Term 1 Revision

Chapters 1 - 3

Define CSR.

Corporate Social Responsibility

A company's overall commitment to operate in an ethical and sustainable manner.

(Often involves the social, environmental, and economic impacts of business decisions.)

Define CSI.

Corporate Social Investment

A specific strategy within CSR where companies invest resources in social and environmental initiatives.

(Often involves addressing specific social issues like poverty, education, and healthcare.)

State at least 5 social responsibility areas.

• Poverty

• Crime

• Lack of Education

• Poor Health Services

• Lack of/Poor Infrastructure

• Unemployment

• Inequalities + Human Rights Issues

• Economic

• Environment

State the 3 Ps of the Triple Bottom Line.

1. Profit

2. People

3. Planet

How can a business apply the triple bottom line to ensure that they are ethical and sustainable?

Profit:

• A business must ensure that they are profitable, otherwise they are not sustainable.

• All profit should not be distributed to internal stakeholders, a percentage must be invested in CSR campaigns.

• A business needs to be ETHICAL and provide audit trails to ensure that they are transparent, accountable and compliant.

People:

• A business must consider how their actions impact all their stakeholders. 

• A business should het involved in CSR activities that uplift the community in which they operate. 

• A business can get involved in CSR by providing healthcare to their workers, fair working hours and conditions as well as opportunities for growth within the company. 

Planet:

• A business should aim to minimise its carbon footprint. 

• A business can get involved in recycling etc. and buy into the 'going green' concept. Consumers tend to support businesses who are environmentally responsible and this will in turn increase the profits of the business. 

What is considered ‘Going Green’

• Reduce energy usage

• Disposing of toxic waste safely

• Not being involved in the production of goods that are unhealthy or unsafe for the environment or the people.

State all seven of the principles of the King Code 2 and explain how two of them can apply to contribute to good corporate governance.

1. Transparency

2. Accountability

   Taking responsibility for one’s actions. accountability increases the level of confidence that stakeholders have in the business decisions taken.

3. Integrity or Honesty

   Truthfulness will influence people or corporations to do the right thing because of the consequence of disciplinary action.

4. Independence

5. Discipline

6. Social Responsibility

7. Fairness in dealing with Stakeholders

8. Responsibility of Directors

What are a business’ level of responsibility and what do they entail from the business?

1. Primary

   The business’s obligation to look after the interest of stakeholders which are directly affected by the success of the business.

2. Secondary

   The business’ obligation towards stakeholders who are indirectly affected by the business’s activities, e.g. the community, government and the environment.

State Blowfield and Murray’s tool to measure the level of responsibility.

A pyramid.

From TOP to BOTTOM it reads:

• Discretionary Responsibility

• Ethical Responsibility

• Legal Responsibility

• Economic Responsibility

Explain each of Blowfield and Murray’s levels of responsibility.

1. Discretionary Responsibility

   A business’ responsibility to not harm others and build a brand that has values and practices giving back to the community.

2. Ethical Responsibility

   The business has to ensure it is making ethically sound business decisions that will not have a negative impact on stakeholders and the sustainable future of society and the environment.

3. Legal Responsibility

   All businesses have the responsibility to ensure it is respecting the laws of the country in which it operates.

4. Economic Responsibility

   A business is responsible to ensure that it is economically active, i.e. it produces goods / services that can be sold at a profit and from which employees and shareholders will benefit.

State at least 2 Argument for CSR.

1. Community members will become brand loyal to the business because of all the good work they have done within their community.

2. If businesses assist the community to increase its standard of living through education and health programs, it will benefit from a community that has a higher standard of living and a higher level of disposable income.

3. Investing resources into a community issue will cause less people to relocate and benefit the business by eradicating crime, which will make customers have more money to spend.

State at least 2 Argument against CSR.

1. CSR can distract a business from its core business activities.

2. Shareholders may think that investing in CSR is not profitable.

3. It is difficult to measure the benefits of CSR.

State the 4 elements of CSR sustainable business practice.

1. Making Operations Environmentally Sustainable

2. Making Operations Socially Sustainable

3. Making Society Sustainable

4. Influencing Suppliers

State all 9 steps to designing a CSR program.

1. Managements communicates need for CSR across business.

2. Management creates CSR policy.

3. Management communicates CSR policy throughout business and buy-ins take place.

4. Management links CSR policy to business success factors.

5. Employees brainstorm CSR initiatives.

6. CSR program is planned and necessary skills and resources are implemented.

7. Implement CSR project(s).

8. Monitor CSR initiatives.

9. Make necessary changes or brainstorm again.

State and explain the 6 principles of Implementing a CSR strategy.

• Concepts of Citizenship

  The business’ position within a community and its responsibility to different stakeholders.

• Strategic Intent

  How CSR forms part of the core values of the business i.e The business has to define what the purpose of the CSR initiative is going to be.

• Leadership

  CSR initiatives could be either offensive or defensive or a combination of the two.

• Structure

  CSR activities must be planned, organised, driven and controlled by management to ensure CSR goals are met.

• Stakeholder Relationship

  Has to maintain sound relationships with both internal and external stakeholders through communication.

• Transparency

  Communication to all stakeholders. Contingency plans must be put in place to overcome negative events or failures.

Define Environmental Scanning.

The process of obtaining information about possible current and future events that may have an impact on the performance of the business.

Which environment(s) make up the external environment of a business and how do we analyse them?

Macroenvironment and Market Environment.

Macroenvironment uses PESTLE to identify Opportunities and Threats.

Market Environment uses Porter’s model to identify Opportunities and Threats.

Which environment(s) make up the internal environment of a business and how do we analyse them?

Microenvironment.

Identify Strengths and Weaknesses.

Why are strengths and weaknesses considered to be internal to a business?

Because the business has complete control over them.

State at 4 strengths of a business.

• Competitive Price

• Location

• Patent

• Product Differentiation

• Skilled Workforce

• Business Culture

• Good Marketing and Strong Brand

• Access to finance and other resources

• Operational efficiency and good quality

State at least 2 factors that contribute to the location of a business.

• It is important that customers should have easy access to the business. Look at the availability of parking.

• Security is an important aspect to consider, otherwise customers may not feel safe to come into the business.

• The type of business has to “fit in with the neighbourhood”.

• Also consider how a complementary business in close proximity may be considered a strength.

What is the value of a SWOT analysis?

The value of a SWOT analysis lies in how the business uses the information it has obtained by assessing the interrelationships of the different strengths, weaknesses, opportunities and threats and then converting them into strategy plans through tactical planning.

According to a TOWS analysis, what does SO, ST, WO and WT stand for?

SO - Strategies are created by thinking about how the business could utilise its strengths to take full advantage of the opportunities that have presented themselves.

ST - strategies are created by assessing how the business’s strengths could be used to eliminate threats.

WO - strategies are created by a business overcoming weaknesses, so that they are able to take advantage of opportunities.

WT - strategies assess how a business could avoid threats by reducing or eliminating its weaknesses.

State three ways in which the Market Environment can be analysed.

1. An environmental scan

2. A SWOT analysis (O and T only)

3. Porter's Six force model

State at least 3 elements that a Porter’s Six forces analysis can identify within a Market Environment.

1. Competitors: which sell the same product as the business. Levels of Rivalry

2. Competitors: which sell a substitute product (similar product). Availability of substitute products

3. Competitors: other businesses which may try to enter the market in the future. Threat of new entrants

4. Suppliers of the products. The power of suppliers

5. Buyers who need to be persuaded to use their limited finances to buy the product or service. The power of buyers

6. The impact of complementary products. The power of complementary products

Identify 2 challenges identified in a Porter’s six forces analysis.

Competitive Rivalry:

• Price Wars

• Changes in Brand Loyalty

• Larger selection of products/better quality of products or services.

Threats of Substitutes:

• Technological Advancement

• Fast Fashion Trends

• Second-Hand Clothing market.

Threat of New Entrants:

• High Capital Requirements

• Brand Recognition of established businesses

• Government Regulations

Power of Suppliers:

• Supplier Dependance on Raw Materials

• Increasing Costs or limited availability of key supplies

• Limited Supplier Base

Power of Buyers:

• Price Sensitivity

• Brand Loyalty

Identify 2 solution strategies for every Porter’s six forces model analysis.

Competitive Rivalry:

• Customer Loyalty Programs

• Focus on customer segmentation

• Implement effective marketing strategies

Threats of Substitutes:

• Develop a strong brand identity

• Product Differentiation

• Customer Loyalty Programs

Threat of New Entrants:

• Invest in Innovation

• Offer unique and high-quality products

• Promote Sustainable business practices

Power of Suppliers:

• Diversify Suppliers

• Build Strong relationships with suppliers

• Develop private label brands

Power of Buyers:

• Customer Loyalty Programs

• Provide excellent customer service

• Focus on Value proposition

State the six elements of a PESTLE analysis.

Political

Economic

Sociocultural

Technological

Legal

Environmental

State one challenge and one strategy for every element of PESTLE.

Political

• Political instability can disrupt supply chains, increase import/export costs, and impact consumer confidence.

• The business should have contingency plans to mitigate these risks, such as diversifying suppliers and maintaining strong relationships with key partners.

Economic

• During economic downturns, consumers may reduce spending on non-essential items

• Offering more affordable product lines, promotions, and loyalty programs to attract budget-conscious consumers.

Sociocultural

• Fashion trends and consumer preferences are constantly evolving.

• Invest in market research to stay updated on the latest trends and adjust their product offerings accordingly.

Technological

• Online shopping has become a major trend.

• Invest in a strong online presence, including a user-friendly website and mobile app.

Legal

• The retailer must comply with consumer protection laws, such as product labeling, advertising standards, and warranty regulations.

• Set up a system to monitor laws and regulations in your key markets.

Environmental

• Climate change can impact supply chains and consumer behavior.

• Adopt sustainable practices, such as reducing waste, minimizing carbon emissions, and using eco-friendly materials.

Define Management.

The process of organizing, leading, and directing resources to achieve organizational goals.

State and explain the different levels of management.

• Top Management

  Responsible for the strategic decisions of the business.

• Middle Management

  Responsible for tactical decisions in the business.

• Lower Management

  Responsible for the day to day decisions in the business.

State and define all Management Tasks.

1. Planning

   The first function of management where a combination of creative and logical thinking is used to improve the future performance of the business.

2. Organisation

   Identifying activities that should be undertaken in order to ensure the business’ objectives are achieved.

3. Leadership

   The way in which the leader behaves while influencing the behaviour of the workforce.

4. Control

   Checking the current performance against the predetermined standards that were set in the planning phase to ensure there is progress in achieving the business’ objectives.

State at least 1 principle of effective planning.

• The future is anticipated in order to identify and bridge the gap between the current status of the business and the projections for the future plans of the business.

• During the planning phase decision makers will debate, discuss and formulate the business’ vision, mission, objectives, policies and procedures.

• Management has to plan where and how to obtain the resources needed to achieve the objectives.

State the funnel approach to an effective planning process.

• Plans must be flexible.

• Planning takes place at all levels of a business.

State and explain the 5 steps in the planning process.

1. Establish Objectives

   The overall direction of business is clearly defined and communicated to middle management.

2. Deciding on Planning Period

   Business plans for anticipated period for meeting goals.

3. Considering Alternatives

   Business will evaluate, develop and contingency plans.

4. Implementing the Plan

   Business decides on implementation of business plan.

5. Controlling Process

   Business puts into place control mechanisms that evaluates if the plan is succeeding according to parameters set.

State and explain the 4 steps in the organising process.

1. Considering Objectives

   Clear understanding of objectives and their purpose must be done by managers.

2. Identifying and Grouping activities

   Identification of important tasks to be completed in order for objectives to be met.

3. Assigning Duties

   Tasks will be assigned to individuals within different functional areas of the business.

4. Delegating Authority

   Required authority is delegated to subordinates to ensure the completion of activities.

State at least one advantage of Organisation.

• Organizing people in a logical and easy to understand manner, provides the business with a communication structure.

• Organizing helps the business to identify the key internal stakeholders to which responsibility and authority should be allocated.

• Organization creates proper balance in the business when it groups activities of similar importance on the same management level in the business.

• Organizing within the business helps to stimulate creative thinking when it forces people in task teams.

• Organizing assists the business in putting the necessary structures (framework).

State at least two principles of organisation.

• The manager has to ensure that the business’ objectives are achieved, while the employees feel they are also able to achieve their personal goals (harmony of objectives).

• Clear Communication

• Unity of Direction means each employee knows to whom they should report and who will be giving instructions.

• Direct Supervision enhances subordinate morale if personal rapport with the manager is established.

• Following up involves managers adjusting the task at hand to make sure objectives are achieved.

State the different leadership styles.

1. Autocratic Leadership

2. Democratic Leadership

3. Laissez faire Leadership/Free-rein Leadership

State 2 characteristics of Autocratic Leadership.

• Commands or instructs subordinates when directing activities.

• Formulates all objectives, policies and procedures without asking for input from anyone.

• Saves time and gets quick results in a crisis.

• Employees will have no doubt about the chain of command, thus eliminating confusion.

State 2 characteristics of Democratic Leadership.

• Subordinates are encouraged to participate in making decisions.

• Leader will help to grow the confidence and collective performance of the workforce, which boosts morale.

• It could take a long time to make decisions and it may sometimes be used as a way to avoid responsibility.

State 2 characteristics of Laissez faire Leadership

• Does not exercise control over the workplace.

• Simply supplies employees with the necessary information and resources to set and achieve objectives.

• This leadership style is effective if the workforce consists of independent thinkers who are creative, intrapreneurial and competent, and have high levels of integrity.

• If a laissez faire approach is used it may create uncertainty and confusion, especially when employees are not sure what they have to do to achieve their goals.

State the 3 steps in the control process.

1. Establish Objectives

   Part of planning process.

2. Measuring Performance
   The process of evaluating the different activities against the required standards or benchmarks.

3. Corrective Action

   Putting the necessary plans and/or resources in place to rectify any deviation from the plan.

State and explain at least 2 components of a good control system.

• It is important that the control systems is suitable/appropriate for the business.

• A functional control system needs to be flexible so that it can be adapted to changes in the environment.

• A good system of control will be employee-centered to ensure buy-in and motivation from employees.

• It should indicate how the process may be refined to ensure the future performance of the business is safeguarded.

• An efficient control system will be economical and the cost of the control system will not exceed the benefits gained from the system.

Define communication.

The process of exchanging information, opinion, views and ideas between staff members and management.

State 2 motivational methodologies to convince workforce to perform at optimum levels.

1. Maslow’s Hierarchy of Needs

2. Adam’s Equity Theory

State and explain each of Maslow’s hierarchy of needs.

1. Self-Actualisation

   A person’s desires to achieve their full potential.

2. Esteem Needs

   Desire for esteem often results in people’s need for power, prestige and status.

3. Social Needs

   People need to feel they belong and are accepted by the group of which they are part.

4. Security Needs

   The need to feel safe, but it also related to the fear of losing a job.

5. Psychological Needs

   Food, water, shelter and sleep.

State and explain each reward quantity which determines an employees work output according to Adam’s Equity Theory.

• Inequitable Rewards

  Dissatisfaction leads to reduced output.

• Equitable Rewards

  Continuation at the same level of output.

• More than Equitable Rewards

  Works harder and exceeds required output.

State at least 5 Entrepreneurial Characteristics.

• Initiative

• Risk-Taker

• Information Gatherer

• Planner

• Self-Confidence

• Problem Solver

• Persistence

• Assertiveness

• Credibility

• Concern for Quality

• Experience

State at least 2 differences between an Entrepreneur and a Manager

Manager:

• Works for a business that already exists.

• Employee of a business.

• Does not bear any financial risk besides job security.

• Rewarded with a salary or a bonus.

• Involved with the execution of plans.

Entrepreneur:

• Build their business to gain personal gratification and success.

• Owner of the business.

• Assumes all risks involved in the business.

• Receives profit from business.

• Innovates through creative thinking and problem solving.

State and explain each activity of an entrepreneur.

• Generating Business Ideas.

• Conducting market research to determine success of idea.

• Evaluate ways to obtain funds to implement idea.

• Recruiting the right workforce to assist with the implementation of the idea.

• Procurement of other factors of production.

• Develop the necessary action plans for the implementation of the idea.

Define the role of an Intrapreneur and how they can be valuable to a business.

Intrapreneur is an employee who creates new ideas and then converts them into products and services within the framework of the business.

Intrapreneurs can help a business innovate and give the business a competitive advantage.

Define the role of an Ultrapreneur and how they can be valuable to a business.

Ultrapreneurs identify a viable business opportunity and then establish a business. The ultrapreneur then procures a super management team of highly competent individuals who then develop, produce and market the idea.

The ultrapreneurs often sell a large number of shares in the business as soon as the business is established. The aim of the ultrapreneur is to achieve a maximum return in the shortest possible time and then repeat the process over and over again.

State and discuss the different types of Entrepreneurs and how they function.

Socio-preneur: Uses innovative business ideas to solve social problems. The aim of these entrepreneurs is not to create a profit for themselves, but to use profits to achieve widespread social improvements.	Eco-preneur: Creates a business based on solving environmental problems by creating environmentally friendly products/services.
Techno-preneur: uses technological advancements/development to build a new business venture. There are two types A technology developer – is a person who develops a new and unique technological concept that drives the new business. A technology user – is a person who identifies new technology and understands how the concept can best be applied to meet customers’ needs and wants.	Tender-preneur: Develops an entrepreneurial business based around a tender he/she would like to apply for. In some cases the business already exists, but the business operations are adapted to meet the requirements of the tender. The tender-preneur often makes a living by getting tenders and then subcontracting it to other business.

State at least 5 Management Competencies/Skills

• Global Awareness

• Organisational Awareness

• Analysis

• Strategic Thinking

• Teamwork

• Empowerment & Talent Development

• Initiative

• Judgement/Decision-Making

• Negotiation

• Customer Service

Explain how Global Awareness is an important skill for a manager to have.

The manager must understand that even if the business does not trade (buy or sell) directly with other countries, the business world is interconnected and has interrelated relationships and that the business's supplier can buy from a supplier in another country.

State the difference between Internal and External organisational awareness and how they are important for a manager to understand.

Internal:

• The manager must realize the strengths and weaknesses of the business.

• It is important to have an understanding of what is happening in the whole business, because the actions of the different functions or departments in the business influence each other to be successful.

External:

• Management must show an understanding of the opportunities and/or threats facing the business within the context of the external environment.

• When thinking about the external environment, it must be taken into account that aspects such as national and international trends can have an impact on the business, but that the business can also influence events in the external environment.

Explain how Analysis is an important skill for a manager to have.

• The manager should be able to identify important information resources, gather the relevant information, interpret the impact that the different events may have on each other and then compare alternative plans. It is the ability to analyze and draw conclusions.

• Potential problems should be identified and solutions planned in advance to ensure risks are managed.

Explain how Strategic Thinking is an important skill for a manager to have.

• The manager's ability to look at the business's current position relative to the rest of the market and then decide where the business should be within the next few months or years.

Explain how Empowerment & Talent Development is an important skill for a manager to have.

• Empowerment & Talent Development involves the business is investing time and resources to help employees grow in order to achieve the goals and objectives of the business.

• When the employee is empowered, they feel that they are gaining something through the development process and this can lead to better morale and higher levels of motivation.

Explain how Initiative is an important skill for a manager to have.

• Showing initiative means the manager does not wait for other people to think of new ways to improve their department or the overall business.

• By showing initiative, encourage subordinates to think of new ideas and innovations before the situation requires it.

Explain how Judgement/Decision-Making is an important skill for a manager to have.

• The manager must continuously make decisions in different situations.

• One of the most important tools a manager can use in such a situation is the ability to reason logically.

• The manager must take responsibility for decisions made.

Explain how Negotiation is an important skill for a manager to have.

• A manager who is proficient with negotiation will try to achieve a win - win situation by proposing a compromise if there is a problem.

Explain how Customer Services is an important skill for a manager to have.

• The customers and their needs are the primary focus areas and this must be taken into account in all business decisions.