‘In life we should measure twice and cut once.

’
 This book is a special dedication to my wife Alice and my sons
Preston, Presley, and Prescott

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TABLE OF CONTENTS

The business Enterprise ……….………….……..……4

Possible business Enterprise questions…………..…………………..…...8

The Enterprising Environment……………………….9

Possible Enterprising Environment questions…………………….…….15

Setting Up a New Enterprise…………………………16

Possible Setting Up a New Enterprise questions………………….…….32

Business Planning………………………..………..…33
Possible Business Planning questions ..…….……............................…’.37

Enterprise Finance and Securing Investors..……….38

Possible Enterprise Finance and Securing Investors questions……….43

People in Business Enterprises.……………….……..44

Possible People in Business Enterprises questions.………………....…48

Markets and Marketing.………….………….…..…49

Possible Markets and Marketing questions…………………….…..…57

Operations Management.…………………..……....58
Possible Operations Management questions……..……………….….71

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 THE BUSINESS ENTERPRISE F2 COMPLETE NOTES

The role of the enterpriser in an enterpriser.

Lesson objectives
➢ Define the term enterprise
➢ Identify the role of an enterpriser in an enterprise
➢ Discuss the role of an enterpriser in an enterprise
Def:
The role of an enterpriser in an enterprise
✓ Scanning the environment – is the process of gathering crucial information that is
needed in the decision-making process of and enterprise. Scanning enables businesses
to identify opportunities and threats hence creating a unique selling point and
enjoying profits
✓ Identifying business opportunities – enables the identification of business ideas that
will enable the business to enjoy profits. Identification is the first step hence scanning
will be done to assess the opportunities and threats in the provision of goods and
services hence one can become a market leader.
✓ Mobilizing necessary resources - involves the accumulation the required items, in
required quantities, at the right time and at the right place to have a successful
enterprise. Resources can be divided into the following:
➢ Financial resources -
➢ Human resources
➢ Capital resources
✓ Proper allocation of resources - resources need to be allocated in order of priority to
the available departments. Failure to allocate resources properly can lead to failure of
the business emanating from conflicts. Crucial departments that needs priority are:
➢ Production departments
➢ Marketing department
➢ Human resource department etc.
✓ Setting up the business – This will need clarity on what exactly the business wants to
do e.g. Manufacturing, Retailing, Service provision
➢ This will involve establishing a clear objective of what type of business one
wants to establish e.g. sole trader, partnership, cooperative, or a company.

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 ➢ Entrepreneurs need to assesses the opportunities and threats of setting up a
new business start-up.
➢ There would be need to scan for the required amount of capital, required
labour force, types and quantities of products, and required services.
➢ This will involve demand forecasting, researching on the right quantities
required on the market and what competitors are available on the market
➢ The enterpriser will have to come up with a convenient location for the
business, close to the customers/ market or close to the suppliers or raw
materials
➢ The setting of a business requires the following:
▪ Identification of a business opportunity
▪ Determine the size of a business e.g. small [sole trader] or large [limited
company]
▪ Determining the form of business manufacturing or retailing
▪ Selecting the location of the business
▪ Financial requirements e.g. capital
▪ Manpower requirements e.g. skilled, semiskilled and unskilled labour
▪ Physical facilities buildings, land motor vehicles
▪ Naming and registration process e.g. licence, partnership deed,
memorandum of association
✓ Managing business operations – this will comprise of management functions such as:
➢ Planning - is looking ahead. This involves setting aims or targets for the
organisation. Planning gives the organisation a sense of direction or purpose.
Managers need to take the organisation's available resources and the flexibility
of its personnel into consideration when planning.
➢ Organising - An organisation can only function well if it is organised. This
means that there must be sufficient capital, staff and raw materials for the
organisation to run smoothly and have a good working structure. A manager
cannot do everything, and must therefore delegate responsibilities to others in
the organisation. These people must have the resources to do their tasks. It is
the responsibility of the manager to make sure that these resources exist. The
manager's function is to organise people and resources effectively.
➢ Directing - People who work in an organisation need to know what to do.
This means that managers need to give clear working instructions so that
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 employees know exactly what is required of them. Managers need to be able
to motivate a team and encourage employees to take the initiative.
➢ Co-ordinating - means bringing together. The co-ordinating function of
management means bringing the people in the organisation together. For
example, an organisation with many departments, such as marketing,
production, transport and finance, needs to be co-ordinated so that the people
can work well together for the good of the organisation. This requires clear
communication and good leadership. Only through positive employee
behaviour management can the intended objectives be achieved.
➢ Controlling - involves verifying whether everything is going according to
plan and making sure that the correct activities are being carried out.
Managers need to measure and evaluate the work of all individuals and groups
to make sure they are on target or meet tl1e aims of the organisation
✓ Key departments in business
Marketing
➢ This a department that is responsible for research of consumer taste and
preferences and ensuring that they are satisfied for a profit. Its responsible for
checking competitor activity so that the business is not left behind in a
competitive environment that they operate in.
➢ Market research enables the business to be adoptable to environmental
changes since consumers are dynamic animals and their needs and wants
change constantly
Finance
➢ This is the department that is responsible for all the monetary transactions of
the business.
➢ Tis is the life blood of the business and without this department businesses
would be struggling and having difficulties
➢ There I need for equitable distribution of financial resources amongst
departments to ensure smooth flow of business transactions and there is ned
for good cash or working capital within the business.
Operations management/ production
➢ This is the department that is responsible for development of products in an
organisation.

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 ➢ This is the department should work hand in hand with the marketing
department so that they produce the right product, right quantities, to match
the marketing department needs.
➢ This department needs a larger allocation to cater for its needs such as
manpower and sophisticated tech to improve the quality of the products so as
to lower production cost
➢ The operations department is responsible for quality checks on each part of the
production process [quality control and total quality management]
Human resource
➢ This is a department that is responsible for recruitment and selection of
manpower in the business. [manpower planning].
➢ This department ensures that all the departments get skilled, semi-skilled and
unskilled labour that is required.
➢ This is the department that is responsible for hiring and firing the workforce
and ensuring that each worker signs a contract.

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BUSINESS ENTERPRISE POSSIBLE QUESTIONS
explain the concept of enterprising
identify skills and personal attributes needed to run an enterprise
explain skills and personal attributes of a good enterpriser
apply leadership skills in a given project
identify the benefits and drawbacks of enterprising
explain the role of an enterpriser in an enterprise
list the drivers towards enterprising
explain the different drivers towards enterprising
evaluate drivers towards enterprising

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 THE ENTERPRISING ENVIRONMENT F2 COMPLETE NOTES

Lesson objectives
➢ Define the term internal and external environmental factors
➢ Identify internal and external environmental factors
➢ Describe internal and external environmental factors
➢ Identify different ways of acquiring resources
➢ Analyse the different forms of resource ownership
➢ Identify ways of sustainably using resources
➢ Explain the ways of sustainably using resources
➢ Explain the importance of using resources sustainably
Business environment
Def: these are these surroundings in which the organisation operates, influence business
operations and is divided int internal and external factors.
Internal environment
Def: these are the factors that influence the business activities and come from within the
business
➢ These are factor the business has control over and comprises of the following factors:
✓ Directors / owners
✓ Employees
✓ Managers
✓ Resources

➢ Directors / owners
✓ These are the individuals who provide capital to the business in form of
financial and physical resources.
✓ These directors/ owners will get profits and dividends at the end of the year.
➢ Employees
✓ These are the physical and mental effort of the business hat is needed in the
production process
✓ Employees can be in different forms namely skilled, semi-skilled and
unskilled labour and permanent and contract worker

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 ➢ Managers
✓ These are senior employees within an organisation and are responsible for
planning, controlling, coordinating, organising.
✓ These are the individuals who are responsible for running the daily business
activities.
✓ Managers have levels and the levels are as follows:
▪ Low level managers
▪ Middle level managers
▪ High level managers
➢ Resources
✓ These are the items that are needed by an organisation to ensure smooth flow
profitably
✓ Resources are divided into categories namely:
▪ Financial resources
▪ Physical resources
▪ Human resources
External environment
Def: these are the factors that influence the business activities and come from outside the
business and are divided into micro and macro environments
➢ These are factor the business has no control over and comprises of the following
factors:
✓ Micro environment – these are factors that are found outside the business and
managers have influence over them but do not have control of the factors and
comprise of the following:
▪ Customers – these are people who buy a company’s products and are
mainly concerned with quality products and low prices. So, the
company needs to mainly cater for their tastes and preferences
▪ Suppliers – these are people who provide the company with goods or
resources [inputs], they are mainly concerned with the credit
worthiness of the business and ability to finance.
▪ Competitors – these are people or organisations that provide the same
products as us on the market hence we compete to satisfy consumer
tastes and preferences

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 ✓ Macro environment - these are factors that are found outside the business and
managers do not have influence and control over the factors, these factors are
represented by the acronym P.E.S.T.E.L and comprise of the following:
▪ Political - This is a constraint emanating from government policies and
economic systems, this is mainly based on how the government runs
the country e.g. free market economy, command economy and mixed
economy. More so, it is based on the type of government that is
implemented by the government such as democratic, autocratic,
socialism and monarchy
▪ Economic - This is another constraint that emanates from the political
environment, it emerges from the economic systems implemented by
the government such as free market, command economy and mixed
economy. In a command economy the government dictates what
happens on the market rather the market forces of demand and supply.
▪ Social - This mainly focuses on customs, believes, practices and
cultural aspects, it also deals with social responsibilities of the business
[corporate social responsibility] e.g. Econet and Edgars [Mhanyame
marirangwe trust] they offer scholarships. If businesses need to operate
in a social environment, they need to cater all social classes and social
preferences e.g. a business cannot establish a pork selling butchery in a
Marange or Seventh day communities
▪ Technological - This is mainly based on sophisticated electronic
gadgets used in businesses, thus making business better. Adopting to
current and sophisticated tech enables businesses to run effectively and
efficiently hence providing quality goods and services and elimination
of wastages [total quality control]. Failure to adopt to tech changes can
have negative impacts to the business in terms of speed, quality,
storage and retrieval of information.
▪ Ecological - This is a constraint that is concerned with the surrounding
in which the business is operating in. Businesses are now mainly
concerned with pollution levels such as air, so manufacturing firms are
now using carbon filters to try to reduce ozone [O3 ] depletion, the
government has also come up with a tax termed carbon tax.

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 ▪ Legal - This is a constraint that is mainly concerned with laws,
regulations and policies set by the government and local government.
The laws can be legal formalities laws required when one needs to
establish an enterprise e.g. limited company i.e. Memorandum of
association

Political

Legal Economic

External
environment
Ecological Social

Technological

S.W.O.T analysis
➢ This a management tool that is mainly responsible for ensuring the business is
smoothly operating and comprise of the following:
✓ Strengths
✓ Weaknesses
✓ Opportunities
✓ threats
➢ Strength and weaknesses are mainly centered on internal factors whilst opportunities
and threats are mainly centred on external factors.
Strengths

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These are the internal factors about a business that can be looked upon as real advantages.
They could be used as a basis for developing a competitive advantage. They might include
experienced management, product patents, loyal workforce and good product range
Weaknesses
These are the internal factors about a business that can be seen as negative factors. In
some cases, they can be the flip side of a strength e.g. poorly trained workforce, limited
production capacity and ageing equipment.
Opportunities
These are the potential areas for expansion of the business and future profits e.g. new
technologies, export markets expanding faster than domestic markets and lower rates of
interest increasing consumer demand.
Threats
These are also external factors, gained from an external economic environment, market
conditions and the strength of competitors e.g. new competitors entering the market,
globalisation driving down prices, changes in the law regarding the sale of the firm’s product
and changes in government economic policy.

The need for resources

➢ These are the items a business needs to ensure a smooth run of its activities and are as
follows:
✓ Financial resources – these are all monetary items that are needed for
acquisition of physical assets and funding the day to day running of the
business e.g. cash in hand, cash at bank, working capital. Financial resources
can be sourced from different areas such as banks, family and friends, personal
savings.
✓ Physical resources – these are what the business owns and is divided into
tangible comprise of Buildings, motor vehicle and intangible comprise of
goodwill, patents. The tangible resources can also be classified into movable -
these are assets that are used are not stationery on the same place e.g. motor
vehicles whilst immovable - these are assets that are used and are stationery on
the same place e.g. plant and machinery. These assts can be acquired through
use of cash, credit [hire purchase] and leasing.
✓ Human resources – this resource comprises of recruitment and selection of
the mental and physical effort needed in the production process. The
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 employees can be skilled, semi-skilled and unskilled labour. More so, the
employees can be permanent [full time] or contract workers
Sustainable use of resources
➢ This is the wise use of available resources so that they can be reserved for future use,
this applies to both renewable such as wind, and Solar energy and non-renewable
resources such as oil, natural gas and coal
Ways of sustainably using resources
➢ Proper methods of harvesting e.g. fish
➢ Cut one plant one policy [COPO]
➢ Proper methods of farming
➢ Use friendly methods of pest control
➢ Efficient methods of extracting resources
➢ Recycling of paper and metals
➢ Utilising waste material e.g. biogas
➢ Fully utilise renewable resources and reduce pressure on non-renewable resources
➢ Efficient methods of extracting minerals
Importance of sustainable use of resources
➢ Conserve for use by future generations
➢ Employment creation
➢ Economic development
➢ Revenue for the government
➢ Infrastructural development
➢ Eliminate creation of ghost towns such as Mhangura.

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THE ENTERPRISING ENVIRONMENT POSSIBLE QUESTIONS
distinguish between internal and external stakeholders
explain the role of each internal and external stakeholder
differentiate resources and capabilities
explain the need for resources in an enterprise
explain reasons for analysing capabilities
identify different types of resources required in an enterprise
identify the internal and external environmental factors
describe the internal and external environmental factors
identify different ways of acquiring resources
analyse different forms of resource ownership
justify ownership of resources
explain various ways of sustainable use of resources
explain the importance of using resources sustainably
identify business constraints
explain the business constraints
identify opportunities and risks for enterprise
investigate opportunities and risks associated with local business enterprises
identify risks associated with business enterprises

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 SETTING UP A NEW ENTERPRISE F2 COMPLETE NOTES

Lesson objectives
➢ Define the term incorporated business
➢ Identify forms of incorporated businesses
➢ Explain the features of incorporated businesses
➢ Analyse the benefits and limitations of different incorporated businesses
Incorporated businesses
Def: These are businesses that have limited liability and separate legal entity
Def: These are businesses that have been registered according to the company’s act such as
limited companies
Incorporated business units
✓ An incorporated business unit is one that separates the business entity from the
owners of the business and has the following characteristics.
✓ It is a separate legal entity. it is a corporate body or legal entity that is able to sue or
be sued for any breach of contract.
✓ The business has a name that it is identified by the words limited.
✓ It has limited liability, which means that the investors in business units do not face the
risk of losing their personal property or possessions. The owners lose what they have
✓ invested in the business.
✓ It has share capital that is contributed by big and large investors who are called
shareholders.
✓ It is required by law to present their audited accounts to the Registrar of Companies
and its shareholders.
✓ There is continuity of the business if the owner decides to resign or owner dies
✓ Types of incorporated business
✓ units
Types of incorporated business units:
➢ Private limited companies
➢ Public Limited companies.
Private limited companies
Def.: an incorporated business that does not issue shares to the general public but issues to
family and friends and there is strict transfer of shares. The name ends with the words Pvt
State.:
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 ✓ National foods Pvt Ltd
✓ Biltrans Pvt Ltd
Ownership of private companies
✓ A private company can be owned by at least one person and have a maximum of fifty
shareholders.
✓ The name of the company should end with the words 'Private Company
✓ Share transfer is restricted as shares cannot be sold publicly on the Stock Exchange.
Shares can only be sold or transferred to approved investors.
✓ Shareholders have limited liability,
✓ Ownership of the business can be confined to a family only or the founders of the
company or owned by management or owned by private investors.
Control of private companies
✓ Shareholders are usually involved in management functions.
✓ There is direct control of the business by shareholders.
✓ A Board of Directors is nominated or voted onto the Board.
Formation
✓ A private limited liability company is required by law, the Companies Act of
Zimbabwe, to register with the Registrar of Companies and to submit the following
documents to the Registrar of Companies before commencing business:
➢ Articles of Association
➢ Memorandum of Association
➢ Certificate of Incorporation

Advantages of incorporated business units [Private Ltd companies]

✓ The shareholders all have Limited liabilities and can invest personal large and small
sums of money without fear.
✓ There is continuity of existence
✓ The company is a going concern in that the companies are considered to be in
existence for a long time.
✓ Companies can easily raise large capital for long-term investment.
✓ Companies enjoy large-scale discounts when buying in bulk.
✓ Strict transfer of shares enables retention of ownership and control.
✓ There is privacy since they do not publish their accounts hence les risk of takeover
✓ There is little or no government intervention
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 ✓ Can borrow money due to existence of collateral security
✓ They are able to employ highly qualified professionals and experts.
✓ Companies are able to invest ill new technology and in new equipment and
machinery.
✓ There is greater efficiency and effectiveness in management.
Disadvantages of incorporated business units [Private limited companies]
✓ They fail to raise large capital due to the restriction on advertising the sale of new
shares publicly. Shares are only sold to people approved by the existing shareholders.
✓ Shareholders who may want to disinvest may fall to transfer the shares to other people
who have not been approved by existing shareholders.
✓ The formation of private companies is expensive due to setup costs as compared to
sole and partnership proprietorship.
✓ Interferences by the shareholders, who are directors of the company, may disrupt day-
today management of the business by employed managers.
✓ Shareholders with a majority stake in the company may want to personalise
ownership of the company.
✓ Can raise limited amount of capital
✓ There is bureaucracy and red tape in decision making
Public limited companies
Def.: an incorporated business that issue shares to the general public through invitation by a
prospectus and there is no strict transfer of shares. The name ends with the words Plc
State.:
✓ Econet
✓ Telecel
Ownership of public companies
✓ Potential investors can be owners of a public company by buying shares in the
company on the Stock Exchange.
✓ A public company is open to many shareholders provided the shareholders
contribution does not exceed the authorised capital.
✓ Shareholders may own a majority of shares, but the company may also attract
minority shareholders.
Control of public companies
✓ Control of a public limited company is done through a voted Board of Directors and
the shareholders.
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 ✓ The Board of Directors are expected by law to perform loyalty to the best of their
abilities.
✓ Shareholders vote in the Board of Directors.
✓ This Board of Directors employ professional managers to run the company, on behalf
of the Board of Directors.
✓ Shareholders in Zimbabwe are not allowed to manage or run companies.
Formation
✓ A private limited liability company is required by law, the Companies Act of
Zimbabwe, to register with the Registrar of Companies and to submit the following
documents to the Registrar of Companies before commencing business:
➢ Articles of Association
➢ Memorandum of Association
➢ Certificate of Incorporation
➢ Certificate of trading
➢ Prospectus
NB the first 3 documents are applicable to both Private and Public companies

Advantages of incorporated business units [Public Ltd companies]

✓ The shareholders all have Limited liabilities and can invest personal large and small
sums of money without fear.
✓ There is continuity of existence
✓ The company is a going concern in that the companies are considered to be in
existence for a long time.
✓ Companies can easily raise large capital through public issue of shares for long-term
investment.
✓ Companies enjoy large-scale discounts when buying in bulk.
✓ Strict transfer of shares enables retention of ownership and control.
✓ There is privacy since they do not publish their accounts hence les risk of takeover
✓ There is little or no government intervention
✓ Can borrow money due to existence of collateral security
✓ They are able to employ highly qualified professionals and experts.
✓ Companies are able to invest ill new technology and in new equipment and
machinery.
✓ There is greater efficiency and effectiveness in management.
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 ✓ Disadvantages of incorporated business units [Public limited companies]
✓ It is expensive to form a public company due to a number of legal requirements and
costs needed to register the new company.
✓ Public companies may grow to be very big in terms of size and administration
resulting in a complete separation of ownership and control,
✓ Management is accountable to the Board of Directors, who may be in conflict with
the shareholders.
✓ Due to the large' size of the company, the administration of the company becomes
bureaucratic. There are too many layers of management, which may result in
inefficiency
✓ The accounts of the public company are published publicly for everyone to see, which
✓ reveals the performance of the company to competitors.
✓ The company may be taken over by d hostile company that may buy as many shares
in the company as possible, which will be sold on the Stock Exchange.
✓ Shareholders cannot demand their money from the company if they want to disinvest
but can sell their shares on the Stock. Exchange, which may be difficult If the
company is not performing well.

Setting up a Sole proprietorship

➢ This is the simplest business to establish since it does not have many requirements in
terms of legal formalities.
Requirement when establishing a sole proprietorship:
➢ Financial resources – these are the monetary resources that are needed to make a
business functional, this is the life blood of business which determines success or
failure of a business. A sole proprietor needs a small amount of business depending
on the size of the business
➢ Human resources – this is the mental and physical effort needed in the production
process, the labour recruited and selected can be skilled, unskilled and semi-skilled. a
sole proprietor can either not employ individuals but can do the work himself and be
assisted by family members [cheap labour]
➢ Physical resources - these are the buildings, vehicles that are needed I the
establishment and running of the business. Some Sole proprietors can operate as back
yard businesses.

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 ➢ Legal formalities – these are the legal documents that are needed in the formation of
the business and sole proprietorship has few legal formalities namely a trading licence
obtained from the town council [local government]
➢ There are a series of steps that are followed to establish a sole proprietorship namely:
✓ Go to the council and be allocated land and establish infrastructure/ one
has his own buildings already
✓ Council comes and inspects if the premises are fit to operate a business
especially a grocery shop
✓ If the buildings pass then proprietor will be issued a trading licence which
will be valid for a certain period e.g. 6 months or a year
Setting up a partnership
➢ This is the simplest business to establish since it does not have many requirements in
terms of legal formalities.
Requirement when establishing a partnership:
➢ Financial resources – these are the monetary resources that are needed to make a
business functional, this is the life blood of business which determines success or
failure of a business. Partnerships needs a small amount of business depending on the
type of the business e.g. surgery requires more capital to acquire sophisticated tech
➢ Human resources – this is the mental and physical effort needed in the production
process, the labour recruited and selected can be skilled, unskilled and semi-skilled. a
partnership can either employ individuals or partners can do the work themselves.
They utilise the expertise they have e.g. managerial expertise
➢ Physical resources - these are the buildings, vehicles that are needed I the
establishment and running of the business. Some require small physical resources
depending on the type of the business e.g. surgery requires more buildings and motor
vehicles
➢ Legal formalities – these are the legal documents that are needed in the formation of
the business and sole proprietorship has few legal formalities namely:
✓ Partnership deed/ Deed of agreement is a document that is prepared by the
partners themselves and comprise of the terms in which the partnership will
operate.
✓ Partnership act is a document that is enacted by parliament and comes into
effect if the partners fail to draft a deed of agreement and also comprise of the
terms in which the partnership will operate in.
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 ➢ There are a series of steps that are followed to establish a partnership namely:
✓ Go to the council and be allocated land and establish infrastructure/ if
partners have buildings already
✓ Council comes and inspects if the premises are fit to operate a business
especially a grocery shop
✓ If the buildings pass then partners will either prepare a partnership deed or
use a partnership act as a guiding document

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Business ethics
Lesson objectives
➢ Define the term business ethics
➢ Explain issues concerning business ethics
➢ Evaluate the importance of being ethical in business
➢ Apply business ethics in businesses
Ethical considerations in business
Def: Ethics are rules or principles that guide the behaviour of people or organisations towards
what is good for people and society.
Def: They are moral guidelines that govern business on what is good and what is bad or what
is right and what is wrong
➢ It is important for an organisation to operate ethically so that it can be held
accountable for its actions.
➢ All reputable business organisations should have a formal code of ethics. A code of
ethics is a written document stating how all the individuals working in the
organisation and other stakeholders should behave.
➢ A code of ethics can assist an organisation to establish a unique company culture,
especially when there are various different cultures working within the same
organisation.
Unethical business practices
➢ Poor quality goods and services
➢ Bribing inspectors
➢ Charging exorbitant prices of commodities
➢ Hiring of child labour
➢ False price cuts
➢ Misleading advertising
➢ Environmental pollution through dumping toxic wastes
➢ Misappropriation of funds by owner/ employees
➢ Unfair dismissal of labour
➢ Selling alcohol and cigarettes to persons under the age of 18
➢ Evasion of tax payment by business

A well-written code of ethics, which is accepted by all employees and executed by each
employee every day, ensures that the organisation will be seen as a leader within industry.
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A code of ethics could have the following elements:
➢ Honesty
This element will state how the organisation views honesty and how they will treat
employees and customers with regards to honesty. For example, dishonesty of employees
will be dealt with according to the organisation's disciplinary code and the dishonesty of
stakeholders will be dealt with according to the relevant legislation applicable to the
offence.
➢ Integrity
This element refers to how reliable the organisation is towards all its stakeholders. For
example, the organisation shows integrity when it pays the employees' salaries when they
are supposed to or if it pays its creditors strictly according to the payment agreement.
➢ Trust
Within all relationships there must be a certain level of trust. For example, an employee
must be able to trust another employee that specific output will be done at a given time or
the finance department must trust that the debtors will pay according to the payment
agreement. Trust is also the belief that the agreement between two parties will be
honoured by both parties.
➢ Loyalty
This element refers to the consistent devotion between two stakeholders. Internally, this is
quite a difficult matter because employees are often required to work with one another
without having an option. It is easier for external stakeholders to reflect loyalty. For
example, if the client receives the required quality~ quantity of products and the supplier
is paid according to the agreement, both stakeholders will be loyal to each other until such
time as the required performance is not according to the agreement in place.
➢ Fairness
This refers to how the organisation treats all stakeholders. For example, all employees
should be treated the same way when it comes to salary adjustments and the
organisation's disciplinary code should be applied in the same way to all employees who
are guilty of the same offence. In terms of external stakeholders, all suppliers should be
treated in the same way if they fail to deliver according to the agreed delivery agreement,
for example
➢ Caring
It has become very important for organisations to care about the communities in which
they operate. For example, organisations are expected to: ensure that natural resources,
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 such as the air and local rivers, are not polluted and are taken care of offer jobs to people
from the local communities provide assistance to local communities in the event of
natural disasters, like floods, fires and drought grant bursaries for tertiary studies to the
children from the local communities.
➢ Respect
This refers to how people or organisations admire or have a high opinion of each other.
Respect should be observed between all levels of organisation. So, the electrician should
show respect to the CEO and the CEO should show respect to the electrician.
➢ Obeying the law
Each country has specific legislation to ensure that the country functions properly.
Organisations play their part in obeying the law by paying taxes to the government
according to the taxation laws, ensuring that the applicable health and safety laws are
enforced at various sites, reporting fraud to the authorities and dealing appropriately with
serious crimes, like assault, when they happen in the organisation.
➢ Morale
This element refers to how optimistic employees are about the organisation and how
happy they are to work for it. If the morale of the employees is high, they are more
willing to work hard for the organisation.
NB// All the elements listed are interlinked. If one element is missi.ng or deemed to be
unimportant to an organisation, its code of ethics will not function as it should.

Factors that influence business ethics

➢ Rules and laws
✓ The government sets rules and laws to protect the community from unethical
practices e.g. the price control act governs businesses from overcharging
consumers
➢ Code of conduct
✓ This is a code that is established by the business and should be developed from
the government’s code of conduct, this establishes what is right and what is
wrong in order to safe guard the general public.
➢ Social considerations
✓ There are certain organisations that might pressure the business to value the
community and ethically treat the community such as Lobbyists,
Environmental Management Agency [EMA]
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 ➢ Standard variations
✓ Standards vary from one country to another and this can promote unethical
behaviour but the government formed the SAZ that monitors standards in
Zimbabwe to make the uniform locally though varying with other countries.
The role of ethics in business and society
No reputable business wanting to continue with its operations should operate without a code
of ethics. Ethics have several functions in business and society, as follows:
• Organisations that work strictly according to the acceptable ethical practices of the society
or community in which the organisation functions will ensure that the organisation's
reputation is in good standing.
• Organisations that adhere to legislation relating to health and safety will be deemed as
ethical organisations in that they portray an image of caring to both their employees and the
environment.
• Organisations that are visible within the community, for example by sponsoring schools,
community centres, health days, awareness against abuse of children or local sport events, are
deemed as caring towards their community and have a high regard for a healthy, dignified
community.
• How quickly an organisation reacts to natural disasters, such as floods and fires, affecting
communities will show communities that the organisation cares about people and not just
profits.
Importance of business ethics
Business ethics are very important to a business to ensure that it continues to operate or
function.
➢ Increase customer, supplier and employee loyalty
➢ Increase in sales volume
➢ Elimination of competition by gaining competitive advantage
➢ Improve employee engagement resulting in high loyalty and reduced employee
turnover
➢ Improve the image and branding of a business,
➢ Result in higher profit margins
➢ Increase in investor interest (ultimately, an increased share price).
➢ Improves the goodwill of the business
➢ Eliminates fines from authorities due to shoddy or poor-quality product
➢ Status and respect of the owner and the workforce
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Business growth
Lesson objectives
➢ Define the term business growth
➢ Identify factors that influence business growth
➢ Describe the factors influence business growth
➢ Discuss the reasons why businesses fail
➢ Suggest solutions to causes of business failure

Def: this is the increase in the size of the business that maybe emanated by increase in sales
volume, production levels, number of workers, market capitalisation, market share.

Factors that influence business growth

➢ Objectives
✓ As businesses operate, they set objectives and some businesses may set
objectives that will prohibit them from growing e.g. operating in a Niche
market
➢ Financial resources
✓ The more the financial resources the greater the chances of growth whilst the
lesser the financial resources the lower the chances of growth of a business
➢ Competition
✓ Business that operate in environments that have cut throat competition grow at
a very slow rate whereas businesses that operate in environment tend to grow
fast
➢ Employees
✓ The greater the number of the workforce the greater the chances of growth
while the lesser the number of the workforce the lesser the chances of growth
➢ Location
✓ Some businesses may be located in areas where there is limited space for
growth this will limit growth of the business premises cannot be extended
whilst some businesses are situated in areas where they can expand easily
extension of premises.

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 ✓ Some businesses are located close to consumers hence this will increase sales
volume and profit margins whereas some businesses can be located in areas
far from consumers hence limited chances of growth.
➢ New product on the market
✓ Businesses that develop new products tend to grow whereas businesses that
do not develop new products tend to be small

Causes of business failure

➢ Poor management
✓ Poor management can lead to poor motivation of the labour force hence
workers tend to sabotage by making poor quality products thereby leading to
failure of the business.
➢ Poor record keeping
✓ Poor record keeping will mean the business owner cannot carry proper
inventory management hence workers take advantage and greater risks of
inventory pilferage hence business failure.
➢ Lack of financial resources
✓ Lack of finance is a major causative of business failure since they can not
meet the everchanging consumer tastes and preferences and cannot research
market needs.
✓ The business cannot acquire sophisticated tech to provide consumers with
quality products and services hence they fail.
➢ Wrong business idea
✓ This involve establishment of businesses in the wrong areas such as
establishing a beerhall or pork selling butchery in a Marange and Seventh day
society. The business will definitely fail.
➢ Over trading
✓ This is expansion or growth of the business quickly which does not suit or
match the available resources [working capital] hence the business will
definitely fail.
➢ Failure to adopt to environmental changes

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 ✓ Business success is determined by the ability of the business to adopt to the
change in the environment if it fails to provide consumers’ tastes and
preferences it will fail.
➢ Poor location
✓ Organisations that usually locate themselves away from consumers tend to
have greater chances since it will have limited consumers hence the sales
volume and profit margins will be low.
➢ Poor cash management
✓ Failure to manage cash means more problems of the business such lack of
confidence from creditors and low morale of the work force hence the
business will be bound to fail
✓ Poor cash management means also there is low or no working capital hence
the business cannot pay its daily expenses such fuel and power hence affecting
production and leading to failure of the business.
➢ Unskilled labour
✓ The hiring of unskilled labour within the organisation can lead to increased
cases of poor-quality products being produced that will not satisfy consumer
tastes and preferences.
✓ Unskilled labour cannot properly operate machinery hence there re greater
risks of machine breakdown and slow production that will increase the cost of
production.
➢ Cut throat competition
✓ A business operating in an environment that has stiff competition increases the
chances of the business a business failing since it will be losing market share.
➢ Poor market research
✓ Organisations tend to conduct poor market research hence giving false or
incomplete information about the market the business is operating hence fails
to satisfy consumer tastes and preferences thereby failure of the business.
➢ Bad business ethics
✓ Organisations that have bad business ethics such as overcharging, improper
waste disposal, taking bribes tend to fail more since consumer lack confidence
and loyalty to such organisations hence low sales and profit margins thereby
leading to business failure.

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Solutions to business failure

➢ Good management
✓ A good manager should have emotional intelligence which mean he will have
the worker as his first priority there by providing what they want hence
boosting their morale and reducing sabotage and poor-quality goods and
services.
➢ Proper record keeping
✓ The business by keeping proper records this will enable the business to detect
any stock pilferage.
✓ Businesses will also be able to manage their stocks hence they will not run out
of stocks hence gaining brand loyalty
➢ Financial resources
✓ The business should ensure that is has adequate financial resources, if not
adequate the business should source from outside in form of loans and
overdrafts.
✓ The business needs to ensure it has adequate working capital to cater for all
the day t day expenses of the business.
➢ Business idea
✓ The business should take time to assess the business idea and develop it from a
gap [problem on the market], hence the business will be sure enough that their
business idea will not fail since they scanned the environment.
✓ The owner of the business should consult other people and pitch his idea and
see what others have to say.
➢ Proper stages of growth
✓ The business is supposed to assess the level the business will be, expand the
business depending on the resources that available this way the business will
not fail.
➢ Best location
✓ The business is supposed to be located in an area where there are more
customers that will acquire the business’ products. By doing so this means the
business will flourish and never fail.
➢ Cash management

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 ✓ The business should ensure proper cash management that enables the business
to have more working capital.
✓ Proper methods of cash management will eliminate or reduce the chances of
failure
➢ Employ skilled labour
✓ The business has to employ skilled labour that will add value to the business
by producing quality products.
✓ The business is supposed to build the best teams from the available labour
force
➢ Fight competition
➢ The business needs to equip itself with strategies to fight cut throat competition such
as pricing methods, bench marking, market research
➢ Proper market research
✓ The business should use different methods of research t get correct and
accurate data that will be used by the business to cater for consumer tastes and
preferences
➢ Good business ethics
✓ Businesses need to have good business ethics such as charging correct prices,
deny bribes from consumers and other businesses.
✓ Good business ethics will enable the business to have positive goodwill and
brand loyalty.

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SETTING UP A NEW ENTERPRISE POSSIBLE QUESTIONS
identify forms of unincorporated business enterprises
describe the forms of unincorporated business’ enterprises
explain advantages and disadvantages of unincorporated business enterprises
explain the purpose of business enterprises
identify forms of incorporated business enterprises
explain the features of incorporated business enterprises
analyse the benefits and limitations of different incorporated business enterprises
identify the requirements of setting up a business enterprise
establish a sole proprietorship or partnership business enterprise
explain issues concerning business ethics
evaluate the importance of being ethical in business
apply business ethics in their projects
describe factors influencing business growth
discuss the reasons why some businesses failure
suggest solutions to causes of business failure
Outline forms of business enterprises
describe the features of different forms of business enterprises
analyse the advantages and disadvantages of each form of business enterprise
compare and contrast different forms of business enterprises
justify reasons why new business enterprises need support
identify ways of support given to new business enterprises
explain why some enterprises grow and others remain small
discuss advantages and disadvantages of business enterprises being small or large
identify risks associated with formation of new business enterprise
explain the concepts of corporate legal personality and limited liability
evaluate the importance of limited liability
perform fundraising activities to raise money for mini-enterprises
identify legal formalities required in the formation of a business enterprise
explain the contents of business documents required in the formation of a business
enterprise
Identify ways of measuring business size
evaluate the methods of measuring business size

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 BUSINESS PLANNING F2 COMPLETE NOTES

Lesson objectives
➢ Define the term business plan
➢ Describe business planning process
➢ Discussing the importance of each business planning step
➢ Execute business planning process.
Business Planning
A business plan – is a set of management decisions that define what the business will do to
try to be successful in the future

A business plan – is a management tool that sets short term objectives and defines the steps
necessary to achieve them.

A business plan - this is the planned activities and aims of any entity, individual group or
organization where effort is being converted into results,

A business plan is a statement that evaluates the feasibility of a new business idea,

Business planning process

➢ This is the process where by the organisation will establish objective and aims that
will determine success of the business
➢ The planning process has steps that are involved namely:
✓ Setting of objectives
✓ Forecasting
✓ Identification of alternative courses
✓ Evaluation of the alternative courses
✓ Implementation phase
✓ Evaluation of the planning process
Objectives
Def: these are short term goals that are set by an organisation and will be achieved in a week
or 6 months, the objectives are supposed to be S.M.A.R.T
➢ Setting of objectives

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 ✓ As defined above objectives are short term goals that act as a guide in an
organisation. This is a very important part of the organisation as it defines how
the business will operate.
✓ Setting of objectives can be done in two ways namely
▪ Top – down – this occurs when management sets objectives and the
subordinates have to comply with the set objectives.
▪ Down – top – this is when the subordinates set objectives and
management has to adjust to set objectives that fit into the set
objectives
✓ Objectives form a hierarchy that shows the lowest up to the highest objectives
e.g.
▪ Individual targets [lowest objective on the hierarchy]
▪ Departmental objectives
▪ Divisional objectives
▪ Corporate objectives
▪ Mission
▪ Aim [highest objective on the hierarchy]

➢ Forecasting
✓ These are predictions that are done by the management of sales and production
levels, these predictions help the business to plan financial resources for the
different departments.
✓ Its better for the business to over budget than underbudget its financial
resources since it will have complications in its operations.
✓ Forecasts are affected or influenced by either internal e.g. company polices or
external factors e.g. P.E.S.T.E.L
➢ Identification of alternative courses
✓ When the management sets its objectives, they will use the just in case bases
so they have to come up with different options.
✓ The management will identify the ones they think are promising to give better
results
➢ Evaluation of the alternative courses
✓ This is the stage when the management will have to sit down and assess the
alternative that were agreed upon.
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 ✓ The management will have the choose the alternative action that will give the
best results or benefits.
✓ The choice of the best alternative is also determined by the availability of
resources e.g. financial, physical, and human resources.
✓ The business can take even two courses of action if they are giving favourable
results
➢ Implementation phase
✓ This is the action stage were all the subordinates are supposed to be aware of
the set objectives [clear communication channels].
✓ This is the stage that needs involvement of all the members of the organisation
to ensure it becomes a success.
✓ The business is supposed to come up with policies, budgets to ensure a smooth
flow of the planning process.
➢ Evaluation of the planning process
✓ This is the stage where the management will sit down and evaluate the
outcomes of the set objectives either positive or negative outcomes.
✓ The management will have to make a comparison between budgets and actual
results:
▪ If negative they sit down and agree on a different course of action that
will give better results.
▪ If positive they also identify ways to improve or surpass the level
reached by the previous objectives.
✓ These results from the evaluation will be used next month or next year to
prepare forecasts
Importance of stages of the planning process
➢ Will assist the management to make a plan that shows whether or not a business has
the potential to make a profit.
➢ It helps map the future of the business. The plan helps the business to be managed
effectively through constant reference to goals and objectives.
➢ A well-set objective helps to attract prospective investors to feel confident in the
company and can therefore offer assistance to the company in the face of competition.
➢ It assists a company to manage its cash flow so as to avoid becoming insolvent. Most
businesses fail due to poor management of cash, not because the business did not
make a profit.
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 ➢ A business plan helps in setting the future vision of the business venture. It helps to
anticipate growth strategies, a merger by constantly revisiting the goals.
➢ A business’ planning process is a management tool which explains the organisational
structure of the business, including the titles of directors or office bearers,
➢ It shows the strengths, weaknesses to make it a true reflection of a real business
rather than an unrealistic projection.
➢ Helps to obtain banks loans and bank overdrafts this is made possible due to
feasibility of the business plan.
➢ A guideline for what the company intends to achieve which are known as objectives
of the business.

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BUSINESS PLANNING POSSIBLE QUESTIONS
explain business planning and a business plan
describe importance of business planning
explain importance of a business plan
design a mini-business plan
identify different business objectives
describe business planning process
discuss importance of each business planning step
execute business planning process
explain components of a business plan
explain the importance of a business plan
develop a business plan
implement designed business plans on selected projects
manage selected projects

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 ENTERPRISE FINANCE AND SECURING INVESTORS F2 COMPLETE NOTES

Financial statements
Lesson objectives
➢ Explain the importance of keeping accurate records
➢ Defining financial statements
➢ Preparing income statements
➢ Drafting a statement of financial position
➢ Prepare a simple budget
➢ Describe a cash budget

Importance of keeping accurate records

➢ Allows good cash management
➢ Allows proper inventory management
➢ Reduces chances of pilferage of inventory and cash
➢ Shows the need for cash within the business hence look for loans
➢ Reduces the risk of shortages of commodities
➢ Shows viability of the business
➢ Shows liquidity of the business
➢ Shows profitability of the business
➢ Enables good decision making
➢ Enables the business to have good reputation towards creditors
➢ Enables the business to improve employee welfare to curb high labour turnover
➢ Enables the business to source loans from banks

Def: Financial statements these are sets of final accounts prepared to ascertain:
✓ Income statements
✓ Statement of financial position
✓ Statement of cash flows
Income statement
➢ This is a final account that is prepared by a business to calculate or ascertain either
profit or loss.

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 ➢ If a business has income in excess of expenses that mean the business has earned a
profit whilst if expenses are in excess of income that means the business ha incurred a
loss

Proforma of an income statement

Name of business’
Income statement for the year ended 31 December 20—
Sales XXX
Less cost of sales
Opening inventory XX
Add purchases XX
XX
XXX
Less closing inventory [XX]
Cost of sales XX
Gross profit XX
Less expenses
Salaries X
Rent X
Electricity X
Fuel and heating X
Depreciation: Motor vehicle X
[XX]
Net profit/ loss X

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Statement of financial position
➢ This is a final account that is also known as a balance sheet and is prepared to show the
viability and liquidity of the business.
➢ This statement shows the assets of a business both fixed and current assets, it also shows
liabilities of the business which are also divided into long term and short-term liabilities
➢ It also shows the capital structure of a business which is the equity section

Assets
➢ In financial accounting, assets are economic resources. Anything tangible or
intangible that is capable of being owned or controlled to produce value and that is
held to have positive economic value is considered an asset.
➢ There are two classes of assets namely:
✓ Non-Current assets-these are assets owned by the business for more than one
accounting period e.g. motor vehicles, buildings. Non-current assets are
sometimes called Fixed assets
✓ Current assets-assets-held by a business for less than one accounting period.
They can easily be converted into cash e.g. cash, bank, debtors and inventory.
Liabilities
➢ Liabilities represent amounts that the entity/business owes to outside parties or debts
of the business which it has to settle at some future point in time.
➢ There are two classes of liabilities namely:
✓ Current liabilities- these are liabilities which have a repayment date of less
than one year.e.g. creditors
✓ Non-current liabilities-these are liabilities which have a repayment date of
more than one accounting period e.g. loans and debentures.

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Proforma of an income statement

Name of business’
Statement of financial position ended 31 December 20—
NON- CURRENT LIABILITIES AT COST DEP NBV
Premises at cost xxx xx xx
machinery xx x x
Motor vehicles xx x x
Fixtures and fittings xx x x
xxxx xx xx
CURRENT ASSETS
Inventory xx
Receivables xx
Bank xx
Cash xx
Prepayments x
xxx
CURRENT LIABILITIES
Payables [xx]
Working capital xx
xxxx
Financed by:
Capital xx
Add/ less net profit/ loss xx/ [xx]
xxx
Less drawings [xx]
xx
Add long term loan xx
xxx

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Cash budgets
➢ This a final account that shows the amount of cash a business has, this cash can either
be sufficient or insufficient [surplus/ deficit]
➢ If income is in excess of expenditure this means the business has a cash surplus whilst
if expenditure is in excess of income this means the business ahs a cash deficit
➢ A cash budget is prepared on a monthly or quarterly basis, the balance in the first
month or quarter is brought forward in the next month or quarter

Proforma of a cash budget

Cash budget
Inflows Jan Feb Mar
Sales xx xx xx
Donations xx -- --
Disposals of assets -- xx --
Total inflows xxx xxx xx
Outflows
Acquisitions of assets xx -- --
Purchases xx xx xx
Wages and salaries xx xx xx
General expenses x x x
Drawings x x x
Total outflows xx xx xx
Net inflows/ outflows xxx xx xx
Balance brought forward -- xx xxx
xx xxx xxx

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ENTERPRISE FINANCE AND SECURING INVESTORS POSSIBLE QUESTIONS
Explain the need for finance in an enterprise
Explain investment and saving
Identify sources of finance
Differentiate between internal and external sources of finance
Explain advantages and disadvantages of various sources of finance
Identify factors to consider when choosing sources of finance
Explain importance of keeping accurate financial records
Prepare an income statement
Draw a statement of financial position
Prepare a simple cash budget
Describe a cash budget
Explain the meaning of working capital
Identify components of working capital cycle
Discuss importance of managing working capital
Explain ways of managing working capital
Control working capital in a given enterprise
Prepare an income statement
Draw a statement of financial position
Identify different types of financial institutions
Explain functions of different financial institutions
Classify costs
Explain break-even analysis
Construct a break-even chart
Calculate break-even point, output and margin of safety for a business venture
Discuss importance of breakeven analysis
Explain the concepts of budgeting and budgets
Identify different types of budgets
Prepare a budget for an enterprise
Explain the importance of budgeting
Explain different ways of attracting investors

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 PEOPLE IN BUSINESS ENTERPRISE F2 COMPLETE NOTES

Lesson objectives
➢ Define the term manager
➢ Explain the functions of managers
➢ Define the term business motivation
➢ Explain the benefits of motivated employees
➢ Identify financial and non-financial methods of motivating staff
Managers
Def: These are senior employees in an organisation responsible for planning, leading,
organisation, controlling, and coordinating.
Functions of Managers
➢ Planning - is looking ahead. This involves setting aims or targets for the
organisation. Planning gives the organisation a sense of direction or purpose.
Managers need to take the organisation's available resources and the flexibility
of its personnel into consideration when planning.
➢ Organising - An organisation can only function well if it is organised. This
means that there must be sufficient capital, staff and raw materials for the
organisation to run smoothly and have a good working structure. A manager
cannot do everything, and must therefore delegate responsibilities to others in
the organisation. These people must have the resources to do their tasks. It is
the responsibility of the manager to make sure that these resources exist. The
manager's function is to organise people and resources effectively.
➢ Directing - People who work in an organisation need to know what to do.
This means that managers need to give clear working instructions so that
employees know exactly what is required of them. Managers need to be able
to motivate a team and encourage employees to take the initiative.
➢ Co-ordinating - means bringing together. The co-ordinating function of
management means bringing the people in the organisation together. For
example, an organisation with many departments, such as marketing,
production, transport and finance, needs to be co-ordinated so that the people
can work well together for the good of the organisation. This requires clear
communication and good leadership. Only through positive employee
behaviour management can the intended objectives be achieved.
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 ➢ Controlling - involves verifying whether everything is going according to
plan and making sure that the correct activities are being carried out.
Managers need to measure and evaluate the work of all individuals and groups
to make sure they are on target or meet tl1e aims of the organisation

Management levels

Top
Managers

Middle
Managers
Functional
Managers
Functional managers
➢ These are low level managers also known as operational managers and are responsible
for short term goals. They supervise non-managerial workers in a business
Middle level managers
➢ These are middle level managers also known as tactical managers that set medium
term goals and responsible for management of operational managers. These managers
act as a bridge between low level and top-level managers
Top level managers
➢ These are top level managers responsible for strategic planning, setting of objectives
in a business and set long term goals [aims] of the business e.g. more than a year. This
comprises of examples such as Chief Executive Officer [C.E.O]

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Motivation
Def: is the reason why employees want to work hard and work effectively and efficiently in a
business
Def: the intrinsic and extrinsic factors that stimulate people to take actions that lead to
achieving a goal
Def: is the process of inspiring people to do work

Benefits of motivated staff

➢ Increase worker productivity
➢ Improves quality pf products
➢ Reduces machine disruption due to sabotage
➢ Lowers costs by eliminating reworking costs
➢ Improves business’ Goodwill
➢ Low labour turnover
➢ Reduces absenteeism
➢ Promotes innovation and creativity
➢ Reduces pilferage of cash and inventory
➢ Enables brand loyalty
➢ Reduces lawsuits of the business by employees and consumers

Financial Rewards
➢ These are monetary items that influence an individual to achieve set objectives and
comprise of the following:
✓ Time rate
✓ Piece rate
✓ Salary
✓ Commission
✓ Performance-based pay
✓ Bonuses
✓ Profit-related pay
✓ Employee share-ownership schemes
✓ Fringe benefits.

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Non – Financial Rewards
➢ These are non- monetary items that influence an individual to achieve set objectives,
these are factors are derived from the job itself and comprise of the following:
✓ Job enlargement
✓ Job enrichment
✓ Job redesign
✓ Team working
✓ Empowerment.
✓ Management by objectives
✓ Quality circles
✓ Company Wi-Fi
✓ Training
✓ Company house and car

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PEOPLE IN BUSINESS ENTERPRISES POSSIBLE QUESTIONS
Discussing the theories of motivation
Identifying human needs according to Maslow
Explaining motivation theories by Maslow, Taylor, McGregor and Herzberg
Evaluating the applicability of motivation theories to different business enterprises
Defining what leadership is
Outlining qualities of a good leader
Discussing different leadership styles
Role play exhibiting different styles of leadership
Discussing the importance of business communication
Debating on the advantages and disadvantages of various communication methods
Visiting existing enterprises and observing communication methods in use.
Debating on the advantages and disadvantages of various communication media
Recording and reporting on their observations
Evaluating the impact of ICTs in business communication
explain functions of managers in a business
explain the benefits of motivated employees
identify financial and nonfinancial methods of motivating employees
investigate how local employees are motivated
demonstrate motivation skills in projects

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 MARKETS AND MARKETING F2 COMPLETE NOTES
Lesson objectives
➢ Define the term market
➢ Identify types of markets
➢ Explain types of markets
➢ Describe features of a virtual and physical market
➢ Discuss the advantages and disadvantages of virtual and physical markets
➢ Evaluate the benefits and challenges of foreign markets
➢ Outline solutions of foreign market challenges

Market
Def: this a place where buyers and sellers meet to conduct business transactions and is
divided into virtual and physical
Physical market
Def: are where buyers can physically meet the sellers and purchase the desired merchandise
from them in exchange for money. Shopping malls, department stores, retail stores and
Mbare Musika.
Features of physical markets

✓ A physical market is where buyers can physically meet the sellers and purchase the
desired merchandise from them in exchange for money.
✓ Physical markets are classified into two types:
✓ Physical consumer markets include:
➢ Food retail markets, such as farmers' markets, fish markets, and grocery stores
➢ Retail marketplaces, such as public markets, bazaars, shopping centres and
shopping malls, supermarkets, hypermarkets and discount stores
➢ Auction markets, where goods or services are offered up [or bidding and then
sold to the highest bidder
➢ used-goods markets, such as flea markets
➢ Temporary markets, such as fairs.

Physical business markets include:

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 ✓ Physical wholesale markets, where goods are sold to retailers, industrial, commercial,
institutional or other professional business users or to other wholesalers and related
subordinated services
✓ Markets for intermediate goods used in the production of other goods and services
✓ Labour markets, where people sell their labour to businesses in exchange for a wage
✓ Auction markets
✓ Temporary markets, such as trade fairs.

More so, they are different types of physical markets namely:

Marketing boards

➢ Marketing boards provide essential goods or services to a particular market. For

example, the Grain Marketing Board (GMB) provides the following services to the
growers of grain:
✓ They store grain in silos.
✓ They fix the prices of grain.
✓ They prevent shortages by evening out the supply of grains
➢ Many of Zimbabwe's marketing boards have either been commercialised or
privatised.
➢ The Cotton Marketing Board was converted into a public limited company called the
Cotton Company of Zimbabwe Ltd (Cottco).
➢ The Cold Storage Commission is now called the Cold Storage Company Ltd.
➢ The Dairy Marketing Board is now called Dairiboard Zimbabwe Ltd.
➢ The GMB is still a state enterprise also known as a parastatal.
Advantages of marketing boards

✓ Marketing boards store agricultural produce.

✓ They reduce the monopoly in selling goods.
✓ They control the selling and buying prices.
✓ They even out the supply of commodities.
✓ They prevent shortages of goods.
✓ They act as a ready market for farm produce.
✓ They facilitate the importation and exportation of goods, which means they buy in when
a country experiences Shortages and sell when there is surplus.
✓ They promote research and development of agricultural products.

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 ✓ They inspect, grade, process and package agricultural produce.

Disadvantages of marketing boards

✓ Decision-making and consultations on the growers' price takes a long time.

✓ The producer's prices generally fall far below the expectations of most farmers as they
are usually low and this demotivates growers.
✓ The bad conditions of the roads coupled with inaccessibility to small-scale farms and
communal areas make it impossible for vehicles to deliver seeds and fertilisers and to
collect produce.
✓ There is a lot of political interference (and 'red tape') by government officials in the
affairs of the marketing boards.
✓ Late payment for produce that has been delivered makes it difficult for farmers to plan
ahead on when or what to grow.

A produce markets

✓ These are markets where agricultural products are sold, this where farmers bring their
output and sell it to customers ranging from manufacturers, supermarkets and
wholesalers.
✓ This market provides agricultural products in their raw state e.g. vegetables, grain and
fruits for example Mbare Musika

Advantages to the consumer

✓ The produce is usually fresh.

✓ Different types of produce are always available.
✓ Seasonal goods are always available.
✓ Goods are available in bulk.
✓ Healthy high-quality produce is available at low prices.

Advantages to the farmer

✓ These are some advantages to the farmer:

✓ Sales and profits increase by selling to wholesalers, food processors and grocery shops.
✓ There is less handling of commodities because no middlemen or agents are involved.
✓ The farmer has the independence of selling directly to consumers.
✓ Transport, refrigeration and storage costs are lower when selling directly to consumers.

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 ✓ Disadvantages of produce markets
✓ These are some disadvantages of produce markets:
✓ Goods can spoil easily, as most fresh produce is perishable.
✓ Fresh produce requires refrigeration or cold storage facilities.
✓ It is necessary to constantly restock on a daily basis.
✓ If the produce is not sold, it is wasted.

Commodity markets

Commodity markets are specialised markets where commodities are sold by grade, description
or sample via auctions, trading, and direct sales or private agreement.

✓ A commodity is d basic good that h used in commerce.

✓ Commodities are used as Input or raw materials in the production at other goods or
services.
✓ A commodity market is a market that deals in the trading of raw primary goods.
✓ There are two types of commodities namely:
➢ Hard commodities
➢ Soft commodities.
✓ Hard commodities can be extracted or mined, such as oil, rubber or silver,
✓ Soft commodities refer to agricultural products, such as coffee, wheat, barley, soya
beans and pork.

Advantages of commodity markets

✓ Manufacturers buy a variety of raw materials at competitive (cheap) prices. Seasonal

raw materials, such as grain, can be obtained throughout the whole year because
different countries have different seasons.
✓ Manufacturers can supplement scarce resources with imports.
✓ Manufacturers keep their industries busy by producing goods throughout the year.
✓ Commodity markets create employment in both the importing and exporting countries.
✓ The exporting country generates foreign currency, which is used to pay for its imports.
✓ In future contracts, an importer (buyer) is given a period of credit in which to make
payment and an exporter (seller) has time to look for the commodity or, in the case of
grain, to grow and harvest the commodity.
✓ Hedging is used to minimise the impact of fluctuating prices in the future (when the
crops are ready to sell, for instance). Hedging is where the buyer and seller of a

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 commodity agree on a price for the commodity before it is available. In this way, sellers
are assured that their commodities will sell at a given price previously agreed upon
regardless of the current market price. Buyers are guaranteed the supply of raw
materials at a later date at a contracted price.

Disadvantages of commodity markets

✓ Non-renewable raw materials, such as mineral ores, of the exporting country can be
depleted.
✓ In future contracts a buyer may lose if, in the future, the price of a commodity falls.
✓ Similarly, a seller may lose if, in the future, the price of a commodity goes up.
✓ The price of commodities tends to fluctuate due to speculation.

Virtual marketing
Def: Also known as a non-physical market is where buyers purchase goods and services
through the Internet. In such a market, the buyers and sellers do not meet or interact physically.
Instead, the transaction is done through the Internet. An example of a virtual market is eBay,
AliExpress, Alibaba, Be Forward and amazon.

Features of a Non-physical (virtual) markets

✓ In non-physical markets, buyers purchase goods and services through the Internet.
Virtual markets are also referred to as electronic markets and are the foundation of
electronic commerce (ecommerce). They combine together advertising, product
ordering, delivery and payment systems.
✓ E-markets provide an electronic, or online, method to facilitate transactions between
buyers and sellers. E-markets often provide support for all of the steps in the receiving,
processing and delivery of the goods.
✓ No face to face transactions
✓ Takes days for the product to reach the consumer
✓ Consumers can view the products posted on the website
✓ Coded
✓ fully described
✓ in picture form
✓ individually priced

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 ✓ The customer does the shopping in the comfort of his or her home, selects goods using
the product codes and places the order electronically.
✓ When making payment the customer provides the following details electronically:
✓ customer’s name and address and account number or credit card number
✓ choice of delivery that is COD mail or personal
✓ Date of delivery
✓ terms of payment
✓ Total purchasing price is displayed on the screen for the customer.
✓ Payment can be done through credit cards, Cash on Delivery (COD) or direct debit.
Delivery of goods is by mail, courier services, or personal.

Foreign markets

Def: these are places where suppliers and buyers meet but beyond their national boundaries
e.g. selling products to Zambians or South Africans selling products to Zimbabweans. These
markets involve the use of foreign currency rather than local currency

Challenges faced by importers and exporters

Importers and exporters encounter a lot of difficulties and challenges. The following are some
of the problems that importers and exporters face, along with some possible solutions:
✓ Different languages form a barrier in foreign trade and this leads to problems in
communication breakdown
✓ Different currencies are used by different countries and these currencies need to be
converted to the currency of the home country.
✓ Different weights and measures make it difficult to compare quantities or volumes of
goods such as converting measurements from feet to metres.
✓ People belong to different religions and cultures. A Zimbabwean trader cannot export
mini-skirts to Malawi or beef to India
✓ Each country has its own laws and regulations that govern the activities of its
citizens. For example, Zimbabweans drugs need a prescription but in Zambia you buy
over the counter
✓ Some countries, such as Japan, America, China and Germany, have acquired
advanced technology in the production of high-quality goods hence face stiff
competition on foreign markets

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 ✓ Conducting market research to establish the demand for goods in another country is
expensive
✓ The exporter experiences delay in payment and in some instances faces risks of non-
payment (bad debts)
✓ A lot of documents need to be completed, such as the bill of lading.
✓ Long distances result in higher transport costs more transit risks, higher insurance
Charges and difficulty in providing after-sales services.
✓ The government may impose trade restrictions by enforcing quotas in an effort to
reduce
✓ Countries must establish free trade areas to reduce protectionism tendencies.
✓ Political instability, such as civil wars, and disorder in a country, as well as political
interference by government, may restrict trade.
✓ Agents are expensive to employ.
✓ Special packaging is expensive and adds to costs.

Solutions to challenges of foreign markets

✓ Employ a translator or the owner can learn the foreign language
✓ The individual can buy or sell the foreign currency to get their local currency
✓ Products being sold abroad should have different weighting systems e.g. kilograms
and pounds on the packaging
✓ Conduct market research on what the foreign market requires in terms of food and
clothing
✓ Identify the products they need and provide them where [niche market] hence
eliminating competition
✓ Business should seek government assistance so that they can conduct market research
and provide consumers tastes and preferences
✓ Exporters should ensure their merchandise with the Export Credits Guarantee
Corporation (ECGD) against the risk of non-payment
✓ The exporter must use the forwarding agent to complete these documents.

Benefits of foreign markets:

✓ Expansion of the business which will lead to greater sales volumes
✓ Raise or obtain the foreign currency needed to import essential goods and services.

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 ✓ Risk diversification but making sure that the business will not put all its eggs in one
basket
✓ Maintain a favourable balance of trade and balance of payments.
✓ Increase in sales volume will lead to increase in profit margins
✓ Some countries specialise in producing certain goods and providing certain services
where they have a comparative cost advantage.
✓ Reduces seasonal market fluctuations of the local market
✓ Other countries may obtain cheaper goods from countries that can produce them at
lower costs.
✓ A country can obtain seasonal goods throughout the year because different countries
have different seasons or climatic conditions.
✓ Zimbabwe can import a wide range of goods and services from different countries,
thus helping to satisfy the needs and wants of its citizens.
✓ In the process of importing and exporting, Zimbabwe's trading activities expand to
satisfy, or widen, the markets, thus creating employment as job opportunities open
up.
✓ Sells the excess goods (or services) to obtain foreign currency.
✓ Promote cultural ties and cultural tourism, which fosters peace and friendship and
enhances scientific and economic co-operation.
✓ In times of crisis, such as drought, where insufficient quantities of goods like grain
have been produced, Zimbabwe imports to supplement such shortages.

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MARKETS AND MARKETING POSSIBLE QUESTIONS
explain the meaning of market, product, demand and supply
discuss the importance of marketing to business enterprises
explain the relationship that exists between demand and supply
identify types of markets
explain types of markets
describe the features of virtual and physical markets
discuss the advantages and disadvantages of physical and virtual markets
participate in various types of markets
evaluate benefits and challenges encountered in foreign markets
Implement solutions that reduce challenges faced in foreign markets
explain the importance of marketing research
identify different types of research data
identify sources of data
apply appropriate sampling methods to given situations
design data collection tools
Collect research data
Present data in formats such as graphs, tables and charts
interpret and analyse data
discuss factors to consider when segmenting a market
explain reasons for market segmentation
Segment a market
explain the importance of demand forecasting
identify methods of demand forecasting
explain the concept of economic integration
describe aims of different economic blocs
explain the advantages and disadvantages of economic integration
identify marketing mix variables
explain marketing mix variables
evaluate the impact of marketing mix variables on marketing

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 OPERATIONS MANAGEMENT F2 COMPLETE NOTES
Lesson objectives
➢ Define the terms value addition and transport
➢ Explain ways of adding value to a product
➢ Explain the importance of adding value to products
➢ Explain the importance of transport as aid to trade
➢ Identify different modes of transport
➢ Evaluate the advantages and disadvantages of different modes of transport
➢ Explain factors influencing choice of a mode of transport.

Value addition
Value addition
Def.: It is the difference between the price of a good or service and the cost of production / it
is found by subtracting the cost of production form the selling price
Def.: It’s the improvement a company gives its product or service before offering it to
consumers

Def.: It is the estimated amount of a product is increased at each stage of manufacture

through storage and distribution

Def.: It is also known as increasing the worth of a product

Def.: It can also be a change of place, time or form of the material

Def.: It is the increase in the economic value of a product through a number of activities such
as packaging, distribution etc.

Advantages of value addition

✓ Value addition creates brand loyalty
✓ Enables the business to charge a premium [higher price]
✓ Instils a sense of pride to the consumers
✓ Allows consumers to be willing to pay more for a product
✓ It increases the life span of a product
✓ Gives the business competitive advantage over its rivals
✓ It leads to trade

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 ✓ Products look attractive
✓ Increase the economic value of a product
✓ Employment creation
✓ It leads to an increase of demand of products

Disadvantages of value addition

✓ Products become expensive
✓ Businesses lack adequate tech to add value to products
✓ Entrepreneurs lack knowledge that is needed to add value to products
✓ Can be wasteful if consumer do not buy the product

Beneficiation
Def.: This is defined as the removal of impurities from mineral ore or raw materials to give
them a high-grade product that can fetch a higher price e.g. diamond cutting and removal of
intestines of Mopani worms
✓ The concepts of value addition and beneficiation are inseparable or are interwoven or
intertwined and need caution when dealing with them, the diagrams below will give a
clear understanding of the two concepts:
Concept of value addition and beneficiation
Diamonds
Cutting polishing

Rough stone of Diamonds Diamonds sold

diamonds

Raw materials beneficiation value addition

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 Mopani worms

Harvested from Intestines Boiled, salted,

Mopani worms
trees removed dried, packed,
stored and
distributed
Raw materials Extraction in beneficiation value addition
Primary production

Wheat
Grinding baking

Shelling removes Flour Bread / cakes

Wheat
husks

Raw materials beneficiation value value

addition addition

How to add value to products

➢ Processing
➢ Manufacturing
➢ Pre packaging
➢ Branding
➢ Grading
➢ Distribution channel
➢ Adding product features
➢ Product differentiation

TRANSPORT
Def.: is the carrying or ferrying of goods and passengers from one point to another enabling
production to be complete
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Def.: It is a commercial activity that s involved in the movement of goods and people from
one point to another enabling production to be complete
The role of transport is to get the goods to the right place, at the right time and in the right
quantities. Transport systems have evolved over the years and will focus on the major
developments in transport from the traditional systems of transport to modem-day transport
systems.
Importance of transport as a commercial activity
The goods are moved from the producers to the consumers, who are the final users of the
goods. Transport is important for the following reasons:
➢ It carries workers to and from work.
➢ Transport moves raw materials from their source to production sites.
➢ It is used to deliver the finished products to the market place.
➢ It carries the machinery and equipment needed for production.
➢ Transport delivers the spare parts needed to repair and maintain production units.
➢ It can also be used to advertise the business by printing the name and logo of the
business on the vehicles,
➢ It carries business executives and supervisors,
➢ It moves customers.
Modes of transport
Transport can generally be classified into five modes:
➢ Road transport
➢ Air transport
➢ Rail transport
➢ Sea transport
➢ Pipeline transport
➢ Road transport

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Road transport
is mainly used to carry both small and large loads (consignments) of goods within a country.
Different transport companies are involved in the transportation of goods by road.

Advantages of road transport

➢ It is cheap and fast over short distances.
➢ It provides door-to-door delivery.
➢ Door-to-door delivery reduces the risks of theft and damage.
➢ There is less handling of goods.
➢ Road transport is readily available as it has no
➢ Fixed routes or fixed timetables. It can be used anytime.
➢ It has the widest network within countries, which means goods can be moved even to
remote places.
➢ There is a wide variety of vehicles used for road transport, which means that it can be
used to carry anything from small parcels to abnormal loads. There are also special
vehicles for special cargo, such as refrigerated trucks for perishables.
➢ Road transport can easily be rerouted.
➢ Return loads can easily be arranged in road transport

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Disadvantages of road transport
➢ It is slow over long distances.
➢ It is expensive over long distances.
➢ Road transport is not suitable for heavy and bulky goods over long distances. There is
a limit to the size and weight of the goods that can be carried.
➢ There are high rates of accidents in road transport.
➢ There are high incidents of traffic congestion, which may delay the delivery of goods,
➢ It can be affected by bad weather conditions, such as floods, especially where the
roads are not tarred,
➢ It has high maintenance costs,
➢ It is dependent on the quality of the road infrastructure.

Air transport
Air transport is a major mode of international trade, it is mainly used for the transportation of
light, high-value goods, such as gold and diamonds, as well as perishable and emergency
goods,

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Advantages of air transport
➢ It is the fastest means of transportation. Goods take less time to travel to their
destination compared to other modes of transport.
➢ There are lower risks of theft and damage with air transport, which reduces the cost of
insurance,
➢ There are fewer accidents in air transport.
➢ It has low packaging costs.
➢ It operates on fixed routes and runs according to fixed timetables, which means that it
is easier to predict the arrival times of goods.
➢ It reduces traffic congestion on the roads.
➢ It reduces the need to keep large stocks of spare parts as they can quickly be flow in
when needed.
Disadvantages of air transport
➢ Air transport is the most expensive mode of transport. The freight charges are high.
➢ It is expensive to set up air transport. For example, airports and runways need to be
constructed and maintained and aeroplanes need be bought and maintained.
➢ Air transport is not readily available, you have to wait for scheduled times to use it.
➢ There is no door-to-door delivery.
➢ Air transport is easily affected by bad weather, such as fog.
➢ The costs of fuel and maintenance are high.
➢ It has a limited carrying capacity,
➢ It is not suitable for heavy and bulky goods,
➢ Although accidents are rare, they result in a total loss of goods when they occur.
➢ The goods cannot be easily rerouted,
Debate In groups, why? within a country, road transport is more widely used to carry goods
and passengers than air transport.
Rail transport
Rail transport is commonly used to move heavy and bulky goods over long distances. The rail
transport system in most countries is government owned because of the high initial capital
costs. Rail transport provides transport for both goods and passengers.

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Advantages of rail transport
➢ Rail transport can carry bulky and heavy goods.
➢ It is a cheap mode of transport over long distances.
➢ It is fast over long distances, especially with electric trains.
➢ Rail transport can carry large quantities of goods at a time.
➢ It can carry dangerous cargo.
➢ Different types of wagons are available to carry different types of goods, such as
tankers for fuels.
➢ It operates on fixed routes to a fixed time table.
➢ Rail transport has low fuel costs.
➢ It is not affected by bad weather.
➢ There are few accidents and less congestion in rail transport.
➢ Rail transport requires less labour in relation to the size of the train.
Disadvantages of rail transport
➢ It is very expensive to set up. The railway tracks must be constructed, train engines
and wagons must be bought and stations must be built.
➢ It is slow and expensive over a short distance.

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 ➢ Rail transport is not flexible as it follows a fixed route and fixed timetable. It is not
readily available.
➢ It lacks door-to-door delivery.
➢ There is a higher risk of theft and damage to the goods.
➢ It has a higher incidence of disastrous accidents.
➢ The high insurance costs are high.
Pipeline transport
Pipeline transport is a mode of transport limited to the transportation of fluids (liquids and

gases). It is mainly used to move natural gas and oil from ports to inland depots and water
from dams to reservoirs and then to residential areas.

Advantages of pipeline transport

➢ Pipeline transport has a large carrying capacity, which means it can transport large
volumes of fluids.
➢ It has low maintenance costs.
➢ It provides a continuous flow of goods.
➢ It is fast and carries goods direct to where they are required.

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 ➢ It is a safe means of transport as goods are protected from pollution or theft and
damage.
➢ It is not affected by congestion.
➢ It requires less labour and power since the product just flows on its own.
➢ It can carry different types of fluids at different times.
Disadvantages of pipeline transport
➢ A pipeline system is expensive to set up.
➢ The system may require frequent and expensive pumping where gradient cannot be
used.
➢ Pipelines are prone to sabotage and can easily be vandalised.
➢ It is not suitable for small and irregular cargo.
➢ Pipeline transport can carry limited types of goods.
➢ Leakages result in losses and delays.
➢ The pipelines cannot be redirected to other destinations once they have been laid.
➢ Damage in one part makes the whole system stop.

Sea transport
Sea transport has a wide variety of vessels to move goods and people. These vessels include
tramps, liners, roll-on roll-off ships and oil bulk ore ships.

Tramps

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 ➢ Tramps are vessels meant for hire.
➢ They are hired at freight markets where owners and hirers meet to negotiate freight
charges.
➢ The vessels have no permanent home port and they go wherever there is business.
➢ They have no fixed routes and no fixed timetables.
➢ These vessels carry a wide variety of cargo and no passengers.
Liners
➢ Liners operate on fixed routes and have fixed timetables.
➢ Liners have permanent home ports and are not meant for hire.
➢ Their charges are fixed by owners at conferences.
➢ They carry both goods and passengers.
➢ Oil tankers and refrigerated vessels are examples of liners.
Roll-on roll-off ships (RoRo)
➢ RoRo ships are designed to carry vehicles with their cargo across seas and channels.

➢ Vehicles are driven on to the ship without off-loading the cargo they are carrying,
carried across the sea and then driven off the ship at the destination port.
➢ These ships have parking bays and can also carry passengers.

Oil bulk are ships (OBO)

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These are specialised vessels designed to carry 1arge quantities of goods such as oil, ores and
other bulky goods. They have a large cargo holding space and are faster than ordinary ships.
Loading and off-loading is done at purpose-built terminals.
Advantages of sea transport
➢ Sea transport uses natural waterways, thus there is no need to construct routes.
➢ It has a large carrying capacity.
➢ Sea transport is the cheapest mode of transport.
➢ There are a variety of vessels to carry different types and Sizes of goods.
➢ Few accidents occur in sea transport.
➢ It has low fuel costs
➢ It can carry high-bulk low-value goods.
➢ Sea transport links most ports.
➢ It is a flexible mode of transport as ships can be rerouted easily.
Disadvantages of sea transport
➢ Sea transport is the slowest mode of transport.
➢ It requires expensive packaging to protect goods
➢ Many documents are used in sea transport.
➢ It is easily affected by bad weather.
➢ It is expensive La set up and build vessels.
➢ There are high risks at theft and damage as goods are in transit for a long time.
➢ It has high insurance and labour costs.
➢ Sea transport lacks door-to-door delivery.
Factors affecting choice of transport mode
➢ Nature of the goods - The types of goods to be carried should be assessed in terms
of their value, and whether they are fragile, perishable, bulky, heavy or light, before
choosing a mode e.g. when transporting light and high-value goods over a long
distance, air transport may be the most appropriate.
➢ Cost - How much you are willing to pay for the freight charges will be a factor in
choosing a mode. Some modes are more expensive to use, such as air transport.
➢ Distance - Consider how far the goods have to be carried. Road transport is more
efficient over short distances, while air and rail transport are ideal for long distances.
➢ Urgency of delivery - How fast must the goods get to their destination? Fast modes
of transport must be selected where goods are urgently required.

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 ➢ Quantity of goods - The size of the load must be considered in relation to the
capacity of the mode, some modes, such as rail and sea transport, are suited to large
volumes of cargo, while others can only carry small loads.
➢ Availability of mode - Not all modes of transport are available in all areas. Road
transport is widely available, whereas air, sea and rail transport are limited to certain
areas.
➢ Security of cargo - How safe are the goods in each mode? Some modes are prone to
theft and damage and therefore cannot be used to transport valuable items. Air
transport has low risks of theft and damage.
➢ Flexibility of mode - Rail, sea and air transport operate on fixed routes and to fixed
timetables. Road transport provides a more flexible service as the goods can be
rerouted easily and this mode is readily available.
➢ Reliability of mode - Rail transport offers a regular service compared to other modes
as it is not affected by bad weather. Road, sea and air transport may not be useable
when there are storms, strong winds or other bad weather elements.
NB// these factors must not be considered in isolation. A number of these factors may
influence your choice at the same time.

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OPERATIONS MANAGEMENT POSSIBLE QUESTIONS
identify the means of production
identify stages of production
explain the production function
illustrate the production function
identify factors influencing the location of a business unit
discuss factors that lead to relocation of a business
explain value addition
explain ways of adding value to a product
explain the importance of adding value to products
create a product using locally available inputs
explain the importance of transport
identify different modes of transport
describe strengths and weaknesses of different modes of transport
explain factors influencing choice of mode of transport
Explain importance of the purchasing function
identify the five (5) ‘rights’ of purchasing
explain stages of the purchasing cycle
explain the role of e-purchasing
describe inventory management
explain the advantages and disadvantages of holding inventory
describe role of warehousing
explain factors to consider when locating a warehouse
State different types of warehouses
explain functions of different types of warehouses
explain the concept of quality management
analyse the importance of producing quality products
explain ways of assuring quality
evaluate the impact of ICTs in operations management
recommend appropriate ICT tools for given circumstances as;
- Bar codes
- Radio frequency identification (RFID)
- Computer aided design
- Online billing
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