics in part two and in part

THREE; we are dealing with all FOUR topics.

The paper will be set out of 500 and the learner will know all these contents.

Learners and educators are warned to help each other with the choices in the

question paper.

If a learner knows all five questions in sections B, it is going to be difficult to make

a choice of only three questions.

56

Business Ventures and Business Environments

BUSINESS VENTURES (MAIN TOPIC) MANAGEMENT AND LEADERSHIP (TERM 2 CHAPTER) Leadership:

Refers to the ability to influence followers

I.e. employees or teams or groups towards achievement of vision and goals.

Is about inspiring people to become achievers.

Are generally born with special innate characteristics or personality traits

Management:

Refers to the ability to control, plan and controlling and organise towards achieving the

vision and goals.

Is the process of getting things done by exercising the responsibility resulting from a

particular position (authority)

1. Difference between leadership and management

Leadership Management

Influenceshuman behaviour. Guideshuman behaviour

Inspires staff to trust and support each other Controls systems and proceduresto get the job

done

Focuses on the horizon to take long term

decisions.

Focuses on the bottom line to take short-

/medium-/long-term decisions.

Leaders are born with natural/instinctive

leadership skills.

A person becomes a manager because he/she

is appointed in the position/trained/qualified.

Always trying to find more efficient waysof

completing tasks

Enforce rules on subordinates to ensure that

tasks are completed

People orientated Task orientated

A leader innovates A manager administer

A leader is an original A manager is a copy

A leader develops A manager maintains

A leader focuses on people A manager focuses on systems and structure

A leader originate A manager imitate

A leader does the right thing A manager does things right

2. Distinction between leadership styles: - Democratic

- Autocratic

- Bureaucratic

- Laissez-Faire/Free Reign


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-Transactional

-Charismatic

2.1 Autocratic/Authoritarian/Boss-centered leadership style - The leader makes all the decisions alone.

- The leader has little or no consideration for the needs or opinions of subordinates.

- The leader tells employees what to do and how to do it without asking them for input.

- The leader gives directives/instructions as a way of communicating with subordinates.

When can it be used/implemented?

- This style can be used when implementing policies of the business

-Dealing with employees who are non-co operative AND when employees are less competent in

their work

-Implementing government legislations


Quick decision making

Effective when employees are unskilled

Good for crisis situations

Practical in large businesses

Creates division between management and

staff

Poor motivation and productivity

Little input from employees

Top down approach which can create

disrespect

2.2 Democratic/Participative/Consultative/Consensus leadership style - The leader invites team members to take part in decision making.

- The leader considers the needs and input of followers and encourages group involvement.

- The employees provide lots of feedback before decisions are made.

- The tasks are delegated to employees and they take full control over the completion of the

work.

- The leader remains responsible for making decisions.

-Leader remains accountable and has authority to make final decisions

When can it be used/Implemented?

- Is effective in situations where the leader does not have all the information

- This style is used when changes have to be made to systems and processes.

- This style is used in creative-type businesses and manufacturing concerns

- This style is suitable when cooperation is required between a leader and a team.

- This style is suitable when decisions need to be looked at from several perspectives.

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Employees are involved

Variety of skills and inputs

Greater variety of ideas

Encourages innovation

Incorrect decisions can be taken if

employees inexperienced

Discussions can take time

Not effective in times of crisis

2.3 Laissez-faire/Free reign/Subordinate centered leadership style (hands-off style) - The leader is not part of the decision making process,

-allows employees to make all the decisions within the framework/limits of the policy.

- The leader gets involved when requested.

- The leader is responsible and accountable for the employees’ decisions and actions.

- Employees are left on their own with minimal interference.


- When the leader is empowering his employees through the delegation of duties.

- Useful when employees are knowledgeable and experienced.

- Applied in situations where employees are highly skilled

- Applied in businesses that require flexibility, creativity and innovation.


Employees make the decisions

Employees are empowered and motivated

Variety of skills and input

Incorrect decisions can be taken if

employees inexperienced

Employees can lose focus

Can be time consuming

2.4 Bureaucratic Leadership Style

- The leader provide strict rules of the business.

- The leader ensures that employees follow rules and procedures accurately and constantly.

- The leader leads through instituting/implementing processes and procedures.

- The leaders follows the rules systematically and makes sure that employees also adhere to the

rules.


- This style is used where accountability is very important,

E.g. government departments, accountable to the general public.


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- This style is used at dangerous places

E.g. as mines, oil rigs and construction sites where health and safety is important.

- This style is used for routine jobs.


Employees are disciplined

Increase productivity

No/ lack of flexibility

2.5 Charismatic Leadership

-Uses personal charm, inspiration rather than power to lead subordinates

-Serves as a role model, others follow

-Has a vision, and communicates this easily to subordinates

- The leader first gives subordinates easy tasks to more difficult tasks

- Praises subordinates even if little success is achieved


- used when the management has identified low morale amongst its employees.

- Used as a method to motivate employees.


The leader is often popular amongst staff

and communities

Often the leader charm subordinates to

take on tasks, increasing workload

Staff feel they add value to the business Staff not being recognised often, feel

they add little value to the organisation.

Subordinates are willing to go an extra

mile to impress their leader

Staff is motivated through inspiration

and recognition

2.6 Transactional leadership

-Leader uses rewards and punishment method

-Communicates clearly what is expected from the subordinates

-Clearly spells out what the reward or punishment will be

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-Subordinates takes sole responsibility and accountability for their actions


-Effective when applying disciplinary actions to employees that do not behave properly


Clear reward systems are in place to

motivate staff

Staff are punished for not meeting

deadlines

Clear communication channels exist. Disciplinary action may lead to

dismissal

Staff is often blamed when things go

wrong

3. LEADERSHIP THEORIES

Differences

Leaders and followers theory Focus on relationship between leader and follower

Key to success is an open and honest

communication between leader and follower

Respect is encouraged

Example: employee able to critically evaluate a

leaders solution to a problem and suggest changes

Situational leadership theory Determines how a leader should lead Based on the

theory that there is no single style of leadership

The leader adapt to the leadership style according

to the task at hand

Leaders show various skills

Followers are highly skilled and have high level of

maturity

Transitional/Transformational

leadership theory Occurs during the time before big changes

Interaction between leaders and followers are

critical for a success during a transition

Leaders inspire followers

Leaders explore new ways of doing things

Open communication between leaders and

followers

Leadership is people orientated

Followers are highly motivated

Transactional NB….Same as one discussed in leadership styles,

please refer to the detailed discussion above


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The role of personal attitude in success and leadership

Enthusiasm-Passionate involvement

Self-confidence and believing-belief in yourself as a leader

Desire and Drive- Strong feeling of wanting to have something

Courage-never gives up-the strength to take challenges

Persistence-Dedication and commitment to overcome obstacles

Importance of personal attitude in leadership

Positives:

- Attitude releases leadership potential.

- A leader's good/bad attitude can influence the success or failure of the business.

- Leaders must know their strengths and weaknesses.

- Great leaders understand that the right attitude will set the right atmosphere.

- Leaders' attitude can influence employees'/ teams' thoughts and behaviour.

- Leaders should model the behaviour that they want to see in team members.

- Leaders must know and understand their team.

Negatives:

- May affect publicity/image of the business.

- Workers morale may be affected negatively.

- May be in conflict with the goals of the business.

- The leadership style may lead to conflict within management and employees.

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Investments: Investment opportunities and Securities

(TERM 3 CHAPTER) 1. FACTORS TO BE CONSIDERED WHEN MAKING AN INVESMENT

1.1 Return on Investment (ROI):

Refers to income from the investment e.g. interest, dividends

Generally there will be direct link between risk and return i.e. the higher the potential

return, the higher the risk of potential loss

The return should be expressed as net after tax return

The net after tax return should be higher than the inflation rate at the time

1.2 Risk

A good investment will be at low risk

An investment with high rate of return will usually have a greater degree of risk

1.3 Liquidity

A certain amount of capital should be invested in a type of investment that can be easily

converted to cash

Liquidity refers to ease and speed with which you can convert an investment

1.4 Taxation

A good investment will yield good after tax returns

South Africa has a high interest rate

1.5 Inflation Rate

Inflation refers to a decrease in the value of money and rising prices

People with a fixed income are highly affected by a high inflation rate because if prices

increase, they can buy less with their money i.e. buying power decreases

Income from investment should be higher than inflation rate.

2. FORMS OF INVESTMENTS

2.1 Unit trust

Package made up of shares in different companies and can be bought directly from Unit Trust

Company

Risk factor- a stock exchange crash will have a negative impact on the value of the investment

2.2 Managed Portfolio

Money is invested in different shares and is managed over the investment period, it can be

managed by financial institution or financial advisor.


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Risk factor- a stock exchange crash will have a negative impact on the value of the investment

2.3 Endowment Policies

This is where companies invest investors’ money in large projects such as buildings

Risk factor: a forecast is made, which is not always accurate and high unrealistic expectations of

the investors are created, the investor could receive return that is less than the capital

2.4 Fixed Deposit

This is a very conservative method of investment, it is based on a fixed rate but it is also more

secure

Risk factor- it is very low as the investor receive what was promised

2.5 32 Day notice deposit

Your money is invested at a fixed rate, and you may withdraw it at any time provided you give a

32 days’ notice to the bank.

Risk factor: low because interest rate or rate of return is low

2.6 Bonds

The investor money is used to finance the purchase of buildings, the rate of return is normally

above average.

Risk factor: Is high as some buildings are overvalued and do not generate the required

return/income when resold

2.7 Ordinary Shares

Standard Shares with no special rights or restrictions, ordinary shareholders are least paid when

company shut down

Risk factor-Medium to high depending on the type of share

2.8 Preference Shares

Positives/benefits/advantages - Shareholders obtain proportional ownership in a company.

- Investment in preference shares has a lower risk than ordinary shares as preference

shareholders have preferential claims on the assets of a company at liquidation.

- Dividends are paid out before any other shareholders receive theirs.

- Preference shareholders receive a fixed dividend amount/percentage per year.

- Accumulated preference shareholders may be compensated for past dividends not paid out in

previous years.

- Shareholders may also share in surplus profits that remain after all other shareholders have

received their dividends.

- Shareholders have limited liability to the debt of the company; therefore, they stand to lose

what they have invested.

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- Shareholders will receive their claim on company assets after creditors have been paid, but

before ordinary shareholders receive their claims when the company is liquidated.

Negatives/disadvantages - Shareholders have no voting rights at the Annual General Meeting (AGM).

- Shareholders may receive less dividends when company profits are high as their dividends are

fixed.

- Convertible preference shares may be converted into ordinary shares, In which case preferential

rights on dividends/assets are lost.

- Non-cumulative preference shareholders have no cumulative rights on past dividends not paid

out.

RISK FACTOR:

- Risk may be high, as investment may be lost when companies are liquidated.

Types of preference shares

1. Ordinary preference shares: dividends only received when there are profits to be

divided

2. Cumulative preference shares: dividends accumulate for the future if they are not paid

in current year

3. Non-cumulative preference shares: dividends do no accumulate for the future if not

paid in current year

4. Participating preference shares: these may receive regular dividends and also share in

surplus profits if available

5. Non-participating preference shares: they do not carry right to participate in surplus

profits

2.9 Government retail bonds

Investment earns a fixed interest for the term of the investment and also serve as a

savings

The amount that can be invested ranges from R1000 to R1 million for a period of 2, 3 or

5 years

Interest rate is fixed

Interest is paid out every six months on March 31 and September 30 directly on buyers

account

Positives/Advantages/Benefits - Guaranteed returns as interest rate is fixed for the whole investment period.

- Interest rates are market related.

- Investment may be easily accessible, as cash may be withdrawn after the first twelve months,

subject to penalties.

- Retail bonds are easily/conveniently obtained electronically/from any Post Office/any Pick 'n

Pay shop/directly from National Treasury.

- No charges/costs/commissions payable on this type of investment.

- Interest is usually higher than on fixed deposits.

- Retail bonds are listed on the capital bond markets/on the JSE.


65

Negatives - Retail bonds cannot be ceded to banks as security on loans.

- A minimum of R1 000 must be invested, which may be difficult for some small investors to

accumulate.

- Retail bonds are not freely transferable amongst investors.

RISK FACTOR

Low risk/Safe investment, is made with the South African Government which cannot be

liquidated.

2.10 Debentures

Investors lend money to public companies and they will receive interest on this investment

Risk Factor: Med

2.11 Offshore investments

Keeping/investing money in a foreign country

Risk factor: low to high depending on economic conditions

JSE (JOHANESBURG SECURITIES EXCHANGE)

Institution where Individuals and businesses buy and sell shares

3.1 FUNCTIONS OF JSE

- Keeps investors informed by publishing the share prices in the newspaper.

Debentures

Every company has the right to borrow money.

A very good way of money is to issue debentures. Therefore the company borrows money from the

general public.

A debenture is a document issued by a company to a person from whom it borrows money. On it is

specified the rate of interest and the date of repayment.

Types of Debentures.

Debentures to bearer They are not registered in the name of any person and ownership

thereof is freely transferable by simply handing over the debenture

itself

RedeemableDebentures Here, the debenture holder receives fixed interest at the end of every

specified period where the loan is paid back at the end of such

period.

IrredeemableDebentures

This is where the loan is not repaid, the interest is paid annually

66

- Serves as a link between investors and entrepreneurs.

- Serves as a barometer of economic conditions.

- Encourages financial institutions to invest surplus funds in shares.

- Serves as a disciplined market for securities.

- Encourages new investments by businesses/individuals/previously disadvantaged.

- Protection of investors/regulatory requirements.

- The JSE is obliged to cater for the previously disadvantaged.

- Ensures that the market operates in a transparent manner.

- Opportunities for venture capital.

- Encourages short term investment.

3.2 SHARES LANGUAGE/INTERPRETATIONS ON JSE

Note: The table below is by no means a reflection of reality and position of companies

mentioned, it is only for illustration and educational purposes

Name Close High Low DM YM DY PE DV

Clicks 4249 4288 4200 -50 44.2 - 18.2 833822

PicknPay 4280 4295 4205 +38 7.0 3.3 26.0 1138060

Pikwik 1785 1798 1759 +24 6.9 3.9 21.7 340184

Shoprite 9833 9949 9720 -215 31.1 2.4 20.6 1725507

Spar 9120 9255 9068 -140 21.6 4.0 17.0 562706

KEY:Close: Market close, High: Day’s high, Low: Day’s low, DM: Daily Move, YM% Last 12

month’s percentage move, DY: Dividend yield, PE: Price earnings ratio, DV Days volume

2. RETURN ON INVESTMENTS

Investors often have a way of reflecting on their investments, this reflection is based on

their returns in relation to money they initially invested, this is normally reflected as

interest.

Comparisons among different investments and different individuals is a useful tool to

reflect on the returns earned.

To compare apples with apples (like to like) the use of % to reflect returns is useful i.e.

returns are expressed as a percentage of initial investment. The following formulas will

be used to express returns

1. Interest/return=Total maturity value-initial investment

Example:

Rea invested R400 in a fixed deposit 2 years ago, and she received R500 on maturity date

The return/interest can be calculated as follows:

Interest/return=Total return-initial investment

= R500-R400

= R100


67

2. Interest as a Percentage of initial investment 𝑖𝑛𝑡𝑒𝑟𝑒𝑠𝑡

𝑖𝑛𝑖𝑡𝑖𝑎𝑙𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑥 100

Example:

Rea invested R400 in a fixed deposit 2 years ago, and she received R500 on maturity date

The return/interest can be calculated as follows:

Interest/return=Total return-initial investment

= R500-R400

= R100 100

400x 100 = 25%

To meaningfully compare different investments, the investment with higher percentage return is

the good one/more beneficial.

3. Simple interest

This is a mathematical formula used to calculate interest, and interest is fixed based on initial

investment the formula is expressed as follows

FV=P(1+i x n)

Where: FV=Future Value, P=initial investment, i= interest, n= number of years

Example:

Betty invested R1000 in a bank account at 8% per annum interest for 5years, and interest is

calculated using simple interest.

Calculate the amount that Betty will receive after 5 years/maturity date.

Solution

FV=P(1+i x n) OR P*R*N

= 1000(1+8

100x 5)

= 1400

4. Compound formula

This is a mathematical formula in which interest is calculated on the balance available on the

investment. And it can be expressed as:

𝐹𝑉 = 𝑃(1 + 𝑖)𝑛

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Where FV=Future Value, P=initial investment, i=interest, n= number of years

Example:

Betty invested R1000 in a bank account at 8% interest per annum compounded annually for

5years.

Calculate the amount that Betty will receive after 5 years/ at maturity date.

Solution

𝐹𝑉 = 𝑃(1 + 𝑖)𝑛

𝐹𝑉 = 1000 (1 +8

100)

5

= R1469.33 – 1000 = 469.33 interest

DIFFERENCE BETWEEN SIMPLE INTEREST AND COMPOUND INTEREST

Simple interest

Compound interest

- Calculated on the original/principal amount

invested.

- Accumulated interest from prior periods is

not used in calculations for the following

period.

- Money charged by the lender on the fixed

amount for a certain period of time.

- Interest charged remain fixed for the full

period of investment.

- Calculated each period on the

original/principal amount including all

interest accumulated during past periods.

- Based on the concept of adding accumulated

interest to the original/ principal amount and

interest is earned on interest.

Insurance(TERM 3 CHAPTER) Definition

An insurance contract is a contract between the insurer and the insured.

The insurer undertakes to compensate the insured for losses suffered as a result of a

specified risk. The insured undertakes to pay a monthly premium to the insurer.

The purpose of insurance is to indemnify the insured against risk, e.g. fire, storms,

burglary


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Insurer:

Entity/party taking full responsibility to cover losses in return of premiums, and accept

the transfer of risk.

Insured:

The person who takes out the insurance policy (i.e. needs coverage) and pays the premium.

Premium:

The amount of money paid by insured to the insured periodically e.g. every month

Two categories of insurance include:

Non-Compulsory

Compulsory

o Non-Compulsory:

There is no legal obligation to take this type of insurance for example, theft insurance

o Compulsory:

There is a legal obligation to have this type of insurance for example Road Accident

Fund (RAF).

Other important terms/definitions

TERM DEFINITION

Beneficiary : The person who will receive the benefits as a result of claims i.e. in a

form of payment or other form of re-imbursements

Policy Holder : The person to whom the insurance policy is held

Cession: Portion of obligation (risk) that is passed or transferred to a third party

(re-insurer) by the insurer

Risk : The possibility of damage, liability, losses caused by a second party

or by internal weaknesses that can be avoided.

Subrogation : Process where the insurance company claim money from a third party

who was guilty or negligent

Surrender

- Applies to life assurance and means to terminate a policy. A cash

amount is paid to the policyholder, no further premiums are paid and

no further cover is provided

Excess: The amount that the insured has to pay before claiming from the

insurance company.

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Market Value : Amount which the asset is worth in its current condition.

Under Insurance : Occurs when the asset is insured for an amount under the market

value

Over Insurance: Occurs when the asset is insured for an amount over the market value.

Re-Insurance : Insurance taken by the insurer (insurance company) from other

insurance companies (i.e. pass certain portion of the risk) to reduce

likelihood of paying huge amounts in future to the insured

Iron safe clause - Insured must keep a complete set of books in a fireproof safe at night

to enable the insurer to have evidence of amount of stock on the

premises. If safe is damaged, contract is still viable and damages will

be paid.

Pooling

- The combination of several small groups into one large group for

insurance purposes, such as obtaining lower premiums or more group

benefits.

Cession of

insurance policy

- The rights a person has in a policy may be transferred to another

person by means of a written agreement

Reinstatement - The insurer can replace the damaged or stolen goods, instead of

paying the amount to the insurer

Subrogation - Means “to stand in the place of” through the process where the

insurance company claim money from a third party who was guilty or

negligent

Clause - Paragraph in an insurance contract.

LIFE INSURANCE VS RETIREMENT ANNUITY

LIFE INSURANCE: Taken against individual’s lives, the insurer pays out a certain amount of

money upon occurrence of certain event e.g. reaching the age of 60 or death.

RETIREMENT ANNUITY: Taken as a savings for individuals when they stop working i.e. they

get monthly payments after retiring.

1. Requirements of a valid insurance contract

Good faith


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Insured must disclose everything that may affect the extent of the risk. All questions asked by the

insurer must be answered honestly. Otherwise, the policy may be declared void in a court of law.

Both parties must disclose all material facts

Insurable interest

Insured must be able to prove that he/she derives a financial benefit from the existence of the

object which is being insured and/or that the insured stands to lose financially if goods are

destroyed or by the death of a person.

RELEVENCE/IMPLICATIONS OF INSURANCE ON INDIVIDUALS AND

BUSINESSES


- Insurance protects businesses against any insurable losses they may suffer.

- Certain types of insurance can be used as security for loans.

- Ensures that all employees are guaranteed of pension support after retirement.

- Replaces broken or stolen items.

- Protects a business from claims made by a member of the public for damages that the business

is responsible for.

- Ensures businesses of compensation if employees are injured or die while at work.


- It is money wasted because if businesses and individuals do not claim, they lose money.

- Insurance companies will always find a reason for refusing to pay claims.

- Hidden clauses in insurance contracts are complicated and confuse clients hence they may not

be paid when claims are made.

- It is better for people to save their money at a higher return on investment than to invest in

insurance.

- Insurance premiums are very expensive and sometimes do not cover the real value of

assets/goods.

2. Principles of insurance

(1) Average Clause

(2) Indemnity

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(3) Insurable Interest

(4) Utmost good faith

2.1 Average Clause (Over/Under insurance)

Insurance claim/ payout will be according to the amount insured, normally used under principles

of over/ under-insurance, this is to ensure that the insurer is not taken advantage of. The amount

of the claim for the loss will be in proportion of insured amount to the market value of the

insured asset.

Formula: Insured amount

Market Valuex loss

Example 1 (under insurance)

Scalene Limited suffered a fire on their factory building during the year and suffered a loss of

R100 000, the building has a market value of R400 000 and it was insured for R250 000 with VV

insurance company.

Required:

Calculate the amount of the insurance claim

Solution

Insured amount

Market Valuex loss

250 000

400 000 X 100 000

R62 500

What if the insured amount is greater than market value?

The formula above still applies, but the claim is limited to the loss suffered, consequently you

cannot claim amount above the actual loss.

Example 2 (Over Insurance)

BS Limited suffered a fire on their factory building during the year and suffered a loss of R100

000, the building has a market value of R400 000 and it was insured for R600 000 with ABC

insurance company.

Required: Calculate the amount of the insurance claim


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Solution:

Insured amount

Market Valuex loss

600 000

400 000 X 100 000 = 150 000

but the amount is limited to ACTUAL LOSS OF R100 000, THUS THE ANSWER IS R100 000

Note: the insurer will normally replace the asset instead of paying out (i.e.re-instate)

1.2 Indemnity

Indemnity is the promise to pay for losses that will be or may be suffered and it is made by

the insurer to the insured. Under this principle insurance pay if there is a proof for the loss

suffered. For example by entering to a fire insurance, the insurance company give you a

contractual promise to pay you or replace the burned asset in case of fire occurrence to that

asset.

1.3 Insurable interest

A party (individual or business) may only claim if they are going to suffer a financial loss

1.4 Utmost good faith

This means that the insured must be honest in the insurance contract as far as possible. All the

information that might affect the insurance must be disclosed

2.5 INSURABLE RISK VS NON-INSURABLE RISK

INSURABLE RISKS NON-INSURABLE RISKS

- Businesses are compensated for losses

arising from specified risks.

- These risks are not insured by

insurance companies/It remains the

responsibility of the business.

Examples: - Fire.

- Theft and burglary.

- Storm/Damage during natural

disasters.

- Life insurance.

- Vehicle insurance (includes theft, hi-

jacking, accidents, etc.).

- Public liability insurance.

- Fidelity insurance.

- Money-in-transit.

Examples:

- Losses caused by war.

- Most risks occurring in the period

between placing orders and receiving

goods.

- Changes in fashion.

- Shoplifting (recurrent expenditure/risk

too high).

- Losses caused by marketing

malpractices on the part of the business.

74

- Unemployment insurance.

.

- Advancement in technology/new

machinery invention.

2. ASSURANCE VS INSURANCE

Insurance Assurance

Provides short term cover. Provides long term cover

Event may occur Event will definitely occur

E.g. Insures a building against fire, storm

damage etc

E.g. to provide for financial security after

retirement or death, etc

Amount of compensation is determined by

the extent of the damage and insured

amount

Amount is pre-determined when agreement

is drawn up

Compensation may/may not be paid out Compensation will be paid out.

3. Compulsory Non Compulsory Insurance (difference)

For definitions please refer to earlier discussion of important concepts

4.1 Compulsory insurance

Workers Compensation Fund/Compensation for Occupational Injuries and Disease Act

(COIDA)

Unemployment Insurance Fund (UIF)

Road Accident Fund (RAF)

a) Workers Compensation Fund (WCF)/COIDA

Purpose:

Workers who are injured on duty are entitled by law to compensation from the Workers

Compensation Fund.

This fund insures the workers for medical expenses that they incur as a result of being injured

or contracting any illness as a result of performing their occupational duties.

This fund also compensates workers financially for any disability that may arise as a result of

accidents while performing their duties in the workplace.

How is it funded?


75

This fund is only funded by the employer, thus employees do not make any contributions.

(b) Unemployment Insurance Fund (UIF)

Purpose:

It is compulsory for the employer and the employee to contribute to the UIF.

This fund provides benefits to workers who have been working and are now unemployed.

Benefits are also paid to the dependents of deceased contributors.

UIF also provides benefits to people who are not working as a result of illness or are on

maternity leave.

How is it funded?

Employees Contribute 1% of total monthly income, Employers also contribute 1%, thus making

2% of monthly income as a total contribution

BENEFITS UNDER UIF:

• Unemployment

• Illness

• Maternity

• Adoption

• Death

(c) The Road Accident Fund (RAF)/ Road Accident Beneficiary Scheme (RABS)

Purpose:

Provide cover for drivers of motor vehicles against claims by persons injured in accidents in

which the driver of the motor vehicle is at fault.

It provides compensation for persons injured in a motor vehicle accident.

It provides compensation for the dependents of a person killed in an accident.

Only losses suffered due to bodily injuries or the death of a person will be compensated.

Damages/loss of property will not be compensated.

After August 2008, a maximum of R160 000 per year may be claimed as loss of income by

drivers and passengers.

Persons injured in accidents may use private health care , but the RAF will only pay out

public health care rates /the difference can be claimed from their personal medical aid

funds.

How is it funded?

The Road Accident Fund is funded by a levy on fuel (diesel and petrol).

76

These funds are deposited into the Motor Vehicle Accident Fund (MVAF) and claims are paid

out of this fund.

2. Non Compulsory

Examples:

(a) Fire Insurance This refers to losses incurred by fire to a business.

Fire damages the property and assets of the business.

(b) Theft Insurance

Losses that result from burglaries and robberies.

Insurance in this regard protects the business by compensating for the losses as well as the cost

of repairing any damage to property during the burglary.

(c) Life Assurance

The death of key personnel such as partners, management personnel etc. may

cause serious problems and financial losses to the enterprise.

Therefore, it is possible for the enterprise to take life assurance against the death

of such key personnel.

(d) Motor Car Insurance

Most business enterprises have assets such as motor vehicles.

Losses as a result of theft, hijacking and accidents are for the cost of the

enterprise.

Therefore, most business enterprises insure their vehicles.

(e) Public Liability Insurance

This type of insurance protects the business from claims arising out of

injuries to an individual on the business premises.

FORMS OF OWNERSHIP (TERM 3 CHAPTER)

(significantly adapted from platinum textbook grade 12)

Learners/Educators are advised to recap grade 10/11 work before teaching/learning this

chapter, however, in grade 12 we focus more on SUCCESS AND FAILURE

Sole Proprietor


77

Partnership

Close Corporation

Private company/Personal Liability

Public Company

1. Sole trader

FACTOR Success Failure

CAPACITY -The business is easy to control as

it is small

-Personal attention and dedication

given by the owner

-Difficult to continue and grow long in

long term

-Not suitable for complex business model

-Owner has to manage and carry out all

business functions

TAXATION Owner only taxed on profits in

personal capacity

If profits get too big may end up paying

high tax in personal capacity

MANAGEMENT -One owner so there are no

disagreements

-Can make quick decisions without

consulting others

-Can be creative and use own ideas

to try new methods

-Owner has to do all of the administration,

management and decision making

-Owner has to rely on own decisions and

could make incorrect ones

-Management could have a lack of

experience

CAPITAL Capital can be carefully spent and

managed

-Limited capital which restricts growth

-Cannot appoint people with large salaries

-Owner solely responsible for capital

borrowed

DIVISION OF

PROFITS

The owner takes all the profits. -

The owner can use his/her profits to

improve the quality of the product

sold or services rendered.

-Owner has to budget carefully so that

business debts are covered

LEGISLATION -No registration required -Unlimited liability

-Personal debts and business are one

-Personal assets and business are one

1 Partnership

2 Factor Success Failure

CAPACITY -The business is easy to control as it

is small

-Partners provide personal attention

and dedication

-Partners usually active in business

-There is no limit on the number of

partners, so too many partners could be

complex

-Difficult to continue and grow in long

term

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-Not suitable for complex business model

TAXATION - Partnership on its own does not

pay tax.

- Partners running small businesses

enjoy tax concession from the

government.

- Profit generated may be used for

expansion or division to partners.

- Failure to comply with tax regulations

by one or more partners may lead to

business closure. - Individual tax paid by

partners on income earned is higher than

fixed tax rate percentage paid by

companies/close corporations.

MANAGEMENT Partners are actively involved in the

management of the business.

-Combined management skills by

partners may lead to success of the

business

- Lack of commitment by one partner in

business management may lead to failure.

- Quick decision-making cannot take

place since all partners have to agree.

CAPITAL - A larger amount of capital can be

raised as compared to a sole trader

due to unlimited membership.

- Capital can be increased, reduced

or withdrawn without legal

procedures.

- Fewer partners may limit capital for

business expansion

DIVISION OF

PROFITS

-Partners receive all the profits from

business

-Amount of work done may not equal to

the amount of profit that each partner

receive

LEGISLATION - Simple and inexpensive formation

procedure.

- Unlimited liability encourages

partners to work harder.

- An oral agreement may create problems

for partners in future which can affect its

success.

- A partnership is not compelled to audit

its financial statements which minimise

opportunities for financial support.

-Partners are Jointly and severally liable

for business debts. A partnership may fail

if one partner incurs debts which the

business cannot repay

3 Close Corporation (CC)



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CAPACITY -The business is easy to control as it

is small

-Members provide Personal attention

and dedication

-Members usually active in the

business

-Easy to register and not difficult to

set up

-Long term continuity is unknown

-Cannot have more than 10 members

-Lack capacity to compete with large

companies

TAXATION -Business pay income tax on profit

earned

-Profit is distributed to members and

they pay personal tax on that

CC pay same tax rate as companies

MANAGEMENT -Members can use expertise and

collectively make decisions

-No hierarchical management

structure

-Members are usually the managers

-Members use their expertise for

decision making

-Members has to do all of the

administration, management and

decision making

-Have to get all members to agree on

decisions

-Members may have conflict when

making decisions

CAPITAL -Members are responsible for

success of the business

-Between one and ten members

contributing to capital

-Members may not all have capital to

contribute

-Limited to only 10 members

DIVISION OF

PROFITS

-Profits divided between members

according to their percentage of

membership

-The less a member contribute, the

lower the percentage of membership,

the less profit they receive

LEGISLATION -Founding statement has to be

completed

-CC’s may no longer be formed

-Limited liability

-Expensive to appoint an accounting

officer

-Very little legal control over

management of CC

3 Public Company


CAPACITY

-Normally large and can have number of

owners

-Has become easier to establish

-Large capacity of the company can

also lead to its downfall in that

structures and process may become

too costly

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TAXATION

-Pay income tax on profit earned

-Profit is distributed to shareholders in

form of dividends and dividends tax is

paid on those dividends

-Shareholders pay secondary tax/

dividends tax(15%) so they need to

earn enough profit to make their

investment worthwhile

MANAGEMENT

-Shareholders own the company and

directors run the company and are

accountable to the shareholders

-Shareholders can be people or other

companies

-Business managed by directors with

expertise

- Owners can remove themselves

from the daily running of the business,

so often there is no personal

involvement.

- Large management structures can

result in decision making taking time.

CAPITAL

-Amount of shares available can be

increased to raise capital

-Shares are transferable

-Shares sold to the public

-Share prices change all the time and

can lose their value

DIVISION OF

PROFITS

Profits belong to the company.

- Profits are distributed to shareholders

according to the number and value of the

shares

- Shareholders decide on the payment

date for dividends.

- Dividends are not always paid out

which may discourage new

investors.

-Shares can increase and decrease in

value and affect investor confidence

LEGISLATION

-Must comply with Companies act 71 of

2008

-Must complete Memorandum Of

Incorporation, Notice of incorporation

-Limited Liability

- Take a long time and is a long

process to form a company.

- Can be expensive to make the

necessary payments.

- Can become complicated to obtain

all the necessary legal documents.

5 Private Company/ Personal Liability Company (PLC)


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CAPACITY

-Can attract more shareholders

-As the company become

successful the value of the

shares increase which attract

more investors

-

It is expensive to run companies and profits

may not be sustainable and may result in

liquidation

-Does not have capacity to draw on large

financing sources , thus hamper growth

TAXATION

-Pay income tax on profit earned

-Profit is distributed to

shareholders in form of

dividends and dividends tax is

paid on those dividends

-Shareholders pay dividends tax(15%) so they

need to earn enough profit to make their

investment worthwhile

MANAGEMENT

- Business managed by

directors with expertise.

-Directors are usually highly

skilled individuals who know

how to run a business.

- Directors are accountable to

shareholders.

- Owners can remove themselves from the

daily running of the business,so often there is

no personal involvement.

- Large management structures can result in

decision making taking time.

- Shareholders have the power to elect

directors, but not all shareholders exercise

their voting rights.

CAPITAL

- Capital can be increased by

taking on more shareholders.

- There is no limit to the number

of shares a private company can

register with CIPC and issue to

obtain capital.

- Shares cannot be sold to the public.

- Capital is limited to private shareholders.

DIVISION OF

PROFITS

- High profits and good returns

to

shareholders indicate the

success of a company, which

increases the value of shares.

- Profits generated can be

reinvested to expand business

operations.

- Dividends are not always paid out

which may discourage new investors.

- Shareholders receive profits according to the

type and number of their shares.

- Shareholders may sell their shares when

dividends are low, resulting in a drop in share

prices.

LEGISLATION

- Easier to establish under the

Companies Act.

- Take a long time and is a long process to

form a company.

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- Limited liability allows for

greater risk taking, which may

lead to growth of the business.

- Can be expensive to make the necessary

payments.

- Can become complicated to obtain all the

necessary legal documents.

PRESENTATIONAND DATARESPONSE

PRESENTING INFORMATION (TERM 3 CHAPTER) As business people we need to plan our presentations and the first step is preparation.

Preparation (i.e. how to prepare)

Decide on the purpose of the presentation.

Establish the main points that you are going to make.

Consider the background of the audience and use appropriate methods to address them.

Find out about the venue for the presentation, e.g. what equipment is available.

Consider the time frame for presentation.

Plan the format of presentation (verbal/non-verbal, explanation, discussion).

Prepare for the feedback session.

Prepare graphics such as tables/diagrams/graphs.

Rehearse so that you are confident.

Make sure that information is relevant and accurate.

Make sure that you are fully conversant with the content and the objectives of the

presentation.

Factors to be considered when/while presenting

Establish credibility by introducing yourself at the start.

Mention important information first.

Make the purpose of the presentation clear at the start of the presentation.

Maintain eye contact with the audience.

Speak with energy and enthusiasm.

Pace yourself and do not rush or talk too slowly.

Keep the presentation short and simple.

Avoid hiding behind equipment.

Various methods of presentation

Verbal/Oral presentation

o Refers to the spoken word.

Advantages/Positives

o Most common means of sharing business information.


83

o Immediate feedback can be given/received.

Disadvantages/Negatives

o Voice may be too soft.

o Possible language barrier.

o Negative environmental disturbances, e.g. outside noise/restless target audience.

Non-verbal o Posture: Can communicate a variety of messages, e.g. standing upright usually conveys

the message that you are self-confident and positive.

o Facial expression: Looking at the ceiling, combined with a serious expression often

communicate a different message.

o Eye contact: Usually improves communication.

o Gestures: Your hand and body movements convey specific information to others.

o Cultural differences: May result in a different interpretation of the information.

o Body language: May prevent/promote effective communication.

AIDS OF PRESENTING

1.1 PowerPoint

Advantages/Positives - Graphic programmes have the capacity to convey ideas and support what the presenter says.

- Simple/Less cluttered slides may capture the interest of the audience.

- Video clips can provide variety and capture the attention of the audience.

- Variation of colour and background immediately capture the attention of the audience and

retain their interest throughout the presentation.


- Unprofessional handling of PowerPoint presentation material can lead to irritation/may result in

the audience losing interest.

- Less effective to people with audio-visual impairments.

- Simply reading off the slides makes a presentation boring/meaningless.

1.2 Graphics/Visuals

Advantages/Positives - Graphics include tables/graphs/line graphs/pie graphs/histograms/bar graphs/column graphs.

- Makes it easier to understand concepts that are presented.

- Keeps the audience focused.

- Simple and clear graphics/visuals make it easier to understand/follow the presentation.

- Enhances the quality of the presentation.

- Very useful when presenting financial information to management.


- Not all people have the same understanding of graphics/visuals.

- Too much graphics/visuals may lead to confusion/loss of interest in the presentation.

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TABLES Line Graph

INDUSTRY NUMBER OF

BUSINESSES

A 22

B 30

C 50

D 45

1.3 Written information/Reports/Manuals/Notices/Handouts


- This type of presentation is based on feedback from research/investigation/ survey.

- Reports in printed form may be distributed to all participants.

- Accurate information/reports may result in better decision making.

- Organised information can save reading time.


- Written information/Reports must be relevant to its target audience.

- Reports containing long sentences/poor language may make it difficult for readers to

understand the content.

- Reports/Manuals that do not meet the delegates’ needs, may be irrelevant/meaningless.

2.4 Electronic

0

10

20

30

40

A B C D E

NU

MB

ER O

F B

USI

NES

S

INDUSTRY

BAR GRAPH

25

30

22

30

30

PIE CHART

0

10

20

30

40

A B C D E

NU

MB

ER O

F B

USI

NES

S

INDUSTRY

LINE GRAPH


85

- It includes faxes/video conferencing/telephone conferencing/e-mails/ Twitter/Facebook

pages/websites/e-commerce.

Advantages/Positives - Information reaches its target users quicker.

- Transaction/Meeting time may be reduced.

- It may lead to corruption, e.g. fraudulent transactions.


- Target audience may not be familiar or be able to use new electronic communication

technology.

- Target audience may not have access to electronic technology.

Aspects to be considered when designing a multimedia presentation

-Start with the text/headings.

- Use legible font and font size.

- Select the background.

- Choose images that may help to communicate the message.

- Include/Create graphics.

- Add special effects/sound/animation.

- Create hyperlinks to allow quick access to other files/documents/video clips.

- Keep slides/images/graphs simple.

- Make sure there are no grammatical/spelling errors.

- Use bright colours to increase visibility.

- Structure information in a logical sequence.

- Limit the information on each slide.

Types of visual aids

Data projector/PowerPoint

Positives

- Graphic programmes have the capacity to convey ideas and support what the presenter says.

- Easy to combine with sound/video clips.

- Simple/Less cluttered slides may capture the interest of the audience.

- Video clips can provide variety and capture the attention of the audience.

- Variation of colour/background/sound immediately captures the attention of the audience and

retain their interest throughout the presentation.

- Slides should only be used where they can enhance the facts or summarise information.

Negatives

- Unprofessional handling of the data projector/PowerPoint presentation material

- May lead to irritation/may result in the audience losing interest.

- Less effective to people with visual impairments.

86

- Simply reading off the slides makes a presentation boring/meaningless.

- Unable to show slides without electricity/data projector.

Overhead projector

Positives

- Summaries/Simple graphics/Diagrams/Processes may be explained easily on transparencies.

- It can be prepared manually (OHP pens) or electronically on computer/ copier.

- A useful replacement/back-up if computer/electronic equipment fail or are not available.

- Effective transparencies/projections should be clear and visible, e.g. large print, few

words/lines.

Negatives

- Transparencies that are not well ordered/organised, may convey an unprofessional image.

- It can be easily replaced by a PowerPoint presentation.

- Not easy to combine with sound/audio.

- Used most effectively when lights are dimmed/switched off which make it difficult for the

audience to make their own notes.

Interactive whiteboard/Smart boards

Positives

- Images can be projected directly from a computer, so no external projector/devices necessary.

- Special pens allow the presenter to write on the board while prepared images are displayed.

- Additional notes that was added during the presentation can be captured on computer after the

presentation.

- It can be controlled by the touch of a finger, so the presenter can move away from the computer

during the presentation.

- Easy to combine with sound/other visual aids.

- Useful to capture feedback and new ideas.

Negatives

- Should only be used by a presenter who knows the unique features of the interactive

whiteboard/who can use it to its full potential.

- Cannot be connected to any computer as special, licensed software is needed to be able to use

it.

- Technical challenges may render it ineffective, e.g. loss of signal while using it.

Hand-outs/Flyers/Brochures

Positives

- It can be handed out at the end of a presentation as a reminder of the key facts of the

presentation.

- Meaningful hand-outs may be handed out at the start of the presentation to attract attention.

- Extra/Useful information may be handed out, e.g. contact details/price lists/feedback

questionnaires.


87

Negatives

- Hand-outs cannot be combined with audio material, so it only focuses on the visual aspects of

support material.

- Handing out material at the start of the presentation may distract the audience.

- As it only summarises key information, some details might be lost/omitted.

Posters/Signs/Banners/Portable advertising stands/Flags

Positives

- Useful in promoting the logo/vision of the business.

- It should be colourful/eye-catching/creative to support the core message of the presentation.

- May contain large illustrations/pictures/features of the products/key concepts to emphasise

detail, e.g. creative jewellery/unique features of the jewellery.

- Can make impact when placed strategically in/outside the venue.

Negatives

- May overpower/draw attention away from the presentation if it is too big/not placed correctly.

- May not always be useful in a small venue/audience as it can create a 'crowded' atmosphere.

- Only focuses on visual aspects as it cannot always be combined with sound/audio.

Flip charts/White boards

Positives

- Mainly used for a small audience to note down short notes/ideas.

- Very effective in brain storming sessions as suggestions are summarised or listed.

- In a sales pitch it may be useful during the feedback session to summarise main facts/aspects

that the presenter needs to follow up.

Negatives

- There may not be enough time during the presentation to make written notes, so some ideas

may not be listed.

- Handwriting may be illegible/untidy which may not contribute to a professional

image/presentation.

- It may not always be possible to prepare flip charts before the presentation, so it can become

cluttered/chaotic.

4. Handling feedback/Ways to respond to feedback Feedback is part of the communication process when a person evaluates the work of another

person to ensure that high standards are maintained.

How to handle it?

- Stand up throughout the feedback session.

- Be polite, confident and courteous.

- In order to be prepared, try to anticipate questions/comments.

- Presenter should ensure that he/she understands each question/comment before responding.

- Listen and then respond.

- Must always address questions and not the person.

- Acknowledge good questions.

88

- Rephrase questions if uncertain.

- Do not get involved in a debate.

- Presenter should not avoid the question if he/she does not know the answer; but rather refer it to

the audience.

- Address the whole audience and not only the person asking the question.

5. Criteria for logical and effective presentation

- Be well prepared

- Keep to the time limit to prevent boredom

- Allow time for feedback

- Speak clearly and audibly

- Know your audience

- Organise the content

- Capture attention in the introduction

- Organise the body

- State the aims in your introduction

- Put the most important information first

- Use visuals effectively

- Use your conclusion to summarise your key point

6. Recommendation for improvement

- Revise objectives that were not achieved

- Use humour appropriately.

- Always be prepared to update or keep your information relevant.

- Reflect on any problem or criticism and avoid it in future presentations.

- Any information received as feedback from a presentation should be analysed and where

relevant, incorporated or used to update or amend your presentation.

- Reflect on the time/length of the presentation to add/remove content.

- Increase/Decrease the use of visual aids or replace/remove aids that did not work well.

- Reflect on the logical flow of the format/slides/application of visual aids

BUSINESS ENVIRONMENTS (MAIN TOPIC)

LEGISLATIONS(TERM 1 CHAPTER) Introduction

Legislation were developed in response to the demand to redress equity

Reduces the effect of former injustices

Redress and equity

Apartheid policies created discrimination

Certain race groups were treated differently

Black people, particular black women were offended

Government introduced new laws to redress the legacy of apartheid


89

These laws ensure equal opportunities and rights for every citizen regardless of race,

gender, culture, religion, age and marital status.

Legislations to be covered

Skills Development Act, 1998 (Act 97 of 1998)

Labour Relations Act, 1995 (Act 66 of 1995)

Employment Equity Act, 1998 (Act 55 of 1998)

Basic Conditions of Employment Act, 1 7 (Act 75 of 1997)

Compensation for Occupational Injuries and Diseases Amendment Act, 1997 (Act 61 of

1997)

Black Economic Empowerment

Broad Based Black Economic Empowerment:

National Credit Act, 2005 (Act 34 of 2005) (NCA)

Consumer Protection Act, 2009 (Act 68 of 28 April 2009) (CPA)

1 SKILLS DEVELOPMENT ACT, 1998 (Act 97 of 1998), SDA

1.1 Nature

Passed to develop and Improve skills of people already employed

Passed to redress equity in skills shortages

An integral part of the National Skill Development Strategy that aims to link learning

to the demands of the world of work.

CONSUMERS

NCA

CPA

BUSINESSES/EMPLOYERS

SDA

BBBEE

EEA

EMPLOYEES

LRA

BCEA

COIDA

90

1.2 Purpose / Aims

to develop skills of people;

Improve employment prospects of previously disadvantaged people

business to invest in training of workers;

business to improve the skills of workers;

improve the chances of previously disadvantaged people to get jobs

the workplace must be viewed as an active learning environment

1.3 Impact [Advantages / Disadvantages] or [Positives / Negatives]

Advantages / Positives

improve the skills level of the workforce;

Improve employment opportunities for workers

improvement in work prospects of the unemployed;

increasing the labour mobility of employees;

Improve overall efficiency in the workplace

increase in productivity levels in the workplace;

promotion of self-employment and entrepreneurship

increase South Africa's global competiveness

Disadvantages / Negatives

Involves a large amount of paperwork and administration.

Difficult to assess performance of various SETA’s

SETAs are not well organised.

Many service providers that offer training services are not SAQA accredited.

Workers need regular training to meet demands of dynamic work environment

1.4 Rights of businesses and employees

Right of the business / employers

Right to reclaim 70% of all levies paid provided a Workplace Skills Plan was

submitted and evidence is provided that it was carried out.

May claim a Learnership incentive payment for employing workers who find it

difficult to be employed, due to their lack of skills

Rights of employees

Entitled to enrolling in skills development programmes

Entitled to participate in Learnership programmes


91

1.5 Compliance

Employers who collect PAYE have to register with SETAs. And make 500 000 pa

One percent (1%) of an employer’s payroll has to be paid over to the SETA.

Businesses must register with SARS

1.6 Penalties

Any person convicted of a fraudulent offence may be sentenced to a fine,

imprisonment or stop operating.

1.7 Actions regarded as discriminatory/Contravene/Non-Compliance

No employee may be discriminated against and be prevented from signing up for a

learnership due to their work or age, gender, disability etc.

Employers who promote skill and development unfairly.

1.8 The National Skills Development Strategy [NSDS]&Human Resource Development

Strategy [HRDS]

The National Skills Development Strategy

[NSDS]

Human Resource Development Strategy

[HRDS]

Framework for skills improvement was

drawn up as part of the National Skills

Development Strategy.

HRDS for South Africa ensures that the

various components of the state work together

to deliver opportunities for human

development


identifies priorities for skills development and

the contribution toward an emerging national

human resources development strategy.

The Human Resource Development Strategy

for South Africa is therefore, to ensure that

relevant Constitutional provisions are

progressively ensured


makes provision for a new system of learning

Implementation of the SDA is to be achieved

through the establishment of the Sector

Education and Training Authorities (SETAs).

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NSDS combines structured learning and work

experience culminating in nationally

recognized qualifications that signify job

readiness within the National Qualification

Framework (NQF)

Government Organised business and

Organised labour must participate

1.9 Sector Education & Training Authorities [SETAs]

1.9.1 Role / Functions of the SETAs

To develop sector skills plans

Registering learnership agreements

Reporting director general

Implement sector skills development plan

Support the development of training material

Responsible for quality control in training

To disburse money from the National Skills Development Levy

To support struggling sectors

To apply for accreditation from SAQA

1.9.2Skills Development Levies

Introduced to ensure that private businesses contribute to the development of skills.

All businesses with a salary bill of more than R500 000 per annum must pay 1% of the

amount as a levy to SARS.

The business can claim a proportion of the levy back from the SETA for producing

workplace skills plans and implementation reports.

1.9.3 Learnership

Learnership are structured learning component that are offered by accredited providers

and constitute credit(s) towards a qualification within the NQF

Includes practical and theory work experience.

Completed while working/experiential training

1.9.4 Purpose / Benefits of SETAs

Manage the learnership’s and training in each SETA sector.


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Ensure that skills requirements of different sectors are identified.

Ensure that training is of the appropriate quality.

Responsible for skills programmes to improve skills of current workers.

Assist unemployed people to enter the job market by providing skills programmes.

Provide accreditation to facilitators and training providers.

1.9.5 Funding of SETAs

The 1% collected is split as follows

The SETAs’ receive 80% of the funds collected from the skills development levies.

20 % of this the fund will be paid to the National Skills Fund.

Grants, donations and bequests made to the SETA.

Income earned on surplus money deposited or invested.

Income earned on services rendered.

1.9.6 Examples of SETAs

W&RSETA Wholesale and Retail Sector Education and Training Authority

BANKSETA Banking Sector Education and Training Authority

THETA Tourism and Hospitality Education and Training Authority

CHIETA Chemical Industry Education and Training Authority

ESETA Energy Sector Education and Training Authority

1.10 Impact of SETA on Business Operations

2 LABOUR RELATIONS ACT, 1995 (Act 66 of 1995) LRA

2.1 Nature

Sets out the rules and regulations employers, employees and for labour unions and the

settling of disputes.

Establish the framework for relationship between employers and employees

Protect workers from unfair labour practice

LRA deal with matters like:

- hiring and firing procedures;

- disciplinary processes;

- rights and responsibilities of trade unions;

- negotiations;

- strikes; and

- disputes.

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2.2 Purpose / Aims

Promote simple procedures for the resolution of labour disputes.

Promote and facilitate collective bargaining at the workplace.

Regulate the right to strike and the recourse to lock-out.

Established the Labour Court to hear and rule on dispute.

Promote employee participation in decision making through establishment of

workplace forums

Simplified the registration of trade unions and employers' organisations.

Provides regulations to ensure that these organisations act democratically and have

proper financial controls

2.3 Impact

Businesses

Loss of production occurs during union activities

Union officials have to be given information about the firm

Have to deduct union dues and agency fees

Employers are allowed to use lock out

Employees are allowed to take part in union actions during working hours

Workers cannot be dismissed during a legal strike

Workers cannot be dismissed without going through correct procedures

Employees

Employees can go through CCMA and labour court if they have grievance

Non-union members can still benefit from union negotiations

Union representatives have to be given paid time off to take their duties

Firms have to re-employ those who win unfair dismissal case in labour court

Advantages

Promotes a healthy relationship between the employers and employees

Promotes orderly collective bargaining and effective resolution of labour disputes.

Provides opportunities for and encourages workers to participate in decision-making

Supports and regulates the constitutional right of employees to strike, within

reasonable limitations/also regulates lockouts in a similar manner

Protects the employee's rights to engage in trade unions.

A workplace forum is an elected organisation consisting of employees in a particular workplace


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Protects employees against unfair dismissal.

Disadvantages

Businesses must restructure their human resources department to accommodate the

additional workload

Businesses must follow lengthy legal procedures before dismissing employees.

This act gives more powers to employees through trade unions.

It can lead to lower productivity and profitability.

Unrealistic demands could lead to indefinite strikes.

Business owners will have to undergo training to familiarise themselves with the

change management process that has to take place.

It can be costly to consult labour lawyers especially for small businesses

2.4 Rights of business and employees

Rights of the business / employer

Form an employers’ organisation;

Example Mining companies may join the Chamber of Mines of SA.

Join an employers’ organisation;

Take part in lawful employers’ organisation activities;

Protected from anyone who discriminates against them, because of their membership

or activities.

Rights of the employee

Right to be treated with dignity and respect

Right to fair wages

Right to belong to a trade union

Employees who are trade union representatives are entitled to reasonable time off for

union activities

Employees who are not union members can receive benefits negotiated by trade unions

Right to a safe and healthy working conditions

2.5 Compliance

Employers must allow the formation of workplace forums and bargaining councils

Businesses need to know how to deal with disputes and dismissals legally.

An employer must disclose all relevant information to the trade union representative

required to do the job, excerpt for information excluded in the Act.

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2.6 LRA – Penalties if a business does not comply

Any employee or employer, who does not comply with the LRA, will be forced to

enter into a dispute resolution process.

Agreements reached during the process are binding.

Failure to comply will result in a fine.

Amount of the fine may be stipulated by the Minister of Labour

2.7 LRA – Actions regarded as discriminatory/Contravene/Non-Compliance

/Contravene/Non-Compliance

Employers who request that employees should not become members of a trade union

Employers refusing union representatives leave for trade union activities

Employers dismissing employees illegally or unfairly

Refusing to allow union activities in the work place

Cancellation of employment contract by new owner

3 EMPLOYMENT EQUITY ACT, 1998 (Act 55 of 1998) EEA

3.1 EEA - Nature

Ensures equality for all people by providing equal opportunities for employment

Creating fairness in the employment of people

Apply affirmative action to employment

Apply to employers who employ 50 or more employees

3.2 EEA – Purpose / Aims

Purpose is to achieve equity in the workplace.

Ensuring equal representation of all population groups (demographics of the country)

Eliminate unfair discrimination against all employees.

Redress disadvantages in employment experienced by designated/disadvantaged

groups

Putting in place affirmative action measures for designated groups of employees such

as:

- women employees;

- Coloured employees;


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- Indian employees;

- African employees; and

- People with disabilities.

3.3 EEA- Impact [Advantages / Disadvantages]


Promotes equal opportunity and fair treatment in the workplace.

Promotes the implementation of affirmative action in the workplace.

Prevents unfair discrimination.

Creates a framework for acceptable employment practices.

Promotes diversity in the business.

Encourages consultation between the employer and employee.

Requires the business to develop and implement an employment equity plan.


Inexperienced employees can be appointed and promoted into positions.

Implementation can be costly to the business as it requires investment in training.

Businesses are often compelled to appoint someone not regarded as their first choice.

Can be used to unfairly promote individuals.

Other groups may see this as reversed discrimination

Some position remain vacant because lack of skills in designated groups

3.4 EEA - Rights of business and employees

Rights of a business / employers

To test employees in specific sector for HIV, e.g. In the health sector

To perform psychometric testing of employees where it has been scientifically shown

that it is valid and reliable

May appoint an applicant on the basis of an competency or unique requirements of a

job.

Rights of employees

Equal opportunities and fair treatment when applying for a job

Refer unfair discrimination to the CCMA

Employment equity plan: plan on how employers will balance employment opportunities

for all population groups

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Terms of conditions must be the same for employees doing the same or similar work

Only psychometric testing certified by the Health Professional Council of SA may be

used to assess employees.

3.5 EEA - Compliance

Employers must promote equal opportunities in the workplace

Businesses must draw up an employment equity plan that details how they plan to

implement affirmative action.

Businesses must make a summary of the Act available for employees to view in the

workplace

Allow labour inspectors to enter and inspect the business

3.6 EEA – Penalties for not complying with the LRA

A labour inspector may issue a compliance order if the business does not comply.

If found guilty, the employer could be fined between R500 000 and R900 000;

As well as be ordered to pay compensation and damages to the employee

3. EEA – Actions regarded as discriminatory/Contravene/Non-Compliance

Not employing a young woman because she will want to have children

Refusing to employ a person because they have strong religious beliefs

Does HIV testing unless justified by the Labour Court

Any person who is denied access to the workforce by being treated unfairly is being

discriminated against.

4 BASIC CONDITIONS OF EMPLOYMENT ACT, 1997 (Act 75 of 1997) BCEA

4.1 BCEA - Nature

Prescribe the conditions under which all people must be employed

Lay down minimum employment conditions

Ensures that the rights to fair labour practices are put into effect.

Protect workers from violations of human rights.


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The Act applies to all employers and employees.

The Act, however, does not apply to the following workers:

- members of the National Defence Force;

- members of the National Intelligence;

- members of the South African Secret Service; and volunteers working for charities.

4.2 BCEA - Purpose / Aims

Regulate basic conditions of employment for all employers and employees.

Set minimum standards for employment contracts.

Creates a framework for acceptable employment practices.

Advance economic and social justice

4.3 BCEA - Impact [Advantages / Disadvantages] or [Positives / Negatives]

Advantages / Positives

promotes equal opportunity in the workplace;

promotes fair treatment in employment;

prevents unfair discrimination;

creates a framework for acceptable employment practices;

encourages consultation between employer and employee

Disadvantages / Negatives

process of ensuring that all employees have contracts can be time-consuming;

employees are restricted to a maximum number of hours that may work overtime per

day and per week;

processes and procedures stipulated can be very costly to a business;

businesses are restricted within the framework of the BCEA

Businesses cannot offer cheap labour.

4.4 BCEA - Rights of businesses and employees

Right of the business / employers

Can decide to pay cash or give the employee time off / lieu of overtime worked

May require a medical certificate before paying a worker who was sick more than two

days at a time or more than twice within a period of eight weeks

May ask for proof that an employee’s family responsibility leave was necessary, for

example may request a death certificate

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Provisions of BCEA

1 Working hours May not work more than 45 hours in one week

Maximum 9 hours a day for a 5 day week

Maximum of 8 hours for a 6 day week

2 Overtime By mutual agreement between employer and employee

Max 3 hours a day

Max 10 hours a week

3 Payment for

overtime Weekdays & Saturdays – 11/

2 times the normal rate

Sunday’s & Public Holidays – Double the normal rate

4 Meal Breaks Meal break of 1 hour after 5 hours of work

May be reduced to 30 minutes by mutual agreement

5 Night work Hours between 18:00 – 06:00

Must receive extra pay or get the same pay for less hours

of work

6 Public Holidays Paid holidays if the public holiday falls on a working day

Work is by mutual agreement

Paid at double the normal wage rate

7 Annual Leave Up to 21 days continuous annual leave

8 Sick Leave Up to 6 weeks(36 Days) paid sick leave during a 36 month/3years cycle

9 Maternity Leave Pregnant women may take up to 4 months continuous maternity leave

The 4 months is a paid leave

Family

responsibility leave Employees are entitled to 3 days of family responsibility each year

(INCREASED TO 5DAYS DUE TO RECENT DEVELOPMENTS)

Can be taken on adoption, birth of a child and death of family members

10 Job information New employee must receive a copy of their job description and working

conditions

This includes salary information & deductions that will be made each month

11 Remuneration Must be made on a regular basis as negotiated

Payslip containing details of payment must be issued to workers

12 Termination of

employment Notice of termination of employment by the employer must be in writing

Due notice must be given in terms of the time stipulated on the employment

contract

Employee may challenge dismissal if they consider these to be unfair, through

the CCMA and Labour Court

13 Child Labour Unlawful to employ a child under the age of 15 years

No child under the age of 18 years may do work considered to be dangerous

4.5 BCEA - Compliance


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An employer may not force an employee to work overtime.

An employer must give new workers information about their job description and

working conditions in writing.

Labour inspectors must issue a Compliance Order in the event of non-compliance by

employers.

Labour inspectors must also report non-compliance to the Department of Labour.

Department of Labour will verify the facts and either agree with the order, change the

order or cancel it.

4.6 BCEA - Penalties

The business could face fines and legal action from the Labour Court.

Employers could be imprisoned for up to three years for an offence in terms of section

43 of the Act.

A business could be held liable by the CCMA or Labour Court for non-compliance.

4.7 BCEA - Actions regarded as discriminatory/Contravene/Non-Compliance

Forbidding workers to discuss wages and salaries with co-workers

Preventing workers from having access to employment contracts or conditions of

work.

Refusing to accept the medical certificate of a worker who is sick.

Refusing to grant a worker family responsibility leave in the event of a family

member becoming sick or dying.

Prevent union members from meeting with trade union representatives

5 COMPENSATION FOR OCCUPATIONAL INJURIES AND DISEASES ACT, 1997 (Act 61

of 1997) COIDA

5.1 COIDA - Nature

Provides or more comprehensive protection to employees who are injured in the course

of performing their duties.

Provides compensation for people who are disabled or injured in the workplace

Employees who are injured on the job have the right to claim compensation from the

fund.

Medical expenses and other types of compensation are paid to employees and / their

families.

Payment is made based on the type and seriousness of the employees injuries.

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Injuries could be:

- temporary disablement;

- permanent disablement;

- Death.

5.2 COIDA - Purpose / Aims

To protect health and safety of employees in the workplace.

The employee must be a bona fide employee that is he / she must be legally employed.

To protect the health and safety of visitors to the workplace

5.3 COIDA - Impact on Businesses [Advantages / Disadvantages]


Promotes safety in the workplace.

Creates a framework for acceptable employment practices/safety regulations.

Supply administrative guidelines/mechanisms for dealing with/processing claims.

Eliminates time and costs spent on lengthy civil court proceedings.

Covers all employees at the workplace if both parties meet all the necessary safety

provisions in the Act.

Employees are compensated financially for any injury/disability resulting from

performing their duties at their workplace.


Claiming processes/procedures can be time consuming.

Processes/Procedures required by this Act may be costly as paperwork places an extra

administrative burden on businesses.

Employers have to register all their workers/make annual contributions to COIDA,

which may result in cash flow problems.

Employers may be forced to pay heavy penalties if they are found guilty of

negligence/not enforcing safety measures.

5.4 COIDA - Rights of employees and obligations of the employer

Rights of the employee

Right to make a claim for compensation.

Dependents have a right to receive compensation if a worker has died as a result of the

accident.

Ensure they are not injured as a result of serious/wilful misconduct.

Notify the employer of the accident as soon as possible.


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Obligations of the employer

Provide healthy and safe working environment.

Ensure that the employees have adequate changing rooms, drinking water and seating.

Register with the Commissioner of the Compensation Fund.

Send record of wages paid and time worked by all employees to the Commissioner.

Pay a levy to the Commissioner each month for each employee.

Keep record of wages paid and time worked for a period of four years.

Ensure that the injured employee will be able to receive compensation.

5.5 COIDA - Compliance

All companies must register their businesses with the commissioner of the

Compensation fund.

At the end of the year the business must provide the commissioner with information on

the workers employed, wages / salaries paid to them.

These records must be kept safely for a period of four years.

Employers must register and submit annual returns by no later than 1 March each year

Employers make sure their work environments are safe.

The employer must send the claim, medical report and any other relevant documents to

the Commissioner within seven days of receiving it.

5.6 COIDA – Penalties if a business does not comply

The Compensation Fund will recover costs from the employer or a civil law suit will

be brought against the employer by the injured employee.

If businesses have a high accident record, they may be required to pay more to the

Compensation Fund.

The employer may be fined for not notifying the commissioner within the specified

time or failing to do so altogether.

5.7 COIDA – Actions regarded as discriminatory/Contravene/Non-Compliance

Employers who bribe employees not to report the accident/injury.

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Providing false information about previous, serious accidents/occupational diseases.

Employers who do not contribute to the Compensation fund.

Employers who do not allow claims for injuries, discriminates against injured

employees.

6 BROAD BASED BLACK ECONOMIC EMPOWERMENT (BBBEE)

6.1 BBBEE - Nature

Aim to address inequality in the workplace and the economy

Ensure black people participation in the economy

Increase employment for black people

Promote equal opportunities

Promote equal access to government services and business

6.2 BBBEE – Purpose / Aims

Empower black people to own and manage businesses

Enable wealth to be spread more broadly

Outlines areas that would give the government a better platform for bringing about a

better spread of wealth.

BBBEE Act is an enabling framework

Allows for the development of Codes of Good Practice

6.3 BBBEE- Impact [Advantages / Disadvantages]

Advantages

A good BBBEE rating will improve the image of the business

Develops the employees’ potential and skills, and boosts staff morale.

BBBEE can be used as a tool for marketing the business to other businesses looking

for a BBBEE compliant supplier.

Disadvantages

Investment and ownership issues can cause dissatisfaction/reluctance between

shareholders.

It can lead to corruption and jobs for friends/(nepotism).

It can lead to fronting

Many employees get jobs based on BEE rating rather than on proficiency.


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Pillars (revised exam guidelines only focuses on only FIVE)

1. Ownership

Businesses should include black people in shareholding/ shareholders

Selling of shares to black employees to share in the profit of the company.

Should be at least 25% black shareholding

There are bonus points for black women owners.

Outsourcing of certain business functions to black employees.

2. Management control

Business should appoint black people in senior executive positions

The number of people from different race groups included in the management team,

specific in executive positions.

Black management at least 50,1% of top management

3. Skill development

Companies are encouraged to spend money in training black employees

Target is to spend 2% of their annual gross annual turnover

Points are awarded for the number of employees undergoing skill development.

4. Enterprise and supplier development

Businesses are encouraged develop and support black owned businesses

Businesses score points according to their support to other BBBEE / BEE businesses.

Target is 2% of net profit

5. Socio-Economic development

Businesses must assist the community by addressing socio-economic issues

Businesses will be assessed on their annually social investments projects

amongst the PDIs’

6.5 BBBEE - Compliance

Use the services of verification agencies who issue certificates of compliances.

Increase the number of black employees managing and owning the business

Use suppliers who comply with BBBEE standards.

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6.6 BBBEE – Penalties for not complying with the BBBEE Act

Fronting will be penalised

Companies that do not comply with the employment equity ratios will be prosecuted

and fined

It will be difficult for sectors (mining sector) to renew their licenses.

6.7 BBBEE – Actions regarded as discriminatory/Contravene/Non-Compliance

Not employing a young woman because she will want to have children

Refusing to employ a person because they have strong religious beliefs

Doing HIV testing, unless justified by the Labour Court

Any person who is denied access to the workforce by being treated unfairly is being

discriminated against.

6.8 BBBEE –Distinguish between BBBEE and BEE

BEE

BBBEE

Consists of two empowerment

elements that measures black

participation in the economy through:

- equity ownership: and

- management representation in

Businesses

It aims to accelerate the participation

of black people in the economy by

encouraging change in the following

key areas of business:

- ownership,

- management and control,

- employment equity,

- skills development,

- preferential procurement,

- enterprise development

- socio-economic development

6.9 Justify the introduction of BBBEE in relations to BEE

BEE

Policy that was put in place by the government to give those who are classified as

previously disadvantaged a chance to balance out the inequalities of the past

The objective was to right the wrongs of the past

Focus was on getting black people into management


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BBBEE

Objective is to distribute the wealth of the country across all races and gender groups.

Focus was on increasing black ownership of businesses; increase the skills levels;

increase the number of candidates in management positions who are blacks

6.10 Obligations / principles of businesses in terms of their broad based approach

Human Rights

Basic Human Rights linked to BBBEE

- Equality

- Respect and dignity

- Education

- Economic

- Social

Link between BBBEE and the human rights

Equality:

Previously disadvantaged persons are given equal opportunities for

promotion/management/ownership in the workplace.

Preferential procurement processes should be fairly implemented to

the benefit of previously disadvantaged persons.

BBBEE Act should be implemented fairly at all levels to ensure

equality before the law.

Respect and dignity:

Previously disadvantaged persons are empowered by skills

development to improve their chances of better employment/wages.

Black people are economically more active through preferential

procurement/entrepreneurial development and are able to live with

dignity and respect.

Black people, who have been promoted to managerial positions, has

the right to be treated with respect and dignity.

Education:

Skills development programmes promote the right to education.

Skills development programmes/Learners programmes improve

businesses' BBBEE scoring.

Economic:

BBBEE ensures that economic transformation takes place.

Previously disadvantaged people are given a chance to manage, own

and control the economy.

Social:

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6.11 BUSINESS IMPLICATIONS

-Businesses are evaluated against their contribution to BBBEE.

-Businesses who want to deliver goods or services to the local, provincial or national authority

are assessed on a scale (scorecard of compliance) before the contract will be given to the

business.

-Verification of BBBEE applied by businesses will be done by agencies accredited by the

Department Of Commerce and Industry.

-Businesses that do not adhere to BBBEE requirements, can be fined

6.12 BEE Scorecard element points

Used to measure compliance with BBBEE

For any criteria met, the business is awarded a point

Ownership of firm 20

Management Control 10

Employment equity 15

Skills development 15

Preferential procurement 20

Enterprise development 15

Socio-economic development 5

Socio-economic development programmes should include provision

of houses/access to healthcare to previously disadvantaged workers.

Inclusivity

No employees should be discriminated against on the basis of:

- race;

- gender;

- sexual orientation

- disabilities

- HIV status

The workforce must represent the demographics in the country

Preferential treatment should be given to Blacks, women, people with

disabilities.

Investment in the training and development of its black employees.

Representation of black people at each level of management

Environmental

Issues BBBEE is also concerned with the relationship between business and

the environment in which blacks resides

The business should make Socio-economic development or CSR

contributions to projects in Black areas that will impact positively on

the environment.

Example: making funds available to ensure that the level of pollution

is reduced in rivers and the air in black areas


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Total 100

7 CONSUMER PROTECTION ACT 2008-CPA

7.1 CPA - Nature

Protects the interests of all consumers.

Ensures access to clear and efficient ways for consumers to set right if they experience

abuse or exploitation in the market place.

Ensures that previously disadvantaged persons enjoy full participation as consumers in

the economy

7.2 CPA - Purpose / Aims

Promotes and protects the economic interest of consumers.

Improves the access to information to make informed choices.

Protects consumers from hazards to their well-being and safety.

Promotes and provides for consumer education.

7.3 CPA - Impact [Advantages / Disadvantages]

Impact of Consumer Protection Act (CPA) on consumers

Positives

- There is now only one law for protecting consumers and this makes it easier to enforce and

apply the law.

- Protects the consumers from unfair, exploitative and aggressive business and marketing

activities.

- Promotes consumer rights and ensures that businesses do not violate these rights.

- Allows all consumers fair access to the market for goods and services.

- Educates consumers about how to participate responsibly in the goods and services market.

- Ensures that consumers do not buy goods of poor quality which do not meet quality

standards.

- Provide consumers with information and thereby promote consumer education.

- Consumers are forced to make responsible and informed decisions.

- Consumers have a cooling-off period of five working days after purchasing a product.

- Protect consumers from hazardous products or poor workmanship in terms of service

rendered.

- Encourages consumers to complain.

Negatives

- Consumers may not be aware of the CPA/their consumer rights.

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- Consumers may be unaware of mechanisms in place to lodge disputes.

- Serious implementation problems with regard to handling consumer complaints.

Impact of Consumer Protection Act (CPA) on businesses

Positives

- Enables businesses to resolve disputes fairly through the National Consumer

Commission/Consumer Court/Industrial ombudsmen.

Negatives

- Faulty items may be replaced/repaired/money refunded if the fault occurs within six months

after purchase.

- Businesses must disclose more information about their products and services.

- Consumers can take advantage of businesses and return goods when it is not necessary to do

so.

- Processes and procedures required of businesses can be expensive and time consuming.

- Some businesses feel unnecessarily burdened by the required processes.

- Penalties for non-compliance may be very high.

- Businesses need to train staff and consult legal experts, which can be expensive for smaller

businesses.

- Consumers have a right to receive contracts in simple and understandable Language

- Legal contracts must be worded in plain language

- Marketing must not be discriminatory and must adhere to marketing standards

- Provisions in the Act increase the risks for insurance companies in protecting businesses

against unforeseen claims and lawsuits.

7.4 Consumer Rights

Right to choose

Consumers have the right to:

- choose suppliers and goods.

- shop around for the best prices.

- return goods that are unsafe/defective for a full refund.

Right to privacy and confidentiality

- Consumers have the right to stop/restrict unwanted direct marketing.

- They can object to unwanted promotional e-mails and telesales.

- They have the right to stop/lodge complaints about the sharing of their personal details.

Right to fair and honest dealings

- Suppliers may not use physical force or harass customers.

- Suppliers may not give misleading or false information.

- Businesses may not promote pyramid schemes and chain-letter schemes.

- Businesses may not overbook/oversell goods/services and then not honor the agreement.

Right to information about products and agreements/Right to disclosure and information

- Contracts and agreements should be in plain language and easy to understand.


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- Businesses should display prices which are fully inclusive disclosing all costs.

- Consumers may request the unit and bulk price of the same product.

- If two prices for the same product are displayed, consumers should pay the lower price.

- Businesses should label products and trade descriptions correctly.

Right to fair/responsible marketing/promotion

- Businesses should not mislead consumers on pricing, benefits/uses of goods.

- Consumers may cancel purchases made through direct marketing within five working

days/cooling off-period.

- All information related to the country of origin/expiry dates/ingredients of the products should

be disclosed.

Right to fair value/good quality and safety

- Consumers have the right to demand quality service or goods.

- They have the right to return faulty items if the fault occurs within six months after purchasing

the item.

- Consumers may receive an implied warranty or a written warranty.

Right to accountability from suppliers

- Consumers have the right to be protected in lay-bye agreements.

- Businesses should honor credit vouchers and prepaid services

7.5 CPA - Rights and obligations of the business

Obligations of the business

Business should not treat any person differently, or in a manner that constitutes unfair

discrimination.

Warrants that the goods comply with the requirements, with regards to the consumer’s right to

safe and good quality goods

Not to bundle certain goods or services into a single transaction as a condition of entering into

an agreement or transaction.

To display the price of goods or services adequately to the consumer.

Trade descriptions must not mislead the consumer.

Written sales records of all transactions, for the supply of goods or services, must be given to

customers stipulating certain specified information.

Rights of the business

The supplier has the right to recover goods delivered within 20 days after the date of informing

the consumer that the goods were delivered in error.

If the consumer terminates the contract before fully paying for goods, the supplier may charge

a penalty in respect for those goods

7.6 CPA - Compliance

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Businesses must comply with the terms and conditions of the National Consumer Commission.

The business will have to consider how to manage all the risks linked to the implementation of

the Act.

Businesses have to comply with the requirements of the law regarding promotional

competitions.

Businesses must disclose the prices of all products, including those on sale.

7.7 CPA – Penalties if a business does not comply

The consequences for businesses that contravene the CPA could be costly, involving a fines of

up to a R1 000 000 or imprisonment.

A business may be ordered to pay any interest or damages that may be due to the consumer.

Replace goods or complete the service as specified by the authority.

Refund any money owing to the consumer.

7.8 CPA - Actions regarded as discriminatory/Contravene/Non-Compliance

Varying the quality of goods when selling in different areas

Prioritising any consumers' groups over another when marketing or selling

Charging unfair prices for the same goods and services

Treating customers differently based on age, race, gender etc.

8 NATIONAL CREDIT ACT, 2005 (Act 34 of 2005) (NCA)

8.1 Nature

Covers all aspects of credit management and application

Allows consumers to make informed decisions before buying on credit.

National Credit Regulator [NCR] was established to regulate the credit industry in SA

8.2 Purpose / Aims

Improves the protection offered to consumers.

Promotes full participation in the economy by all South Africans, especially the previously

disadvantaged South Africans.

aims to improve consumer rights in terms of applications for credit

Streamlines credit transactions:

Seeks to remove unfair discriminatory practices, to make it easier for more people to have

access to credit.


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Promotes responsible granting of credit by credit providers.

8.3 Impact [Advantages / Disadvantages]

Business/credit provider

The advantages of the National Credit Act to Businesses/Service providers

More prudent buying.

The whole credit process is transparent.

Lower bad debts.

Better cash flow.

Protects businesses against non-paying consumers.

Increases cash sales.

Gains goodwill and loyalty of the consumer.

Leads to more customers through credit sales as they are now protected from abuse.

The disadvantages of the NCA to Businesses/ credit providers

Decrease in credit sales due to customer loss/ economic decline (downturn).

May be restricted in getting generous overdraft facilities.

Creditors may not force consumers to agree to a credit agreement telephonically or through

visits at home.

More working capital is needed.

Businesses are now struggling to survive because they depend on customers who had easy

access to credit.

Misinterpretation of the act may lead to decline in profit. e.g. increased bad debts

Consumers may give false information to get credit

Consumer/clients

Advantages of the NCA to consumers/client

Protect consumers against unfair credit practices.

Protect customers from receiving credit that they are not able to repay.

Relieve consumers who do not understand the risks involved and therefore become over

indebted.

Protects customers by restricting trading hours for direct sales.

Provides for debt relief through debt counselling.

Consumers understand all the costs and charges

Disadvantages of the NCA to consumers/clients.

Customers who are blacklisted cannot access credit.

May lead to a drop in the standard of living.

Customers are not always informed why their credit application is turned down.

Consumers have to provide detailed information about their finances

No more credit allowed if consumers are placed under credit review

What can be done if a consumer's application for credit is declined?

A credit provider needs to provide you with a reason.

The customer may request a written reason for decline.

Can reapply for credit.

Provide information to support the reasons for the decline

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8.4 Obligations of business and Rights of consumers

Obligations of the business / credit provider

All registered credit providers must treat all consumers equally when assessing the credit

application.

A credit provider must advise the consumer, in writing, the reasons for refusing application for

a new credit facility.

All your documentation and information from credit providers must be delivered to consumers

in a manner that is in plain language.

Credit Providers must provide records and statements without charge

Statements must be delivered within 20 days if the credit agreement (account) is more than one

year old.

Rights of consumers

The right to apply for credit and the right to know why your credit was refused.

You have the right to receive documentation and information in the language that you can

speak, read and understand.

The right to receive documents, including statements.

The right to access and challenge Credit Bureau Records and Information.

The right to confidentiality and for personal information not to be disclosed to a third party,

without written consent.

The right to apply for debt counselling in terms of The (NCA).

The right to be advised by the credit provider, before any adverse information is reported.

The right to receive a free credit report, once a year, from each of the Credit Bureaus operating

in South Africa.

8.5 Compliance

Credit providers must submit an annual compliance report to the National Credit Regulator.

Credit providers must do an affordability assessment to ensure the consumer has the ability to

meet his/her obligations.

Credit providers need to have procedures in place to comply with the provision of the Financial

Intelligence Centre Act ( FICA) e.g. verify the identity of clients, report suspicious

transactions, train staff on their obligations in terms of FICA.

Credit providers must also conduct a credit check with a registered credit bureau and may also

consult the National Credit Register.

A credit provider or debt counsellor who does not adhere to the regulations set out in the NCA

could be criminally prosecuted.


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8.6 Penalties for not complying with the NCA

The credit provider will receive a non-compliance notice and may even lose its registration

with the NCR.

Have its credit agreements suspended.

Fined R1 000 000 or 10% of annual turnover.

8.7 National Credit Regulator vs. Credit Provider

National Credit Regulator Credit Provider

-Regulate the activities of credit providers

-Aims to protect consumer rights in credit

agreements

-Businesses that offer credit to consumers

e.g. banks, shops

8.8 Actions regarded as discriminatory/Contravene/Non-Compliance

Refusing to grant credit to a customer based on gender, race, religion or age.

Charging consumers different interest rates based on the gender, race, religion or age of the

consumer.

Blacklisting the consumer before exhausting all other remedies.

8.9 Consequences for reckless granting credit

The court may declare the granting of credit reckless

The court may order clients/consumers not to repay the debt/or part thereof

Businesses may not demand payment, sue or attach the clients/customers salary/assets.

Businesses may not charge any fee/interest/other charges under that specific credit agreement.

The National Credit Regulator may impose a fine/penalty (R30 million) on businesses.

May be deregistered as an accredited credit provider.

DEVISING STRATEGIES (MACRO-ENVIRONMENT

STRATERGIES)(TERM 1 CHAPTER) 1. Strategies

Meaning of the term: Plan of action to achieve certain desired goals

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3.1 The strategic management process or stages in strategy formulation

- Have a clear vision, a mission statement and measurable/realistic objectives in place.

- Identify opportunities/weaknesses/strengths/threats by conducting environmental

scanning/situational analysis.

- Tools available for environmental scanning may include a SWOT/PESTLE/Porters Five Forces

model.

- Formulate alternative strategies to respond to the challenges.

- Develop (an) action plan(s), including the tasks to be done/deadlines to be met/resources to be

procured, etc.

- Implement selected strategies by communicating it to all stakeholders/organising the business's

resources/motivating staff.

- Continuously evaluate, monitor, measure strategies in order to take corrective action.

OR

Review vision statement.

Analyse mission statement.

Conduct an analysis using models such as PESTLE/PORTERS.

Formulate strategy, referring to strategies such as defensive strategies.

Implement strategy using templates such as action plans.

Control of strategy to identify gaps in planning.

Evaluate strategy to identify deviations in implementation.

Take corrective action to ensure objectives are met.

1.2 Apply the strategic management process to solve business-related problems.

• Use any creative-thinking technique to devise business strategies

• Generate business ideas

• Resolve conflict

• Solve any business-related problems

2. Challenges

Meaning of the term: Tasks or situations that test the organisation’s abilities to successfully

resolve the tasks or situation

2.1 SWOT analysis

Tool to analyse factors within the Business Environment

Focus on the strengths, weaknesses, opportunities and threats that the business could

face

Useful for setting goals and for strategic planning


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Apply PESTLE

Tool used to analyse factors within the Macro Environment

Used to determine the impact of external factors on the business

Components of PESTLE: Political, Economic, Social, Technological, Legal

&Environmental factors

Formulate strategies

Refers to the process of choosing the most appropriate course of action that will enable the

business to achieve its goals and objectives.

Strategic plan provides employees with a clear vision of the purpose and objective of the

business.

Formulating strategy is part of the business planning process

STEPS

1 Set objectives Objectives define the destination of the organisation.

Strategy will show what must be done to achieve the

objective.

2 Evaluate the

environments Evaluate the general economic and industrial environment

in which the organization operates.

Micro, Market and Macro Environment must be

evaluated.

Tools that could be used are the SWOT analysis, PESTLE

and Porters Five Forces.

3 Set targets Determine target values for some of the organizational

objectives.

Allow the organisation to compare and evaluate the

contribution that might be made by various product zones

or operating departments.

4 Use contexts The contributions made by each department within the

organization are identified.

Strategic planning is done for each department.

5 Analyse

performance Analysis is made of the gap between the planned

performance and the actual performance of the business.

Critical evaluation must be done of past performance,

present conditions and desired future outcomes.

6 Choose strategy Organisation must choose the best course of action to

achieve its desired goals.

Strategy is then implemented by taking specific steps.

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2.4 Implement strategies

Involves putting the strategy that was formulated into action.

The correct implementation of the strategy is essential for the organisation to achieve its

objectives and desired goals

STEPS

1 Allocate resources Plan for appropriate implementation of the budget

Ensure that resources are used efficiently and effectively

2 Ensure that

organisation structure

is in place

Organizational structure is a system used to define a hierarchy

within an organization

It identifies each job, its function and where it reports to, within

the organization

3 Motivate staff Staff must be motivated to carry out the plan effectively and

efficiently

4 Organisational policies Develop and follow organisational policies that support the

implementation strategy

5 Management

involvement

Manage sub-ordinates through creative leadership

Management must be fully supportive of the implementation plan

6 Solve on-going

problems

Give immediate attention to problems that might arise

Use creative thinking to solve problems and challenges

7 Adapt Adapt the strategy, if necessary when it becomes clear that the

current strategy is not going to achieve the desired outcomes

2.5 Evaluate strategies

Process of monitoring business activities and performance results

Actual performance can be compared with the desired performance

Evaluation and feedback provides the foundation for successful future strategy

formulation

Steps in strategy evaluation:

- Identify goals and measure achievement against the goals

- Compare expected results with the actual results

- Determine the deviations and reasons therefore

- Develop actions that can be implemented to prevent similar deviation

- Implement the actions to correct the deviations

2.6 Industrial tools to analyse the challenges of the business environment

2.6.1 SWOT Analysis


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2.6.2 Porters Five Forces

Strategic management tool that assists a business to have a competitive advantage over

its competitors

Useful tool to analyse factors within the Market Environment

Informs the business about trends in the industry

Profitability of the business will be influenced by the FIVE competitive forces

PORTERS FIVE FORCES are: Threat of new entrants; Threat of substitution, Power of

buyers; Power of suppliers & Competitive Rivalry

PORTERS FIVE

FORCES

EXPLAINATION/DISCUSSION

1 Threat of new

entrants New entrants bring more competition into the market.

New competitors can quickly enter your market and

weaken your position.

Strong and durable barriers to entry, limits the number of

new entrants.

2 Threat of substitution Occurs when a competitor offers a different product with

the same quality and performance at a lower price.

Businesses are always looking at ways of imitating

products of competitors that are industry innovators.

If substitution is easy and substitution is viable, it

weakens the power position of the business.

3 Power of buyers Refers to the power of buyers to compel the business to

offer lower prices.

A few powerful buyers can dictate terms to the business.

Example: Buyers buying in large quantities can negotiate

discounts.

STRENGTHS [INTERNAL

ADVANTAGES]

WEAKNESSES [INTERNAL

DISADVANTAGES]

Refers to those factors that exist

within a business that contributes to

the business achieving its objectives

Example: Skilled workers

Includes characteristics within the

business that will prevent the business

from achieving its objectives

Example: Insufficient capital

OPPORTUNITIES [EXTERNAL

ADVANTAGES]

THREATS [EXTERNAL

DISADVANTAGES]

Refers to factors outside the business

that could improve the chances of the

business being successful

Example: New technology

Refers to factors outside the business

that could prevent the business from

achieving its objectives

Example: High interest rates

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4 Power of suppliers Refers to the ability of suppliers to increase the input cost

of the business.

The fewer suppliers in the industry the greater their ability

to drive prices upwards.

The more unique the product of the supplier the more

control the supplier will have over your business.

5 Competitive rivalry Important here is the number and capability of your

competitors.

If you have many competitors, and they offer equally

attractive products and services, then you'll most likely

have little power in the situation.

Suppliers and buyers will go elsewhere if they don't get a

good deal from you.

The less intense the rivalry amongst competitors, the

more attractive the market.

2.6.3 PESTLE analysis

3. TYPES OF BUSINESS STRATEGIES:

FACTORS IMPACT ON EACH FACTOR

Political Changes in government; Political instability; Affirmative Action

Economic Inflation; Interest: Exchange rates

Social Poverty; Unemployment; Crime; Government grants

Technological New technology; Social networking; Communication technology

Legal Labour laws; Competition laws: CPA; NCA:

Environmental Pollution; Recycling; Green taxes;


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ADAPTED FROM THE INTERNET

3.1 Integration

Integration takes place when companies merge or one company buys another

Forward integration

• A form of vertical integration that combines a core business with its buyers.

• Involves expansion of business activities to gain control of the direct distribution of the

enterprise’s products

• E.g. a chicken farmer entering into a fixed supply agreement with a buyer, such as KFC (a

buyer):

Backward integration

• A form of vertical integration that combines a core business with its suppliers.

• Involves distributors owning the suppliers in order to reduce the business’s dependency on

the supplier

Horizontal integration

• Involves acquiring business activities at the same level of the value chain, for example:

Acquiring competitors to reduce the threat from the competition.

Acquiring activities that are substitutes for the business’s products,

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For example Spar acquiring Shoprite

3.2 Intensive strategy

Aims to increase sales and market share through INTENSIVE efforts to improve long-term

growth

Directed at internal growth within the business

TYPES

Market penetration Business focuses on selling existing products in existing markets

Do research on current consumer base and use the information to

make adjustments and improvements

Example: Decrease the prices of products to ensure higher sales

levels

Example: Run an aggressive marketing campaign aimed at existing

customers

Market

development Focus is on selling existing products in new markets

Product remains the same, with the emphasis on increasing its

market share

Example: Exporting products

Example: MTN providing cell-phone services in Nigeria

Product

development Focus is on introducing new products into existing markets

Customer base remains the same, but new products are introduced to

current customers

Example: Modifying packaging of a product to appeal to current

customers

3.3 Diversification

Involves changing both the product and the market

Businesses market new products in new markets

Used to increase sales, market share and ensure the growth of the organisation

TYPES

Concentric Adding new products or services that are related to existing products

and will appeal to new customers

Example: A business selling fried chicken may add fried chips to the

chicken and sell a new product fried chicken & chips


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Horizontal Adding a new product or service that are unrelated to existing

products to appeal to existing customers

Example: A Car dealer selling cars and offering financing of the car

services or insurance of the car to the customer

Conglomerate Adding new products or services that are unrelated to existing

products that may appeal to new customers

Example: computer manufacturing company manufacture new

drinks

3.4 Defensive

Used by businesses when they are under severe pressure and have very few other options

Used by businesses to defend themselves against attacks from their competitors

TYPES

Divestiture Occurs when a business starts selling divisions, within the business, that

are not profitable or assets that are not productive.

Aim is to either acquire additional capital or to reduce the cost of running

the business

Example; Shoprite sell the bakery division making a loss

Retrenchment Occurs when business reduces the number of employees for operational

reasons

Aim is to decrease the running cost of the business by reducing the salary

bill of the business.

Example: Business dismiss 500 employees

Liquidation Occurs when a business stops operating and sells the assets of the

business.

The cash raised will be used to pay creditors & money owing to

employees

4. Other Business Strategies

1. The company repositions itself by replacing one or more individuals

Business must ensure that the correct individuals are employed in the right

positions

Replacing an employee takes place when they don’t fit in; cannot cope; resign;

retire or are promoted

2. Revising a business mission

As the business grows it will be necessary to revise its mission so it can adapt

to the changing environment

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As trends change, the business must be aware of it and adapt its mission to the

latest trends

3. Establishing or revising objectives

Short-term objectives must be constantly evaluated to ensure that all the

stakeholders are working towards the same goal

4. Devising new policies

Business policies need to be revised regularly to ensure that the business keeps

up with the latest developments and trends

Involving all employees in this process will ensure that they take ownership of

the policies and the implementation thereof

5. Issuing stock to raise capital

Additional shares could be made available to the public to ensure that the

business has sufficient capital to finance any expansion or growth of the

business

6. Adding additional salespersons

Additional staff could be employed to increase sales figures and to service any

new customers that the business may have acquired

7. Allocating resources differently

Strategies should be in place to ensure that resources are optimally used in the

business

Where this is not happening the resources must be allocated to departments

where it will be used effectively and efficiently

8. Developing new performance incentives.

The more motivated the staff, the more productive they will be, thereby

increasing productivity and profit levels of the business

Developing new methods to incentivise the staff will encourage staff members

to be more motivated and more productive

5. Evaluation [advantages & disadvantages] of strategies and making

recommendations for their improvement

STRATEGY ADVANTAGES DISADVANTAGES

Integration Can significantly reduce cost

and competition

Increase the growth potential

of the business

Legal process of franchising

and buyout can be time

consuming

Can be an expensive process

and could involve large

amounts of capital

Intensive Variety of ways in which

intensive strategies can be

implemented

Research & development of

new products could be

expensive

Could be labour intensive and

place extra strain on staff


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Some strategies can have a

large impact with a limited

amount of capital

Diversification Exciting and motivating for

staff

Potential new mission,

visions and goals

Requires skilled resources

May remove the focus from

the main objective of the

business

Defensive Can save costs

Get rid of departments that

are not profitable

Demotivating to the staff

Time consuming process

6. Make recommendations for improvements of strategies

Develop strategies for reaching target customers.

Devise strategies for selling additional products or services to existing customers,

thereby growing the organisation.

Thoroughly reviewing the company’s operations to find ways of saving money.

Set aside time for long-range strategy development.

Having strategies in place to deal with challenges that could arise, as a result of risks

the organisation could be exposed to.

7. Evaluation of strategies process

The process of monitoring corporate activities and performance results, so that actual

performance can be compared with desired performance.

The purpose for evaluation of strategies is to see if the implemented strategy has solved

the challenge. Steps to be used during the evaluation process:

• Determine the results the business wants to create and measure the final results against it.

• Compare expecting performance with actual performance to determine deviations.

• Determine the reasons for deviations and analyse the reasons for these deviations.

• Determine affirmative action to prevent these deviations in the future.

• Take corrective action

BUSINESS SECTORS AND ENVIRONMENTS

(TERM 2 CHAPTER)

1. The three economic sectors

Primary sector

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Deals with raw materials and natural resources

Extract natural resources from nature

Products are sold in raw state

Examples of industries : mining, fishing, agriculture, forestry, farming

Secondary Sector

Manufactures and processes raw material into final goods

Final goods are sold to the consumer

Goods are ready for consumption

Examples of industries: manufacturing, construction, ship building, generation of

electricity

Tertiary Sector

Includes all industries that offer services to other businesses and consumers

Examples: banking, retailers, transport businesses, consultants

2. Business Environments related to the three business sectors

Primary Sector (e.g. Dairy Farm)

Environment Elements Description Extent/ Degree of

Control

Micro Environment Vision

Mission

Goals

Objectives

Workforce

Provide goods (milk)

to consumers

Managers workers

Chooses the workers

he wants to employ

Full control over the

business

Must comply with

legislative framework

(EE, BEE,

Affirmative action)

Market

Environment

Suppliers

Consumers

Competitors

Intermediaries

Suppliers of farming

equipment and feed

Some suppliers are

from the primary

sector (fodder) and

some from the

secondary sector

(electricity) and some

No control over

availability of

supplies, but can

choose his suppliers

Has no control over

the consumers, but

can attract them with

quality products


127

from the tertiary

sector (transport)

Macro Environment Political

Environmental

Social

Technological

Legal

Economical

Employ technology to

improve efficiency

New inventions can

cause equipment to

become obsolete

Legislation affects the

business, e.g. land

reforms

Has no control over

technological

inventions

Has no control over

legislation

Secondary Sector (dairy)

Environment Elements Description Extent/Degree of

Control


Mission

Goals

Objectives

Workforce

Aims to provide dairy

products to consumers

Maintain high levels

of productivity and

profitability and

socially responsible

Chooses people he

wants to employ but

must comply with

legislative

requirements

Full control over

mission and vision

Market

Environment

Suppliers

Consumers

Competitors

Intermediaries

Supplier from primary

sector (milk)

Supplier from tertiary

sector (transport)

Clients (retailers)

from tertiary sector

Has no control over

availability of

supplies but can

choose the best

supplier

Has no control over

clients, but can

influence through

advertising

campaigns, good

quality products and

affordable prices

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Environmental

Social

Technological

Legal

Economical

Uses technology in

manufacturing and

transformation

process

Legislation affects the

business, e.g. land

reforms

Can adapt to

challenges in macro

environment by

forming power

relationships, strategic

alliances or lobbying

Has no control over

technological

inventions

Has no control over

legislation

Tertiary Sector

Environment Elements Description Degree/Extent of

Control


Mission

Goals

Objectives

Workforce

Retailer (checkers)

aims to create a

wonderful shopping

environment and offer

widest range of

quality products to

consumers

Determine own vision

and mission

Choose who they

want to employ as

long as they comply

with labour legislation

Full control over

mission and vision

Market

Environment

Suppliers

Consumers

Competitors

Intermediaries

Suppliers from

secondary sector

(diary) and tertiary

sector (shop fittings)

Has no control over

availability of

suppliers but can

choose the best

supplier

Has no control over

clients, but can

influence through

advertising


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campaigns, good

quality products and

affordable prices


Environmental

Social

Technological

Legal

Economical

Can use technology to

advertise online

Choose who they

want to employ as

long as they comply

with labour legislation

Can adapt to

challenges in macro

environment by

forming power

relationships, strategic

alliances or lobbying

Has no control over

technological

inventions

Has no control over

legislation

Extent of control

Environment Extent/Degree Of control

Micro Full control

Market Little/Limited control/Influence

Macro No control

EXAMINATION TIPS

(YOU ARE ADVISED TO READ THIS BEFORE EVERY TEST)

Read through the whole examination first.

• Read carefully through all instructions and every question.

• Do not skim as you may get the wrong idea as to what is being asked.

• Reading through the whole exam has a number of advantages, particularly for

Business Studies:

Ø It allows you time to become more calm and in control;

Ø It gives you an idea of each of the questions being asked which means

your brain can think ahead to other questions while you are busy working

on your first question

Ø You can mark off the questions that cover the areas that you know best.

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Ø this is particularly important due to the choices you have in Section B and

C of the Business Studies examination

How to approach section A, B and C

• Start with Section A as it is compulsory

• In Section B start with a question that you feel more in control.

• Make sure that the numbering of the questions are correct otherwise you will be penalised for

the incorrect numbering of the questions and sub questions in

all sections.

• Do not exceed the number of facts required per questions and sub-questions.

• Please note that in section B, you must chose THREE questions from this

section. Should you decide to choose more than THREE questions, only the FIRST THREE will

be marked.

• This is also applicable to section C.

Take note of the action verbs in the question.NB!

• List means just give a list with no explanation needed

• Name means just give the appropriate name with no explanation needed

• Define means explain the precise meaning of the concept

• Describe means say what the concept is like and how it works

• Compare means set items side by side (preferably in a table) to show their

similarities and differences

• Differentiate means the same as compare (above), but only show differences

• Analyse means take apart the concept and consider all the factors

• Assess means give a judgment and back it up with evidence or reasoning

• Critically evaluate means describe both sides of an argument and come to a

final conclusion and justify your decision. (You can argue for or against)

• Recommend/Suggest means give your opinion and back it up with facts and

reasons based on the knowledge of the subject

• Explain/Discuss means give a clear, detailed description of the focus topic

• Justify means give clear, detailed reasons for taking a particular position


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• Illustrate give examples to demonstrate or prove something

• Identify give the main points that need to be considered

The difference between 'evaluate' and 'critically evaluate' can be explained as follows:

EVALUATE CRITICALLY EVALUATE

(a) When 'evaluate' is used candidates are

expected to respond in either a positive/negative

manner or take a neutral (positive and negative)

stance, e.g. Positive: 'COIDA eliminates time and

costs spent on

lengthy civil court proceedings.'

(b) When 'critically evaluate' is used candidates are

expected to respond in either a positive/negative

manner or take a neutral (positive and negative)

stance. In this instance candidates are also expected

to support their responses with more depth, e.g.

'COIDA eliminates timeand costs spent on lengthy

civil court proceedingsbecause theemployer will not

be liable for compensation to the employee for

injuriessustained during working hours as long as it

can be proved that thebusiness was not negligent.'

SOURCES USED FOR COMPILING THIS DOCUMENT

Platinum Grade 12

Focus Grade 12-

X kit Achieve study guide grade 12

Past question papers and memorandums

Gauteng lesson plans and preparation documents

Examination guideline Business studies

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