GLOBAL ASSESSMENT CERTIFICATE

FACILITATOR GUIDE
Table of Contents
FACILITATOR INTRODUCTION ...................................................................................................................... I
ABOUT THE FACILITATOR GUIDE ................................................................................................................. I
MODULE OVERVIEW ................................................................................................................................... I
LEARNING OUTCOMES............................................................................................................................... II
UNIT DESCRIPTIONS................................................................................................................................. III
SUGGESTED DELIVERY SCHEDULE ........................................................................................................... IV
ASSESSMENT EVENTS ............................................................................................................................... V
TIPS FOR DELIVERING THIS MODULE ......................................................................................................... VI
BEFORE YOU BEGIN.................................................................................................................................. X
MATERIALS CHECKLIST ............................................................................................................................ XI
ICONS ....................................................................................................................................... XII
UNIT 1: INTRODUCTION TO BUSINESS: WHAT DO BUSINESSES DO? ...................................... 1
PART A UNIT INTRODUCTION........................................................................................................... 1
PART B THE ROLE OF A BUSINESS .................................................................................................. 3
PART C THE CLASSIFICATION OF A BUSINESS .................................................................................. 4
PART D THE PRIME FUNCTION AND MISSION STATEMENT ................................................................. 7
PART E UNIT REVIEW ..................................................................................................................... 8
UNIT 2: EXTERNAL SOURCES OF CHANGE: INTRODUCTORY ECONOMICS .......................... 11
PART A UNIT INTRODUCTION......................................................................................................... 11
PART B WHAT IS ECONOMICS? ..................................................................................................... 11
PART C TYPES OF ECONOMIES ..................................................................................................... 14
PART D TYPES OF MARKETS ......................................................................................................... 15
PART E ECONOMIC CYCLES .......................................................................................................... 16
PART F ECONOMIC PERFORMANCE INDICATORS ............................................................................ 20
PART G UNIT REVIEW ................................................................................................................... 22
UNIT 3: EXTERNAL AND INTERNAL SOURCES OF CHANGE ...................................................... 25
PART A UNIT INTRODUCTION......................................................................................................... 25
PART B ADDITIONAL EXTERNAL FACTORS INFLUENCING BUSINESS ................................................. 26
PART C INTERNAL FACTORS INFLUENCING BUSINESS ..................................................................... 33
PART D UNIT REVIEW ................................................................................................................... 35
UNIT 4: PLANNING ............................................................................................................................ 39
PART A UNIT INTRODUCTION......................................................................................................... 39
PART B BUSINESS PLANS ............................................................................................................. 40
PART C BUSINESS PLANNING: STRATEGIC PLANS AND ACTION PLANS ........................................... 41
PART D GOALS: AIMS AND OBJECTIVES ........................................................................................ 43
PART E BUSINESS PERFORMANCE INDICATORS ............................................................................. 46
PART F UNIT REVIEW ................................................................................................................... 48
UNIT 5: EFFECTIVE MANAGEMENT PRACTICE ........................................................................... 51
PART A UNIT INTRODUCTION......................................................................................................... 51
PART B DIFFERENT MANAGEMENT STYLES .................................................................................... 52
PART C ROLES OF A MANAGER ..................................................................................................... 55
PART D THE DECISION-MAKING PROCESS ..................................................................................... 57
PART E ETHICS ............................................................................................................................ 59
PART F UNIT REVIEW ................................................................................................................... 62
UNIT 6: SUPPORT SERVICES: EMPLOYMENT RELATIONS...................................................... 65
PART A UNIT INTRODUCTION......................................................................................................... 65
PART B HUMAN RESOURCE MANAGEMENT .................................................................................... 66
PART C LEGISLATION .................................................................................................................... 69
PART D INDUSTRIAL RELATIONS .................................................................................................... 70
PART E UNIT REVIEW ................................................................................................................... 72
UNIT 7: SUPPORT SERVICES: MARKETING ................................................................................ 75
PART A UNIT INTRODUCTION......................................................................................................... 75
PART B THE ROLE OF MARKETING ................................................................................................ 76
PART C STRATEGIC MARKETING ................................................................................................... 77
PART D MARKET RESEARCH FOR STRATEGIC DECISION MAKING .................................................... 79
PART E TACTICAL MARKETING - THE FOUR PS ............................................................................... 80
PART F MARKET SEGMENTATION .................................................................................................. 81
PART G UNIT REVIEW ................................................................................................................... 83
UNIT 8: SUPPORT SERVICES: ACCOUNTING AND FINANCIAL MANAGEMENT ...................... 87
PART A UNIT INTRODUCTION......................................................................................................... 87
PART B THE ROLE OF THE ACCOUNTING FUNCTION ....................................................................... 88
PART C THE ROLE OF FINANCIAL MANAGEMENT ............................................................................ 94
PART D MATHEMATICAL CONCEPTS AND TECHNIQUES ................................................................... 96
PART E REVIEW OF THE MODULE: CONCLUSION .......................................................................... 101
GLOSSARY........................................................................................................................................ 103
REFERENCES ................................................................................................................................... 111
Facilitator Guide GAC012: Business II: Business Studies
Introduction

Facilitator Introduction
About the Facilitator Guide
This Facilitator Guide contains guidelines for delivering this module, together with notes to the
teacher. It does not, however, claim to have included every point of view or idea on the given units.
Teachers are encouraged to explore the topics and to supplement and/or adapt the material provided
in the Student Manual with relevant material for the specific teaching situation or location.
You are, therefore, expected to utilise any of the following:
Newspapers and magazines - relevant articles on the economy, politics, local businesses, etc.
Internet sites that consolidate the information contained in the module. For example:
www.austrade.gov.au contains much information on the latest development in the business
world and has a lot of case studies that can be used as reference and practice in class
https://www.cia.gov/library/publications/the-world-factbook/index.html - the World
Factbook provides information on the history, people, government, economy, geography,
communications, transportation, military, and transnational issues for 266 countries
http://www.bbc.co.uk/schools/gcsebitesize/business/ - this BBC site revises most business
topics and includes games and videos
http://www.bized.co.uk/educators/16-19/business/index.htm - a resource for Business Studies
teachers, including lesson plan/s, presentations and activities
Television and videos - if available
Supplementary text books - if available

Module Overview

This module is an introductory course in Business Studies. It provides students with an understanding
of the fundamentals essential to a basic appreciation of how business works. The purpose of this

to business-related research and requires students to write a Business Studies research report. This
module is a pre-requisite for the business module in Level III, GAC022 Business III: International
Business Studies.

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Introduction

Learning Outcomes

On completion of this module, students should be able to demonstrate an understanding of the

theory, process and practice of contemporary business, and the functions and services that support it.

More specifically students will be able to:

1. Demonstrate an understanding of important business concepts

2. Identify, evaluate and apply effective management theories
3. Demonstrate and apply an understanding of employment relations
4. Demonstrate and apply an understanding of marketing strategies
5. Demonstrate an understanding of finance and accounting in its application to business
environments
6. Demonstrate investigative and analytical skills for a business research task
7. Communicate information using appropriate formats for business

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Introduction

Unit Descriptions
The units included in this course are:

Unit Unit Title Description

1 Introduction to Business: The Role of a Business
What Do Businesses Do? The Classification of a Business
The Prime Function and Mission Statement
2 External Sources of What is Economics?
Change: Introductory Types of Economies
Economics
Types of Markets
Economic Cycles
Economic Performance Indicators
3 External and Internal Additional External Factors Influencing Business
Sources of Change Internal Factors Influencing Business

4 Planning Business Plans

Business Planning: Strategic Plans and Action Plans
Goals: Aims and Objectives
Business Performance Indicators
5 Effective Management Different Management Styles
Practice Roles of a Manager
The Decision-Making Process
Ethics
6 Support Services: Human Resource Management
Employment Relations Legislation
Industrial Relations

7 Support Services: The Role of Marketing

Marketing Strategic Marketing
Marketing research for Strategic Decision Making
Tactical Marketing - the Four Ps
Market Segmentation
8 Support Services: The Role of the Accounting Function
Accounting and Financial The Role of Financial Management
Management
Mathematical Concepts and Techniques

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Introduction

Suggested Delivery Schedule

This guide contains eight units of study and a glossary of business terms. A suggested schedule for
delivering these eight units over twelve weeks is outlined below. Each unit in the Facilitator Guide
contains suggestions designed to help teachers devise appropriate activities for group work at various
points throughout the module.

Teachers should feel free to adapt activities to make them appropriate for their groups. These activities
would depend largely on the number of students and the time allocated for the lessons.

Week 1 Overview of module

Unit 1 A, B, C, D & E

Week 2 Unit 2 A, B, C & D

Week 3 Unit 2 E, F & G

Unit 3 A & B
Week 4 Unit 3 C & D
Unit 4 A, B & C
Business Terminology Logbook: first submission
Week 5 Unit 4 D, E & F
Unit 5 A, B & C
Week 6 Unit 5 D, E & F
Unit 6 A & B
Week 7 Unit 6 C, D & E
Assessment Event 1: In-class Test Multiple Choice and Short Answer Test
Week 8 Unit 7 A, B, C & D

Week 9 Unit 7 E, F & G

Assessment Event 2: In-class Test Short Essays Test
Week 10 Unit 8 A, B & C
Draft Assessment Event 3: Written Report
Week 11 Unit 8 D & E
Week 12 Module Review
Assessment Event 3: Project Written Report to be submitted
Assessment Event 3: Project Oral Presentation
Assessment Event 4: Business Terminology Logbook: second submission
Assessment Event 4: Participation

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Introduction

Assessment Events

Assessment Assessment Event Weighting

Number

1 In-class Test Multiple Choice and Short Answer Test 15%

- 30 questions
Week 7 or at the end of Unit 6
Two variants provided: same questions, different order

2 In-class test Short Essays Test - 3 questions 30%

Week 9 or at the end of Unit 7

3 Project: Written Report and Oral Presentation 45%

Week 12 or at the end of Unit 8
a) Written report minimum of 1,000 words (30%).
Submitted in both soft and hard copy.
b) Oral PowerPoint presentation followed by a question
and answer session (15%).

4 Course Work 10%

On-going
a) Active participation in class, including: evidence of
preparation for class, willingness to contribute
positively by working cooperatively with other class
members, asking questions, seeking clarification and
contributing to class discussions.

b) Accomplishment of assigned Independent Study

Tasks.

c) Completion of a Business Terminology Logbook

which is collected twice: in Week 4 or at the end of
Unit 4C, and again in Week 12 or at the end of Unit 8.

Details of the Assessment Events can be found in the GAC012 Assessment Folder. It is important
that you fully understand the requirements of the assessments prior to the commencement of classes.
Your attention is drawn to the following resources:
The GAC Referencing Guide: it will help you to prepare your students to write the reference list
and correctly use in-text citations
The GAC Academic Writing Manual: it will help you prepare your students to write their short
essays and research reports.
The GAC Study Skills Support Manual for Facilitators: you are advised to become familiar
with the content and to apply where appropriate to your classes.

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Tips for Delivering this Module

This module is designed to be adapted, within its broad framework, to the local teaching
environment.

Some topics included here may be sensitive in some teaching situations, so teachers should exercise
their discretion over the content used in class. For this reason, teachers may omit areas which could
be culturally or politically sensitive. If a teacher is in any doubt as to the suitability of material,
they should always check with their Director of Studies.

Assessment tasks are fixed but the actual content of the research will differ from centre to centre,
country to country and from region to region.

The Learner-Centred Approach

This module is designed to be learner-centred instruction, preparing students for independent study
in a university or higher education study environment. The material should be delivered with an
emphasis on communicative methodology. Students should be encouraged to work together, to form
groups for discussion and brainstorming, to work with a partner to encourage discussion, and to
check answers with a partner before class feedback is elicited by the teacher. Throughout this
module, every opportunity should be taken to maximise the amount of student interaction. This is
often indicated in the Student Manual as pair work, partner discussion or group tasks.

While the content focus is on business, the development of language skills is embedded in this
module and the tasks are designed to augment this with their focus on communication.

It is crucial that the language of instruction for this material is English, and that students interact in
English AT ALL TIMES during class. The aim should be to create an English-speaking
environment for students, to accelerate the development of their English language skills and to
provide them with an authentic experience of studying in English.

General Guidelines for the Preparation of Group Work

Resources: Consider the resources you will need for each class. Your tasks may include organising
written material, arranging to set up video equipment or liaising with guest speakers.

Reading: Allow yourself time to read through the material that the class will be discussing (and
perhaps read more widely) so that you will be well-informed and your contribution will be valuable.

Venue/equipment: Check the venue to ensure it is arranged appropriately. The furniture should be
suitable for the activities, and the room should be adequately lit, appropriately heated or cooled, and
ventilated. You will need to ensure that any equipment that is provided is also available when you
need it. This might include PowerPoint presentation equipment. Check to see that the equipment is
in working order and that you know how to use it.

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Introduction

Lesson Plans
Every lesson should have a plan. However the plan should be flexible enough to allow it to be

get side-tracked on irrelevant or unrelated issues. A lesson plan outlines who will do what, when,
how and for what purpose.

A lesson plan has three parts: a beginning, a body and an end. The beginning provides for the

the plan and learning objectives for the lesson. The middle (or body) of the lesson plan identifies all
the material to be covered. The end summarises the key points and links the material to the next
lesson. The lesson plan also provides for the indication of learning aids to be used at various points
through discussion.

Various Techniques to Enhance Learning

The key to achieving an effective learning environment is to get the students involved. The quality
and quantity of learning that takes place is directly proportional to the degree of learner
involvement.

Discussions
One of the most important activities for group work is discussion. All members of the group must be
encouraged to speak and must be given equal, uninterrupted time. The teacher should take careful
account of who speaks, and encourage the quieter members to speak also. In this regard, it is

respected, and will be treated with confidentiality. The teacher should keep track of the time allowed
for each speaker or topic, and listen carefully to the debate in order to keep it focused on the topic.
Teachers should keep a record of student participation in discussions as these are included in the
class participation mark.

Questions
One of the most tried and true ways of getting students involved is to open a discussion with a
question. Questions serve a variety of purposes. They arouse interest and help to hook people into
the subject matter. Questions stimulate individual thinking; they keep people on track and can be
used with good effect to determine if learning has taken place.

Avoid asking

fuller response. Asking too many closed questions may sound like an interrogation.

Think, pair, share is a good activity using questions:

Ask a question.
Ask students to think quietly, on their own, for possible answers. This is usually only thirty
seconds to one minute, unless the question is quite complicated (think).
Ask students to pair with a neighbour to discuss their thinking. The discussion usually lasts two
to three minutes (pair).
Ask students to share their responses with the whole class (share).

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Using Structured Experiences

Structured experiences get students involved in doing something other than sitting and listening.
They employ the concept of experiential learning: that is, students do whatever task is necessary to
learn.

There are many types of structured experiences, and these can range from simple to complex
depending on their purpose. Some are designed to introduce the class to one another; others are
designed to demonstrate concepts. The important thing to remember in a structured experience is
that learning is more important than the activity used to get it across.

Problem-solving
Problem-solving is facilitated by means of planned activities or discussion where the participants
discover there are many different perceptions of a problem, and many alternative solutions.

Role-plays
Role-plays are one of the most powerful learning techniques, because participants become immersed
in the learning. Roles may be highly structured or may allow people to act them out as they see fit.

Case Studies
Case studies require students to solve problems that are described in the cases. If the case studies are

thinking and responding.

There are other methods of working with groups, but those mentioned above are generally found to
be effective for small groups. You may already have some techniques that you prefer. Whatever
works for you and your class is the right technique.

Business Terminology Logbook

Assessment Event 4 requires the development of a Business Terminology Logbook, in which

students record unfamiliar subject-specific vocabulary. As a facilitator, it is important to accept that
; it is up to the student concerned and will depend on their
individual learning style. They may even use several different approaches depending on whether
they are trying to learn the new words or simply have a record of them to help jog their memory.

The Study Skills Support Manual for Facilitators outlines various strategies for acquiring new
vocabulary. The layout overleaf is taken from page 13 of that manual. Students may find it useful.

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Introduction

Word or Concept (in red) Translation (in green)

Meaning (in blue)

Here the student paraphrases/uses own words - NOT the dictionary definition

Context (in black - except for the word/concept which is written in red)

Research Requirements
Assessment Event 3 is a research report and students are expected to submit this according to normal
undergraduate university standards. Refer to the GAC Academic Writing Manual and carefully
explain the requirements to your students.

A note regarding the use of Wikipedia

Students often fall back on using Wikipedia as their main source of information. Although it is
accessible and easy to read and understand, students should be alerted to the fact that the content on
Wikipedia is not reliable and that anyone can make contributions.
appropriate Web sites for their
business research. Wikipedia is therefore NOT an acceptable academic source and should not
appear in Reference Lists. To assist, a list of Web sites relevant to Assessment Event 2 research
topics is available on iTAP in the Supplementary Resources for Teachers section.

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Introduction

Before You Begin

Students will each need a dictionary (English-

grammar reference books.

Recommended resources for students:

BusinessDictionary.com [online]. Available at: http://www.businessdictionary.com/ [Accessed
15 December 2014].
Collins COBUILD Advanced Learner's English Dictionary, 4thed, (2003), Harper Collins, London
th
Oxford Advanc ed, (2000) OUP, Oxford

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Materials Checklist

The checklist below details the materials you will need to facilitate this course.

Item

One copy of the Student Manual per student

Dictionaries

Reference Grammars (if possible)

Internet Access

Access to Overhead Projector

Access to Projector

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Introduction

Icons
The following icons will be used as a visual aid in the Facilitator Guide and Student Manual:

Icon Meaning

Information

Task

Hints and Cautions

Review

Independent Study

Language Focus

Written Assessment /
Assignment

Presentation

Assessment Event

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Facilitator Guide GAC012: Business II: Business Studies
Unit 1: Introduction to Business: What Do Businesses Do?

Unit 1: Introduction to Business: What Do Businesses Do?

Part A Unit Introduction

Part B The Role of a Business
Part C The Classification of a Business
Part D The Prime Function and Mission Statement
Part E Unit Review

Part A Unit Introduction

Overview This unit introduces the role of a business, the different types of
businesses, and their reason for existing.

In this unit students will learn to:

describe what a business is and does
explain the different types of businesses
distinguish between a prime function and a mission statement

Overview At this point, introduce all the Assessment Events for this module.
of
Assessment Inform students that they will be given a copy of the Assessment
Events
Criteria used for grading each of their assignments. Refer to the
1, 2, 3 & 4
GAC012 Assessment Folder for details.

Assessment In-class Test Multiple Choice and Short Answer Test - 15%
Event 1
(due Week 7 or at the end of Unit 6)
Inform students that this test comprises of 30 questions, based on the
content of Units 1 to 6. This test must be conducted in class under test
conditions.
The test paper can be found in the GAC012 Assessment Folder.

Assessment In-class test Short Essays Test - 30% (due Week 9 or at the end
Event 2 of Unit 7)
Short answers written under test conditions based on the topics in Units
1 to 7. Encourage students to revise the units each week and to make
additional notes in their workbooks. The test paper can be found in the
GAC012 Assessment Folder.

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Unit 1: Introduction to Business: What Do Businesses Do?

Assessment Project - Written Report and Oral Presentation - 45%

Event 3 (due Week 12 or at the end of Unit 8)
At the beginning of this module, give students a copy of Assessment
Event 2 provided in the GAC012 Assessment Folder. Students will
need a copy of the cover page, topics, list of useful Web sites and
Assessment Criteria for the written and oral components.

This project requires students to utilise the Internet to investigate a

particular topic.

Ask students to present their findings in a report in minimum of 1,000

words, to be submitted in hard and soft copy during the last week of
the module. They will also have to present their findings orally in class
using a PowerPoint presentation.

The correct business research report format is found in the Academic

Writing Manual Units 3 and 4. Stress to students that their reports
must be in their own words. Evidence of research undertaken,
including and beyond material in the Student Manual, must be
correctly referenced (both in-text citations and the Reference List)
according to the guidelines in the GAC Referencing Guide. Students
may require your assistance in referencing. Encourage students to
plan, draft, edit and redraft their reports.

Students who choose Assessment Event 2, Topic 1 are required to

elaborate two business plans. They will find a business plan template
in the Student Manual Appendix C. This template is a tool to help
those students organise their thoughts, and gather and analyse
information in a time-efficient and relevant manner. It is NOT the
format in which they should present their reports. Their reports should
be formatted according to the guidelines in the Academic Writing
Manual: Units 3 and 4.

Assessment Course Work - 10% (on-going)

Event 4
Active participation in class is required, including: evidence of
preparation for class, willingness to contribute positively by working
cooperatively with other class members, asking questions, seeking
clarification and contributing to class discussions. Let your students
know that you will be recording how active or passive they are in the
classroom. Assigned in-class and independent study tasks must be
completed, and a Business Terminology Logbook developed. The
Business Terminology Logbook will be collected twice: the first time
after Unit 4 Part C, and the second time in Week 12.

A minimum of 90% attendance is required to pass the module.

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Unit 1: Introduction to Business: What Do Businesses Do?

Part B The Role of a Business

Before Ask students:

You
Begin What is a business?
Why do businesses exist?
With which business structures are you familiar?

Write their responses on the board. After the lesson students may check
their predictions against what they learned in class.

Go through with students the basic definition of a business and its

functions. Also, discuss the different structures of a business and
differentiate between a public and private business.

Task 1.1 Organise the students into groups of two or three and ask them to make a
list of businesses in alphabetical order and the industry that they belong to.
It is a good idea to first start by making a list of different industries or
providing a list for them. This activity may require the use of the Internet so
that they can search for the proper industry. This may also be a good time to
introduce suitable, credible websites that can be used for research.

In this task, the objective is for the students to start thinking of businesses
and the different industries that they belong to. This way, students are able
to distinguish between the different products and/or services that businesses
offer.

The first example has been done for them.

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Unit 1: Introduction to Business: What Do Businesses Do?

Part C The Classification of a Business

Industry 1. Industry Sector
Sector
Go through Figure 1.2 - Industry classification by sector with the students.
Then think, pair, share : Ask students:
Can you think of example companies for each industry sector?

After an agreement is reached, students may want to write them in their

Student Manuals. If they are unfamiliar with these companies, you may look
up alternatives on the Internet.
Sample Answers

Primary Secondary Tertiary

De Beers Coca Cola Company HSBC

BHP Billiton Adidas amazon.com

Ferrero China Airlines

2. Legal Structure

Before your students begin this task, share the following generic information
about a company:
Whenever a company is formed, its owners are usually the shareholders.

The shareholder/s choose/s directors to manage the business.

The most senior director is usually called the Chief Executive Officer
(CEO).

The law distinguishes a company from its shareholders.

Companies may be private or public.

Task 1.2 The five main legal structures for businesses are listed in the first column of
the table in the Student Manual. Students work with a partner to complete
their description (column 2) and list advantages and disadvantages (column 3).
Check with the class.

Hint: If your students have very little prior knowledge about this topic, you
may choose to have them do a sorting activity with this information:
Provide students with the descriptions of each business legal structure.
For a few minutes, they brainstorm advantages and disadvantages in pairs.
and disadvantages: use
photocopies/Overhead Projector (OHP)/PowerPoint.
In pairs, they match this information with the correct legal structures.
When they have finished, discuss as a class

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Unit 1: Introduction to Business: What Do Businesses Do?

Structure Description Advantages and Disadvantages

Sole Trader An individual owns and runs the Easy to set up or close down
business Minimal start-up costs
The law does not distinguish between Quick decision making: the owner
the owner and the business - they are makes all the decisions
regarded as one Few government regulations
Usually found in trades, such as Not required to publish accounts
plumbers, electricians and
Business losses can be deducted from
hairdressers
other income
May have to work long hours
Owner has to provide all the financing
- limited investment potential
What do they do when they want a
vacation?
Possible lack of expertise
Partnership Two people or more, usually limited Relatively easy to start up
to a maximum of 20 Access to more capital
Set up by signing a contract Few government regulations
witnessed by lawyers More expertise available
Usually found in professional Risk is shared among partners
services like accountants, doctors,
Possible leadership problems - who is
stockbrokers and lawyers
the boss?
Partners share profits and are jointly
Possible relationship problems among
responsible for debts
partners
Agreement on goals and directions
may be difficult
Not required to publish accounts
Private Also known as a proprietary limited Shares are transferable, so ownership
Company company (Pty Ltd) can change
Buying and selling of shares subject Access to even more capital
to approval of the Board of Directors Tight government regulations
Usually family businesses that want Agreement on goals and directions
to keep control of the business within may be difficult
the family Not required to publish accounts
Public Their shares listed on the Stock Ability to raise large amounts of cash
Company Exchange very quickly
Usually multinational companies, Careful checking of the accounts
e.g. Vodafone, Unilever and Mobil Control of a business can be lost if
large quantities of shares are bought
by outside investors (this is called a
takeover bid)
Required to publish accounts

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Unit 1: Introduction to Business: What Do Businesses Do?

Franchise A type of business where a company Quick way of owning an established

with a successful product/service (the business
franchisor) sells another company Benefits of a well-known brand
(the franchisee) permission to sell Enjoys exclusive right to market a
that product/service in a given area. product/service in a specific location
The franchisor usually takes a Franchisor often supplies training
percentage of the profits
Franchisee is own boss
Usually found in the fast food sector
Sometimes franchisee required to buy
and other services, like ,
an agreed percentage of supplies from
Pak Mail, Cartridge World and
the franchisor
Coldwell Banker
No guarantee of success
Franchises may be held by sole
Loss of control
trader, a partnership, or a company
Relatively high start-up costs
Franchisor may fail to properly
promote its products

Ask students to provide a local example for each legal structure above.

3. Size

Businesses can be classified according to size. With the students, go through

the information in the Student Manual. Draw their attention to Figure 1.3
Business size standards by number of employees European Union (EU)
and the USA, and Figure 1.4: Business size standards by market
capitalisation USA.

What do they notice?

Task 1.3 Students are asked to research the number of employees within certain business
size standards for their country. They are asked:

What are the main size classifications?

Do they differ by sector?

Answers will vary.

If you are pressed for time, you may wish to research this yourself prior to the
lesson and simply present it to the students. They may add a column to Figure
1.3 Business size standards by number of employees European Union
(EU) and the USA in the Student Manual.

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Part D The Prime Function and Mission Statement

Explain to students the difference between a prime function and a mission
statement. Then read and discuss the Reebok mission statement in the Student
Manual.

Task 1.4 Ask students to research two well-known companies on the Internet and write
their mission statements. What do they say about the goals of those companies?
Ask them to complete the table in their manuals. Discuss.

Answers will vary.

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Part E Unit Review

Review What have I learned in Unit 1?

In Unit 1, students were introduced to what a business does, the different types
of businesses, and the difference between a prime function and a mission
statement. You may wish to assign the review section for homework. Ensure
you check the answers during the next class.

Language Student review this unit. They make a list of all new business terms in their
Focus Business Terminology Logbook. Ensure they are clear on the definitions and
the appropriate use of the terminology.
Remind students that the Business Terminology Logbook will be collected for
marking at the end of Unit 4 Part C.

Task 1.5 Unit 1 - Introduction to Business - Key Terms Crossword Puzzle

Note: If there are hyphens or apostrophes, they count as letters.

The following are made up of two or more words, with a blank in

between each word:
Across: 7, 12
Down: 2, 3, 5, 6, 8, 9

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Task 1.6 Summary

Answers
1. The size of a public company is measured by its market capitalisation.
2. A company owned by the government is called State-Owned Enterprise.
3. A business exists to sell goods and/or services.
4. A business organisation has goals, people and a structure.
5. aim.
6. In the private sector, the main aim is generally to make a profit for the
owner.
7. In the public sector, the main aim is generally to provide an essential
service to the community.
8. The objectives are the precise steps the business needs to take to achieve its
aims.
9. Business may be classified according to industry sector, legal structure
and size.
10. Mining is an example of a primary sector industry.
11. A chocolate company is an example of a secondary sector industry.
12. Airlines are an example of a tertiary sector industry.
13. Sometimes, business need to adapt their prime function to changed market
conditions.
14. The mission statement conveys the public image of the business.

Task 1.7 Short Answer Questions

Answers will vary.

Students choose two businesses that they find interesting. Encourage them to
choose businesses from two sectors which are both different in size. They
answer the questions in the Student Manual about each business they have
chosen, then share with a partner.

Answers will vary.

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Unit 2: External Sources of Change: Introductory Economics

Unit 2: External Sources of Change: Introductory Economics

Part A Unit Introduction

Part B What is Economics?
Part C Types of Economies
Part D Types of Markets
Part E Economic Cycles
Part F Economic Performance Indicators
Part G Unit Review

Part A Unit Introduction

Overview The business environment is comprised of all those factors which affect a

internal factors. Units 2 and 3 introduce students to the key external and
internal factors affecting the business environment.

In this unit students will learn to:

describe what an economy is
explain what an economic system is
define microeconomics and macroeconomics and understand the
relationship between them
demonstrate an understanding of the terms

Part B What is Economics?

Before Introduce the notion of the economy as the way in which a government allocates
You the resources of a country amongst its people.
Begin
Start by asking your students what the term resources means. Then ask them to
identify what resources that their country possesses. For example, the important
resource in South Korea is its people whereas in another country, such as
Australia, the important resources are minerals and land.
As a way of checking how much your students know about economics, ask them
to brainstorm the key economic terms that would be needed for a basic
discussion about the economy. Start the brainstorming session with the terms
mentioned in this unit of the Student Manual, for example: macroeconomics,
microeconomics, growth rate, inflation rate, unemployment rate and interest
rate. Then add consumers, producers, capital and debt. You could expand the

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knowledge.
Explain that the health of the economy reflects the collective health of the
Individual businesses are affected by economic changes.
For example, interest rates affect the availability of capital and inflation can
restrict consumers to purchase goods and services.
Then facilitate a short discussion on the current state of the economy in the
country in which the GAC is being delivered, or in your home country, and list
and explain the major indicators that allow economists to predict trends over the
short term. See Part E of this Unit for a list.
Distinguish between the national economy and the global economy, and arrive at
an understanding of how communications technology and multinational
corporations have combined to shrink distances and eradicate borders. Discuss
the impact that events such as September 11, 2001 and the Iraq War had on the
global economy.
in this section. The aim
of this section is to give students a brief introduction to the concept of the
economy.
Go through the section on external environment with the students. If time,
brainstorm examples for each of the main external factors influencing
business.
This unit introduces the basic concepts of economics, and the economic
principles which are important in the business world. Economic principles,
e
ways.
Micro- The twin concepts of microeconomics and macroeconomics are introduced.
and Students may need help in distinguishing between the two. The key distinction
Macro- here is that microeconomics looks at the behaviour of individuals whereas
economics
macroeconomics takes the -eye view and attempts to examine the impact
of those individuals at a national and international level. For example, a study of
the wages and benefits offered to employees of a business or company would be
considered microeconomics. On the other hand, looking at the laws or policies
that govern wages and benefits of an industry or country would be considered
om- -
approach to the study of economics.

Task 2.1 After reading about microeconomics and macroeconomics, ask students to
discuss the following questions in the Student Manual with a partner.

Answers should include some of the following:

Economics is the way in which a governments and businesses work to

distribute resources to its people.

Macroeconomics
of the economy as a whole, dealing with factors such as GDP,

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employment levels and monetary (e.g. interest rates, supply of money)

and fiscal (e.g. taxes, level of government spending) policy.
Microeconomics takes a close-up view of economics. It looks at the
economic behaviour of individual consumers and companies.

Businesses:
Provide necessary goods and services for the people. Goods are
physical products which satisfy needs and wants; they may be useful
or desirable. Services are products that are not goods (physical
things); you cannot touch them. Examples are: education, banking
and repairs.
Provide work opportunities for people so they can take advantage of
those services
Generate tax revenue for governments which allows them to provide
services for their citizens
Make profits for re-investment in the economy

Ask students to explain how a country knows whether its economy is working.
This can be understood from both a microeconomic and macroeconomic
perspective.
Then ask students why internationally there has been a significant increase in
the number of businesses offering services as opposed to selling goods. See if
you can draw out some of the following:

Changing lifestyle trends means people are looking for more services
that fulfil their needs

The Internet has made these services much more accessible

People have more disposable income

Part C discusses the different types of economies.

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Unit 2: External Sources of Change: Introductory Economics

Part C Types of Economies

Before Begin by asking students what type of economies there are. Make comparisons,
You for example, between starting a business in a western-style economy such as
Begin the UK and a state-controlled economy such as North Korea. What different
factors would have to be taken into consideration?

Make sure students understand that all economies must address the following
questions:

wants?
What goods and services should be produced and by whom?
How should the goods and services be distributed among the population?

Ask students for more examples based on their personal experience, from the
Internet or television reports.
Ask students to read Part C on the types of economies in their Student Manual.

Task 2.2 Students prepare notes to contribute to a whole class discussion of the
following questions:
What are the major differences between a free-market economy, a planned
economy and a mixed economy?
What type of economy does your country have? Provide evidence to support
your opinion.
First, ask students if this translates into a distinction between capitalism and
communism. What is their understanding of socialism?
Emphasise the nature of a mixed economy and illustrate with examples, such
as Australia.
To sharpen their understanding of this topic, break the class into three groups
and ask each group to list the advantages and disadvantages of each type of
economic system.
To start the discussion ask students to consider the following questions:
Why are planned (and some mixed) economies privatising some of their
government corporations? (to raise revenue for needed services)
Under what circumstances might a government intervene in a free market
system? (to protect consumers by preventing a monopoly)
Does competition always lead to improved product quality? (only if
suppliers believe that superior quality will increase sales. If competition
causes suppliers to compete on price, then the quality will mostly likely
decrease)

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Unit 2: External Sources of Change: Introductory Economics

As a way of evaluating their understanding, ask students to categorise the

countries in the table in the Student Manual in terms of the type of economy
they largely employ. They could either write their answers in their manuals, or
-
and ask students to move to their category and discuss
their choice.
Free-market Planned Mixed
UK Cuba Pakistan
Mexico Burma (Myanmar) France
Japan North Korea
China

Review Review the distinguishing features of the three main economic systems and
check that your students understand the following:

the extent of government control

the issue of government versus private ownership of natural resources or
property rights
advantages and disadvantages of each system

Part D Types of Markets

Before you This section focuses on the different types of markets that exist; perfect
Begin competition, oligopoly, and monopoly. It may be a good idea to go through
each type and then discuss some companies or industries that operate in each
type of market, in addition to the examples provided.
If there is time, ask students to brainstorm of conduct research to find
examples of each type of market.

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Part E Economic Cycles

Before discussing economic cycles, it is a good idea to review Gross
Domestic Product (GDP) with your students.

Task 2.3 Ask your students the following questions to find out what they know about
GDP:
What is Gross Domestic Product?

What does GDP include?

What is GDP used for?

Explain to students the concept of Gross Domestic Product as an indicator

of the economic well-being of a nation. Allow students time to make notes in
their Student Manual as you present this information. You may also wish to
display the definition and ensure there is general understanding before
proceeding.
GDP stands for Gross Domestic Product. It is an economic indicator,
expressed as a monetary value. GDP is the value of a country's overall
output of goods and services (typically during one fiscal year) at market
prices, excluding net income from abroad.
Source: Business Dictionary [online]. Available at:
http://www.businessdictionary.com/definition/gross-domestic-product-GDP.html [Accessed 15
December 2014]

Since it reflects the monetary worth of all goods and services produced within
a country for a specific time frame, GDP is the broadest indicator of a

To calculate GDP, use the following formula: C + G + I + NE

GDP = Consumption of goods and services (consumer spending) +
Government spending + Investments made by industry + Net Exports
(exports minus imports)
Adapted from: Calculating GDP (2014), MindTools.net [online]. Available at:
http://mindtools.net/GlobCourse/formula.shtml [Accessed 15 December 2014]

You can then deal with the next section.

Supply Read through the section on supply and demand and discretionary spending
and in the Student Manual.
Demand
Explain to the students that the demand curve, in its most basic form, slopes
downwards in a linear fashion, and that the supply curve will slope upwards.
You can illustrate with an example on the board showing that as the price
changes, the quantity demanded and supplied will change as well.

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Discretionary It might be a good idea to write both discretionary spending and essential
Spending spending on the board and ask the students to provide examples of activities or
purchases that would constitute each type of spending.

Task 2.4 Create a demand curve with the class. A demand curve is a graph showing
how much of a good/service is sold at different price levels.
You will need one can of a famous soft drink, one small carton of milk, a bag
of crisps, and a snack bar. The Class Demand Curve - Student Activity Sheet
is found in Appendix B of the Student Manual.
1. Set the products on your table, with a $1.50 price label in front of each
product. Explain to students that they have a maximum of $7.50 to
spend, and can buy any of the products, in any combination, and more
than one of each. They must spend all of their money.
2. Explain to students that now it is a new day and that they have finished all
the food and drinks they bought yesterday. Explain that a global shortage
of potatoes has pushed the price of the bag of crisps up to $2.00. Tell
them they have another $7.50 to spend. They must spend all of their
money.
3. Organise students into small groups. Ask them to work out the quantity

together the quantities demanded for each product at each price level.
4. Ask them to plot the market demand for the can of soft drink on the table
provided.
5. Then ask them to plot the market demand for the crisps.
Adapted from: Biz/ed [online]. Available at: http://www.bized.co.uk/educators/games/snickers/index.htm
[Accessed 15 December 2014]

Answers will vary.

Economic Economic conditions determine consumer-spending patterns and business

Cycles cycles. Be sure to point out that periods of growth or recession have different
impacts on the price of goods and services. Link this with government
measures to stimulate a flagging economy. The government may change its
monetary policy (e.g. drop interest rates) or its fiscal policy (e.g. reduce taxes).
Discuss how all of this affects consumer behaviour.

Facilitate a discussion where students are asked to examine the manner in

which economic factors affect businesses.

Ask students these questions:

How is inflation both good and bad?
Why does the government try to control it?
On a micro level, increased levels of spending by individuals may lead to
consumer debt. Where this involves the purchase of imported goods it can send

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the economy into deficit if spending on imports outweighs revenue from

exports.

On an international level, it needs to be pointed out that globalisation leads to

the creation of much larger markets but that this brings with it increased
competition and, therefore, the need for innovation and reduced costs if the
economy is to remain healthy.

Introduce the fact that all countries experience economic cycles (also known as
business cycles). Illustrate this on the board (or have an overhead/PowerPoint
slide) showing the four stages introducing the new terms:

Prosperity

Recession

Depression

Recovery

Discuss each of these stages as detailed in the Student Manual.

Ask students to look at Figure 2.1 The Economic Cycle in the Student
Manual. Lead a discussion about the definition of a recession. An economy is
said to be in recession
product across two consecutive three-month periods (Pride et al. 2002).

Review the progressive steps that lead from a recession into a depression and
ask the students how the government might move to stimulate the economy.
Try using a graph or a table to illustrate how the changing of either fiscal or
monetary policy can affect government spending, taxes, interest rates and, as a
result, stimulate the economy.

Ask students where a depression would go on Figure 2.1 (from about half way
down the contraction to the trough).

Conclude this section by asking students if they know of any other ways of
, apart from GDP. This sets the
stage for the next section in this unit.

Task 2.5 Ask students to work in pairs to brainstorm responses to the following
questions:
What are the signs indicating the various stages of the economic cycle?
How does each stage impact on business?
They should write their answers in the table provided.
Students should conduct research to find additional information from the
Internet. They compare their findings with those of other pairs.

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Unit 2: External Sources of Change: Introductory Economics

Suggested Answers

Cycle Signs Impact

Prosperity Full employment Demand for luxuries goes up
People have plenty of Prices rise because demand has increased
money to spend
Higher levels of debt (consumers and producers)
Inflation increases
People have plenty of money to spend
Businesses are making High discretionary spending
good profits
Government uses fiscal and monetary policy to
GDP is at a high level reduce inflation
High confidence in the Interest rates rise to curb spending
economy

Recession GDP has decreased for two People have less money to spend - less discretionary
consecutive three-month spending
periods.
Demand for goods and services falls
Fewer profits being made
Businesses begin to contract
Employment gets tighter

Depression High unemployment rates Little money is circulating in the economy

Low wages Government encourages spending e.g. on public
works to increase employment and to get money
GDP is low
circulating in the economy
No confidence in the
Government uses monetary policy to stimulate the
economy
economy: interest rates are decreased to encourage
consumers to borrow money

Recovery Employment levels Consumer confidence grows

improve, so do wages
People begin to spend again
More confidence in the
Businesses begin re-hiring workers
economy
Home sales improve

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Unit 2: External Sources of Change: Introductory Economics

Part F Economic Performance Indicators

Economic Go through the notes in the Student Manual, ensuring students understand
Performance the concept of economic performance indicators and how they work.
Indicators
Discuss where someone interested in the performance indicators of a country
would go to find details for each.

Task 2.6 Students go onto the Internet and find the unemployment rates per year in
their country for the last 10 years. They plot them on the graph provided.

Answers will vary.

Task 2.7 Students answer the questions.

1. What are the likely effects of high unemployment on costs and
demand?

Answers

High unemployment effects on costs High unemployment effects on

demand
Economic costs
GDP decreases: there are fewer The demand for jobs exceeds the supply
people contributing and output goes of jobs: employers can more easily find
down labour, there is downward pressure on
Government loses tax revenue: bigger wages.
budget deficit Downward pressure on wages weakens
Those who are employed have to pay for demand for goods and services, since
those who are unemployed: overall fall in consumers have lower purchasing power
living standards Some unemployed people default on
Government must spend more on welfare mortgage/rent payments: there is a lower
benefits: increased budget deficit demand for housing, depressed housing
Social costs market
Negative psychological effects Overall lower demand may fuel
Technical and social skills of unemployed protectionism: people may demand trade
people are eroded: loss of human capital barriers to protect local industries
Social deprivation leads to increased
crime, domestic violence, health
problems

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Unit 2: External Sources of Change: Introductory Economics

2. How would a falling unemployment rate affect the following businesses?

a) A company specialising in loans for purchasing cars.

As the unemployment rate falls, car loan companies enjoy increased

turnover and profit. Falling unemployment means that fewer people
default on car loans, reducing the financial risks for auto loan companies.
Also, employed people are more likely to buy cars or upgrade cars. The
demand for cars, and therefore car loans, increases.

b) A chain of coffee shops which pays workers only the minimum wage in
an industry known for its high staff turnover.

As unemployment falls, wages tend to increase. People will have more

options, they will move from lower to higher paying jobs. The coffee
shops will see an increased rate of staff turnover. All things being equal,
if they increase wages to hold onto staff, their profit margins may
decrease.

Task 2.8 If possible, allow time in class for students to do Task 2.8. Otherwise set it
for homework. Students may work in pairs. Ask them to choose two countries
and use the Internet, or the latest copy of a national newspaper, to source the
latest economic performance indicators for the two countries. They complete
the economic performance indicators table in the Student Manual.
Answers will vary.

Task 2.9 Still in pairs, students compare and contrast the state of the economy in the
two countries they researched. They present their findings to the class.
Encourage students to think about and to discuss why there are differences
amongst the countries. For example, does the economic situation in certain
countries have an impact on other economies?
Answers will vary.

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Unit 2: External Sources of Change: Introductory Economics

Part G Unit Review

Review What have I learned in Unit 2?

In Unit 2, students have learned what an economy is, and how different
economic systems operate. They have also examined the difference between
macroeconomics and microeconomics, studied the phases of the economic
cycle, and become familiar with key economic performance indicators.

You may wish to assign the review section for homework. Ensure you go
over the answers during the next lesson.

Language Students review this unit. They make a list of all new business terms in their
Focus Business Terminology Logbook. They ensure they are clear on the definitions
and the appropriate use of the terminology.
Remind students that their Business Terminology Logbooks will be collected
for marking at the end of Unit 4 Part C.
If you feel that students are struggling with the terminology, direct them to
the Glossary and/or do some vocabulary building activities where students
match definitions with the terms and practice using the vocabulary in an
appropriate context. Refer to the Study Skills Manual for Facilitators for
ideas for developing vocabulary.

Independent Advise students to begin preparing for Assessment Event 1: In-class Test
Study Multiple Choice and Short Answer Test (at the end of Unit 6) and
Assessment Event 2: In-class test Short Essays Test (at the end of Unit 7)
in their independent study time from now on.

Point out that they are expected to revise for both assessments. Their revision
should be based on material in their Student Manual, their notes, their
Business Terminology Logbook and discussions in class, as well as on their
independent study about the topic areas.

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Unit 2: External Sources of Change: Introductory Economics

Task 2.10 Unit 2 - Introductory Economics - Key Terms Crossword Puzzle

Note: If there are hyphens or apostrophes, they count as letters.

The following are made up of two or more words, with a blank in

between each word:

Across: 6, 9, 15
Down: 1, 2, 3, 4, 5, 7, 8, 9, 11

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Unit 2: External Sources of Change: Introductory Economics

Task 2.11 Summary

Answers

Economic conditions are an external influence on business. In any business,

are indicative of the health of the economy. The health of the economy
determines spending patterns by consumers, businesses and the government.
There are three major economic systems: free-market, planned and mixed.
Economies go through expansion and contraction cycles. There are four
stages to the economic cycle; these are prosperity, recession, depression and
recovery. In addition, economic performance indicators are used to
monitor the economy. The most important variables are interest rates,
inflation, and the possibility of a recession.

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Unit 3: External and Internal Sources of Change

Unit 3: External and Internal Sources of Change

Part A Unit Introduction

Part B Additional External Factors Influencing Business
Part C Internal Factors Influencing Business
Part D Unit Review

Part A Unit Introduction

Overview There are a number of external factors which make up the context within
which businesses must operate:

1. Economic
2. Political
3. Social
4. Technological
5. Ethical

In Unit 2, students studied how economic factors influence business. This

unit will introduce the remainder of the external factors influencing
business

In this unit students will learn to:

describe the different contexts that affect business today

explain the impact these contexts have on business dealings

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Unit 3: External and Internal Sources of Change

Part B Additional External Factors Influencing Business

Before Before going through Part B with your students, begin by brainstorming the
You different types of businesses with a view to drawing out common features,
Begin such as a need to make a profit, a need to produce something or to provide a
service, as well as a need to attract and maintain appropriately skilled
employees. Discuss how organisations are made up of an internal structure
with goals and people. Draw the diagram below to show how structure,
people and purpose overlap and are important for a business. Then lead into
the wider context of the environment in which the business will exist.

Figure 3.1 The Business Environment

Political Economic

Structure People

Goals

Technology Business
processes

Technological Social and

ethical

Brainstorm the external factors influencing business, including politics,

technology, globalisation, and social and ethical considerations.
Then encourage students to consider each of these as they are presented in
the Student Manual and do the tasks.

Factors 1. Economic - covered in Unit 2.

2. Political
Students need to understand that business cannot be removed from politics,
at the local, national and international levels. Political decisions impact on
how trade can be conducted at all levels. Political decisions also impact on
the state of the economy.

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Unit 3: External and Internal Sources of Change

Free Trade 2.1 Free Trade

Task 3.1 After reading the section on free trade in the Student Manual, students
conduct Internet research to answer the questions.
Suggested Answers

What is free trade? Free trade is the unrestricted buying and selling of goods and
services (and not labour or capital). There are no tariffs or other
barriers (such as quotas or lengthy legal processes).
What is trade liberalisation? When trade is liberalised, governments limit their intervention:
they neither try to stimulate nor limit transnational trade.
It is a politically sensitive topic, since trade affects the work of
many people.
What is the opposite of free Protectionism. The application of import tariffs.
trade?
What are some positive and Positive
negative impacts that free Openness, competition and innovation tend to promote growth
trade has on a country? and wealth
Gives rise to new industries and more jobs
Gives consumers access to many products that cannot be
produced locally
Gives producers access to bigger markets
May prolong the life cycle of certain products, maintaining
producer profits and therefore employment opportunities
Farmers in developing countries have an opportunity to
produce and sell more goods and make a better living
Encourages inter-cultural exchange, leading to greater
understanding among people of different backgrounds
Negative
Developed countries lose jobs as they are outsourced to
countries with cheaper labour
It is more profitable for developing countries to produce
export foods wanted by developed countries than it is to
produce local foods to feed their own populations
Developing countries fear a loss of their own traditions and
culture
Developing countries may have lax rules about environmental
protection, ns, resulting in
practices that would be unacceptable in developed countries

Provide examples from your Answers will vary.

own country.

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Unit 3: External and Internal Sources of Change

Globalisation 2.2 Globalisation

Make sure students understand the concept of globalisation and ask them to
consider the positive and negative impacts this can have on businesses, both
large and small.

Task 3.2 For this exercise, form groups of two or more and ask them to create a table
with columns and rows. On the left-hand side, ask the students to write the
questions and then in the rows to the right, the students can compare the
local company to the global company. Ask each group to present their ideas
to the class.

Answers will vary.

Workforce 3. Social
Demographics
3.1 Workforce Demographics - Aging population
The aging work force is simply one example of a particular demographic.
There are many others that could be discussed, including levels of education,
gender balance across industries or occupations, or ethnicity, etc. Some of
these may be of more relevance and interest to your students than others.
Task 3.3 Students discuss the questions in the Student Manual in pairs and report back
to the class. Make sure students can explain their ideas.
Time permitting, pairs could be asked to research one of these questions and
take turns to present more detailed responses to the class in the next lesson.
Answers will vary.

Gender 3.2 Gender-related Issues

Discrimination
The important thing here is for students to consider why gender emerged as
an issue and why it remains one. What other factors are relevant?

Task 3.4 Ask students to discuss the questions in the Student Manual in small groups
and report back to the class. They should be able to explain their ideas.

Once your students have discussed this topic and completed the task, you
could get them to research some case studies of successful women in their
chosen occupations. In particular, you could get them to research successful
women in the field that they hope to pursue. It in business.
Answers will vary.

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Unit 3: External and Internal Sources of Change

3.3 Behaviour Changes in Attitudes, Values, and Beliefs

Behaviour
Changes Get the students to start thinking of businesses and their need to keep abreast
with the changes occurring every day that can influence the operations of the
business.
Discuss with them some factors that can influence how the company might
decide to change its products or services, the company structure, or even its
marketing strategies.
Also, ask the students about certain trends or ow
people in their community acted and how businesses acted. Ask: What were
the end results? Are those products/services still available or popular today?
If so, have the products/services transformed in any way?

4. Technological Factors
Here students need to understand the importance of fast and efficient access
to information via the newer communications technologies for a business to
be competitive.
Ask students to describe how technology has changed the face of t
workplace by listing some examples, including:
e-mail
voice mail
networked computers
the Internet
mobile phones
smartphones
tablet computers
Try to draw out the view that fast, accurate, timely and relevant information
is instrumental in being more efficient and productive.
Ask for some examples of how businesses have become more efficient and
productive due to this technology.
Also provide more examples of recent technological advances which
businesses have incorporated.

Divide the class into small groups. Write the following workplace
technological issues on the board:
Data security - who gets access to what?
Information privacy - should employee e-mails and voice mails be
private?
Productivity - does technology improve or interrupt productivity and
work flow?
Sabotage and theft - how do you protect against hackers and computer
viruses?

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Ask each group to decide how they would deal with each issue. Facilitate a
class discussion.

E- 4.1 E-Commerce
Commerce
After reading the information in the Student Manual, find out from your
students how much they utilise e-commerce in their daily lives. How much
do they expect to use it once they have left school and are earning an income?

Make sure to discuss the four main types of online retail business models in
class. It might also benefit the students if they were to research these different
models themselves and find some companies that they are familiar with for
each type.

Task 3.5 Students discuss the questions in the Student Manual in pairs and report back
to the class.
They complete the table provided. Blank space is provided for students to add
their own, country-specific examples if they wish.
Time permitting, students could be asked to research these questions and
provide more detailed responses in the following lesson.

Sample Answers

E-commerce development Impact on business Example

Quick access to information via Quite simple to attract new amazon.com

search engines customers

No need to rent expensive store Wider reach of customers while strawberry.net

reducing costs

Shipping costs of goods bought Offset by the savings made in overstock.com

online are significant distribution costs

Some jobs will disappear - for Reduced costs for business,

example customer service can be improved quality of service for washing machines
handled electronically and consumers
customers can access databases and
manuals online

Much more openness - customers Increased transparency = increased Mobile / smart phone
more involved in product competition = lower prices, but also companies
development could infringe on privacy

Companies engage in trade with Quicker response time - no need to banks

other companies online be there in person

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Unit 3: External and Internal Sources of Change

4.2 Technology in the Future

Before reading this section, ask your students: What do you think will be the
next steps in technology and the world of business? Write their responses on
the board.
After reading, discuss whether their predictions were mentioned and whether
they would like to add to their list.

5. Ethical considerations
Ethics Before reading, ask students:
importance in the business world?
Do they believe that ethical business behaviour is on the rise? Ask them to
share any recent events that support their opinion.
Ask students to consider the Gallup Honesty and Ethics of Professions Annual
Survey in the Student Manual. What are the key trends? Do any of the trends
surprise them and why? What is the situation in their country?

CSR Corporate Social Responsibility (CSR)

increased social awareness.
Ask students whether they know of any businesses that have implemented CSR
plans and what those plans involve.

Task 3.6 Students research another company which has made ethical business practices
central to its strategy.

What does this company stand for?

How has it created and sustained a competitive advantage by adopting this

ethical stance?

They share their results with the class.

Task 3.7 Students should do this task in pairs and report back to the class. Time
permitting, students could be asked to research these questions and provide
more detailed responses later. This task provides you with an opportunity to
expand on the topics previously covered.

The information below is by no means comprehensive - use it as a starting

point for your own ideas. Remember, however, that this is an introductory
course and you cannot include everything here! Please beware of information
overload for your students.

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Sample Answers

Factors Issues Impact - Positive or negative?

Political Free trade Opens up country for more imports
Good for consumers, harder for local industries to
compete
Some local producers may not be able to compete with the
imports
Reduced tariff Reduces trade barriers between countries
protection Promotes globalisation

Protectionism Home country industries are protected by high tariffs, such

as import duties
Prices are generally higher for consumers as there is less
competition

employment rates

Technological E- commerce Less costly to set up a business and can be quicker to

make a profit
Easier to access the market and attract new consumers
Encourages innovation
Encourages competition as it is easier for consumers to make
price comparisons
Convenient for consumers, e.g. online banking
Enables less scrupulous businesses to take advantage of
naïve consumers

Smart office Communications are faster, more effective and more

communications efficient
technology People can work from home
Virtual teams - people can be geographically placed around
the world
No-one can escape from the world of work - mobile phones,
24 hour contact, etc.
Social Working People lead more productive lives
women Companies need to consider provision of child care facilities,
and more family-friendly policies
Aging More expensive workforce
population Governments may have to give incentives to keep older
people in the workforce (e.g. reduced taxation, etc.)
Diversity Companies need to develop policies that are inclusive (i.e.
respect for all individuals, etc.)
Cross-cultural training may be required.
Facilitates more creative thinking.

Ethical CSR On the one hand, businesses are implementing strategies

which address customer concerns (the environment, fair
trade, sustainability etc.)
On the other hand, certain businesses are associated with
totally unethical practices.

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Unit 3: External and Internal Sources of Change

Part C Internal Factors Influencing Business

Internal Draw the K-W-L chart below on the board or on an OHT/PowerPoint slide.
Business Ask students to work in pairs to complete it for the internal business
Environment environment.

They begin by writing what they Know about the topic. Then they list any
questions they might Want to Know. After they have finished reading
Part C, they will complete the Learned column.

Topic: The internal business environment

Know (K) Want to Know (W) Learned (L)

1. Management Leadership
Ask students how management in businesses today might be different
in terms of experience, accountability, responsibilities and roles,
compared to managers in the past.
Students should understand that too much reliance on a single person
may be devastating for a company so they must have a succession plan
in place. The more reliance a business has on a single person, the more
important it becomes to create a succession plan and plan ahead.

2. Manpower Diversity
Diversity within the workforce is considered an internal factor which impacts
on how organisations conduct their business.
Ask students to read this section in the Student Manual and explain issues as
they arise. Relate this topic to the country where you are teaching.

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When you have read the section about Qantas, ask the following question:
How do you think Qantas, which employs people who collectively speak over
130 languages, addresses the challenges of managing differing customs and
beliefs?
The purpose of this question is to generate discussion. What problems and
benefits can the students identify in such a diverse workforce? The problems
will include cultural differences as in clothes, understanding of time,
language and attitudes to women, religious beliefs, customs, etc. Qantas does
its best to communicate that it will accommodate these differences and needs.
Training is essential to establish cross-cultural norms of an airline service.
Qantas has had to reassess its own organisational culture to see if the shared
meaning and beliefs which are appropriate to a more homogenous workforce
support diverse views.
One of the benefits for Qantas in having such a multicultural workforce has
been to secure millions of dollars in catering contracts from other airlines, a
result based on the employees' understanding of the food preferences of
airline passengers from other cultures.
Source: Robbins et al. (2003, p.423)

Answer: Qantas encourages diversity and reinforces inclusiveness for the

benefit of all.

3. Machine - Technology
In this section, students consider how the traditional workplace is changing.
After reading the relevant section in the Student Manual, discuss the
questions in the Student Manual as a class.
Answers will vary.
4. Material Material Management System
A material management system can be thought of as a system that
organises the what, where, how and when a company receives or sends
out material (raw materials or finished products) from start to finish.
5. Money New Regulations
This sections deals with the importance of having an up-to-date money
handling system and also being up-to-date with any changes in
financial reporting rules. The business does not want to unexpectedly
pay taxes or fines that could have been avoided.

Task 3.8 To be done either in class or for homework. Students pick one task
from each of the two columns. They write their answers on a separate
sheet of paper.
Answers will vary. Provide feedback.

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Unit 3: External and Internal Sources of Change

Part D Unit Review

Review What have I learnt in Unit 3?

In Unit 3, students have been exposed to the different external and internal
factors which affect businesses today. They have also studied their impact
on business dealings.

You may wish to assign the review section for homework. Ensure you go
over the answers during the next class.

Language Students review this unit. They make a list of all new business terms in their
Focus Business Terminology Logbook. They ensure they are clear on the
definitions and the appropriate use of the terminology.
Remind students that their Business Terminology Logbooks will be collected
for marking at the end of Unit 4 Part C.

Assessment Assessment 1 Multiple Choice and Short Answer Test is due after Unit 6.
Reminder Advise students to now revise Units 1, 2 & 3.

Important Notice
Remind the students that assessment event 1 has two parts: part one
multiple choice and part two short answer questions.
The short answer questions require short answers and the students
must answer in the space provided on the question paper.
If the students are not familiar with this type of format, you should
provide examples before test day and explain how to answer these
types of questions.

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Unit 3: External and Internal Sources of Change

Task 3.9 Unit 3 - External and Internal Sources of Change - Key Terms
Crossword Puzzle
Note: If there are hyphens or apostrophes, they count as letters.

The following are made up of two or more words, with a blank in between each
word:
All EXCEPT for the following which are one word:
Across: 4, 10, 13, 18, 20
Down: 12, 16

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Unit 3: External and Internal Sources of Change

Task 3.10 Summary

Answers

There are a number of external and internal factors which make up the context
within which businesses must operate. The main external factors influencing
business are economic, political, social, technological and ethical.

Free trade and globalisation are examples of how government policies can
influence businesses.

Workforce demographics and gender-related issues are social influences on

business. Technological innovation opens up the possibility of change; change
in production methods, the product itself and skill requirements. Ethical
business behaviour offers a competitive edge, in particular through the use of
Corporate Social Responsibility strategies.

The internal environment is changing thanks to increased e-commerce and

advances in technology.

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Facilitator Guide GAC012: Business II: Business Studies
Unit 4: Planning

Unit 4: Planning

Part A Unit Introduction

Part B Business Plans
Part C Business Planning: Strategic Plans and Action Plans
Part D Goals: Aims and Objectives
Part E Business Performance Indicators
Part F Unit Review

Part A Unit Introduction

Overview This unit, will consider the role that business planning plays in creating a
successful business.
Planning should be a major occupation for managers. There are many good
reasons to plan. Firstly, it provides direction to managers and employees.
Secondly, it reduces uncertainty by encouraging managers to look ahead and
anticipate change. Finally, planning sets the standards by which performance
and results can be compared. Only by planning can managers know whether a
business is on course, and if not, can take corrective action.

In this unit students will learn to:

describe a range of business terms
recognise the significance and benefits of business planning
identify the key factors that contribute to a successful business
describe how key aspects of a business are measured

Assessment Business Terminology Logbooks are to be collected for

Reminder marking after Part C of this unit.

Assessment Assessment 1: In-class test Multiple Choice and Short Answer Test is due
Reminder after Unit 6. Revise Units 1, 2, and 3.

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Unit 4: Planning

Part B Business Plans

Business Business plans are formal documents setting out the overall goals of a
Plans business and the strategies to achieve them. Business plans give guidelines
on how the business will be run. They are also written to provide
information to investors.

A business plan includes:

Executive Summary: describes the prime function and mission

statement of the proposed product/service, and includes the aims and
short term objectives. Some information about expected returns to the
investor should be included here.

1. Marketing Plan:
potential competitors. This will include price setting, sales projections
and advertising strategies.

2. Operations Plan: outlines the business structure, and includes a

description of the business premises and required plant and
equipment. Regulatory issues will be considered.

3. Organisation Plan: details organisational structure, as well as job

descriptions and personnel specifications.

4. Financial Plan: identifies the resources needed to start up the

business and projected income, costs and cash flow for a set period of
time.

Appendices: contains supporting charts and tables.

Go over the each point listed in the business plan to make sure students have a
clear understanding of what type of content that would go into each heading.

See Appendix C in the Student Manual for a detailed business plan template.
Note: Students who choose Assessment Event 2, Topic 1: Setting up a Small
Business (Assessment Folder Version 9B) are required to elaborate a business
plan as part of their research report.

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Unit 4: Planning

Part C Business Planning: Strategic Plans and Action Plans

Business Introduce the importance of planning for personal and professional lives.
Planning Highlight that planning should be the primary occupation for managers. There
are many good reasons to plan. Brainstorm some ideas with the class.
Examples:
provides direction to managers and employees more focused approach
reduces uncertainty: encourages managers to look ahead and try to
anticipate change and so minimise waste of time/money and other resources
sets the standards by which performance and results can be compared: only
by planning can managers know whether a business is on course, or if not,
take corrective action

Strategic Offer the following definition of strategic plans:

plans
A strategic plan is a document used to communicate with the organisation the
organisations goals, the actions needed to achieve those goals and all of the
other critical elements developed during the planning exercise.
Reference: Strategic Planning Basics (n.d.), Balanced Scorecard Institute [online]. Available at:
http://balancedscorecard.org/Resources/Strategic-Planning-Basics [Accessed 15 December 2014]

A good strategic plan answers the following three questions:

1. Where are we now?
2. Where do we need to be?
3. How do we get there?

Ask the students to reflect on Figure 4.1 The Strategic Planning Model in
the Student Manual. After reading the following section - the learning
organisation - discuss as a class how the learning organisation relates to the
Strategic Planning Model.

SWOT Introduce SWOT: write it on the board and explain what the acronym stands
Analysis for. Refer to Figure 4.2 in the Student Manual. Explain that strengths and
weaknesses are generally internal, while opportunities and threats are generally
external factors influencing business. Take the example of a local café or
restaurant. Conduct a SWOT analysis.
Put your students into small groups. Give each group one of the following
three tasks:
1. Brainstorm the things to take into account if they were starting a small
the notion that those ideas
should include:
political considerations (e.g. tariffs, incentives)
consumer spending habits, such as essential spending and
discretionary spending
technology breakthroughs and increased productivity

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Unit 4: Planning

state of the national and global economies

workforce demographics
international terrorism, e.g. 11th September 2001

2. Provide students with a new business scenario for them to conduct a

SWOT analysis.
Example: Opening up a restaurant in the main street of your
city.
3. Ask students to discuss the pros and cons of business planning.

Allow sufficient time for students to discuss these tasks. If you have two
groups per task, ask the two groups to combine and compare their ideas.
Then ask each combined group to report back to the class.

Task 4.1 This task requires students to work in groups of three. They undertake a
SWOT analysis on a business, preferably one with which they are familiar or

Encourage students to speak to the business owner and/or employees.

However to do this effectively, they must plan what questions they are going
to ask. They need to brainstorm their SWOT analysis prior to meeting with
the business staff.

If necessary, assist your students in deciding which business they will study.
It does matter if their work is not entirely accurate. It is more important
that they are analysing their ideas to reach sound business decisions from a
SWOT analysis. Ask each small group to report back and discuss their results
in class.

Answers will vary.

Action Action Plans

Plans
Action plans detail the steps to be taken in putting strategies into effect. Go
through Figure 4.3 From Strategic Plan Down To Action Plan in the
Student Manual. Point out to students how the strategic plans
(mission/vision/aims) pave the way for the action plans
(objectives/initiatives), which in turn are monitored by evaluation plans
(measures/targets).

Task 4.2 Encourage students to make some notes on the questions in the Student
Manual. These will be reviewed in class:

Assessment Business Terminology Logbooks for marking now.

Reminder

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Unit 4: Planning

Part D Goals: Aims and Objectives

Aims As students consider the importance of objectives for planning, they will
and become aware how this part links together all the other parts in this unit.
Objectives
After students have read this section, review the checklist for objectives below:
Do they relate to and reflect the mission statement?
Are they stated in a specific and measurable way?
Are they simple to understand?
Are they action-oriented?
Will they motivate employees in the business?

Examples of effective and poor objectives to discuss:

Effective Objectives Poor Objectives
grow sales volume by 5% this fiscal year grow sales volume

become one of the top 5 fastest growing become the top book store in the country
book stores in the country

the IT department must reduce spending the IT department must increase profits
on software by 10% in the next quarter by 5% in the next quarter

to make the YOWEE smartphone the to make YOWEE the preferred

preferred brand among 18-25 year olds in smartphone brand
the U.S.A. by 2012

Also revisit the mission statements and discuss the underlying objectives, and
introduce the concept of how businesses know when or if they have attained
their objectives.
Review the SMART acronym, which students studied in GAC006. Spend time
writing the words on the board and working through examples.
Specific: (provide concrete facts and figures, for example: a 4% growth in
market share amongst teenagers over the current financial year)
Measurable: (quantify the objectives so results can be evaluated)
Achievable: (make them stretching but attainable)
Realistic: (ensure the business has the necessary resources)
Time-specific: (provide a realistic time frame for achieving the objectives)

Task 4.3 Students are required to write the correct aim against its description. They
check their answers with a partner.

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Unit 4: Planning

Answers

Aims Description
Profitability The amount of money an organisation makes as a percentage return on
invested capital or absolute $ profit.
Growth The position the organisation takes in regard to size, market share, profits,
etc.
Market share The percentage share of total sales in a market.

Corporate Social The position the organisation takes in regard to the environment, social
Responsibility justice, etc.
Employee welfare The position the organisation takes in regard to providing appropriate
conditions for workers.
Product quality and The position the organisation takes in regard to developing excellent
service products and services.
Research and The focus the organisation has on developing its products and processes.
development
Diversification The ability of the organisation to generate new products to meet a
changing market.
Efficiency The ability of the company to maximise outputs from inputs at the lowest
cost.
Financial stability The ability of the company to avoid big fluctuations in financial results.
Adapted from: Table 7.2 Robbins et al. (2003, p.258)

Task 4.4 Now students select 5 aims from Task 4.3 and rewrite them as SMART
objectives. Then they create some objectives for the business they studied in
Task 4.1.

For example:

Profitability: The company will reach and maintain 5% overall profitability on

all items produced in Factory A.

Answers will vary.

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Unit 4: Planning

Task 4.5 Students read the aims of the Coca Cola Company. They identify the type of
each of the three aims. Then they write an objective for each type of aim.

Sample Answers

Aim Aim Type Objective

the number one or second brand in every Market share to be market leader or number 2 in
category in which we compete all beverage categories in which
they are present

Product to be rated as an excellent supplier

quality and by at least 90% of their customers
service

establishing a winning and inclusive Employee to be rated in the top 10% of best
culture welfare companies to work for

Task 4.6 Students make some notes on the following question to be discussed in class:
Can you think of any disadvantages to setting objectives?

Answers will vary but could include:

time consuming to elaborate

danger of basing them on false data
may reduce flexibility
projections may be unrealistic

Students should be able to explain their ideas.

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Unit 4: Planning

Part E Business Performance Indicators

Business Go through this section with the students and ask them to relate it to a
Performance business or organisation they know. Ensure students understand why it is
Indicators important to be able to measure performance and how to identify what
needs to be measured. Understanding the difference between the two types
of performance indicators is also very important.

The easiest way to consider the difference between process and results is for
students to think about their own performance as students. What do they
want to achieve and how will they go about reaching their goals?

You might also want to facilitate a discussion with the students regarding
these performance indicators. Ask why it is important to know these
numbers and how a manager might use them.

Calculate the Profit Margin on the board using a random company or a

made-up company of your choice in addition to the example provided in the
text.

Task 4.7 This task requires students to put the theory into practice.
Write the on the whiteboard.
Answers will vary.

Task 4.8 Case study Apple Inc.

Students work in groups of three or four.

Apple brands and a global leader in the

technology industry. The company has many products and services including
information technology, consumer electronics, online services, and personal
computers. External and internal factors have recently prompted significant
changes in the market.

Using the Web links provided in the Student Manual, students research Apple
and complete the given tasks.
Answers will vary.
1. How has Apple performed over the last five years?
Include both results-oriented and process-oriented performance indicators in
your summary. The financial data is available on page 45 of 2013
annual report.
2. To which risks is Apple exposed? (annual report, starting on page 9)
Describe them and sort them into external and internal risks.
You will find these on page
1 of the compa
4. How could Apple evaluate its results versus its stated aims and
objectives? Use the information you have covered in this unit.

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Unit 4: Planning

Useful link:

http:// http://investor.apple.com/financials.cfm

Adapted from: Adapted from: Performance Monitoring, Biz/ed. [online]. Available at:
http://www.bized.co.uk/educators/16-19/business/strategy/lesson/performance.htm [Accessed 15
December 2014]

[Accessed 15 December 2014]

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Unit 4: Planning

Part F Unit Review

Review What have students learnt in Unit 4?

In Unit 4, students have been introduced to the role of business planning,

including setting objectives and measuring performance.

You may wish to assign the review section for homework. Ensure you go
over the answers during the next class.

Language Students review this unit. They make a list of all new business terms in
Focus their Business Terminology Logbook. They ensure they are clear on the
definitions and the appropriate use of the terminology.
Remind students that their Business Terminology Logbooks will be
collected for marking at the end of Unit 8.

Independent Remind students to prepare for Assessment Event 1 and 2: Multiple

Study Choice and Short Answer Test (at the end of Unit 6) and Short Essays
Test (at the end of Unit 7) in their independent study time from now on.

Point out that they are expected to revise for both assessments. Their
revision should be based on material from their Student Manual, their
notes, their Business Terminology Logbooks and discussions in class, as
well as on their independent study about the topic areas.

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Unit 4: Planning

Task 4.9 Unit 4 - Planning - Key Terms Crossword Puzzle

Note: If there are hyphens or apostrophes, they count as letters.

The following are made up of two or more words, with a blank in

between each word:
All EXCEPT for the following which are one word:
Across: 8, 9, 12, 16
Down: 4, 10, 15

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Unit 4: Planning

Task 4.10 Summary

Answers
In this unit, we looked at the role business planning plays in creating a successful
business. To attract investors to your company, you need to develop a formal
business plan. Once a business is established, planning should continue.
Business planning is usually described in time frames and by breadth.

In the learning organisation, the organisational competence is harnessed and

built to achieve a competitive advantage. A strategic plan answers three
questions: Where are we going? What is the environment? How do we get there?
The scanning of the environment is called a SWOT
analysis. Action plans detail the steps to be taken in putting the strategies into
effect. Objectives must be clearly stated and SMART. They should always relate
to the mission statement.

There are two types of performance indicators: results-oriented indicators and

process-oriented indicators. Ratios are an example of financial monitoring tools.
Management information systems are an example of non-financial monitoring
tools. In summary, the business plan needs to be continuously monitored and
adjusted.

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Facilitator Guide GAC012: Business II: Business Studies
Unit 5: Effective Management Practice

Unit 5: Effective Management Practice

Part A Unit Introduction

Part B Different Management Styles
Part C Roles of a Manager
Part D The Decision-Making Process
Part E Ethics
Part F Unit Review

Part A Unit Introduction

Overview This unit introduces the process of effective management is introduced. In
order to analyse what makes an effective manager, different management
styles and management roles in organisations will be studied. The
importance of decision making and the increasing role of ethics in
business are highlighted.

In this unit you will learn to:

identify and outline the process of effective management

compare different management styles

list the roles a manager may take within an organisational culture
including that of strategic manager, entrepreneur, leader and
planner
outline the decision making process
discuss the role of ethics in business within a management context

Assessment Assessment 1: In-class test Multiple Choice and Short Answer Test is
Reminder due after Unit 6.
Advise students to revise Units 1, 2, 3 and 4.

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Unit 5: Effective Management Practice

Part B Different Management Styles

Language Discuss the definition of management and all the words that contribute to it,
Focus such as control, influence, direct, etc.
Ask students whether they believe all leaders are managers, and all
managers are leaders. Discuss the difference between the wor
Point out that managers are usually concerned with short term
control and immediate results whilst leadership is more about influence.
Then list on the whiteboard the names of the four main areas of leadership
theory as listed in the Student Manual. Ask students to predict the focus of
each theory.

Trait Read and discuss the trait theories outlined in the Student Manual.
Theories

Task 5.1 Students work with a partner. They identify why these traits are useful for
leaders. Do they believe all leaders have them? They complete the table.
Sample Answers

Trait Why is this trait useful for leaders?

Drive People have to discover what drives them to succeed. Drive
is what keeps a leader pursuing goals even when confronted
with great difficulties.
Example of a leader with drive: Nelson Mandela, Mark
Zuckerberg.
Desire to lead Certain people thrive on taking a leading role, while others are
more comfortable following. Enthusiasm for leadership
motivates followers.
Example of an enthusiastic leader: Nicolas Sarkozy.

Honesty and integrity A dishonest leader will lose the support of his/her followers.
Remember the saying: Power corrupts and absolute power
corrupts absolutely.
Example of an honest leader: Mahatma Gandhi.
Self-confidence To inspire confidence in others, you have to have confidence in
yourself.
Example of a self-confident leader: General Patton.
Intelligence Intelligence is required for a leader to make the correct
decisions and command respect. Everyone can learn to be
smarter in the way they work.
Example of an intelligent leader: Bill Gates.

Job-relevant A knowledgeable and experienced leader inspires trust and

knowledge confidence among followers.
Example of a knowledgeable leader: Steve Jobs.
Reference: Robbins et al. (2003, p.594)

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Behavioural Remind students that they studied Behavioural Theories in GAC006. Ask
Theories them to explain and give examples to demonstrate the different styles:
Autocratic: controls, centralises power and does not like to delegate -
consider army or navy officers. In times of emergency, leaders may need to
make decisions without consultation.
Democratic: involves employees in decision-making, encourages
participation, delegates and shares power consider democratic countries
and their style of government.
Laissez-faire: are passive and are controlled more by the group.

Situational/ or
A situational approach to leadership style will cause different managers at the
Contingency same organisation to adapt their behaviour to lead depending on factors such
Theories as external relationships and acquisition of resources as well as structure and
culture of the group. A contingent approach will look at the situation in terms
ties of the followers, and the situation itself to
decide on the leadership style necessary.
Reference: Leadership Styles (n.d.), Changing Minds [online]. Available at:
http://changingminds.org/disciplines/leadership/styles/leadership_styles.htm [Accessed 15 December
2014]

Ask students to form groups of two or three as they conduct the discussion.
Ask students to identify situations that would either suit situational theories
or contingent theories to lead their organisation.

For example, from the situational theory perspective, a manager with many
different subordinates with various backgrounds and work experience will
have to decide how she will adapt her leadership style to accommodate each
person or group. In the case of contingent theory, a manager will take a much
broader approach and consider many different internal and external
constraints before deciding how to lead the group.

Transactional After reading this section in the Student Manual, discuss the differences
and between transactional and transformational leader-follower relationships.
Transforma-
tional Theories
Transactional leaders will focus on getting the job done instead of trying to
bond with co-workers. They do not care about creating any meaningful
relationships with other workers. Transformational leaders care about other
employees and working together in teams. These managers want to provide
opportunities for growth and personal development for employees.

Ask students: Are there any disadvantages to transformational leadership?

One disadvantage would be if a transformational leader tried to inspire their
employees with promotions and growth but an employee, such as a
salesperson, would rather be rewarded by benefits and bonuses.

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Task 5.2 In pairs, students think of three managers that they know or have read about.
They can choose famous business people, such as Jack Ma (founder of
Alibaba), or someone from their own country.
Are they transactional or transformational managers? Students should
provide examples to support their reasoning.

Students discuss the questions in the Student Manual and complete the table
provided. They should be prepared to discuss their findings with the class.

Answers will vary.

Task 5.3 Students read the following statement by Daniel Goleman, in Leadership That
Gets Results (Harvard Business Review). They say whether they
agree/disagree and why.
Leaders who have mastered four or more styles have the best climate and
business performance.
Source: Leadership Styles That Get Results (2003), The Institute for Management Leadership [online].
Available at: http://www.itstime.com/mar2003.htm [Accessed 15 December 2014]

Answers will vary.

Conclude this section with a discussion about the need for managers to be
aware of their own style.

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Part C Roles of a Manager

Before Before commencing this section, hold a discussion on the following:
You
Begin role?
style?
Style is the manner in which managers act, whilst roles are the functions
they perform.
Then ask students to work with a partner. They consider the two managers
in the table provided in the Student Manual. They answer:
How would you define their role?
How would you describe their style?
They write their answers in the table. Discuss their findings as a class.
Students then add a well-known local manager in the last row.
Answers will vary.

Interpersonal This section introduces

Relationships, interpersonal, information transfer and decision making. Before reading,
Information use an OHP/PowerPoint slide or the board to provide students with the 10
Transfer,
roles listed in the Student Manual. Ask them to sort the roles into the
Decision
Making appropriate Mintzberg category. Students read to check their predictions.

Hint You might find a DVD which follows the life of a manager, or you may
wish to discuss a typical day of a manager.

The following Web site offers a range of videos on various aspects of

business management, including leadership:

http://www.meettheboss.tv/ [Accessed 15 December 2014]

This activity leads into Task 5.4.

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Task 5.4 Brainstorm in the class. List what students think a manager might do in a
typical day. Note that different levels of managers will undertake different
roles and activities during the day.
complete the table.
Answers

Role Example Activities

Interpersonal
Figurehead Signs legal documents

Leader Gives speech at annual dinner

Chairs board meeting
Liaison Meets with partner companies

Information Transfer
Monitor Reads research on competition
Inspects factory premises and meets with workers
Disseminator Provides latest information (such as changes in strategic direction,
relocation of business, etc.) to employees

Spokesperson Is interviewed by radio and TV

Decision Making
Entrepreneur Seeks out new partnerships and innovative new products
Identifies new markets
Disturbance handler Meets with union representatives to try to prevent strike action

Resource allocator Approves budget expenditure

Approves recruitment of new staff

Negotiator Meets with government officials to gain approvals for business
expansion, etc.

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Part D The Decision-Making Process

Before Brainstorm all the types of decisions students make in a day. For example,
You what to wear, what to eat, whether to get up or stay in bed!
Begin
Then consider the decisions of a manager.
Discuss why some decisions are harder to make than others.

Decision In the Student Manual, read through Decision Making Overview. This
Making section introduces students to positive and negative decision makers. Ask
Overview students to work in pairs and list at least two people that you know who are
examples of positive decision makers and two examples of negative decision
makers. Then ask pairs to explain their examples to another pair.

Task 5.5 Students work with a partner. They sort the listed actions into two
categories: positive decision makers and negative decision makers. They
put them into the table provided.
Answers

Positive Decision Makers Negative Decision Makers

are decisive (quick to decide and take turn a simple situation into a complex one
action)
come up with solutions that are irrelevant
distinguish between problems and to the key issues
opportunities
are indecisive (struggle to make a
offer solutions that advance the goals decision)
simplify complicated situations to focus on the wrong problems
manageable parts

Now ask students to look back at the people they listed as examples. Do they want to change their
examples? Why or why not?

Decision This introduction explains that decision making should be a rational and
Making logical process.
Process
In GAC006, students studied the Seven Stages of Decision Making. Ask
them Briefly review the Seven Stages with a partner (Refer to GAC006
Student Manual, Unit 2, page 68)
Can you think of another strategic decision making tool you looked at in the
previous unit? (Answer: a SWOT analysis)

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Decision Decision trees tie in nicely with the study of probability, so you may want to
Trees collaborate with a mathematics colleague at this point.
Introduce the decision tree. Using available technology, work through the
steps needed to construct the example decision tree with the students. Go
through Figure 5.2 How a decision tree works in the Student Manual.
Then read together the background to the sample decision tree. Ask students
to think/pair/share the question: Which would be the most profitable option?
In this case, the most profitable option is to hold the school fair outdoors.

Task 5.6 Students work in groups. They think of a decision they need to make, such as
in which country to attend university.

They create a decision tree to help make a decision. Was it useful? Discuss
their findings in class.
If time permits, provide students with more practice in using a decision tree.
Provide business-related or study-related problems.
Answers will vary.

Task 5.7 Students work with a partner. They discuss the questions in the Student
Manual.
Answers will vary.
Then students read about two successful business leaders: Anand Mahindra
and Meg Whitman. Their profiles are taken from the 2008 Harvard Business
School Awards for Alumni Achievement.

For each of these two business leaders, students should answer the questions
in the Student Manual:

You could either:

Ask students to continue to work in pairs, where each pair reads both
articles
or,

Jigsaw the readings, where each pair reads about one business leader, they
then split up and reform pairs, one student having read about Mahindra, the
other about Whitman. They share their findings.

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Part E Ethics

Focus In Unit 3, students learnt how ethical considerations are a major external
influence on business. In fact, certain companies, like Method, have made
it their mission to conduct business in an ethical manner. In this unit,
students will examine how ethical considerations affect decision making.
As a class discuss the questions in the Student Manual, making sure that
students explain their ideas.

Corporate Remind students of the term: Corporate Social Responsibility.

Social
Responsibility Sample Definition:

A firm's sense of responsibility towards the community and environment

(both ecological and social) in which it operates, and draws resources
and sustenance from. Firms express this citizenship (1) through their
waste and pollution reduction processes, (2) by contributing educational
and social programs, and (3) by earning adequate returns on the
employed resources.
Source: Business Dictionary [online]. Available at:
http://www.businessdictionary.com/definition/corporate-social-responsibility.html [Accessed 15
December 2014]

Ask students to give examples of businesses that adhere to this concept.

They may draw on examples from movies or documentaries they have seen.
What are the management implications for businesses that implement CSR
plans?

Task 5.8 Students work in groups of three. They consider the ethical dilemmas.
Follow with a class discussion.

Answers will vary.

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Optional Ethical Considerations - What would you do?

Task
Ask students to work in pairs and consider the following ethical dilemmas.
They must justify their answers and argue logically why their answer is
better or more appropriate than the other options available.

Personal dilemma

1. Assisting friends in their academic study.

You are studying Economics at university. Your friend is late in doing

her assignment and has asked you to lend her your assignment so that she

Would you:

a. Give your assignment to your friend, knowing that she is going to

copy most of it?

b. Refuse to give her your assignment?

c. Give her your notes only?

d. Do something else?

What are the ethical considerations in this case?

Business dilemma

2. In the past, it was normal practice for businesses to give expensive gifts
to potential business partners or clients. Imagine you work for a company
that has a policy that gifts cannot be accepted but you find yourself in a
position where you have been presented with a gift from an important
overseas client. The gift is an expensive coffee maker. To refuse this gift
would be an insult to the client.

Would you:

a. Return the gift in private to your client and explain diplomatically

why you cannot accept it?

b. Keep the gift and not tell your boss?

c. Keep the gift but give it to your boss so that it can be displayed in the
Head Office?

d. Refuse the gift publicly when it is offered to you at the final meeting?

What are the ethical considerations in this case?

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Human Resource Management dilemma

3. Staff Selection

You are about to appoint a new staff member. All the applicants are well
qualified but they have different amounts of experience. These are the
candidates:

a. A young woman, recently married, who is highly qualified and with

relevant experience in another department of the company. This
would be a promotion within the company for her.

b. A young man, recently migrated from Spain and recently married,

who is highly qualified and with relevant experience. This would be a
new appointment to the company.

c. A middle-aged woman with an excellent history of performance and

demonstrated loyalty to previous company. This would be a new
appointment to the company.

d. An older man near retirement age with an excellent history of

performance and demonstrated loyalty to the company. This would be
a promotion within the company for him.

Who would you appoint? What are the ethical considerations in this
case?

Adapted from: Robbins et al. (2003, p.197)

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Part F Unit Review

Review
What have students learnt in Unit 5?

In Unit 5, students have studied the styles and roles of managers and have
considered some important issues in management such as decision making
and ethical behaviour.

You may wish to assign the review section for homework. Ensure you go
over the answers later.

Language Students review this unit. They make a list of all new business terms in
Focus their Business Terminology Logbook. They ensure they are clear on the
definitions and the appropriate use of the terminology.
Remind students that their Business Terminology Logbooks will be
collected for marking at the end of Unit 8.

Assessment Assessment Event 1: In-class test Multiple Choice and Short Answer
Reminder Test, is due in Week 7, or after Unit 6. Remind students to revise Units 1,
2, 3, 4 & 5.

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Task 5.9 Unit 5 - Effective Management Practice - Key Terms Crossword Puzzle

Note: If there are hyphens or apostrophes, they count as letters.

The following are made up of two or more words, with a blank in between each
word:
All EXCEPT for the following which are one word:
Across: 15, 20, 21
Down: 2, 3, 4, 6, 16

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Task 5.10 Summary

Answers
Not all managers are necessarily leaders. There are four main areas of
leadership theory: Trait, Behavioural, Situational/Contingency as well
as Transactional and Transformational theories.
Effective performance of the traditional manager functions (planning,
organising, leading, and controlling) leads to the achievement of the
three
categories: interpersonal, informational and decision making roles.
Decision making is a key success factor for managers. Negative decision
makers abort new ideas. Positive decision makers focus on the
opportunity impact. In GAC006, we studied a tool called the Seven
Stages of Decision Making. In this unit we learned about the decision
tree. Decision making is contingent upon constraints such as time and
available resources.
Ethics are the rules that define right and wrong behaviour. Blanchard and
Peale suggest that managers ask themselves three questions in order to
handle a situation ethically.

Independent After a revision of the main topics in this unit, remind students to revise for
Study Assessment Event 1.

Assessment Before proceeding to Unit 6, it is suggested that you spend time with your
Support students on how to write business reports, using the information in the
Materials Academic Writing Manual, Unit 3: Academic Research Reports Overview
and Unit 4: Business Research Reports.

Appendix A: Tips for Giving Oral Presentations provides advice for

preparing the oral component of the Project.

Going through this material will ensure that students are well prepared for
writing Assessment Event 3: Project - Written Report.

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Unit 6: Support Services: Employment Relations

Unit 6: Support Services: Employment Relations

Part A Unit Introduction

Part B Human Resource Management
Part C Legislation
Part D Industrial Relations
Part E Unit Review

Part A Unit Introduction

Overview The prime function of a business needs to be supported by a number of
business functions - or support services. There are four main types of
support services: employment relations, marketing, accounting and finance,
and administration and information.
This unit introduces the employment relations support services which
include human resource management, the law and industrial relations.
Students should bear in mind that specific details will vary from country to
country.

In this unit you will learn to:

identify and outline the functions of human resource management, the

law and industrial relations within business contexts

describe the human resource cycle in terms of acquisition,

development, training, maintenance and separation
demonstrate an understanding of the principles that underpin laws and
regulations in workplaces
explain and discuss the rights and responsibilities of employers and
employees in industrial relations

Assessment Remind students that Assessment Event 1: In-class test Multiple Choice
Event 1 and Short Answer Test will be conducted at the end of this unit.

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Part B Human Resource Management

Before Begin by explaining the definition of Human Resource Management (HRM)

You provided in the Student Manual.
Begin
Point out that all activities involved in human resource management may be
plotted on the Human Resource Cycle (See Figure 6.1 The Human
Resource Cycle). All human resource management activities will fall under
one of the following four categories of the human resource cycle:
acquisition
development
maintenance
separation

Ask students to brainstorm examples of activities which may fall into these
categories. Display these examples.

Read through the notes on these activities in the Student Manual.

Task 6.1 Students work with a partner. They look at the mind map. They sort the Human
Resource activities into the appropriate column of the table.

Answers

Acquisition Development Maintenance Separation

recruitment workplace culture absenteeism disciplinary
procedures

job descriptions performance appraisal motivation & incentives severance package

personnel professional retention exit interview

specifications development

employment contracts team building workplace health &

safety

remuneration package

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Task 6.2 Ask students to look in major metropolitan newspapers and job search sites on
the Internet and collect examples of HR jobs. They list the tasks and activities,
and then sort them into the appropriate phases of the Human Resource Cycle.
They answer the question in the Student Manual.
Discuss in class.

Task 6.3 As discussed in the Development section of the HR cycle, performance

appraisal systems are used to evaluate how well employees perform in their
jobs. There are many methods that management can use to evaluate
performance. The methods used vary according to the type of work the
employee does.

Students spend a few moments discussing the questions in the Student Manual
with a partner.

Key Key Result Areas (KRAs) are part of a performance appraisal system. They
Result are areas where employee performance may be audited (checked). KRAs are
Areas different from Key Performance Indicators (KPI) which are used to measure
the success or performance of a certain activity the business conducts in. For
example, a KRA increase
.

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Task 6.4 Brainstorm some examples of Key Result Areas with which the students can
identify. For example, improving their marks in assessments, getting a job,
improving their level of fitness or specific sports skills, or learning a musical
instrument.

The students list three KRAs which relate to them as students and then consider
how they could evaluate or measure their achievement. For example, if they
as one of the KRAs, then they might use something

ways to measure their success rate in the KRA.

Conduct a whole class discussion to finish this section.

Answers will vary.

Task 6.5 Students select one article to read about an HR issue in their country. In about
one page they summarise the people involved, key issues and solutions as well as
. They discuss the key issues of this article
with a partner.

Students go to the following HRM Web sites:

http://www.shrm.org/Pages/default.aspx

http://www.hrmguide.net

[Accessed 15 December 2014]

Answers will vary.

Task 6.6 Students present their information to the class using PowerPoint slides.
Remind students that they can check the strategies for PowerPoint presentations
in the GAC 005: Computing I Student Manual. This activity is good practice
for the business research report presentations.

Task 6.7 Students conduct Internet research to answer the questions in their Student
Manual.

Then ask them to discuss their answers with a partner.

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Part C Legislation
Before In this section, you need to reinforce the fact that laws govern the employer-
You employee relationship. It is important that the students realise how
Begin employment laws vary from country to country. They should be familiar with
, so encourage research at a local level.
Emphasise the fact that common law uses precedents to arrive at individual
decisions in the courts. However, contract law and statute law are created by
federal, state or local legislative acts, and that these will differ from country
to country.

Types Students read about the different types of legislation in the Student Manual,
of
Laws Note: If there is time, you could jigsaw Part C. Photocopy the information
and cut it into separate strips according to the law type. Organise students
into five groups, so that there is one group for each type of law: one group,
one information strip. Depending on the number of students, there may be
some doubling up.
Give the groups about five minutes to read about their allocated law type.
Ask students to takes notes. They may include any supplementary
information they may already know.

Ask students to make new groups, this time of five students each. Each
expert tells the
other students in the group about that law type. The remaining students take
notes. They should compare their notes with another group.

Employment On the board, summarise the issues that all employment laws should
Issues collectively address, including:

equal employment opportunity

occupational health and safety
taxation and pay
superannuation

leave entitlements
anti-discrimination
sexual harassment
dismissal

Ask students to rank these issues in terms of the perceived importance for an
employer and an employee. Make sure they can justify their decisions.

Task 6.8 Ask students time to choose three employment issues from the list above and
research the laws pertaining to these issues; for their country and for the USA
They write the date, the name and the key provisions of the laws in the table
provided. They must be prepared to discuss their findings in class.
Answers will vary.

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Part D Industrial Relations

Before Introduce the final section of this unit by de
You One definition refers to the relationship between employees in a
Begin business, and management who is acting on behalf of the owners. It is
therefore about understanding labour and management relations, and once
again differs from one country to another. You will need to point out, for
example, that unions are not as common in the USA as they are in the UK
or Australia.
For an overview of the industrial relations arena in Australia, encourage the
students to go to:
http://www.airc.gov.au [Accessed 15 December 2014]

Use the following kinds of questions to stimulate discussion of this

important aspect of business:
Why do certain
How do you explain the current downward trend in union membership?
What is the future of unions?

Before reading Part D:

It may be useful to introduce students to the Frayer Model. The Frayer
Model is an adaptation of a concept map and can help your students acquire
and remember new concepts.
Follow these steps:
Introduce the concept of industrial relations to students.
Employer-employee relationships covered specifically under
collective bargaining and industrial relation laws.

Source: Business Dictionary [online]. Available at:

http://www.businessdictionary.com/definition/industrial-relations.html [Accessed 15 December
2014]

Ask them to brainstorm examples and non-examples of industrial

relations issues. Write their contributions on the board / OHP /
PowerPoint slide.
Ask them to brainstorm the characteristics of industrial relations. Write
down their contributions.
As a class, sort them into essential and nonessential characteristics.
Next, present the blank Frayer Model template (on the next page).
Students write the information in the appropriate sections of the
organiser.
Once students have read Part D in the Student Manual they:

go back to the Frayer Model they generated

modify or add to it
discuss as a class which ideas they were able to confirm by reading

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Frayer Model Template

Essential characteristics Non-essential characteristics

Industrial relations
Examples Non-examples

Task 6.9 Students should think about and research the current trends in industrial
relations and unions, specifically in their country.
They use the questions in the Student Manual as a starting point.

Industrial Students should be aware that each company puts into place practices and
Relations procedures to create a healthy employer-employee relationship. This is called
Policy the Industrial Relations Policy of that company. A poorly planned or
executed industrial relations policy may lead to an industrial dispute. In the
case of an industrial dispute, there are several conflict resolution processes
available as shown in the Student Manual. Go through the industrial relations
policy information with the students.

Task 6.10 Students imagine they have been appointed the Human Resources Manager of
, an imaginary fast food company. They answer the questions
in the Student Manual.
First they work on their own, and then discuss their approach with a partner.
Finally, facilitate a class discussion.
Answers will vary.

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Part E Unit Review

Review What have I learnt in Unit 6?
In Unit 6, students have studied three important functions of employment
relations: human resource management, the law and industrial relations.

Ask them: Why do you think these three functions are so important?

Lead a revision session on the three important business support functions

covered in this unit. Ask students to brainstorm why they are so important.

You may wish to assign the review section for homework. Ensure you go
over the answers during the next class.

Language Students review this unit. They make a list of all new business terms in their
Focus Business Terminology Logbook. They ensure they are clear on the
definitions and appropriate use of the terminology.

Remind students that their Business Terminology Logbooks will be

collected for marking at the end of Unit 8.

Assessment Assessment Event 3: In-class Test Multiple Choice and Short Answer
Event 1 Test will be taken at the end of this unit.

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Task Unit 6 - Support Services: Human Resource Management, Law and

6.11 Industrial Relations - Key Terms Crossword Puzzle

Note: If there are hyphens or apostrophes, they count as letters.

The following are made up of two or more words, with a blank in between each
word:
All EXCEPT for the following which are one word:
Across: 2
Down: 6, 10, 13

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Task 6.12 Summary

Answers
Human Resource Management is about managing the employer-employee
relationship. The human resource cycle includes all those activities involved
in the acquisition, development, maintenance and separation of the human
resources of a company.

Business managers need to consider the laws of the land governing the
employer-employee relationships. Statute law is law that is passed in
parliament. Common law is developed by judges and based on precedents.
Civil law is the second major legal system in the world. A rigid code of rules is
observed, and an expert judge decides cases without the help of a jury.
Certain Islamic countries are governed by Sharia Law. Contract law is an
agreement between two or more parties and is enforceable in the courts. It is
important to remember that legislation is different in every country.

Industrial relations refers to the relationship between employers and

industrial relations
policy, absenteeism, staff turnover, product/service quality and frequency of
disputes
ineffective, industrial disputes may arise. Conflict resolution processes
include negotiation, arbitration and conciliation.

Assessment This should be administered now.

Event 1

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Unit 7: Support Services: Marketing

Unit 7: Support Services: Marketing

Part A Unit Introduction

Part B The Role of Marketing
Part C Strategic Marketing
Part D Marketing Research for Strategic Decision Making
Part E Tactical Marketing - the Four Ps
Part F Market Segmentation
Part G Unit Review

Part A Unit Introduction

Overview This unit introduces students to the concept of marketing as a key business
function. It describes the role that marketing plays in creating and building
businesses and explains key marketing strategies utilised by businesses to
maintain their competitive edge.

In this unit you will learn to:

demonstrate an understanding of marketing strategies

explain the role of marketing in a business cycle

list and describe the importance of the marketing mix - Product,
Price, Promotion and Place
apply the steps required to define a target market
discuss the interaction between consumers, competition and
marketing strategies

Assessment Remind students that Assessment 2: In-class test Short Essays Test,
Reminder will be administered at the end of this unit. It covers the information
contained in Units 1-7.
Hand out the Instructions to Students found in the Assessment Folder.
Students should be revising Units 1- 6.

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Part B The Role of Marketing

Before Brainstorm what students understand about the word marketing.
You
Begin Discuss with students why marketing is important and why it is a mistake for
businesses to cut marketing expenses when the economy is tight.

Marketing Go through the information about the role of marketing with students.
Ensure students understand the definition of marketing provided in the
Student Manual.
Emphasise that marketing is not purely about selling or advertising.

Check students comprehension of the key ideas contained in the section by

asking questions such as:
What is the difference between the marketing of a product and the selling of
a product?
What is the difference between strategic and tactical marketing?

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Part C Strategic Marketing

Strategic Strategic marketing is concerned with major long term decisions that
Marketing affect the whole organisation.

Before Tell students that strategic marketing deals mainly with achieving four
You types of objectives:
Begin market penetration
market development
product development
diversification
Draw a blank version (on the whiteboard/OHP) of Figure 7.1 Strategic
Marketing Objectives Elaborated in the Student Manual. Write in the
four types of objectives.

Market Penetration Product Development

Strategic Marketing Objectives

Market Development Diversification

As a class, brainstorm what each objective entails and possible ways of

achieving them. Note student responses in the appropriate section. Then
read the information provided in Figure 7.1 in the Student Manual.
Compare the class findings with the information provided. Ask students to
write in any additional pertinent information they may have come up with.

Product The product life cycle is the term for the period over which the
Life product/service meets consumer needs.
Cycle With students, go through the product life cycle diagram and the
corresponding information in Figure 7.2 in the Student Manual.

Competition Make sure students understand the notion of competition, and are aware
that it can bring both benefits and disadvantages.
Also discuss the concepts of monopoly, oligopoly and perfect competition.
Ask students to give examples of these concepts (either real or from
TV/movies).

Task 7.1 Students think of a product with a short life cycle, i.e. a product that was
only popular for a few months or a year at most. Examples include certain
software, electronic goods, or even Web sites. They think about the
question in the Student Manual.
They make notes for discussion in class.
Answers will vary.

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Task 7.2 Students examine the examples of products that are currently at different
stages of the product life cycle. They sort them into the appropriate column.
Answers may vary depending on the country.
Suggested Answers

Introduction Growth Maturity Decline

4th generation mobile portable DVD players fax machines typewriters
phones

iris-based ID cards e-mail credit cards reflex cameras

e-conferencing flat screen TVs personal computers ballpoint pens

electric cars organic food products VHS video recorders

Task 7.3 Students choose one of the products in the Introduction stage. They:
Outline a marketing strategy for this product

Identify the target market

Elaborate a marketing mix

If you have enough time, you could also encourage students to present
their results to the rest of the class, using PowerPoint if time allows. This
would be good practice for their project presentation in the last week of
the module.

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Unit 7: Support Services: Marketing

Part D Market Research for Strategic Decision Making

Market Introduce students to the concept of market research. Ask them:

Research
How can companies use information gathered from market research?

Brainstorm as a class, and then read the information in the Student Manual.

Task 7.4 Students work with a partner. They choose a product from an Internet
advertisement, a TV commercial or print advertisement. They answer the
questions in the Student Manual.

Then they imagine that they want to adopt a new marketing strategy for this
product. They:

Write 8-10 questions you might ask to identify a new strategy for this
product
Interview at least 10 peers (people of their age group)
Analyse their findings and report back to the class

If you have enough time, ask students to develop a new marketing strategy
and present this to the class using PowerPoint. This would be good practice
for their project presentation due in the last week of the module.

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Part E Tactical Marketing - the Four Ps

Marketing Go through this section with the students.
Mix

Task 7.5 As they read about creating the right marketing mix in the next section of
the Student Manual, ask students to summarise the information on a Spider
Map.

Spider Map
The longer lines represent the main ideas, the shorter lines the supporting
details. In this case, the longer lines/main ideas are the 4Ps. On the shorter
lines you will summarise the information about each of the 4Ps. It is
suggested you do product with students, and then ask them to work in pairs
to complete the rest.

The Marketing Mix Summary Spider Map - Sample

Unique design

Characteristics

Number of goods

Quality vs Quantity

Task 7.6 As a class, discuss a possible marketing strategy for a well-known product, for
example, a breakfast cereal or an MP3. List the 4Ps.

Then students think of another product that they know. They list its 4Ps in their
logbook.

Answers will vary.

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Part F Market Segmentation

Market Link this topic with the previous one. Emphasise its importance, namely
Segmentation that segmenting the market allows companies to tailor their marketing
mixes to consumer needs/wants.
The best way to present this information is through an explanation with
examples provided. You could draw this market segmentation
illustration on the board/OHT/PowerPoint slide.

target
market

mass
market

niche
market

Task 7.7 Students complete the table below. For each segmentation factor they
provide the segmentation type and an example of a matching product.

Sample Answers

Segmentation factor Segmentation type Product example

alpine climate geographic ski equipment

coffee drinkers psychographic espresso coffee

coastal location geographic kayak

vegetarians psychographic dried chickpeas

males aged 18-24 demographic deodorant

females demographic cosmetics

Gen Y (people born between psychographic social networking Web site

1975 and 2000)

people over 65 demographic cruise on a ship

People who consume over behavioural Coca Cola

1L a day of soft drinks

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Positioning positioning is its position in the minds of consumers relative to

competing brands. The positioning is developed after the market for a
product has been segmented, and its target market identified.

Task 7.8 Students identify the difference in positioning between two video game
consoles. They consider the features for each that they think would be most
important to customers. They complete the table in the Student Manual.
Answers will vary.

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Part G Unit Review

Review What have I learnt in Unit 7?

In Unit 7, students have studied the role and importance of marketing in

the business context. Marketing is not just about advertising but defines
what a company is about and identifies its products and services. Students
have learnt the importance of having a market strategy in order to target
buyers and/or users and so be able to distinguish the business from its
competitors.

Product, price, place and promotion are essential ingredients of the

marketing mix and all must be considered to ensure the right marketing
tactics are employed to build business success.

You may wish to assign the review section for homework. Ensure you go
over the answers later.

Language Students review this unit. They make a list of all new business terms in
Focus their Business Terminology Logbook. They ensure they are clear on the
definitions and appropriate use of the terminology.

Remind students that their Business Terminology Logbooks will be

collected for marking at the end of Unit 8.

Independent Advise students that they should have included knowledge acquired
Study from this unit in their Projects (due at the end of Unit 8).

Assessment Assessment Event 2: In-class test Short Essays Test, will be

Reminder administered at the end of this unit.

It covers the information contained in Units 1-7.

Advise your students that they should be revising Units 1-7.

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Unit 7: Support Services: Marketing

Task 7.9 Unit 7 - Support Services: Marketing - Key Terms Crossword

Puzzle
Note: If there are hyphens or apostrophes, they count as letters.
The following are made up of two or more words, with a blank in between
each word:
All EXCEPT for the following which are one word:
Down: 5 and 11

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Task 7.10 Summary

Answers
Marketing is the process by which businesses attempt to connect the
needs and wants of their consumers with their own need to achieve their
stated goals. Strategic marketing is concerned with major, long term
decisions that affect the whole organisation. Marketing strategies target
four objectives: market penetration, market development, product
development and diversification.

The product life cycle is the period over which a product appeals to
customers. An example of a product with a short life cycle is a mobile
phone. An example of a product that is in decline is reflex cameras.

Market research is a tactical tool for collecting consumer data. The

purpose of market research is to help companies make better business
decisions. Data can be from either primary or secondary sources. A
profit and loss statement is an example of a secondary source.

The marketing mix covers the product, price, promotion and place of a
brand. How these aspects are managed determines the effectiveness of a
marketing strategy.

Market segmentation is when a business divides its potential market into

different parts. The target market is the particular segment on which a
marketing campaign is focused. A mass market product is produced in
large quantities in a standard form.

Market positioning is the strategy whereby a company aims to create a

distinctive perception of the brand in the minds of consumers. It is very
difficult to reposition a brand without destroying its credibility.

Assessment Revise the details and times of their project presentations and
Event 3 submissions.

Refer students to Appendix A for advice on giving oral presentations.

Also remind them to use the strategies they studied in GAC005.

Assessment Assessment Event 2: In-class test Short Essays Test, should be

Reminder administered now.

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Unit 8: Support Services: Accounting and Financial Management

Unit 8: Support Services: Accounting and Financial Management

Part A Unit Introduction

Part B The Role of the Accounting Function
Part C The Role of Financial Management
Part D Mathematical Concepts and Techniques
Part E Unit Review

Part A Unit Introduction

Overview The finance department of a business is responsible for:
bookkeeping procedures
creating a balance sheet and profit and loss statement
providing management information
managing wages
raising finance
This unit introduces accounting and financial management as important
tools for business decision making. Businesses make accounting and
financial decisions in terms of three different types of activity:
financing
investing
operating

In this unit students will learn to:

describe the role of the accounting function in business activity
describe the role of financial management in business activity
apply mathematical concepts and techniques appropriately to a
business situation

Assessment Assessment Event 3: Project written report minimum of 1,000 words,

Event 3 and an oral presentation (45%).
The draft due after Part C of this unit.
The final version of their reports and their oral presentations are due in the
final week of the module.

Assessment The Business Terminology Logbooks are due in the final week of the
Event 4 module.

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Part B The Role of the Accounting Function

Before Your task is to make sure students understand that businesses make
You accounting and financial decisions in terms of three different types of
Begin activities - financing, investing and operating. Define all three terms and
give examples.
Explain that the coverage of accounting is somewhat constrained by the
time available in this module so only elementary principles will be
explained.

Accounting A useful definition:

Accounting is a systematic process of identifying, recording,
measuring, classifying, verifying, summarizing, interpreting and
communicating financial information. It provides information on the
(1) resources available to a firm, (2) the means employed to finance
those resources, and (3) the results achieved through their use.
Source: Business Dictionary [online]. Available at:
http://www.businessdictionary.com/definition/accounting.html [Accessed 15 December 2014]

In discussing this definition emphasise that the main objective of any

accounting system should be to provide members of an organisation with
information that will assist them in managing their organisation efficiently
and effectively.
Allow students to discuss this topic with their partners and other groups.
In the Student Manual, students will learn that the three main
responsibilities of an accountant are thus to:
1. collect and record financial data
2. analyse financial data
3. report financial data

1. Collection and recording of financial data

When reading this section, point out to students that the terms,
bookkeeping and accounting are often used interchangeably, although
bookkeeping is generally a data entry (recording) role.

Double- Double-entry bookkeeping is a fundamental accounting principle. It is a

Entry system of recording all business transactions twice. Together go through
Bookkeeping this section in the Student Manual.
Ensure students are familiar with the accounting equation (Assets =
Liabilities + Equity) and its terms.
Highlight that according to the debit-credit rule, debits always go on the
left, and credits on the right.

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Unit 8: Support Services: Accounting and Financial Management

Task 8.1 In their notebooks, students complete a double-entry journal for the
transactions in the Student Manual.

Answer

Debits ($) Credits ($)

100.00 (ATM withdrawal) 54.50 (dress)
7.00 (DVD rental)
11.20 (supermarket)

72.70
Vera has $27.30 in her purse.

The The matching principle states that expenses must be related to revenue in
Matching the same accounting time frame. Together, go through the explanation in the
Principle Student Manual. Ensure students grasp this concept.

Task 8.2 Ask students to work with a partner to complete the task.

Suggested Answers

Their responses should cover the following points:

You should record the purchase of the sausages and buns on the day you
sell that hot dog. You don't count the expense when you buy the
sausages and buns. You count the expense when you sell them.

In other words, you match the expense of the item with the revenue of
the item.

So today you will count the expense for 25 sausages and buns. You will
count the remaining expenses on the day you sell the remaining hot dogs.

2. Analysis of financial data

Before reading this section in the Student Manual, tell students that
accounting answers the following four questions, and write them on the
board:

Question 1: How successful has the organisation been in financial terms?

Question 2: What does the organisation own?

Question 3: What is owed to the business by other parties?

Question 4: What is owed by the business to other parties?

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Then do a Wordsplash activity for this section. Wordsplash is a collection

of key terms or concepts taken from a particular unit of study or section,
presented in an interesting way.

Before reading, Wordsplash can draw on

topic. This can help you ascertain what students already know before
beginning a lesson. By enabling them to contribute before the lesson starts,
Wordsplash can also help engage students.

After reading, Wordsplash can be used as a summarising strategy to help

students synthesise information.

For example, you present the key analysis of financial data terms or
concepts on the board or on OHP/PowerPoint slides. (see sample overleaf).

Students make predictions and generate statements about them. You write
on the board. After reading the material, students
correct and add to the information. If time, you can ask them to create a
mind map.

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Break- Together, go through sections 2 and 3: Analysis of financial data and

Even Reporting of financial Data, in the Student Manual. Ensure that students are
Point familiar with the terms: profit, loss, revenue cost, fixed cost, variable cost,
total cost, profit and loss statement and break-even point.

If time, ask students to construct vocabulary word maps for each one. A
vocabulary word map is a different way from the example on page IX for
recording subject-specific vocabulary. See sample vocabulary word map for
profit below.

Dictionary definition: My definition:

The excess of revenue earned during an How much money I made from selling
accounting period over the costs something compared to what it cost me
incurred in earning that revenue during to make it
the same accounting period

Vocabulary Word
Profit Illustration:
Use in a sentence:
All businesses want to make a profit

Go over the break-even calculations with students to ensure they are

comfortable with them before attempting Task 8.3. Practise together using
very simple examples.
Together go through Figure 8.1 Break-even analysis chart. The break-
even analysis chart illustrates the relationship between the cost of a
product/service and its sales revenue. As sales increase, variable costs
increase, resulting in increased total (fixed + variable) costs. When sales are
low, costs exceed revenue. The break-even point of a business is the point
at which the revenue received by a business is equal to the total cost of
producing and selling that product/service.

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Task 8.3 Students calculate the break-even points for the scenarios in the Student
Manual.
a. Answer: 300/0.25 = 1,200 newspapers

b. Answer: 600,000/$3 = 200,000 items

The previous example answered the question: How successful has the
business been in financial terms?

The remaining questions accounting answers are:

What does an organisation own?
What is owed to the business by other parties?
What is owed by the business to other parties?

These are covered in the Student Manual. Make sure to explain to the

owed TO the business by oth

Task 8.4 To stimulate discussion, ask some of the following sorts of questions:
What businesses have an annual report?
What does an annual report tell us?
These questions can then be discussed in class.
To extend this, you could ask students to write questions on a piece of paper
and collect. Randomly draw out one question at a time for discussion with
the class.

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Part C The Role of Financial Management

Before
You role of the financial manager. After canvassing their views, ask them to read
Begin the relevant section in the Student Manual. Then ask the following questions:
Why is the
turbulent environment? (Include things like the effects of inflation and
interest rates.)
What is the purpose of developing an investment portfolio?
With the students, read through the information in the Student Manual.

Task 8.5 Students work with a partner. They consider the main types of analysis that are
carried out in financial management.

Suggested Answers

Financial Role in decision making Implications

Management
Activities
Liquidity How easily can the company access Need to ensure there is sufficient
cash? working capital, or the business will be
unable to function.
Solvency Is the company able pay its debts?
propriate
to avoid legal action from creditors.
Profitability How much money is the company If certain products are more profitable
making? Are certain products/services than others, the company should push
more profitable than others? those. Corrective action should be taken
on less profitable products. The company
may consider abandoning unprofitable
products.
Efficiency How well is the company managing The way capital is invested should
its resources: capital, inventory, debts maximise returns. Stock that takes too
owed, creditors paid etc. long to rotate is a cost burden for the
company. If debtors are taking too long
solvency
is at risk. If the company takes too long
to pay creditors, they may refuse to
service it, jeopardising output.
Growth Is the company increasing the volume In order to survive, the company needs to
or value of goods/services sold? grow. Growth acceleration strategies
need to be implemented.

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Sources Together, go through this section in the Student Manual. Review Figure
of 8.2, which summarises the sources and uses of a funds. Steer the
Funds discussion towards the identification of the three basic areas which concern
a financial manager today, including:

the allocation of funds for appropriate investment projects

raising funds to optimise capital structure

developing a dividend policy

Small If time: To review this topic, organise students into small groups (of three-
Group four each) and ask them to suggest possible ways a financial manager can
Discussion improve the cash flow of a business. Ask them also to determine the risks
associated with each strategy. For example, if they suggest investing excess
cash to earn interest, it brings with it the risk of a downturn in the share
market.

Other questions for review are:

What is the primary purpose of financial management?

Why do companies prepare budgets?

To learn more about financial management, encourage students to log onto

www.investorwords.com [Accessed 15 December 2014] which contains more
than 5,000 definitions of financial terms.

If there is time, ask students to interview the owner of a small business to

learn how the firm attracts short-term and long-term finance. Also they
might ascertain what types of risk management the business uses.

Task 8.6 Using the guidelines contained in Appendix E and the BHP Annual Report
as an example, show students how to read an annual report and ask them to
answer the in the Student Manual.

Note: the link to the BHP Billiton Annual Report can be found in the
Student Manual.

Then ask students to obtain their own copy of an annual report of a business
and answer the same questions again in their workbooks.

Assessment Reminder
Event 3
The draft version of the written report is due for review and feedback now.

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Part D Mathematical Concepts and Techniques

Before Explain to students that in this part, the most popular financial techniques used
You by managers are looked at. Point out that only the concepts are identified here
Begin and the calculations are not expanded upon.
The most commonly used financial controls are budgets and ratio analysis.

Budgets Budgets

Introduce the idea of budgeting.

Ask students if they keep a budget. Are they aware whether their parents have
a budget for housekeeping, holidays and so on?
Discuss fixed expenses and variable expenses and describe how variable
expenses can be adjusted if necessary to balance the budget.
Figure 8.3 details the main types of monetary budgets. If time, before
reading this section you could copy the table below or display it on
OHT/PowerPoint slide. Ask students to work in pairs to complete the purpose
column. Finally, ask them to compare their responses to the completed table in
their manuals.

Type What it does Purpose

Revenue Estimates future sales Factors to consider include competition,

effective selling techniques/staff,
business cycle, etc. Then the sales price
can be determined
Expense Lists and costs main activities

Profit Measures the revenue that is left

after total costs are subtracted
from total revenue

Cash Estimates how much cash an

organisation will have and how
much it needs to operate

Capital Forecasts how much a company

Expenditure will invest in capital, i.e. new
buildings, equipment etc.

Variable Provides for a range of scenarios

Adapted from: Robbins et al. (2003, p.320-321)

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Finish off this section by reading the information about variances.

Ask students:
List any situations which could lead to a positive variance?
Sample Answer

The price of an essential component comes down, so the product is much

cheaper to manufacture than estimated. The profit margin goes up, exceeding
budget. For example, cocoa beans are an essential component of Toblerone
chocolate. If the price of cocoa beans falls below expectations, the profit
margin will exceed forecast and there will be a positive variance.

List any situations which could lead to a negative variance?

Sample Answer
Interest rates go up, so loan repayments are higher than budgeted.
Discounted Cash Flow is an important concept that students majoring in
business and other disciplines will definitely see in university so please focus
and elaborate on this section. Remind the students that the streams of cash

tomorrow. That is, the interest rate allows money to grow. For example, one
dollar invested at 5% today will be worth one dollar and five cents in one
year. So $1.05 in one year is worth $1.00 today.

Ratios Ratios

The ratios need some explanation so examples are given. Keep the work
simple but highlight the importance of being able to do simple ratios in order
to monitor the effectiveness of a business.
Ensure students understand all the words and make notes in their logbooks.

Task 8.7 Students use the information supplied in the sample balance sheet and
sample profit and loss statement to calculate the following ratios:

Answers

1. Current ratio = 400,000/200,000 = 2

2. Debt to assets = 400,000/100,000 = 4
3. Inventory turnover = 2,000,000/1,200,000 = 1.67
4. Net profit margin = 108,000/2,000,000 = 0.05

Independent Ask students to develop a monthly budget for themselves.

Study

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Task 8.8 Students work in pairs. The information provided relates to

Gear for the fiscal year ended 30 June 2014.

Answers

Identify the type of financial statement

Profit and Loss statement

Using ratio analysis, comment on the trends for gross profit and net profit
between 2013 and 2014.

In 2014, for the same sales revenue ($600,000), both the gross profit
(73.3%) and the net profit after tax (45.2%) have gone up. This is thanks
to a much-improved inventory turnover ratio. The company has done a
much better job of managing its stocks.

Explain two ways in which ratio analysis can be used to assist in financial
management.

Ratio analysis helps managers notice trends in a business. They also help
to compare how a business is doing compared with similar businesses in
the same industry. Advance notice allows managers to adapt a business to
address new challenges, or take advantage of opportunities.

The current ratio can help businesses establish whether they have enough
current assets to meet the payment schedule of its current debts with a
margin of safety for possible losses in current assets.

Task 8.9 Summative Case Study: Business Plan Case Study Appendix D.

Students work in groups of four. They complete the SmartSail.com case study.
They compare their findings with other groups.

Task 8.10 Short response questions. Students answer the following questions:

1. Explain the difference between finance and accounting.

2. Explain what is meant by double-entry bookkeeping.
3. What is the balance sheet, and what does it reveal about a business?
4. Outline the main sources of funds.
5. What is factoring, and why is it regarded as a source of finance?

Suggestion: Number the students one to five, each number representing one of
these questions. Then ask each student with that number to get into groups to
discuss and answer that question. Finally, ask students to reorganise into groups
of five, with one student representing each question. They share their
responses. Answers will vary.

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Part E Unit Review

Review What have I learnt in Unit 8?

In Unit 8, students have examined the importance and role of accounting

and finance in businesses. It is important to remember that businesses on
the whole operate with the goal of making a profit. Without effective
financial control and monitoring managers will not know whether the
business is making a profit. Review the unit, highlighting the major
concepts, such as:

the importance of financial accounting

reading an annual report
basic mathematical concepts
budgeting

Independent Ask students to explore the following Web sites to see what additional
Study information is available regarding accounting functions:
http://www.aicpa.org/
(The American Institute of Certified Public Accountants)
http://www.cpaaustralia.com.au/cps/rde/xchg
(Certified Public Accountants, Australia)
[Accessed 15 December 2014]

Language Students review this unit. They make a list of all new business terms in
Focus their Business Terminology Logbook. They ensure they are clear on the
definitions and the appropriate use of the terminology.

Assessment Assessment Event 3: Project written report minimum 1,000 words, and
Event 3 an oral presentation (45%)
These need to be ready for presentation and submission in the final week.

Independent Students should prepare the PowerPoint slides for their project oral
Study presentation and practise delivering their presentations. Remind students
to apply the skills they developed in GAC005. If time, allow students to
practise their presentations and sample Question and Answer sessions in
pairs.

Assessment The Business Terminology Logbook is due for marking in the final
Event 4 week.

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Unit 8: Support Services: Accounting and Financial Management

Task 8.11 Unit 8: Support Services: Accounting and Financial

Management - Key Vocabulary Crossword Puzzle

Note: If there are hyphens or apostrophes, they count as letters.

The following are made up of two words, with a blank in between each
word:
Across: 1, 5, 6, 13, 16, 18
Down: 2, 4, 8, 9, 11

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Unit 8: Support Services: Accounting and Financial Management

Task 8.12 Summary

Answers

Accounting refers to the systematic procedures used by accountants to

produce and supply financial information. Source documents are used to
collect written evidence of business transactions. Examples include bank
statements, invoices and credit card slips. Source documents are used to make
entries in Double-Entry Bookkeeping. The Matching Principle in
bookkeeping requires that each expense be matched with revenue.

Reporting and analysis of the data is done through documents such as profit
and loss statements and balance sheets. Reporting enables finance managers
to establish the break-even point of a business: the point at which revenue is
equal to the cost of producing and selling that product/service.

The financial manager plans, acquires, controls and utilises funds in ways that
maximise organisational efficiencies. The main types of analysis that financial
management engages in are: liquidity, solvency, profitability, efficiency and
growth.

To acquire funds, companies can tap either internal or external sources.

and sale of assets are internal sources of funds. Loans and
factoring debts are external sources of funds.

Budgets enable managers to keep track of and investigate variances.

The figures taken from key financial statements are converted into ratios.
These are analysed to monitor the organisat
criteria. Key ratios include: liquidity, leverage, operations and profitability
ratios.

Review of the Module: Conclusion

Review After reading the review of the module contained in the Student Manual,
ask students to discuss what they think have been the most interesting
sections of the module.

business at university?

CONGRATULATIONS! YOU HAVE COMPLETED GAC012!

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Glossary

Glossary

Glossary Accounting is the process of recording, classifying, reporting and interpreting

business events.
Accounting equation: assets = liabilities + equity
Accounts payable are creditors those to whom the business owes money.
Accounts receivable are debtors those who owe money to the business.
Action Plans detail how the strategic plan will be achieved.
Aims are the broad goals a business wants to achieve.
Asset is the term used to describe something of value owned by, or owing to a
business, that can be turned into money.
Autocratic style is when a leader tends to centralise authority and dictates
work methods.
Balance sheet
a given point in time.
Behavioural Theories differentiate effective leaders from ineffective leaders.
Bookkeeping refers to the methods used to record transactions in accounting
records and to produce the required financial reports.
Break-even point is where the revenue received by the business equals the cost
of producing and selling that product/service.
B2B is business-to-business transactions.
B2C is business-to-consumer transactions.
Budget is a numerical plan for allocating resources to specific actions.
Business is an organisation set up by one or more people to produce and /or sell
goods or services.
Business Performance Indicators specify the evidence required to prove that
a planned effort has achieved a chosen result. Results-oriented indicators
identify measurable performance. Implementation-oriented indicators
provide feedback on the process.
Business plans are formal documents setting out the overall goals of a business
and the strategies to achieve them.
Capitalism is used to describe free-market economies.
Communism is used to describe planned economies in which there is a high
degree of government control.
Conflict resolution involves settling disagreements by processes such as
conciliation/mediation, arbitration and negotiation.
Consumer sovereignty is when competition determines price, which in turn
determines demand.
Contraction occurs during an economic recession: there is a decrease in
growth and low levels of demand.
Credit means to sell goods or services now and receive the money later.

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Glossary

Creditors are also called accounts payable.

CSR stands for corporate social responsibility. It involves businesses
recognising that they need to positively impact on the community and
environment.
Culture of an organisation consists of patterns of behaviour, beliefs, and values
that determine what shall be done and how it shall be done.
Debtors are also known as accounts receivable.
Decision making is a managerial role. It is about making choices. Negative
decision makers focus on the weaknesses of new ideas. Positive decision
makers focus on the opportunities provided by new ideas.
Decision Tree is a graphical tool to help you choose between several courses of
action.
Demand refers to the amount of goods or services that a consumer is willing to
buy at a particular point in time. The law of demand suggests that buyers will
purchase more of a product or service as its price drops, and less as its price
rises.
Democratic style is when a leader involves employees in decision making.
Demographics are the features which distinguish consumers in a target market.
Examples: age, gender, income level, marital status, occupation and religion.
Differentiated marketing is the development of separate marketing mixes for
each target market.
Discretionary spending is when people spend on their wants or luxuries.
Diversity refers to a wide range of abilities, experiences and strengths within a
workforce.
Double-entry bookkeeping is the practice of recording two entries for every
transaction: one on the debit (left) side and one on the credit (right) side.
E-business describes a type of business which uses the Internet in order to
achieve its goals.
E-commerce is the buying and selling of goods over an electronic network.
Economic cycle
stages: prosperity, recession, depression and recovery.
Economics is about how economies operate. Microeconomics studies how
individuals, households and firms make decisions to allocate limited resources.
Macroeconomics is the study of the performance of the economy as a whole.
Economic performance indicators are statistics which tell us about the health
of the economy. Examples: inflation rate, consumer price index, prime interest
rate, unemployment rate.
Economies of scale are a reduction in manufacturing costs due to an increase in
the number of units produced.
Economy is the sum total of available resources that a society uses to produce
and distribute goods and services among its people.
Elasticity of demand refers to the sensitivity of the demand to a change in
price.
Environmental scanning is screening large amounts of information to

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anticipate changes in the environment.

Essential spending is spending on needs or necessities like shelter, food and
clothing.
E-tailers are online stores which use the Internet to sell their goods/services,
without going through retailers such as Walmart.
Ethics are the rules that define right and wrong behaviour and they influence
decisions made by managers.
European Union (E.U.) is a union of European nations created as a unified
economic and trade entity.
Expansion is a period of confidence in the economy when a new period of
growth emerges.
Expenses are costs incurred by a business in the process of earning revenue or
income (e.g. wages, telephone, rent and bank charges).
Exporting is an approach to international expansion that involves making
products in a home country and selling them overseas.
External environment is the outside organisations or forces that can

Factoring debts occurs when a finance or factoring company purchases a

responsible for the accounting and collection of the debts.

Financial risk refers to any uncertainty with respect to financial matters. The
primary areas of risk in the financial arena are default (bad debts), interest rate
changes and exchange rate movements.
Fixed costs are the costs that a business has to pay whether it produces /sells
anything or not. Examples: rent, wages and insurance.
Free-market economies display much competition and consumer sovereignty.
Groups and individuals have many economic freedoms. Government
intervention is limited.
Free trade is the exchange of goods or services (not capital or labour) without
tariffs or complicated requirements.
Gender discrimination is the different treatment men and women receive in
society. This varies depending on the place and time period.
Glass ceiling - an invisible barrier that prevents women from attaining the
highest positions.
Globalisation describes the increasing interdependence of business activity
throughout the world. Businesses sell their products in 'global' markets, just as
though each country's market were part of a single world market.
Goals are the distinct purpose of a business. They state what a business wants
to achieve.
Goods are items that we need or want (e.g. food, clothing, house, etc.).
Gross Domestic Product (GDP) is the total value of goods and services
produced by all people in the workforce in a country over a financial year. It
-being.
Gross Profit refers to the excess of the selling price over cost.
HRM stands for Human Resource Management. It is about managing the

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employer-employee relationship.
Human Resource Cycle - includes all those activities involved in the
acquisition, development, maintenance and separation of the human resources
of an organisation.
Implementation-oriented indicators provide feedback on the process.
Importing is an approach to doing international business that involves selling
products in the home country that are made overseas.
Industrial relations dispute refers to an employee-employer disagreement.
Inflation is an increase in the price of goods and services.
Information transfer is a management role. It is about receiving, collecting
and disseminating information.
Initiatives are planned actions to achieve objectives.
Interest rates are the fees banks charge their clients who borrow money.
Internal environment consists of those factors which the business can control.
Interpersonal relationships are a management role. It is when managers
interact with their employees in order to motivate and inspire them to be
effective.
Interpersonal skills - the ability to work with other people or groups.
Key Result Areas (KRAs) are areas that can be monitored for performance
results.
Law of demand - suggests that buyers will purchase more of a product or
service as its price drops, and less as its price rises.
Leadership is the process by which one individual influences others towards
the attainment of group or organisational goals.
Learning organisation is an organisation which harnesses organisational
competence and capability, and builds upon it.
Liability is an obligation normally resulting from a past transaction that
requires a business to pay money, provide goods, or perform services in the
future.
Liquidity is a measure o
easily converted into cash.
Loss is the opposite of profit. This is when the expenses of running a business
exceed the revenue received.
Macroeconomics is the study of the performance of the economy as a whole.
Management involves planning, organising, directing and controlling an

Marketing is the process by which businesses attempt to connect the needs and
wants of consumers with their own need to achieve their stated goals.
Marketing mix is a set of controllable, tactical marketing tools. They are

Market research is the systematic gathering of information for the purposes of

making a decision.
Mass market is made up of a wide range of consumers whose needs are all

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similar. The product is produced in a standard form in large quantities.

Matching Principle is a bookkeeping principle whereby expenses must be
matched with revenues.
Measures are performance indicators and monitors of success.
Microeconomics studies how individuals, households and firms make
decisions to allocate limited resources.
Mission Statements outline how a business intends to achieve its purpose (see
Vision).
Mixed economy is an economic system that allows for the simultaneous
operation of publicly and privately owned enterprises.
Negative variances are where the actual amount of money coming into the
business is less than the budgeted figure.
Niche market is a very small or specialised market. The consumers have very
specific needs. Sales volumes are much lower than in mass markets.
Objectives are measurable outcomes a business is trying to achieve.
Outcomes relate to achievement. They are measurable aims.
Output is the goods or services produced by a company in a given period.
is the value of a business after the value of all liabilities is
subtracted from the value of all assets.
Peak is the highest level of economic activity during a given period.
Penetration
relative to the total volume of all competitors.
Performance appraisal systems are used to evaluate how well employees
perform in their job.
Performance indicators measure the extent to which a business objective is
achieved.
Planned economies are where the government determines resource allocation,
production, distribution and exchange. Examples: socialism and communism.
Positioning is the marketing strategy which aims to make a brand occupy a
distinct position relative to competing brands in the mind of the consumer.
Positive variances are where the actual amount of money coming into the
business is more than the budgeted figure.
Prime function is the main activity in which a business is involved. Example:

Privatisation is when a business is changed from state to private ownership.

Product life cycle is the period over which the product appeals to customers.
There are four stages in a product life cycle: introduction, growth, maturity and
decline.
Profit describes the excess of revenue earned during an accounting period (say
12 months) over the expenses incurred in earning that revenue during the same
accounting period.
Profitability ratio is expressed as a percentage. It indicates how much profit
the business is making for every $ (or other currency) of revenue.

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Profit and loss statement reports expenses, revenue, and the resulting profit or
loss for a specific timeframe.
Quotas are limits placed by the government on the quantity of a given product
that may be imported during a specified time period.
Ratios
assist with decision making. Liquidity ratios
to meet its debt obligations. Leverage ratios
debt to finance its assets. Operations ratios measure how efficiently assets are
being used. Profitability ratios measure how efficiently assets are being used
to make a profit.
Results-oriented indicators identify measurable performance.
Revenue (income) is earned by a business providing goods or services to
customers in exchange for money or other assets.
Saturated market - is when all people who have an interest in, and use for, a
product have bought it.
Segmentation is the process by which a business analyses its potential market
and then divides it into segments (parts). The four most common ways to
segment a market are: demographic, geographic, behavioural and
psychographic.
Services are provided by people who offer assistance or help (e.g. lawyers,
doctors, accountants, hairdressers, electricians, transport companies, etc.).
Socialism describes a planned economy in which government involvement is
usually limited to industries considered vital to the welfare of the people.
Source Documents are used to record the details of transactions at the time
they occur. They are written proof that a transaction affecting the business has
occurred (e.g. invoices, cheques, purchase orders and receipts).
Strategic marketing is concerned with major long-term decisions that affect
the whole business. It involves conceptualising how company goals could be
met.

Strategic plans are plans that apply to the whole organisation and establish the
goals.
Solvency
Supply is the willingness and the ability of a producer to offer a product or a
service for sale at a particular price.
SWOT analysis involves the scanning of the environment to inform the goal-
setting process. SWOT stands for Strengths, Weaknesses, Opportunities and
Threats.
Tactical marketing is the actions taken to execute (realise) the marketing
strategy. It involves, for example, defining the positioning of the product,
setting prices, selecting distribution channels and organising appropriate
promotions.
Target market is the segment of the market on which a business concentrates
its marketing efforts.
Targets are the desired level of performance and timelines.
Tariffs are taxes imposed on goods and services imported into a country to

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raise revenue for the government and protect local industries from foreign
competition.
Trade union is an association of workers from a particular industry who
collectively bargain with employers.
Transaction is the accounting term used to describe a business event that must
be recorded in the accounting records.
Transactional leadership focuses on getting the job done and attaining goals.
Transformational leadership focuses on inspiring change and building new
cultures.
Trough is the lowest point in an economic cycle.
Turnover is the amount of business done in a certain time period, expressed as
sales revenue in $ (or in another currency).
Variable costs are the costs that are directly linked to the goods/services
produced. Examples: raw materials and energy costs.
Variances are any discrepancies that exist between the budgeted figures and
actual results. Positive variances are where the actual amount of money
coming into the business is more than the budgeted figure. Negative variances
are where the actual amount of money coming into the business is less than the
budgeted figure.
Vision is some desired future state that seeks to improve on the present.
Workforce demographics are the features which distinguish workers in an
organisation. Examples: age, gender, income level, marital status, occupation
and religion.
Workforce diversity is a workforce that reflects differences in gender, race,
age, ethnicity, etc.
Working capital is the cash available for the day to day operations of a
business.

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References

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