Sunday Business Post March 2013

Introduction

As we approach the Leaving Cert examinations this article analyses the Higher Level

Business paper and in particular past papers. We will look at trends and the more

frequently asked questions. We will also look at techniques to improve grades.

Short answer questions

This section is worth 20% of the exam and it is important that you know all of the terms

from the exam questions. It is better to write as much information as possible as one-

sentence definitions are far from sufficient. There is a good mix of Questions varying

from definitions to simple computations to acronyms to chart drawing. It is wise to split

all definitions into 2 separate points. All information should be relevant to the specific

way that the question was asked.

FIT IN AS MUCH ACCURATE AND RELEVANT INFORMATION AS TIME WILL ALLOW

Applied Business Question

Compulsory Section

80 marks (20%)

In Leaving Cert 2013 students will be examined on Units 5, 6 and 7.

Watch for the more general topics

Business : The FINAL Countdown

Unit 5

Market research

Marketing mix

New product Development

Business Plan

Methods of expansion

Unit 6

Services of Community Development Organisations

Impact of economic variables on business

Impact of business on local economy and national economy

Social responsibility

Environmental issues and examples

All the Types of Organisations

Unit 7

Opportunities and Challenges associated with International trade

Importance of global markets

EU Decision making process

Impact of EU policies and Institutions

There are three questions based on a given passage.

You must state your point, expand the point and relate it to the text.

ALWAYS REFER TO THE PASSAGE

Course knowledge is essential here and each part of the answer must be planned.

In the 2012 exam 4 definitions of the Promotional mix components would have been

sufficient plus an appropriate link.

Course knowledge dictates the marks and the links only have a supporting role.

An isolated link without knowledge is never awarded marks.

60 Mark questions Unit by Unit

Question 1 has been taken from Unit 1 every year so far: there has been a question on

“relationships” almost every year between the various people in the business.

The nine parties are

Entrepreneur

Investor

Producer

Consumer

Employer

Employee

Service provider

Government and society

Interest group

The relationships are co-operative and competitive and definitions and examples of each

are very important.

- Last year was a mixture of Consumer and Labour law and an easier Law of

Contract question.

- From an exam perspective the Labour Relations Commission and Labour Court

cannot be ignored.

- Individual questions on legislative methods or Non legislative methods of conflict

resolution are also important.

- Another question on the Labour Laws would not be a surprise and the conditions

and warranties in contract law have not been asked before.

Unit 1

Parties in a business

Relationships – Co-operative + Competitive

Law of Contract (Elements, How to end a contract, Remedies for breach)

Legislative methods of conflict resolution

Non- legislative methods of conflict resolution

Sales of Goods and Supply of Services Act 1980

- Consumer Protection Act 2007

- Employment Equality Act 1998

- Industrial Relations Act 1990 (including Labour Relations Commission

and Labour Court)

- Unfair Dismissals Act 1977-93

UNIT 2

This section is short but appeared as a 60 mark question previously.

Apart from characteristics, skills and

intrapreneurship the applications of enterprise are

important.

In 2011 only specific relevant enterprising words for

a Tidy towns project was suitable

Remember

that Organising and

Controlling are

management terms only.

UNIT 3

Students should be familiar with the following areas:

Management Skills

1 Leadership

Main styles: Autocratic, democratic, laissez faire. WHAT THEY ARE AND A RESULT

OF EACH STYLE PLUS AN EXAMPLE

Include directing and co-ordinating as part of leading.

Know the link with delegation and in particular the “span of control” definition

and diagram and Chain of Command.

2 Motivation

Definition

How to improve motivation

Maslow’s hierarchy and why it is important and how a manager can satisfy the needs

McGregor - be able to distinguish between Theory X and Theory Y.

3 Communication

Definition and importance

Types e.g. upward, downward etc.

Principles of good communication

Barriers to effective communication

Factors when deciding on choosing an effective method of communication.

Layout of Memo, Business letter, Report.

Visual communications (including drawing the diagrams)

Communications and Technology including

Role of Chairperson at meetings

Role of Secretary at meetings and types of meetings

Notice, agenda, minutes, quorum, ad hoc

Benefits of Meetings

- Electronic Data Interchange - Internet

- Electronic Mail - Integrated Services Digital Network

- Videoconferencing

Management Activities

1 Planning

Principles of Planning

Why it is the most important activity

Objectives

Role of SWOT analysis (Know a prepared

example)

Mission Statement

Types e.g. strategic, tactical, contingency and

link them to the benefits of planning

Know a basic definition of each control Type

2 Organising

How to draw any organisation structure and label correctly

How to define and draw a “span of control”

Various structures e.g. Line

Matrix

Benefits of each

Delegation and factors affecting “Span of Control”

3 Controlling

Definition

Principles

Types

- Stock

- Credit

- Cash

- Quality

- Cost

Why it is the most important activity including examples

Simple definition of each is needed and Stock quality and credit are the main ones.

It is important to be able to define each management skill and activity

Remember

Evaluation means

In my opinion and

make a comment

or judgement to

back up your

opinion.

UNIT 4

NB There is usually at least one 60 mark question from Unit 4 on the higher level paper.

Human Resources Management and or Changing Role are likely sections this year

The key areas are of unit 4

Household and Business Manager

Finance

Similarities and differences between managing a household and a business in the

areas of tax insurance and finance

Cash flow forecast

- How to analyse a cash flow forecast e.g Capital Expenditure usually

causes liquidity problems.

- Purpose or Benefits of a cash flow forecast named and explained

- Household cash flow forecast vs. Business cash flow forecast.

Matching a source with a need e.g. house with mortgage and know examples

from each Type of Source of Finance.

Know examples of all types of finance.

Short Term Medium Term Long Term

- Bank Overdraft - Hire purchase - Equity Shares

- Factoring - Leasing - Loan Capital

- Trade Credit - Medium term Loan - Project Finance

- Bank loan - Retained earnings

Insurance

Principles (5 basic ones)

Average clause application and explanation and link to INDEMNITY

Relationship between risk and premium

Overlap with risk management (Planned approach)

Strategies to reduce risk (Insurance\ Health and Safety \and one method all

explained)

Household policies

Business policies

Taxation

Types of Income Tax including:

Tax forms P12, P21, P45, P60

How to calculate net pay using tax credits

Self Assessment

Business Taxes

Recognise:

Corporation Tax

Value Added tax

Capital Gains tax

Capital Acquisitions tax

Implications of each tax on the business example

VAT of 23% on consumer goods makes products unaffordable and Demand falls affecting

the business

Monitoring the Business

Know how to analyse a basic Trading A/C, Profit and Loss A/C and the Balance

Sheet.

Know the terms, e,g current asset, closing stock.

Sales – cost of sales = Gross Profit

Gross Profit – expenses = Net Profit

Know the importance of financial information

The users of financial information

1. Employees look at profits

2. Suppliers look at cash flow

3. Investors look at Capital Structure

Spreadsheets (uses)

Advantages of Low Gearing

Remember

In exams concepts are more important than a range of rates and taxes.

Relationship between Debt and Equity

Advantages of High Gearing

Know how to apply 6 ratios and comment on the trend under the following

headings:

1. Profitability (all percentages)

- Gross Margin

- Net Margin

- Return on Investment

2. Liquidity (:1)

- Current Ratio

- Acid Test Ratio

3. Capital Structure (:1)

- Debt Equity Ratio

UNIT 5

Identifying opportunities

Sources of opportunities: internal and external sources of ideas

New product and service development process

The correct stages in order are very important:

1) Idea generation

2) Screening

3) Concept Development

4) Feasibility Study

5) Prototype Development

6) Test Marketing

7) Full Launch

Marketing

The marketing concept (consumer orientation)

The marketing strategy (benefits of the plan and its parts)

Developing the marketing mix - product, price, promotion and place

Know every aspect of the Marketing Mix thoroughly especially the individual

parts of the Ps

Getting started

Finance, ownership and production options

Developing a business plan

Start up factors which includes the challenges.

Expansion

Reasons (Name and Explain) and finance for expansion (debt and Equity)

Implications and methods of expansion

Know the benefits of mergers and takeovers and the risks involved.

Alliances and franchises overlap with this unit

UNIT 6

1 Categories of industry

Agriculture, manufacturing, services and natural resources

Changing trends in each sector and how it affects business

Know 3 good definitions plus the contribution that each one makes to the Irish

economy

2 Types of business organisation

Choosing between alternatives:

o Sole trader, partnership, alliances, franchising, private limited companies,

transnationals, public limited companies, co-operatives, state-owned

enterprises and indigenous firms

Know the pros and cons of each

Changing trends in ownership and structure

Why the firm would change from one type to

another

3 Community development

Local community and business

County enterprise board /FAS /LEADER/Area partnership Companies are the only

organisations relevant in this section

Community development, incorporating local community initiatives

Use words like local/ self help /social and economic in this chapter

4 Business and the economy

The impact of the economy on business, taking into account the general state of

the economy, inflation, interest rates, tax and grants

Use a table with definitions and the impact on the business

The impact of business on the economy at local and national level, taking into

account employment, tax revenues and environmental issues

The interaction between business and the wider economy

Remember that Alliances and Franchises can be asked from here or from unit 5

5 Government and business

An introduction to the Government's role in encouraging and regulating

business.(Creating a suitable climate)

Role of the Government as employer

6 Social responsibilities of business.

Ethical business practice

Socially responsible business at local and national level

Characteristics of an environmentally conscious firm

Costs and opportunities associated with doing the right thing

The following are the key outcomes from Unit 6 Part 6

i. describe the characteristics of an environmentally conscious company (HL);

ii. analyse the impact of environmental issues on business (HL);

iii. discuss the social responsibilities of business (HL);

iv. NNB: evaluate the effects on a firm's costs of meeting its ethical, social and

environmental responsibilities (HL).

Unit 7

Introduction to the international trading environment

The significance of international trade for the Irish economy

Know the visible and invisible sections and balance of trade and Balance of

Payments

The changing nature of the international economy and its effects on Irish business

Opportunities and challenges for Irish business in international trade

Trading blocs and agreements and an open economy

European Union

The importance of the European Union

The purpose of the main European Union policies and directives and Regulations

and their impact on Irish business

1. Agricultural

2. Fisheries

3. Competition

4. Social

5. Economic and monetary

An outline of the decision-making process in the main European Union

institutions

The role of the special interest groups in this process

International business

The global marketing of products and services including the challenges

The development (reasons for coming here) and impact of transnational

companies (corporation tax paid/jobs created/spinoff effect/payroll paid/types of

companies)

Identify the effects of the single market on Irish business;

outline reasons for the development of transnational companies;

explain the role of information technology on international trade;

discuss the opportunities and challenges facing Irish business in developed and

developing markets; explain the role of global marketing in international business;

explain the purpose of the main European Union policies and directives (HL).

The Last word

It is important

(i) to learn the material and

(ii) to test yourself regularly.

Each question has three areas to look at as follows;

Evaluate how the provisions of the Sale of goods and the supply of services act help to

protect the consumer

(i) Evaluate (in my opinion)

(ii) The Act

(iii) Protecting the consumer

All questions should be treated in a similar fashion.

Almost all questions are state and explain the point using relevant knowledge from the

course.

Learn the course in bullet points and quality revision means being able to rewrite the

exact information unaided

IN THE LONG QUESTIONS A MINIMUM OF 1 AND A MAXIMUM OF 2 QUESTIONS MUST

COME FROM PART 1

NAME

EXPLAIN

EXAMPLE OR EVALUATION in red

TIMING:

Short Questions 30 minutes

ABQ 40 minutes

4 long questions 25 minutes each

10 Minutes planning and reading questions carefully

_________________________

Philip Curry

Ashfield College