Answer any FIVE (5) questions only.

[100 marks]

Question 1
a) Discuss the FOUR (4) types of competitions with examples.
(16 Marks)
Answer:
1) Perfect competition market situation in which there are many buyers and sellers of
a product and no single buyer or seller is powerful enough to affect the price of the
product (eg. Corn ,wheat, peanuts seller)
2) Monopolistic competition market situation in which there are many buyers along
with a relatively large number of sellers who differentiate their products from the
products of competitors (eg. Clothing, shoes sellers)
3) Oligopoly competition a market or industry in which there are few sellers (eg.
Automobiles producers, airplanes services)
4) Monopoly market or industry with only one seller, and there are barriers to keep
other firms from entering the industry. (eg. TNB)
( 1 mark for each correct answer listed. 2 marks for correct explanation. 1 mark for
example)

b) Distinguish between capitalism and communism.

(4 Marks)
Answer: Capitalism is an economic system in which individuals own and operate the
majority of businesses that provide goods and services. Communism is an economic
system where all factors of production are owned and controlled by the government
as proxy for ownership by all citizens.
( 2 marks for each correct answer)
Question 2
a) Explain any FIVE (5) methods by which a firm can organize to enter into
international markets.
(10 Marks)
Answer:
1) Licensing a contractual agreement in which one firm permits another to produce
and market its products and use its brand name in return for a royalty or other
compensation
2) Exporting selling or shipping raw materials or products to other nations
3) Joint venture a partnership formed to achieve a specific goal or to operate for a
specific period of time
4) Totally owned facilities production and marketing facilities in one or more foreign
nations
5) Strategic alliances a partnership formed to create competitive advantage on a
worldwide basis
6) Trading companies firms that provide a link between buyers and sellers in different
countries
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7) Countertrade an international barter transaction in which goods and services are

exchanged for different goods and services
8) Multinational firms a firm that operates on a worldwide scale without ties to any
specific nation or region
(1 mark for each correct answer listed. 2 mark for correct explanation)
b) Describe any FIVE (5) types of trade restrictions that can be implemented by a
country to international trade
(10 Marks)
Answer:
1) Tariffs/import duty a tax levied on a particular foreign products entering a country
2) Import quota a limit on the amount of a particular good that may be imported
during a given time
3) Embargo a complete halt/stop to trading with a particular nation or in a particular
product
4) Foreign exchange control restriction on amount of foreign currency that can be
purchased or sold
5) Currency devaluation the reduction of the value of a nations currency relative to
the currencies of other coutries
6) Bureaucratic red tape subtly imposes unnecessarily burdensome and complex
standards and requirements for imported goods
7) Cultural attitudes can impede the acceptance of products in foreign countries
(1 marks for correct answer listed. 1 mark for correct explanation)
Question 3
a) Explain any FOUR (4) advantages and FOUR (4) disadvantages of sole
proprietorship.
(16 Marks)
Answer:
Advantages
1) Ease of start-up and closure it is the simplest and cheapest way to start a business
that some start-up requires no contracts, agreements or other legal documents
2) Pride of ownership a successful sole proprietorship is often very proud of her/his
accomplishment
3) Retention of all profits all profits will become the personal earnings of the owner
4) No special taxes profits earned by a sole proprietorship are taxed as the personal
income of the owner. Owners are not taxed twice unlike corporations
5) Flexibility of being your own boss the owner is completely free to make decisions
about the firms operations.
Disadvantages
1) Unlimited liability a legal concept that holds a business owner personally
responsible for all the debts of the business
2) Lack of continuity if the owner is sick, retires or dies, the business is essentially
ceases to exist
3) Lack of money bank, suppliers and other lenders usually are unwilling to lend large
sums of money to sole proprietorship.
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4) Limited management skills the sole proprietorship is normally the sole managers of
the business.
5) Difficulty in hiring employees often sole proprietorship find its hard to attract and
keep competent employees since large companies can offer better pay and other
benefits.
( 1 mark for each correct advantages and disadvantages provided. 1 mark for each
correct explanation )
b) Define the following terms:
I.
Stockholder
II. Preferred stock
III. Dividend
IV. Board of Directors
(4 Marks)
Answer:
1) Stockholder a person who owns a corporations stock
2) Preferred stock stock owned by individuals/firms who usually do not have voting
rights but whose claims on dividend are paid before those of common-stock owners
3) Dividend distribution of earnings to the stockholders of a corporation
4) Board of Directors top governing body of a corporation which are selected by the
stockholders
(1 mark for each correct explanation)
Question 4
a) Explain FOUR (4) basic management processes in an organisation.
(8 Marks)
Answer:
1) Planning establishing organisational goals and deciding how to accomplish them.
2) Organizing grouping of resources and activities to accomplish some end result in
an efficient and effective manner
3) Leading process of influencing people to work towards a common goal
4) Controlling process of evaluating and regulating ongoing activities to ensure that
goals are achieved
(1 mark for the correct answer listed. 1 mark for correct explanation)
b) Discuss any FOUR (4) key skills of successful managers
(8 Marks)
Answer:
1) Conceptual skills ability to think in abstract terms
2) Analytical skills ability to identify problems, generate alternative solutions, and
select the best option
3) Interpersonal skills ability to deal effectively with other people
4) Technical skills needed to accomplish a specialized activity
5) Communication skills ability to speak, listen and write effectively.
(1 mark for each correct answer listed. 1 mark for correct explanation)
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c) List the FOUR (4) types of plans that managers can develop and rely on.
(4 Marks)
Answer:
1) Strategic plans
2) Tactical plans
3) Operational plans
4) Contingency plans
(1 mark for each correct answer listed)
Question 5
a) List the FIVE (5) common bases for departmentalization.
(5 Marks)
Answer
1)
2)
3)
4)
5)

By function
By product
By location
By customer
Combination of bases

(1 mark for correct answer listed)

b) Delegation is assigning part of a managers work and power to other workers.
Discuss the THREE (3) steps in the delegation process.
(6 marks)
Answer:
1) Assign responsibility the duty to do a job or perform a task. Managers simply
give the worker a job to do.
2) Grant authority the power, within an organization, to accomplish an assigned job
or task. It might include the power to obtain information, order supplies or make
certain decisions
3) Create accountability obligation of a worker to accomplish an assigned job or
task.
(1 mark for correct answer listed. 1 mark for correct explanation)
c) Explain any THREE (3) basic forms of an organizational structure.
(9 marks)
Answer:
1) Line Structure an organizational structure in which the chain of command goes
directly from person to person throughout the organization
2) Line-and-staff structure an organization structure that utilizes the chain of
command from a line structure in combination with the assistance of staff managers
3) Matrix structure an organizational structure that combines vertical and horizontal
lines of authority, usually by superimposing product departmentalization on a
functionally departmentalized organization

4) Network structure sometimes referred to virtual organization where

administration is the primary function performed while other functions are contracted
out to other organization.
(1 mark for correct answer listed. 2 marks for correct explanation)
Question 6
a) Define utility and explain the FOUR (4) types of utilities that marketers can provide to
its customers with examples.
(14 marks)
Answer:
Utility can be defined as the ability of a good or service to satisfy a human need
1) Form utility: Created by converting production inputs into finished products (eg. Dell
produced laptop to replace PC)
2) Place utility: Created by making a product available at a location where customers
wish to purchase it (eg. Some firms open up websites so that customers can buy
online without having to travel)
3) Time utility: Created by making a product available when customers wish to
purchase it (eg. 7-evelen opens up 24/7)
4) Possession utility: Created by transferring title (OR ownership) of a product to a
buyer (companies makes buying of products easier by removing all unnecessary
procedure)
( 2 marks for correct definition. 1 mark for each correct utility listed. 1 marks for
correct explanation. 1 mark for example)
b) Discuss any THREE (3) classifications of markets
(6 marks)
Answer:
1) Consumer markets - Purchasers and/or households members who intend to
consume or benefit from the purchased products and who do not buy products to
make a profit
2) Business-to-Business markets - Producer, reseller, governmental, and institutional
customers that purchase specific kinds of products for
use in making other products for resale or for
day-to-day operations
3) Producer markets - Individuals and business organizations that buy products to use
in the manufacture of other products
4) Reseller markets - Intermediaries such as wholesalers and retailers that buy finished
products and sell them for a profit
5) Governmental markets - Buy goods and services to maintain operations and provide
citizens with products such as highways, education, utilities, defense
6) Institutional markets - Churches, not-for-profit private schools and hospitals, civic
clubs, charitable organizations
(1 mark for each correct answer listed. 1 mark for correct explanation)
NOTE:
- Statement and explanation given must make sense and must be in full sentence
- Points given by students need not be exact with the scheme but must give the same/similar
meaning
- Grammatical error will not be forfeited but word and structure must make sense to examiner
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