DEPARTMENT OF COMMERCE
BUSINESS STUDIES
GRADE 12: ESSAY QUESTIONS WITH EXAMPLES FOR TERM ONE and
Miscellaneous questions.
QUESTION 7
Vusi's Stores have been experiencing a decline in sales due to a loss of
customers to competitors. The management of Vusi's Stores decides to conduct
a planning session to come up with strategies to increase sales and to attract
customers.
Formulate TWO possible strategies that Vusi's Stores can include in their
strategic planning to address the challenges in the scenario. Discuss how Vusi's
Stores can apply the Porter's Five Forces model to analyse their market
environment.
[40]
7.1 Introduction - Businesses should conduct a strategic management process in order
- A strategy is a
- Porter's Five Forces
model helps the business to understand/analyse/consider both the strength of its
current competitive position and the advantages of a position it is considering moving
- Porter's Five Forces model assumes that there are five important
forces that d
- Any
other relevant introduction related the importance of devising a strategy and/or the
importance of Porter's Five Forces model. Any (2 x 1) (2)
7.2 Suggested strategies that Vusi can use to overcome the business challenges - Vusi
- Improve the
- Take over/Merge
with similar business enterpr
- Diversify - Vusi can develop new products and
- Any other relevant strategies that will lead to increased
sales en attracting customers. Any (2 x 2) (4)
7.3 Porter's Five Forces
- Suppliers refer to all Vusi's suppliers of, e.g. raw
materials/equipment/transport services/support services such as financial
- Vusi must assess the power of the suppliers to
- Suppliers that manufacture products may decide to sell directly
- The fewer suppliers
Vusi can choose from, the more he will need suppliers' help/support and the more
- Vusi must identify the kind of power his suppliers have
in terms of the uniqueness of their products or services, their reliability and their ability
- Any other relevant answer related to the power of
suppliers. Name: (2) Discussion: (6) Max (8)
- Vusi must assess
- Buyer power will depend on the
number of buyers, the importance of each buyer for Vusi's business and the cost of
switching to
- If Vusi's business is dealing with a few
- If Vusi's
customers can easily go without his products/services, then they have more power over
Vusi to d
- Vusi must conduct market research so
- Any other relevant answer related to the power
of buyers. Name: (2) Discussion: (6) Max (8)
- Competitors refer to businesses
- Vusi must find
- If
Vusi's competitors have unique products/services, then they have great power over
- Some competitors have the necessary resources
to start and survive price wars and will continue selling at a loss until other competitors
- If Vusi has many competitors, then his business has very little
- Vusi must draw up a competitor's profile of each rival so
- Any other relevant answer related to
the power of competitors. Name: (2) Discussion: (6) Max (8)
- Substitute products/-services are other
products/services that can completely or partly satisfy the same needs of consumers
- If Vusi's product can easily be
substitute
- Substitute
- If
- If
Vusi's business operates in the industry where the buyers tend to switch regularly
between different products without much effort or costs, the threat of substitution is
- Vusi must do market research to assess if customers are using substitute
products/ser
- It is important that
- Any
other relevant answer related to the threat of substitution. Name: (2) Discussion: (6)
Max (8)
- The power Vusi's
business has in the market will depend on how easy it is for new competitors to enter
- If Vusi's business is highly profitable it may attract more investors,
which will put
- If the barriers to enter Vusi's
- New
competitors can quickly/easily enter the market if it takes little time or money to do
- If there are only a few traders but many buyers in the market, it will also be
- Any other relevant answer related to the threat of new
entrants. Name: (2) Discussion: (6) Max (8)
7.4 Conclusion - If Vusi clearly understands where his power is, his business can reap
the benefits of the aspects where he is strong, and improve on the aspects where he
- With a clear understanding of where his power lies, the business
can avoid taking any wro
- Porter's Five Forces model is useful for
This model makes it possible for businesses to monitor the movement of power in the
market and to adapt in time to the advantage of businesses and the economy in
- Any other relevant conclusion with regard to strategies and analysing the
market environment. Any (1 x 2) (2) [40]
JUNE 2015QUESTION 7: BUSINESS ENVIRONMENTS (LEGISLATION)
The Skills Development Act, 1988 (Act 97 of 1988) (SDA) prescribes different ways of vocational learning
by promoting learnerships, skills programmes and through the Sector Education and Training Authorities
(SETAs). SETAs aim at implementing the National Skills Development Strategy and Human Resources
Development Strategy. As a labour law expert, you are required to compile a report on skills
development. The following aspects should be included in your report:
• Explain the purposes of the SDA • Evaluate the impact of this Act on businesses and employees •
Outline the role of SETAs • Describe the National Skills Development Strategy and Human Resources
Development Strategy • Recommend TWO ways in which businesses can comply with this Act
[40]
7.1 Introduction –
The Skills Development Act, 1998 (Act 97 of 1998) (SDA) was developed in - The SDA is the integral part
of the National Skills Development Strategy that aims to link learning to the demands of the world of
work and enables employers/employees - Learnerships are theoretical and practical training
opportunities that can lead to - Any other relevant introduction related to the implementation
of/compliance to the SDA/SETAs. Max (2)
7.2 Purposes of the SDA - Develops the skills of people in South Africa in order to i - - - - Redresses
imbalances of the past - Provides for the implementation of strategies on a national, sector and Provides funds for skills development through the levy-grant scheme and a National Skills Encourages worker - Any other relevant answer related to the purpose of the SDA. Max (12)
7.3 Impact of the Skill Development Act on businesses and employees Businesses: Positives - Increases
the number of skilled employees in areas where these skills are - - - - Improves - Any other
relevant answer related to the positive impact of the SDA on businesses. AND/OR Negatives - The SDA
process is prescriptive and requires a large amount of paperwork and - Skill Development Levy could be
an extra burden to financially struggling - It may be monitored and controlled by government
departments that do not h
- The SETAs may not be well organised and many courses offered by companies may - Many service
providers that offer training services are not - - - Employees are expected to attend learnerships during
work hours which could affect the production process/ - Costly for businesses to employ a person to
implement, manage and control - The time and money spent on improving employee skills is wasted if
they leave - Any other relevant answer related to the negative impact of the SDA on businesses. Sub
max (8) Employees: Positives - - - Increases self- - Promotes self- - More employment
opportunities for new entrants who find it difficult to be - Encourages on-going skills development and
learning - Employees have the opportunity to acquire new skills/qualifications/work - Improves the
quality of life of employees resulting in higher job satisfaction/ morale. - Any other relevant answer
related to the positive impact of the SDA on employees. AND/OR Negatives - Some employees may not
be interested in skills development and may perceive - Employees are expected to acquire practical
work experience and attend education/training programmes, which may increase their stress
levels/work load - Skills programmes may not always address training needs of employees, so it may
discourage them from attending other training programmes. - Employees may not be credited by SETA
when attending certain work shops. - Accumulation of credits may not be transferable/recognised by
the relevant - Any other relevant answer related to the negative impact of the SDA on employees. Sub
max (8) Max (12)
7.4 Roles of SETAs - Develops skills plans in line with the National Skills Development St - - Pays out
grants to companies complying with the requirements of the Skills - - Registers learnerships and
learning prog - Provides training material/programmes - - - Draws up skills development plans Allocates grants to employers, education and training providers and - Promotes learnerships and
learning programmes by identifying suitable workplaces - - Any other relevant answer related to the
roles of SETAs. Max (10)
7.5 National Skills Development Strategy and Human Resources Development strategy
7.5.1 National Skills Development Strategy - Provide - Encourages good quality training in the
workplace to ensure on-going - Indicates how Sector Education and Training Authorities (SETAs)
should use the money allocated from the Skills Development Levy (SDL) - - - Encourages and
supports small businesses, community-training groups, NGOs and worker- - - - Establishes and
promotes closer links between employers, training institutions - - Any other relevant answer related to
the National Skills Development Strategy. Sub max (4)
7.5.2 Human Resources Development Strategy - - Develops short term and - Promotes social
development and social justice and helps to alleviate - Aims at achieving faster growth, higher
employment and reduced levels of - - Increases employee participa - - Any other relevant answer
related to Human Resources Development Strategy. Sub max (4) Max (8)
7.6 Compliance with the Act - Employers who collect PAYE should - One per cent of an employer' Businesses should register with SARS in the area in which their business is - Employers should submit a
workplace skills plan and provide evidence that it - Any other relevant recommendations related to
compliance with SDA. NOTE: Mark the first TWO (2). Max (4)
7.7 Conclusion - The SDA plays an important role in ensuring that the workforce is skilled and - The
SDA enables businesses to improve the skills of their employees and this increases employee
morale/reduces staff - Any other relevant conclusion related to the implementation of/compliance to
the SDA. Max (2)
[40]
QUESTION 7: BUSINESS ENVIRONMENT (Porter's Five Forces and Strategies) Feb
–March 2015
Susan is selling sandwiches from a small shop in a busy office block. Her sandwiches
are very popular as she uses only fresh quality ingredients that are delivered daily. She
wants to expand to other office blocks in the area, which are further away from her
suppliers and closer to other fast food restaurants.
Analyse Susan's idea of expanding her business using the Porter's Five Forces model.
Explain how Susan can apply the THREE intensive strategies to address challenges
she may experience when expanding to other areas.
[40]
7.1 Introduction - Porter's Five Forces model helps the business to understand both the
strength of its current competitive position and the advantages of expanding.√ - Porter's
Five Forces model is based on five important forces that determine competitive power in
the market environment of a business.√ - Businesses need to conduct intensive
strategic management in order to solve identified challenges.√ - A strategy is a plan of
action to address an opportunity or to solve a problem.√ - Any other relevant
introduction related to the Porter's Five Forces model and implementing intensive
strategies.
Max (2)
7.2 Porter's Five Forces 7.2.1 Power of Suppliers√√ - Suppliers of Susan's business
include the suppliers of bread and ingredients.√√ - Susan must assess the power of the
suppliers in influencing prices.√√ - The more powerful the suppliers are, the less control
Susan has over them.√√ - Suppliers that deliver quality ingredients daily may decide to
increase delivery cost and thus may have power over Susan's business.√√ - The fewer
the choice of suppliers, the greater the need for Susan to seek help as they could
become more powerful.√√ - Susan should identify the kind of power her suppliers have
in terms of the quality of their products or services, reliability and their ability to make
prompt deliveries.√√ - Any other relevant answer related to the power of suppliers.
Force: (2) Discussion: (4) Max (6) 7.2.2 Power of Buyers (including Intermediaries)√√
- Buyers are the final users of the product/services.√√ - Susan must assess how easy it
is for her buyers/customers to drive prices down.√√ - This will depend on the number of
buyers, the importance of each buyer to her business and the cost of switching to
someone else's products.√√
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- If Susan's business is dealing with a few powerful buyers, they are often able to
dictate terms to the business.√√ - If Susan's customers can do without her products
then they have more powers to determine the prices and terms of sales.√√ - Susan
must conduct a market research so that she can get more information about her
buyers.√√ - Any other relevant answer related to the power of buyers. Force: (2)
Discussion: (4) Max (6)
7.2.3 Power of Competitors√√ - Competitors are businesses selling the same/similar
products or rendering the same/similar services.√√ - Susan must find out how many
competitors are there and how influential they are.√√ - If Susan's competitors/other fast
food restaurants have a unique product or services, then they have greater strengths.√√
- If Susan has many competitors with similar products then her business has very little
power in the fast food market.√√ - Susan must draw up a competitor's profile of each
fast food restaurant in the area so that she can determine their strength.√√ - Some
competitors have the necessary resources to start price wars and continue selling at a
loss until other competitors leave the market.√√ - Any other relevant answer related to
the power of competitors. Force: (2) Discussion: (4) Max (6) 7.2.4 Threat of
Substitution/Substitutes√√ - Substitute products or services are different
products/services that at least partly satisfy the same needs of the consumers and can
be used to replace one another.√√ - Susan must check the sellers of substitute products
who have improved their products or sell lower quality goods at lower prices.√√ - If
Susan's sandwiches can easily be substituted, this weakens the power of her business
in the market.√√ - Substitute products can cause Susan's business to lose its market
share completely.√√ - If Susan's products are unique then she will not be threatened by
substitute products.√√
- Susan's business operates in an industry where the buyers tend to switch regularly
between different products, so the threat of substitution is high.√√ - Susan should do a
market research to assess if customers are using substitute products/services and
reasons for using these alternatives.√√ - It is important that Susan changes or improves
her sandwiches to remain competitive.√√ - Any other relevant answer related to the
threat of substitution. Force: (2) Discussion: (4) Max (6)
7.2.5 Threat/Barriers of New Entrants to the market√√ - New entrants are other
businesses that are selling the same/similar products in the existing market for the first
time.√√ - The power Susan's business has in the market will depend on how easy it is
for new competitors to enter the market.√√ - If Susan's business is highly profitable, it
will attract potential competitors that want to benefit from high profits.√√ - If the barriers
to enter Susan's market are low, then it is easy for new businesses to enter the
market/industry.√√ - New competitors can quickly and easily enter the market, if it takes
little time or money to enter the market.√√ - If there are few suppliers of the
product/service but many buyers then it is easy to enter the market.√√ - Any other
relevant answer related to the threats/barriers of new entrants. Force: (2) Discussion:
(4) Max (6)
[30]
7.3 Intensive strategies 7.3.1 Market Penetration√√ - New products enter/penetrate
an existing market at a low price, until it is well known to the customers and then the
prices increases.√√ - It is a growth strategy where businesses focus on selling existing
products to existing markets.√√ - Susan should do market research on existing clients to
decide how to improve her marketing mix.√√ - Reduce prices to increase sales.√√
- Embark on an intensive advertising campaign to increase awareness and customer
loyalty.√√ - Employ more sales staff to improve sales services.√√ - Any other relevant
answer related to market penetration. Strategy: (2) Discussion: (2) Sub max (4)
7.3.2 Market Development√√ - It is a growth strategy where businesses aim to sell its
existing products in new markets.√√ - Susan should implement her idea of
expanding/selling to other office blocks in the area.√√ - Find new ways of distributing
her sandwiches to other office blocks, e.g. setting up sandwich stalls outside the other
office blocks.√√ - Restructure pricing policies to cater for customers of all income
levels.√√ - Any other relevant answer related to market development. Strategy: (2)
Discussion: (2) Sub max (4)
7.3.3 Product Development√√ - It is a growth strategy where businesses aim to
introduce new products into existing markets.√√ - Susan should improve her product
line by adding different types of sandwiches or related products.√√ - Conduct test
marketing/market research to establish whether new products will be accepted by
existing customers.√√ - Ensure that new products are different/of a higher quality/
reasonably priced than those of competitors.√√ - Any other relevant answer related to
product development. Strategy: (2) Discussion: (2) Sub max (4) Max (12)
7.4 Conclusion - With a clear understanding of where power lies, the business can take
advantage from a position of strength, improve a situation of weakness and avoid taking
any wrong steps.√√ - Porter's Five Forces is useful for analysing the power of the
business to yield a favourable return on investment.√√ - This model makes it possible
for businesses to analyse how to shift the power of the forces in their favour.√√ Although implementing intensive strategies may be costly, it usually results in growth
and continuous improvement.√√ - Any other relevant conclusion related to Porter's Five
Forces and intensive strategies. (Any 1 x 2)
[40]
QUESTION 7:
BUSINESS ENVIRONMENTS (LEGISLATION)
The Consumer Protection Act, 2008 (Act 68 of 2008) implemented in 2011, was
introduced to give consumers rights and protection for any business transaction.
Businesses should familiarise themselves with the implications of this Act and change
the ways in which they conduct business.
As a legal adviser, provide a detailed analysis of the Consumer Protection Act (CPA) to
Discuss any FOUR consumer rights as stipulat
that businesses should implement to comply with this Act [40]
7.1 Introduction - The CPA was passed to redress the economic inequalities of the
past.√ - It applies to the supply of goods and services in South Africa.√ - It promotes
and advances the social and economic welfare of consumers in South Africa.√ - Any
other relevant introduction related to the Consumer Protection Act. Max (2)
7.2 Consumer rights
7.2.1 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.√√ - reject goods that are not the same as the sample marketed.√√ cancel/renew fixed term agreements.√√ - request written quotations and cost
estimates.√√ - Any other relevant answer related to the consumers' right to choose. Sub
max (4)
7.2.2 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.√√ - Any other relevant answer related to the consumers' right to
privacy and confidentiality. Sub max (4)
7.2.3 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 honour the
agreement.√√ - Any other relevant answer related to the consumers' right to fair and
honest dealings. Sub max (4)
7.2.4 Right to information about products and agreements/Right to disclosure and
information√√ - Contracts and agreements should be in plain language and easy to
understand.√√ - 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.√√ - Any
other relevant answer related to the consumers' right to information. Sub max (4)
7.2.5 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.√√ - Any other relevant answer related to the consumers' right to
fair marketing/promotion. Sub max (4)
7.2.6 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.√√ - Any other relevant answer related to the
consumers' right to fair value, good quality and safety. Sub max (4)
7.2.7 Right to accountability from suppliers√√ - Consumers have the right to be
protected in lay-bye agreements.√√ - Businesses should honour credit vouchers and
prepaid services.√√ - Any other relevant answer related to the consumers' right to
accountability from suppliers. Sub max (4)
7.2.8 Right to fair, just and reasonable terms and conditions√√ - Businesses should
provide consumers with written notices of clauses that may limit consumer rights.√√ Businesses may not market or sell goods at unfair prices.√√ - Any other relevant answer
related to the consumers' right to fair, just and reasonable terms and conditions. Sub
max (4)
7.2.9 Right to equality in the consumer market place√√ - Businesses should not limit
access to goods and services.√√ - Businesses may not vary the quality of their goods to
different consumers.√√ - Businesses may not charge different prices for the same
goods/services.√√ - Businesses should not discriminate when marketing their products
and services in different areas/places.√√ - Any other relevant answer related to the
consumers' right to equality in the consumer market place. Sub max (4) NOTE:
Mark the first FOUR (4) only. Max (16)
7.3 Impact of Consumer Protection Act (CPA) on businesses Positives - Enables
businesses to resolve disputes fairly through the National Consumer
Commission/Consumer Court/Industrial ombudsmen.√√ - Any other relevant answer
related to the positives of the CPA for businesses. AND/OR 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
processes/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, therefore many business documents
need to be simplified.√√ - Legal contracts must be worded in plain language and pitched
at the level of the consumer who is being targeted.√√ - Prohibits discriminatory
marketing and deals extensively with general marketing standards.√√ - Provisions in
the Act increase the risks for insurance companies in protecting businesses against
unforeseen claims and lawsuits.√√ - Supply chain management in stock levels will have
to be managed differently as defective goods have to be replaced within six months at
the request of the customer.√√ - Information technology systems need to be improved
as the retailer must keep more detailed records of interactions with consumers and be
able to report to the National Consumer Commission.√√ - Any other relevant answer
related to the negatives of CPA for businesses.
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.√√
- Any other relevant answer related to the positives of the CPA for consumers. AND/OR
Negatives - Consumers may not be aware of the CPA/their consumer rights.√√ Consumers may be unaware of mechanisms in place to lodge disputes.√√ - Serious
implementation problems with regard to handling consumer complaints.√√ - Any other
relevant answer related to the negatives of the CPA for consumers. Max (14)
7.4 Practical ways to comply with the CPA - Disclose prices of all products on sale.√√ Ensure that goods/services offered are standardised/of the same quality.√√ - Comply
with the requirements regarding promotional competitions.√√ - Display the name of the
business on all business documents, e.g. letterheads/invoices/contracts.√√ - All
agreements must provide for a five-day cooling off period.√√ - Comply with
requirements regarding the display of information on labels/ packaging, e.g. smoking is
hazardous for pregnant woman.√√ - Bundling of goods/services should benefit
consumers, e.g. offering a cell phone and a tablet at a special price.√√
- Provide adequate training to staff on the CPA.√√ - Implement measures that will
facilitate complaints, e.g. suggestion boxes.√√ - Any other practical way that business
should implement to comply with the CPA. Max (10)
7.5 Conclusion - The CPA forces both businesses and consumers to act responsibly
when doing business.√√ - Non-compliance by businesses may result in penalties/legal
action.√√ - Any other relevant conclusion related to the CPA. (Any 1 x 2) (2) [40]
QUESTION 9: BUSINESS ROLES
(± 30 minutes)
‘DOG-EAT-DOG’
According to this myth the ground rule of business is ‘dog-eat-dog’. It portrays the
business environment as a lonely and hostile world. Either you trample on others, or
you yourself will be trampled upon. To consider the interests of others would be a
fatal mistake. It would leave you vulnerable and open to attack from any of the other
“dogs” in the pack. Business demands that you should fight for your own interests.
Contrary to the myth, many enterprises agree that ethical and professional behaviour
are important factors to consider in order to operate a sustainable business.

Describe the concept of ethical and professional behaviour and use practical
examples
to explain the various issues relating to the abovementioned.

Explain how sexual harassment, taxation and the pricing of goods in rural areas
could challenge ethical and professional behaviour.

Also make recommendations by explaining ways in which these issues could be
addressed.
(40)
INTRODUCTION:
Business ethics means the highest legal and moral standards are upheld when
dealing with any stakeholders of the business.
Business managers need to constantly measure the ethicality of their decisions
It is important for businesses to develop their own code of ethics.
Before making decisions, it is necessary to consider the impact of their decisions
and actions
(any 2 sentences X 1 mark = 2 marks)
NB!! Layout = 1 mark, if no information or heading is given, NO MARKS!!
Ethical behaviour

Ethical behaviour goes beyond obeying laws, rules and regulations and
involves DOING THE RIGHT THING.

Set of values that are morally acceptable in society which displays good,
right and fair actions.

These are rules and principles which influence the best business practice.

Ethical behaviour is a requisite for professionalism.

Businesses develop their own code of ethics.
Refer to accepted principles of right or wrong.
(any 2 x 2 = 4)
Professional behaviour

Set of standards of expected practices.

Various occupational practices e.g. doctors , develop their own code of
professionalism.

It means:

Representing your employer, co-workers and yourself with dignity.

Demonstrating appropriate behaviour towards colleagues, superiors,
subordinates and the public at large.
(any 2 x 2 = 4)
Practical examples
PROFESSIONAL:

Treating people with respect, helping others, polite language, dress code

Doing the best job possible

Don’t discuss clients/employees with others
ETHICAL:
(any 1 x 2 = 2)

No business should be started at the expense of others

Pay fair wages/salaries

Pay tax regularly

Should be honesty in all relationships and transactions

Environment should be protected

No dishonest advertising, corruption, selling of defective products
(any 1 x 2 = 2)
TAXATION / TAX EVASION:

Tax evasion (company and personal income tax) is a criminal act.

There are many businesses that do not declare all their received income to
the Receiver of revenue.

Professional behaviour in this regard would be to pay the due tax to the
Receiver of revenue.

Evasion is punishable by law. (it is a criminal offence)

The business needs to be familiar with the latest changes in tax legislation
to avoid fines.

Government needs all the tax to provide for services such as education,
housing, health, etc.
(any 2 x 2 = 4)
RECOMMENDATIONS / STRATEGIES TO ADDRESS TAX EVASION:

Reduce tax rates and more people will choose to pay tax.

Evaluate the risk of being caught against the benefit gained from tax
evasion. CAUGHT vs. TAX EVASION

Government can use bonuses as incentives when businesses pay their
taxes before the due date.

Professional behaviour includes paying taxes and businesses must be
educated on the importance of paying taxes.
(any 2 x 2 = 4)
SEXUAL HARASSMENT

It is unwelcome/unwanted attention.

It is wrong to abuse your position to take advantage of people.

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 favors from the subordinate. (any 2 x 2 = 4)
RECOMMENDATIONS / STRATEGIES TO ADDRESS SEXUAL HARASSMENT:

Formulate a clear policy regarding sexual harassment.

Implementing clear complaints and disciplinary procedures.

Businesses must strive to create a positive corporate culture – everyone
are protected and members are respected.

Implementation of a protocol for dealing with sexual harassment.
(any 2 x 2 = 4)
PRICING OF GOODS IN RURAL AREAS

Most businesses in rural areas are located far away from major towns.
They buy their stock in major centres. The cost of transportation is then
added.

Some rural store-owners abuse their monopolistic position. Ask excessive
prices in poor communities.

Manufactured products in rural areas are much higher than the national
average prices.

The lack of infrastructure in rural areas results in monopolising of some of
the goods.

This leads them charging higher prices to these poor communities.

As a result the businesses lose loyalty of their customers.
(any 2 x 2 = 4)
RECOMMENDATIONS / STRATEGIES TO KEEP THE PRICES DOWN:

Attention must be given to improve the infrastructure in rural areas.

Rural storeowners should be encourage to be more ethical in their dealings
– determine fair prices.

By keeping prices low, they would benefit in the long term and more people
might buy from them.

Suppliers can work together – take turns to deliver goods.
(any 2 x 2 = 4)
CONCLUSION:
Ethics and professionalism form an integral part of business operations and
practices.
Businesses who behave professionally and ethically are usually sustainable and
have a good public image.
OWN OPINION √√
(2)
According to 1-Net Bridge (08/03/2005): “The government departments and
private companies in South Africa that recruited professionals abroad – with
scarce skills – would not be granted exemption from the provisions of the
Employment Equity Act, says Labour Minister Membathisi Mdladlana.”
Apply all your knowledge regarding this Act to critique the above
statement.
[40]
Employment Equity Act
During apartheid era, discriminatory laws resulted in employment of a certain group of
employees. () They had first choice of job opportunities, their income was higher and
they mainly occupied managerial or other senior positions. ()
This Act therefore became the core of labour legislation and has the following
purposes:
 To eliminate unfair discrimination ()
 To promote equal opportunity for all employees in the workplace ()
 To implement affirmative action ()
 that insures equal representation in all categories and levels in the workplace ()
The anti-discriminatory provisions of the Act apply to all employers and employees (),
but the affirmative action provisions only apply to designated employers () and
designated groups of employees. ()
This means that the employment policies of all businesses must prohibit
discrimination () against employees on the basis of:
 Race ()
 Sex ()
 Gender ()
 Disabilities ()
This Act has an impact on all businesses. () Every Human Resource Manager has a
duty to take active steps to promote employment equity in the organisation. () This is
done by compiling an employment equity plan () that clearly indicates the procedure
() to be followed for the successful implementation of the Act.
()
(30)
(The learner must critique: 6 marks for the learner’s opinion – positive or
negative.)
(6)
Introduction: 2 marks
Conclusion: (4) Total: 40
QUESTION 3.Essay on NCA and CPA
The National Credit Act (NCA) was introduced to regulate the credit market.
Businesses feel that the Act gives consumers many rights and it also shrinks the
credit market. Some people believe that the Act is similar to the Consumer
Protection Act (CPA).
Explain the purpose of the National Credit Act and discuss the impact of the Act
on businesses. Differentiate between the NCA and Consumer Protection Act.
Recommend ways businesses can comply with the National Credit Act.
(40)
National Credit Act was put in place to improve the debt of both business and
Any other relevant introduction related to the National Credit Act Max (2)
credit agreements. e.g. charging exorbitant interest rates well above the maximum
consumers are treated equally.√√ Encourages r
The NCA regulates the interest rate to be charged by service providers to
(10)
3.3 Impact
process is transparent√ e.g. both businesses and customers know their
businesses√ against non-paying consumers.√
checks√ and receive up-to-date documentation from the consumer as proof that
positives/ advantages of the NCA for businesses
AND/OR
Creditors may not pester consumers’ √ to agree to a credit agreement
telephoni
Businesses are now struggling to survive √ because they depend on customers
of the act may lead to de
abide by all the provisions of the Act√ might result in a lawsuit. e.g. granting credit
to disadvantages of the NCA to businesses. Max (12)
3.4 Differences between the National Credit Act (NCA) and the Consumer
Protection Act (CPA)
3.5 Ways businesses can comply with the NCA
NCA CPA -Covers all types of credit transactions√ such as micro loans, home
finances, store credit etc.√ -Applies to every transaction involving buying and
selling√as well as the promotion and supply of goods and services √ -Protects
both lenders and borrowers from negligent lending practices√that result in overindebtedness for consumers√ -Protects consumers against unscrupulous
businesses √and against contracts that include unfair terms√ -Prevents unfair
credit marketing practice√ and responsible credit granting√ -Promotes and
advances the social √ and economic welfare of consumers in South Africa √
-Any other relevant answer related to NCA -Any other relevant answer related to
CPA Sub max (4)
ment to ensure the
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,
conduct a credit check with a registered credit bureau and may also consult the
businesses can comply with the NCA Max (8)
ant conclusion related to
NCA.
Max (2)
QUESTION 3 CREATIVE THINKING
Read the scenario below and answer the questions that follow.
Kim Sport Shops (KSS) is no longer profitable and it is experiencing low productivity. To
be competitive, they must address these problems proactively and creatively,
before they impact business operations negatively
As a consultant to KSS, you strongly believe that the challenges facing KSS can be
overcome. Report by justifying how this can be done. Include the following
aspects in support of your answer:
Identify possible barriers that could prevent KSS from solving these problems
(40)
identify/address barriers to avoid lengthy problem-solving processes, which
problem-solving/creative thinking.
(Any 2 x 1) (2)
Role of creative thinking in problem-
le
thinking skills are important when solving a problem/where there are various
the competitive bus
relevant answer related to the role of creative thinking in problem-solving. Max
(6)
Problem-solving steps Identify
prevent KSS from achieving its business goals and objectives.√√
fitability, e.g. employees
are not reaching predetermined targets/suppliers are supplying inferior quality
nge of possible
Investigate to make sure all aspects of the problem are fully understood.√√
kills
The best sol
If the solution is not appropriate, go back to defining the problem.√√
nise and resolving. Heading (2) Application (2) (Max) (20)
Barriers to problem-
-
rejection may result in good ideas or solutions not being
-solving.
(Max) (8)
-Business environment is dynamic and challenging. Business need to be
relevant conclusion related to creative thinking and problem-solving. (Any 1 x 2)
(2)
[40]
OTHER POSSIBLE ESSAY QUESTIONS FOR TERM ONE
LABOUR RELATIONS Act No. 66 of 1995 (LRA)
Purpose of the Act
employees, employer organisations and trade unions.
o promote and facilitate collective
bargaining.
workplace and social justice.
r join a trade union to
enable them to protect their interests as well as collective bargaining and workplace forums.
Employers Organisation.
stration of trade unions and employers’ organisation is easier in the LRA.
proper financial control.
ns, if negotiations between
union representative and employers are not successful.
on businesses
Positives/Advantages
iples of collective bargaining and puts structures in place with which
disputes in the workplace can be settled.
linary procedures.
vides protection for employers who
embark on lawful lock-outs.
unprotected strikes.
erly.
Negatives/Disadvantages
could be the core of their competitive advantage.
llowed.
trade unions may not promote the mandate of their members but embark on industrial action, which is
not und
employees take advantage of the right to strike√ without acknowledging their responsibilities.
all relevant information
If any employer or employee does not comply with the Act, they will be forced to enter into a dispute
nes) and/or ultimately imprisonment
sold
ees from joining trade
collective agreements/resolution mechanisms by either employer/employee
COMPENSATION FOR OCCUPATIONAL INJURIES AND DISEASES ACT (No. 61 of 1997) (COIDA)
they are injured in the perfor
Council for Compensation that must advise the Minister of Labour with respect to the provisions and
orm which
depending on the number of employees, amount of wages received and the level of risk they are
exposed to.
r compensation to employees and their families as a result of
disability to work caused by occupational injuries or diseases sustained in the workplace, or death of the
act diseases in the
workplace, or family members of employees who die as a result of injuries/ illnesses in the workplace,
that causes temporary disability
employee of the business and the injury must be caused as a result of an accident while the employee
was busy with the normal performance of duties.
employees of the South African Defence Force, South African Police Service, domestic servants, contract
than 20
employees must designate one or more health and safety representatives after consultation with
Employers must also establish health and safety committees in the workplace and regularly meet with
these committees to improve health and safety in the workplace.
IMPACT OF COIDA ON BUSINESSES
Advantages/Positives Disadvantages/Negatives
-Employees are protected because they can claim for medical expenses after an accident or illness
sustained in the workplace. -Employers are protected against claims from employees as a result of
injuries and illnesses sustained in the workplace because the employees will claim from the
compensation fund. -The fact that employers with more than 20 employees must appoint a health and
safety committee, and one or more health and safety representatives and regularly meets with them
will ensure that health and safety measures get regular attention. -Promote safety in the workplace. Employers are obliged to ensure safety in the workplace. -Responsibilities for both the employer and
employee, concerning safety and health in the workplace is defined in the Act. -Provide a framework for
acceptable practices for safety and health in the workplace.
-If the employer do not comply with prescribed safety and health measures as prescribed in the Act, the
employer may be held personally responsible for the payment of medical expenses of employees. Certain employees are excluded from the Act. - The contribution of employers to the Compensation
Fund, can be a great expense. -The process and procedures for the establishment of a claim can be time
consuming. -An employee can only claim from the fund if he/ she is more than three months absent
because of an injury. -For the first three months of absence, the employer must compensate the
employee’s basic pay.
e manner in which occupational injuries and
illnesses su
Employers must register with the Commissioner of the Compensation Fund as a contributor to the fund.
ach employee’s wages, must,
must be provided to the Commissioner. According to this information the Commissioner determines
7 days after the employee informed him/ her that he/ she will claim from the Fund, and the employer
must submit the claim within 12 months after the injury to the Fund.
workplace. May not
Compensation Fund for loss of income and medical expenses if the employee was injured in the
injury to
a maximum of two years and even longer in certain circumstances if the disease gained, is listed under
yee should notify the employer as soon as possible after
d
when the employee is three days or less absent because of an injury. Special paid leave or sick leave is
applicable.
Commissioner of the Compensation Fund appoints an inspector to ensure that businesses comply with
sioner of the
information on the workers employed, wages/ salaries paid to them.
t submit annual returns
Commissioner within seven days of receiving
-If businesses have a high accident record, they may be required to contribute more to the
accident within the specified time (within 7 days) or failing to do so altogether.
anything that will result in them being deprived of their rights provided in this Ac
monthly contributions or submit the employees’ claims from compensation would be seen to be
uncaring and thus, discriminating against hi
precautions to ensure the workplace is a safe and healthy environment.
CONSUMER PROTECTION Act No. 68 of 28 April 2009 (CPA)
Enables access to goods and services by low-
thens the culture of
consumer rights √and responsibilities.
disputes fairly through the Na
There is now only one law for protecting consumers and this makes it easier to enforce and apply the
keting
participate responsibly in the goods and ser
Consumers have a coolingthe positives of the CPA for consumers.
return goods when i
can be expensive
Penalties for non/repaired/money refunded if the fault occurs within six
Consumers have a right to receive contracts in simple and understandable language, therefore many
companies in protecting businesses against unforeseen claims and lawsuits.
to be replaced within six months at the request of the customer.
to be improved as the retailer must keep more detailed records of interactions with consumers and be
negatives of the CPA for consumers.
th the requirements of the law regarding
same qu
Comply with requirements regarding the display of information on labels/ packaging, e.g. smoking is
goods/services should benefit consumers, e.g. off
Penalties
service as specified by the authority.
-
s
Consumer rights
as the sample marketed
estimates.
-mails and tel
stop/lodge complaints about the sharing of their personal details.
Businesses may not promote pyramid schemes and
chainagreement.
ts
uct are displayed, consumers should pay the lower
Consumers may cancel purchases made through direct marketing within five
working days/cooling offdates/ingredients of the products should be disclosed.
Right to fair value/good quality
-bye
Right to fair, just an
unfair prices.
s should not limit access to goods and
marketing their products and services in different areas/places.
BROAD BASED BLACK ECONOMIC EMPOWERMENT ( Please remember,we now have five pillars instead
of seven.We need to learn the five pillars from our notes and assignment.)
The purpose of the Act
Through BBBEE the government strives to involve all businesses (profit and nonprofit or
BBBEE Act includes a wider group of previously disadvantaged people, such as black women, people
with disabilities, youth and people living in rural areas through socialeconomic strategies such as
management, ownership, employment equity, social responsibility, preferential procurement and
economy by encouraging more black management, promoting employment equality, encouraging skills
train
-Based Black Economic
Empowerment (BBBEE).
Impact of BBBEE on businesses
Posit
the country’s requirements
committed to social,
o the advantages/positives of BBBEE
corruption and nepotis
ted to the
disadvantages/negatives of BBBEE
suppliers
comply with BBBEE
ll be difficult for sectors (mining sector) to renew their
-compliance with BBBEE
Discrimin
IMPLICATION OF THE PILLARS OF BBBEE ON BUSINESSES
Micro Enterprises (EME's) with an ownership of 50% or more of black people in management are
promoted to l
ibutions to partnerships.
shares to black investors to become directors e.g. the business will score points in both management
to make appointments.
qualified employees regardless of
qualified expertise e
have Employment Equity Plan in place –
conflict between management and employees/colleagues.
Skills develop
from the increased pool of
learnerships/training.√
Pre
BEE compliant businesses are given preference
to use
Contribution can be monetary or nonNonowned SMME's may become too reliant on support from other businesses and are unable to take their
own initiatives.
s on the following critical areas,
e.g. environmental awareness, conservation, education, waste management, housing, poverty,
not support the enterprise i.e. doe
nity may
enterprise's economic efficiency, making it less competitive.
TERM 1: Miscellaneous topics
Differences between the National Skills Development and Human Resources Development Strategy
National Skills Development Strategy
rkplace to ensure on-going development of
businesses, community-training groups, NGOs and workerocational guidance and
the SETAs.
Human Resources Development Strategy
Develops short ter
Supports employment growth through innovation and research.
Roles of SETAs
ays out grants to companies complying with the
facilitator
learnerships and learning programmes by identifying suitable workplaces for practical work experience.
Discriminatory actions of various Acts
Labour Relations Act
Cancellation of employees' contracts by a new owner/employer when a business is sold/amalgamated
trade union representatives to
agreements/resolution mechanisms by either employer/employee.
Consumer Protection Act
will result in them being deprived of
contributions or submit the employees’ claims from compensation would be seen to be uncaring and
the workplace is a safe and healthy environment.
Broad Based Black Economic Empowerment
BBBEE Score card in any of the five pillars"
pay the monthly contributions or submit the employees’ claims for compensation would be seen to be
uncaring and discriminating against his/her worker.
Skill Development Act
for a learnership due to their work or age, gender, disability etc.
development unfairly.
National Credit Act
to discuss
wages and salaries with coconditions of work.
BCEA
Employment Equity Act
ployer will not employ a young woman because she will want to
hat are
not reliable, valid and can be applied fairly to all employees.
TOPIC: BUSINESS STRATEGIES
action to address an opportunity or to solve a problem.
INDUSTRIAL ANALYSIS TOOLS
ve strategies unless it knows what
types of challenges could be encountered in each of the THREE business environments, namely micro,
encounter the challenges:
SWOT analysis
business enterprise has a full control over the strength and weaknesses but cannot control opportunities
and threats.
PESTLE analysis
nalysis evaluates a business’s enterprise’s position in terms of the
following macro environmental factors; Political, Economic, Social, Technological, Legal and
al,
technological, legal and environmental problems- business enterprise cannot control these factors, since
they are from the macro environment however, they can develop strategies for challenges in these
factors.
Porter’s five forces
eloped by Michael Porter) is used to determine whether new
rprise’s
current position, as well as the strength of the position the business want to move to.
model applies to market related factors and bu
of new entries
TYPES OF STRATEGIES
Vertical integration strategies
types of vertical integration:
Forward integration
gain control over the direct distribution of t
Aimed
nt.
developing of new skills could be expensive.
Diversification strategies
it
hat are related to existing product, but will appeal to
Horizontal Diversification
may appeal to existing cu
business adds new products that are unrelated to existing products and that might appeal to a new
Defensive Strategies
Retrenchment
divisions. Liqu
usually sold for much less than the book value and the business loses allot of money. Revising the
Objectives include expected deadline and standards that need to be achiev
replaced. Issuing shares to ra
(dividends / value of shares) to the shareholders. Allocating resources dif
-allocate resources in
important and profitable operations.
goal to work towards
SUMMARY OF TYPES OF SRATEGIES Integration strategies Intensive strategies Diversification strategies
STRATEGY FORMULATION Strategies can be formulated by making use of the following steps/factors to
affect the business
-term goals that will enable the enterprise
to achieve its mission a
STRATEGY EVALUATION Definition
results so that actual performance can be compared with desired performan
evaluation is to determine whether the strategy that was implemented resolved the strategic issues at
hand.
Activities of strategy evaluation/steps in the control process
Determine the results/standards that must be achieved so that actual performance
detect any deviations from the expected performance. determine causes of these deviations and
deviations.
and measurable/realistic o
scanning√ may include a SWOT-/ PESTLE-/Porters Five Forces-
alternative
strategies√ by communicating it to all stakeholders/ organising the business's resources/motivating
Any other relevant answer related to how the strategic management process can be applied. OR
-
to
how the strategic management process can be applied.
MAX (10)
regular feedba
that actual performance can be compared to desired performance
to evaluation of strategies (10)