Attempt the following questions and compare your answers against the suggested solutions.
People in Business
1.(A) Describe how the provisions
of the Unfair Dismissals Act 1977 deal with situations of conflict in an
1.(B) Explain your understanding of ‘Picketing’ in the context of Irish industrial relations.
1.(C) Evaluate the contribution of Ombudsman schemes in the resolution of consumer problems.
2.(A) Outline to a friend who is considering setting up a new business why a private limited company would be the best form of organisational structure to adopt.
2.(B) Explain to your friend the difference between the Memorandum of Association and the Articles of Association of a private limited company.
2.(C) Evaluate the choice of a co-operative structure for a newly established business.
3.(A) Evaluate the importance of International Trade for an open economy like Ireland’s.
3.(B) Analyse the impact of EU directives on Irish Business. Mention 3 specific examples in your answer.
3. (C) Describe the impact that special interest groups have upon the decision making process of the European Union.
4. (A) Describe the essential
characteristics that a good manager should possess.
4. (B) Analyse the contribution of Quality Control for Irish business in the provision of goods and services.
4. (C) Evaluate how good Budgetary control systems can help Irish business.
5. (A) Analyse the importance of Training and Development to the success of a business.
5. (B) Explain your understanding of the role that performance appraisal plays in assessing the contribution of employees to an organisation.
5. (C) Evaluate three reward systems that can be used to motivate employees in a business.
6. (A) Describe the essential elements of a Control System.
6. (B) Analyse the contribution of Quality Control for Irish business in the provision of goods and services.
6. (C) Evaluate how good Budgetary Control systems can aid a business.
7. (A) Describe the importance for an entrepreneur of preparing a business plan.
7. (B) Evaluate the role of Advertising and Sales Promotion in the promotion of goods and services.
7. (C) Describe the factors a marketing manager would consider in setting the price of a new product.
1.(A) Under this
legislation, the burden of proof of dismissal rests with the employer.
To avail of this legislation a person must be at least one year in continuous
Grounds for fair dismissal include:
(1) Claims pertaining to
lack of competence/qualifications
(2) Claims relating to misconduct
(3) Shortage of work leading to redundancy
(4) Breach of law by an employee
Grounds that would be deemed unfair include:
(a) Being a member of a
(b) Being a member of a political party
(c) Being of a particular race/colour/ethnic group.
(d) Being pregnant.
(e) Being selected unfairly for redundancy.
(f) Being a traveller.
(g) Having instituted legal proceedings against one’s employer.
Proper procedures must be adopted when dismissing an employee even when guilty of the substantive issue. Cases under this law may be taken to the Employment Appeals Tribunal or to a Rights Commissioner.
involves workers stopping work and placing pickets at the entrance to their
workplace. Primary Picketing involves placing a placard at the entrance
to one’s immediate employer with the intention of preventing work taking
place. Secondary Picketing is directed at an outside employer who
is deemed by employees/union to be helping their immediate employer overcome
difficulties caused by industrial action.
1(C) An ombudsman operates as a watchdog and in an arbitrary manner. The State ombudsman gets involved when there has been inaction by a public body to a consumer complaint. Public bodies include local authorities, health boards, An Post, Telecom etc.
If consumer complaints against a public body are not acted upon. a consumer can take the matter to the ombudsman who can then inspect the books. Following investigation the ombudsman can take relevant action. An ombudsman scheme also exists for credit institutions and insurance. If more resources were available for the State ombudsman a better service would be provided. Overall these schemes contribute in reducing consumer conflict.
(2).(A) Reasons for
setting up a private limited company include:
(1) Shareholders have limited liability.
(2) A share issue is an easy way to raise share capital.
(3) The structure of such an organisation facilitates future expansion.
(4) A private company in law is considered a separate legal entity from the owners.
(5) There is continuity of existence. If a shareholder dies a business can continue trading.
Memorandum of Association is an important document used in the formation
of a company. It sets out the relationships that would exist between the
company and outsiders. It would contain:
(a) Name of the company with Ltd after a Private Co and PLC after a Public company.
(b) Detailed objectives of the company.
(c) Location of the company’s registered office.
(d) Statement of Limited Liability.
(e) A statement of the company’s registered share capital.
(f) Signatures of initial subscribers with number of shares allotted.
The Articles of Association are the internal rules and regulations for running a company. Articles of Association may contain:
(a) Statement of Authorised Share Capital.
(b) Conduct and procedure of company meetings.
(c) Voting rights for each type of share.
(d) Duties, powers and retirement of directors.
(e) Details of methods involved in distribution of profits.
for adopting a Co-operative structure include:
(a) It can be used for starting up a new business especially in the case of a workers co-op. Such an enterprise only needs a minimum of 3 members.
(b) A co-operative has limited liability.
(c) Each shareholder has only one vote.
(d) There are many examples of co-op’s found in agriculture, retailing, credit unions etc.
(e) In recent years, a number of co-op’s converted to PLC status to avail of more finance.
3.(A) (1) Ireland
as a small open economy is not self sufficient and needs to import oil
and produce that cannot be grown here.
(2) Ireland has a comparative advantage in the provision and export of agricultural produce.
(3) Irish consumers want greater choice and variety and a higher standard of living e.g. importing German cars and Japanese electrical goods.
(4) Due to economies of scale certain products cannot be produced here e.g. cars, steel etc.
(5) Foreign currency must be earned to pay for the large volume of imports into our open economy.
3.(B) EU Directives
must be adopted into Irish law. The aim of these directives are to harmonise
laws in the member states. The impact of EU directives on Irish business
(1) It will make it easier to do business across member states.
(2) Directives in Product Liability mean that Irish producers know what liabilities they have to comply with if they are responsible for faulty goods.
(3) Directives in Misleading Advertising mean that Irish firms will know what is expected from them in this area.
(4) Directives in Company Law make it easier to compare accounts of companies across the EU.
3.(C) Special interest groups can have a powerful influence on the political decision making process in Ireland. Some of the more important special interest groups include farmers, consumers and trade unions. These interest groups combine with groups from all other member states to exert a powerful lobbying influence on policy makers at EU level. These interest groups try to exert influence on policy at local, national and EU level. At EU level, the main interest groups are formally integrated into the Economic and Social Committee e.g. UNICE(Employers), ETUC(Trade Unions). Political parties like the Green Party are a particular lobby that influence policy matters in areas concerning the environment and consumer affairs.
4(A) The most important
characteristics of a good manager are:
1. Judgement: This involves analysing situations, taking all relevant data and past experience into account, followed by a choice from a list of alternatives. Experience is a valuable tool in making judgements.
2. Hard Work: This involves staying with a task until it is completed. A hard working and committed manager would be a good role model for subordinates.
3. Decisiveness: This entails having the ability to make clear and calm decisions and to communicate them to the relevant personnel. It is essential to make sure that decisions are implemented.
4. Delegation: This involves giving more authority and responsibility to subordinates. It will allow for greater freedom and a more challenging job for the subordinate. Delegation allows more time for the manager to engage in strategic rather than operational issues. Allowing subordinates have more responsibility will mean they will be better equipped to take up future promotional opportunities.
5. Integrity: This involves a manager being honest and taking responsibility when errors occur. A manager should allocate work to subordinates in a fair manner. Decisions made should be open and transparent.
4.(B) The ultimate
aim of communication is to achieve action. The essential communications
skills needed by a manager include: Reading, Speaking, Listening, and Writing.
1. Good presentation and display of communication will help employees read communication from a manager especially in the case of memos and reports. If information is clearly written and presented well, other managers and subordinates will have little difficulty reading or interpreting it.
2. Clarity of diction and an understanding by a manager of one’s audience will help when speaking. Clarity in communication will save time and reduce the need for clarification.
3. To be a good listener is to be a good communicator. Listening can play a decisive role for any manager in business negotiations. Aside from hearing the message a manager must be able to analyse and interpret it.
4. Managers who have good communications skills are more approachable. This will help relationships and morale in an organisation. As a result there will be less tension, conflict, disputes etc.
4.(C) The barriers
to effective communication with possible solutions include:
(1) Noise: Any interference from outside the communication process that leads to a message being misunderstood or altered. A possible solution would be to reduce the number of levels in the communications process.
(2) Information Overload: An individual may be exposed to many messages or pieces of information over a very short period of time, much more than can be possibly absorbed. Careful preparation of material and an understanding of what a prospective audience can absorb should be considered.
(3) Language: Certain professionals may use jargon which only their own members understand e.g. solicitors, accountants etc.
To deal with this issue the relevant professional must ensure the recipient of a message understands the meaning of all the words used.
(4) Organisational Climate: The atmosphere in an organisation will affect how a message is received e.g. tension, fear, mistrust. An open and inclusive style of communications with a strong emphasis on human relations skills would help to foster a good communications climate.
5. (A) 1. Major investment
in Training and Development can improve employee productivity, quality
of service offered and also reduces errors.
2. A continous focus upon Training and Development should mean that there should be no future skill shortages.
3. Individuals should also be less stressed in the conduct of their work and should be more adaptable to change. Also labour turnover should not be as much of a problem as a result of investment in this sphere.
4. It should give business a competitive edge over other companies that do not spent as much on training and development.
5. Employees should be better able to manage the interface between customers and their organisation.
5.(B) Performance Appraisal is a systematic approach to the evaluation of employee performance, potential or characteristics with a possible view to assisting with decisions in areas like pay, training, promotion and motivation.
Benefits of Performance
1. It gives a manager an opportunity to learn about the hopes, fears and anxieties of staff.
2. The manager with the employee has a chance to clarify goals and priorities.
3. The manager will have an opportunity to motivate staff by recognising their achievements.
Difficulties of Performance
1. Difficulties can occur in arriving at a mechanism for the measurement of change in an employee’s work performance.
2. Performance Appraisal should be adopted as a measure in helping staff, sometimes it is used as a form of inspection that could penalise staff.
3. Some appraisal techniques used may be too subjective with criticism of employee’s work leading to demotivation
5.(C) 1. Time
Rate: Also known as a flat rate system. It is simple and easy method
to administer. The fixed basic rate is set per hour and multiplied by the
number of hours worked. It has limited motivational potential.
2. Profit Related Pay: This involves a percentage of the firm’s profit being set aside to be shared among employees in addition to their normal pay. The employer is in control of the proportion set.
3. Employee Share Ownership: This involves allocating shares to employees according to an agreed formula. Such schemes can result in greater employee involvement and commitment.
(6).(A) Elements of
Stock Control System
1. A person is in placed in charge of the system with somebody else responsible for dispatch.
2. A system for recording has to be put in place and preferably be computerised
3. Decisions must be made regarding re-order levels
4. Demand levels and speed of response must be considered.
5. Checks have to be put in place on quality of raw material.
6. Lead time must be considered.
7 . Tied in relationships with suppliers are essential.
(6).(B) Quality Control means conformity to customer requirements with a particular emphasis on zero defects. Quality must be evident at all stages of the production process. This includes imposing high standards on suppliers of raw materials. It should also mean that staff are properly trained in their work. Good planning and testing will aid in the delivery of a quality product.
Methods used to improve quality levels include:
1. Attain ISO 9000
standard which will improve the service to customer by placing an emphasis
on procedures to bring about greater consistency in the provision of products/services.
2. Adopt Total Quality Management(TQM) which will focus on zero defects and commit all staff to high quality standards to satisfy both internal and external customers.
3. Adopt World Class Manufacturing(WCM) which is similar in emphasis to TQM with particular attention paid to manufacturing processes.
4. Aim to acquire the Quality Mark (Q Mark) which will represent a stamp of quality to gain a competitive advantage.
of Budgetary Control include:
1. Motivate staff to adhere to pre-determined targets.
2. Deviations from targets can be identified and rectified speedily.
3. It facilitates the best use of resources.
4. As department managers are involved in budget formulation it motivates them to stay within limits.
5. The process is future orientated and forces managers to think ahead thereby identifying/highlighting future problems.
6. It is a standard by which actual financial results are compared against.
7.(A) (1) It is an
essential document to have prepared when approaching a financial institution
for loans or government agencies of grants.
(2) It forces the entrepreneur to think through all aspects of the proposed venture to identify if there is a viable business opportunity.
(3) It can help reduce the financial and personal risk for a entrepreneur involved in starting a Business.
(4) The plan will act as a benchmark to which future performance will be gauged as it involves targets being set for specific areas of the business
(5) If logically pursued will give the entrepreneur and his/her employees a sense of direction.
(7).(B) (1) Advertising: This is a paid form of communication aimed at the mass market. As a communications medium it can be used to inform, persuade and remind. It’s impact is very much in the long term and plays a major role in establishing the success of a brand. The main media methods available include: TV, Radio, Newspapers, Billboards, Cinema etc. The Internet will likely become a very important medium in the future. It is suitable when targeting products or services that have a mass market appeal eg cars, banks etc. Most firms use the services of an advertising agency.
Sales Promotion: Spending on this promotional tool has increased greatly in recent years. It includes the use of coupons, free gifts, competitions, banded packs, flash prices, premium offers etc. As a promotional method it can be targeted at customers, retailers or the firm’s salesforce. Unlike advertising it’s main impact is in the short term.
7.(C) (1) Customers:
Prices have to be set at a level that target customers will be able to
(2) Competitors: Prices must be set taking account of the price range of competitors.
(3) Costs: The ultimate of any business is to make a profit. In this context it is vital to set a price that will cover costs and yield an adequate profit.