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CERTIFICATE IN BUSINESS MANAGEMENT

2016

Instructions to candidates

You are allowed three (3) hours to answer this question paper.

You are strongly advised to carefully read ALL the question requirements before attempting

the question.

Paper consists of SEVEN (7) questions.

Answer Question 1 – COMPULSORY.

Answer ANY THREE (3) other questions of your choice.

Answers for Question 1 should be written on the question paper itself.

Answers for other questions should be written in the answer book.

Formula sheet(s) will be provided to you as a separate hand-out.

Use of a non-programmable calculator is permitted.

Marks for each question are shown in [ ]

Write your candidate number, course name, full name and date in the spaces provided on the

front of the answer book.

Candidate No.

Candidate Name

Date

Page 2 of 12

Question 1 – Compulsory

Answer ALL questions (a-h)

Using the information in the following paragraphs answer the questions below:

a) Starbucks: Managing Internationally

Starbucks sells coffee, pasties, confectionery and coffee related accessories through over

18,000 retail stores – about 13,000 in the United States and 5,000 in more than 50 countries.

The company’s managers adapted the business to local tastes – such as offering curry puffs

and meat buns in Asia where people prefer to eat something while having coffee.

State three (3) elements of the external business environment and describe its impact on

Starbucks in overseas markets. [5 marks]

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b) Kellogg’s: Building a better workplace through motivation

Kellogg’s is the world’s leading producer of breakfast cereals. It is committed to creating a

'great place to work' by offering competitive salaries, providing a safe and healthy work

environment to prevent accidents and promoting team-sprit. Kellogg's positively recognises

and rewards staff achievements and provides employees with the opportunity to take on

challenging and stimulating responsibilities.

Describe the concept of motivation and Maslow’s hierarchy of needs theory for Kellogg’s. [5 marks]

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c) Facebook: Culture

Having great company culture is no longer just an option. Today’s workers consider it as much

as they consider salary and benefits. Facebook offers lots of food, open office space, on-site

laundry, a focus on teamwork and open communication, a competitive atmosphere that fosters

personal growth and learning and great benefits.

Briefly explain the meaning of “organisational culture” and its importance to an organisation

such as Facebook. [5 marks]

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d) Google: Corporate structure

Google’s success is linked to the effectiveness of its organisational structure in supporting

excellence in innovation. Google uses function as basis for grouping employees. For example,

the company has a Sales Operations team, an Engineering & Design Team, and a Product

Management Team, among others. In addition, the firm’s organisational structure has

considerable flatness.

Discuss two (2) advantages each of adopting a functional and flat organisational structure at

Google. [5 marks]

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e) John Keells Holdings – Recruitment and selection

John Keells Holdings employs over 13,000 individuals in 70 businesses. The company

practices a simple human resource policy: hire the very best people and develop them to the

utmost limits of their potential. John Keells careers offer a choice of career paths, depending

on the individual’s competence.

Briefly explain two recruitment methods and two selection methods for John Keells

[5 marks]

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f) Apple iPhone: Consumer buying process

Apple Inc. leads the world through its innovative capabilities. Its iPhone 6S is

a smartphone featuring improved hardware specifications, including 3D Touch, upgraded

rear-facing and front-facing cameras, and a new rose gold finish in addition to the space gray,

silver, and gold finishes found on the previous models, while maintaining an identical design.

Describe the steps of consumer buying process in the purchase of a product such as an

iPhone. [5 marks]

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g) Briefly explain the following.

I. Bank overdraft

II. Working Capital [5 marks]

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h) Chegg PLC is in the process of preparing the budgets for the third quarter of 2016.

The company sells a single product, QXY at a price of $25 per unit. The estimated sales

volume for the next 3 months are as follows.

July August September

5,500 6,000 7,000

The budgeted information are as follows.

July August September

Finished Goods Ending Inventory 500 500 500

Finished Goods Opening Inventory 1000 500 500

Prepare the following budgets.

i) Sales Budget (in Dollars)

ii) Production Budget (in Units) [5 marks]

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[Total 40 marks]

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Answer any THREE (3) questions of your choice.

Question 2

a) Explain four basic functions that constitute the management process. [10 marks]

b) Briefly explain the different roles (managerial roles) which need to be carried out by

the management [10 marks]

[Total 20 marks]

Question 3

You are expected to make a presentation on the title ‘Economic Systems and Business

Organisations” to a group of undergraduates. For this purpose, you are required to make

slides with bullet points. Your slides shall include the following:

a) The economic systems

(i) Different economic systems and their characteristics (3 slides)

(ii) Advantages and disadvantages of each economic system (2 slides)

[10 marks]

b) Different types of business organisations

(i) Different types of organisations and their characteristics (3 slides)

(ii) Merits and challenges of each type of business organisations (2 slides)

[10 marks]

[Total 20 marks]

Question 4

Using examples, describe the elements of the marketing mix. [20 marks]

Question 5

Discuss the nature (meaning) of leadership, two leadership theories and two leadership

styles. [20 marks]

Question 6

Prepare brief notes on the following.

a) Training and compensation [10 marks]

b) Corporate Social Responsibility [10 marks]

[Total 20 marks]

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Question 7

a) Briefly explain the following.

(i) Accrual Concept

(ii) Dual Aspect Concept

(iii) Shareholders’ Funds [6 marks]

b) The following information relates to Flam Ltd for the two years ended 31st December 2014

and 2015.

Flam Ltd

Income Statement for the year ended 31st December

Flam Ltd

Balance Sheet as at 31st December

2015 2014

$ ’000 $ ’000 $ ’000 $ ’000

Sales (all on credit) 11,750 9,450

Less: Cost of Sales

Opening Stocks 1800 1400

Purchases(all on credit) 2900 2,600

Less: Closing Stocks 1600 (6300) 1800 (5800)

Gross Profit 5,450 3,650

Less: Expenses (2100) (2,500)

Net Profit 3,350 1,150

2015 2014

$ ’000 $ ’000 $ ’000 $ ’000

ASSETS

NON-CURRENT ASSETS

Land & buildings 4,750 4,100

Motor-vehicles 1,250 6,000 1,100 5,200

CURRENT ASSETS

Stocks 1600 1800

Trade Debtors 975 1,100

Other Receivables 200 310

Bank 300 3,075 350 3,560

TOTAL ASSETS 9,075 8,760

Page 12 of 12

Required: Calculate the following accounting ratios for the two years 2015 and 2014 respectively.

(i) Gross Profit Ratio

(ii) Net Profit Ratio

(iii) Return On Capital Employed

(iv) Current Ratio

(v) Acid Test Ratio

(vi) Debtors Collection Period

(vii) Creditors Settlement Period

[14 marks]

[Total 20 marks]

~End of Paper~

EQUITY & LIABILITIES

EQUITY

Ordinary Share Capital 2,500 2,500

Retained Earnings 3,350 5,850 1,150 3,650

LIABILITIES

NON-CURRENT

LIABILITIES

10% Loans 1,900 1,900 1,600 1,600

CURRENT LIABILITIES

Trade Creditors 760 1,100

Wages Payable 95 350

Bank Overdraft 420

1,650

Electricity Payable 50 410

TOTAL LIABILITIES 1,325 3,510

TOTAL EQUITY &

LIABILITIES

9,075 8,760