Cambridge Preliminary Business Studies

338 Pages·2017·54.641 MB·English

by  Marianne Hickey, Tony Nader, Tim Williams

YEAR 11 (PRELIM)
CAMBRIDGE
BUSINESS STUDIES
Fourth Edition
Marianne Hickey • Tony Nader • Tim Williams
ISBN 978-1-316-64882-7 © Hickey et al. 2017 Cambridge University Press
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Contents iii
Contents
About the authors v TOPIC 2
Acknowledgements vi Business management 66
How to use this resource viii
Chapter 5: Nature of management 68
TOPIC 1
5.1 Introduction 69
Nature of business x 5.2 The importance of effective
management 70
Chapter 1: Role of business 2 5.3 Features of effective management 71
1.1 The nature of a business 3 5.4 Skills of management 73
1.2 Producing goods and services 3 5.5 Achieving business goals 79
1.3 Economic and social roles of End-of-chapter tasks 84
business 4
Chapter 6: Management approaches 87
End-of-chapter tasks 11
6.1 Introduction 88
Chapter 2: Types of businesses 13 6.2 Classical approach 88
2.1 Classification of business 14 6.3 Behavioural approach 92
2.2 Factors influencing choice of 6.4 Contingency approach 96
legal structure 21
6.5 Strengths and weaknesses of
End-of-chapter tasks 26 the approaches 99
End-of-chapter tasks 101
Chapter 3: Influences in the business
environment 29
Chapter 7: Management process 103
3.1 Introduction 30
7.1 Introduction 104
3.2 External influences 30
7.2 Coordinating key business
3.3 Internal influences 40 functions and resources 104
3.4 Stakeholders 45 7.3 Operations 104
End-of-chapter tasks 49 7.4 Marketing 108
7.5 Finance 113
Chapter 4: Business growth and
decline 52 7.6 Human resources 123
4.1 The business life cycle 53 7.7 Ethical business behaviour 132
4.2 The stages of the business End-of-chapter tasks 136
life cycle 53
Chapter 8: Management and change 138
4.3 Responding to challenges at
8.1 Introduction 139
each stage of the business
8.2 Responding to internal and
life cycle 55
external influences 139
4.4 Factors that can contribute to
8.3 Managing change effectively 145
business decline 59
End-of-chapter tasks 154
4.5 Voluntary and involuntary
cessation 60
End-of-chapter tasks 63
ISBN 978-1-316-64882-7 © Hickey et al. 2017 Cambridge University Press
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iv Contents
TOPIC 3 Chapter 12: Critical issues in business
success and failure 254
Business planning 158
12.1 Introduction 255
12.2 The importance of a
Chapter 9: Small to medium
business plan 257
enterprises 160
12.3 Management 260
9.1 Introduction 161
12.4 Trend analysis 264
9.2 Definition 161
12.5 Identifying and sustaining
9.3 Role 162
competitive advantage 265
9.4 Economic contribution 163
12.6 Avoiding over-extension of
9.5 Success and/or failure 166
finance and other resources 268
End-of-chapter tasks 171
12.7 Using technology 269
Chapter 10: Influences in establishing 12.8 Economic conditions 271
a small to medium enterprise 173 12.9 Strategies for success in
10.1 Personal qualities 174 business 273
10.2 Sources of information 185 End-of-chapter tasks 276
10.3 The business idea 188
Chapter 13: The business plan using
10.4 Establishment options 192 business report format 278
10.5 Market influences 197 13.1 How the business plan is
10.6 Finance 203 determined 279
10.7 Legal 209 13.2 Business report format 280
10.8 Human resources 214 13.3 Main title or heading 281
10.9 Taxation 217 13.4 Executive summary 281
End-of-chapter tasks 222 13.5 Business description 284
13.6 Situational analysis 285
Chapter 11: The business planning
13.7 Organisation and management 287
process 225
13.8 Strategies 288
11.1 Introduction 226
End-of-chapter tasks 305
11.2 Sources of planning ideas 227
11.3 Vision, goals and/or objectives 231
Solutions to end-of-chapter multiple-choice
11.4 Organising resources 237
questions 308
11.5 Forecasting 241
Glossary 310
11.6 Monitoring and evaluations 245
Index 324
11.7 Taking corrective action 247
End-of-chapter tasks 251
ISBN 978-1-316-64882-7 © Hickey et al. 2017 Cambridge University Press
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About the authors v
About the authors
Marianne Hickey
Marianne Hickey, BA Dip Ed, obtained her degree from Macquarie University, majoring in Economics. She is a highly experienced teacher
of Social Sciences in New South Wales schools. Currently teaching at Epping Boys High School, she has taught Business Studies since its
inception at Epping. Marianne has also taught senior Geography and Economics as well as junior social science subjects such as Commerce.
Marianne has experience as a year coordinator and for many years took part in marking the HSC Economics papers.
Tony Nader
Tony Nader is a highly experienced teacher of Business Studies in New South Wales schools. He has been an HSC exam marker and has
written exam material and books for Commerce, Economics and Business Studies. Tony also lectures HSC Business Studies students in
preparation for their final exam. Tony has served as a head judge, assessor, senior marker and member of the Examination Committee for the
BOSTES Economics course, and was a member of the Catholic Schools Secondary Association Economics Trial Committee. Tony also writes
a number of independent Business Studies exams. He is currently HSIE Coordinator at Marist Catholic College Penshurst.
Tim Williams
Tim Williams began a career as an accountant in the late 1980s before moving into the hospitality industry. An accidental move into teaching
occurred in the early 1990s when Tim spent five years as a casual teacher with the New South Wales Department of Education. Following this,
he entered the private education system and spent over 10 years with SCEGGS Redlands in North Sydney. His time there culminated in the
position of Head of Social Sciences, administrating both Board of Studies and International Baccalaureate courses. Tim taught at Abbotsleigh
School for Girls until a move to South Australia. He is now the head of Business and Enterprise at Eynesbury Senior College.
Author acknowledgements
Marianne Hickey would like to thank Richard Hickey, Sarah Hickey, Alicia Catron, Jessica Pintado and Laura Hickey for their ongoing support.
Tony Nader would like to thank Antoinette Nader, Matthew Nader, Harriet Jordan and Linda Kowarzik. This fourth edition would not have been
possible without their efforts and patience.
ISBN 978-1-316-64882-7 © Hickey et al. 2017 Cambridge University Press
Photocopying is restricted under law and this material must not be transferred to another party.
vi Acknowledgements
Acknowledgements
The authors and publisher would like to thank John Clowes (The King’s School) and Yvonne Tarazi (St Maroun’s College)
for kindly reviewing this book and providing feedback.
The author and publisher wish to thank the following sources for permission to reproduce material:
Cover: © Getty Images / Dian Labombarbe.
Images: © Getty Images / Hinterhaus Productions, Topic 1 Opener / Jake Curtis, Chapter 1 Opener / AE Pictures
Inc., 1.1 / Dan Dalton, 1.4 / Guido Mieth, 1.5 (l & R) / Betsie Van Der Meer, 1.6, 2.3 / Time Robberts, 1.7 / Tetra
Images, Chapter 2 Opener / Jeff Greenberg, 2.2 / Stephanie Rushton, 2.5 / Alan Hopps, 2.7 / Andrew Hetherington,
2.8 / SMH, 2.9 / Stuart Kinlough, Chapter 3 Opener / Dougal Waters / 3.3 / Tome & Steve, 3.4 / Porta images, 3.6
/ Hero Images, 3.7 / Jim Corwin, 3.8 / SondraP, 3.9 / Monty Radusesn 3.10 / Rovert Daly, 3.11 / Nick David, 3.12 /
Paul Bradbury, 3.13 / Mark Von Holden, 3.15 / Dawn Delaney, 3.14 / Same Edwards, 3.16 / Mint, Chapter 4 Opener /
Justin Sullivan, 4.2 / Flying Colours Ltd, 4.3 / elboid, 4.5 / Peter Cade, 4.7 / houdre, 4.8 / Ezra Bailey, Topic 2 Opener
/ nzpohtonz, Chapter 5 Opener / Westend61, 5.2 / Erikona, 5.3 / Monty Rakusen, 5.4 / ismagilov, 5.6 / CharlieAJA,
5.7 / alexsi, 5.8 / ero Images, 5.9 / junce, 5.10 / martinedoucet, 5.11 / Bloomberg, 5.12 / Matthew Leete, Chapter
6 Opener / nicoolay, 6.1 / Hero Images, 6.4 / AndrewPopov, 6.7 / Jon Feingersh, 6.8 / Jetta Productions, 6.9 / JGI
Jamie Grill, 6.11 / Hero Images, 6.11 / Dimitri Otis, Chapter 7 Opener / Yingko, 7.2 / Westend61, 7.3 / Andrew
Wilson, 7.5 / PeopleImages, 7.6 / Mike Kemp, 7.7 / Paul Bradbury, 7.14 / Marvin Fox, 7.16 / Richard Goerg, 7.19
/ Mint Images, 7.22 / ColorBlind Images, 7.23 / Jetta Productions, 7.27 / Reza Estakhrain, 7.28 / Thomas Barwick,
7.29, 7.30 / Gary Burchill 7.33 / Stockbyte, 7.35 / Thomas Barwick, 7.36 / Klaus Vedfelt, 7.37 / Henrik Sorensen.
Chapter 8 Opener / Hiroshi Watanabe, 8.1 / Ezra Bailey, 8.2 / Mina De La O, 8.3, Topic 3 Opener / Bloomberg, 8.7
/ Morsa Images, 8.8 / Thomas Barwick, 8.9 / Reza Estakhrain, 8.12 / Thomas Barwick, 8.13 / xPACIFICA, 8.14 /
Tom Merton, 8.17 / Richard Dury, Chapter 9 Opener / Thomas Barwick, 9.4 / David Zaitz, 9.8 / Ingetje Tadros, 9.9
/ Thomas Barwick, 9.10 / Klaus Vedfelt, Chapter 10 Opener / Alistair Berg, 10.2 / Thomas Barwick, 10.7 / Ascent/
PKS Media Inc., 10.9 / SMH, 10.11 / Daniel Grizelj, 10.17 / Sean Justice, 10.20 / Juliette Wade, 10.26 (L) / Steve
Waters, 10.26(R) / James Baigrie, 10.27 / Pawel Libera, 10.31 / Bruce Ayres, 10.33 / Betsie Van Der Meer, 10.35 /
Ridofranz, 10.37 / Visuals Unlimited, Inc./Paul Andrew Lawrence, 10.41 / Ezra Bailey, 10.44 / Jeff Greenberg, 10.44 /
Colin Hawkins, 10.48 / Kelvin Murray, Chapter 11 Opener / Jeff Greenberg, 11.6 / Kelvin Murray, 11.10 / Randy Piett,
11.11 / Greg Wood, 11.16 / Morsa images, 11.18 / Getty Images, 11.20 / Roy Scott, 11.24 / Klaus Vedfelt, 11.25 /
Ezra Bailey, 11.27 / John Fedele, Chapter 12 Opener / David Harry Stewart, 12.2 / Images by Tang Ming Tung, 12.5 /
Kelvin Murray 12.8 / Time Robberts, 12.12 / Philby Illustration, 12.13 / John Lamb 12.18 / Mark Metcalfe, 12.19 /
Glow Images Inc., Chapter 13 Opener / Laflor, 13.1 / Mark Winwood, 13.4 / Ezra Bailey, 13.6 / Gary Houlder, 13.9 /
Simon Watson, 13.10 / Francis Hammond, 13.14 / Sigrid Olsson, 13.15 / David Gould, 13.17 / Simon Watson, 13.20;
© Seabin Project, used with permission, 10.8; © Hero HQ, 10.12; © Wesfarmers, 11.2; © Fiona Morris / SMH / Fairfax
Photos, 12.16.
Text: ‘Alfalfa House’, © Alfalfa, p.19; ‘Our Culture and Values’ © ANZ, used with permission, p.44 Business Bite;
‘Mission and Objectives’ © Nutrition Australia, p.235 Business Bite;
Every effort has been made to trace and acknowledge copyright. The publisher apologises for any accidental infringement
and welcomes information that would redress this situation.
ISBN 978-1-316-64882-7 © Hickey et al. 2017 Cambridge University Press
Photocopying is restricted under law and this material must not be transferred to another party.
vii
ISBN 978-1-316-64882-7 © Hickey et al. 2017 Cambridge University Press
Photocopying is restricted under law and this material must not be transferred to another party.
viii How to use this resource
How to use this resource
Topic and chapter openers
66 Cambridge Year 11 (Prelim) Business Studies Fourth Edition 68 Cambridge Year 11 (Prelim) Business Studies Fourth Edition 67 Chapter 5: Nature of management 69
Every topic opens with the principal focus and list
Topic 2 5 5.1 Introduction
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responsibilities business has to them business situations.
Source 5.1 The functions of management
Glossary terms
78 Cambridge Year 11 (Prelim) Business Studies Fourth Edition Chapter 5: Nature of management 79
All the key terms in each chapter (along with many more)
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How to use this resource ix
Business bites
212 Cambridge Year 11 (Prelim) Business Studies Fourth Edition Chapter 10: Influences in establishing a small to medium enterprise 207
A range of real-world business examples to illustrate key
arhpeparsiscpo errsostp p.b eAryic a intfitheecew r reA ebsCgutuCistluCiant.t ieiTooshnnsi.ss cC ffaoeondur reectro aaanclc hsgtu iooilnvtn det hruisnes mst AreyeCe naCntn C aod srw gm eaabo nlsanisisitatetot irfoson r mSoerctugraegde loSaenc u(firevde -yteeramrs) Debenture Credit card opvCecroerrde-madrampitfp tel rirwomcviitiaehtld a concepts and help you understand how they apply.
information, publications and up-to-date news relating
tMo elerggiselartsio an naddm tainkiseteorvede rbsy the ACCC. exLpeeansstive expMeonsstive
MwA hebirucghsei nrase bsausns dcin ateansk bseu ocyva eonru sitn acarr eec aoasmneop tiehtstei trso imzr ete oaa nncosd n bptyrro o lfi ts. Source 10.38 The relative interest costs of debt finance Ethical spotlight
more of the market rather than trying to push the
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Source 10.43 New food packaging labels in Australia willing to advance cash to the business based on
invoices the business has issued. The advantage
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share in the whitegoods, kitchenware and general home appliance market. The ACCC has
not Tohpisp otasekdeo tvheisr smhoovueld a bnodo gsitv JeBn’ st hceo ntatrkoel oovfe trh iets m aaprpkreotv atol. 29 per cent, with Harvey Business bite
Norman at 24 per cent in 2016.
Dave Roper and Will Miller initially started their business as messenger
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End-of-chapter sections
100 Cambridge Year 11 (Prelim) Business Studies Fourth Edition Chapter 6: Management approaches 101
At the end of each chapter, you will find a chapter summary
CHAPTER SUMMARY END-OF-CHAPTER TASKS
and a set of questions to help you consolidate your learning
Classical theorists used scientific, mathematical or quantitative approaches
to analyse business processes. Chapter revision tasks
from the chapter. The classical theory:
•• ehpmarosed arug chetiidgv ihwt yiltehv ethl eo fd sepveecloiaplmisaetniot no fa tnhde dfiavcistoiorny soyf sltaebmou orf tpor iondcurecatisoen 1 R•• ule CBulepah stashviriceoaeul –rcasolcliuemntnifisc on your page. Use the following column headings:
• uses a strict ‘pyramid’ organisational structure with a rigid chain of • Contingency
command and narrow span of control Place each of the terms from the table under the most appropriate management theory
• places an emphasis on the management functions of planning, organising heading.
and controlling division of labour communication skills job rotation
• encourages managers to use an autocratic leadership style autocratic task-oriented complex problem-solving
• sees employees as an input like raw materials and machinery strict chain of command small span of control time and motion studies
• uses financial rewards as a key motivator for employees. multiskilling motivation participative
Banedh arveicoougranli steh ethoeri e‘sso tcaiakel’ iinnfltou eanccceosu notn t hpero hduumctaivnit yfa icnt oar wino rbkupsliancees.s operations bscuireenatuificcr accaylc ulations paeuothpoleri-toarriieannt ed innetrginostiiact inoene ds
The behavioural theory: 2 Outline the meaning of each of the terms used in exercise 1.
• emphasises the need for management to work with people 3 Add other terms that you feel apply to the three headings provided.
• realises that an effective two-way communication process is needed
between management and workers Multiple-choice questions
• sees management’s role of leadership as paramount
•• fuosceuss ae sfl oantt emr ootrigvaatniiosna tuiosninagl sat rruacntguer eo fw iinthtr iwnosirck atenadm exstrinsic rewards 1 WA h icSht tryapteeg oicf ppllaann deals with the short-term objeCc t ivePsr oodf uac tbiouns inpelasns ?
• encourages managers to use a participative or democratic leadership style B Operational plan D Leading plan
with employee participation in decision-making 2 What are the features of the organisational structure used for a classical approach to
• emphasises teamwork and cooperation. management?
A A wide span of control and a rigid C A wide span of control and a flexible
Contingency theory emphasises the need for a more flexible structure, varied chain of command chain of command
leadership style and greater monitoring of the business environment. B Ach naainrr oowf c sopmamn aonf dc ontrol and a rigid D Ain fwoirdmea sl pcahna ionf ocfo cnotrmolm aanndd an
The classical, behavioural and contingency theories all have strengths: 3 Which level of management determines the strategic plans in a large business?
• The classical theory maximises output from factory-based production. A Board of directors C Middle managers
• Behavioural theories involve workers in decision-making and recognise the B Shareholders D Supervisors
• pTrehrsoepd couoncndtit vitneog peeoxnttceeynr nttihaaell ocohrfya anr egmqeuosit riaevtas st aehd ob raut nsnidno etriescssep .t eoc hteadv ee mexptrloay reees.ources to 4 WmAB ha incaADhgu eoetmofm cotehrcanertat i?fctoi cll owing leadership styles is a charCDac tePLriaasirtsitcisc eoipzfa -ftathiiveree c lassical approach to
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and drop questions) to assist recall of facts and understanding of concepts.
Downloadable Word documents
All activities and end-of-chapter questions are available as downloadable
Word documents, which can be accessed from within the interactive
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ISBN 978-1-316-64882-7 © Hickey et al. 2017 Cambridge University Press
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Cambridge Year 11 (Prelim) Business Studies Fourth Edition
Topic 1
Nature of business
20% of indicative time
Principal focus
This topic focuses on the attributes of business and the part it plays in a changing environment.
Introduction
Businesses form one of the most important sectors of studies, you will be able to examine how these changes
the community. They provide consumers with the goods impact on the functions or the performance of a business.
and services that satisfy their needs and wants, and
Businesses also serve the interests of various
enhance their standard of living. Businesses also employ
stakeholders, whether they are individual owners,
millions of people in the labour force.
shareholders, customers, creditors, employees or
This topic will look at the different types of businesses society. How fairly they do this while attempting to
in Australia and how they seek to achieve various goals. achieve a balance between what is considered good
The environment in which a business operates is often for the business but fair for society is often subject to
subject to considerable change. Through the use of case considerable debate.
Outcomes
Students will:
discuss business attributes, the role business plays plan and conduct investigations into issues affecting
in society and the different structures a business can modern business
have
evaluate information about real and potential
explain what businesses are influenced by, both situations affecting businesses.
internally and externally
analyse internal and external stakeholders, and the
responsibilities business has to them
ISBN 978-1-316-64882-7 © Hickey et al. 2017 Cambridge University Press
Photocopying is restricted under law and this material must not be transferred to another party.