Practice Exam 1

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Choose four (4) of the following questions and answer them in short essay format. All questions are worth equal marks. (12.5 marks each)

QUESTION 1 (12.5 marks)
Discuss the key factors in the international environment that managers of emerging global organisations look to as threats to their international operations. Provide examples as appropriate.

International Environment is the management of business operations conducted in more than one country and usually outside of the organisations normal environment (out of the country).

Legal-Political Environment: Political systems the organisation may be unfamiliar with; dealing with the government. - Political stability
- Quotas, tariffs and taxes
- Law and regulation

Economic Environment: Economic conditions in which the organisation operates in - Consumer Market
- Exchange rates
- Economic development (Developing country? Depression?)

Sociocultural Environment: Common behaviour and way of thinking among the consumers. - Religion
- Time orientation
- Beliefs and values(Hofstede)
- Language

QUESTION 2 (12.5 marks)
What are Porter’s competitive forces in an organisation’s environment? Explain them and provide examples to illustrate your answer.

Threat of new entrants:
- Capital requirements and economic of scale are potential barriers - Easier to enter mail order business than automobile due to high capital cost - Technology made it easier for new entrants to enter market. -

Threat of existing rivalry:
- Coke VS Pepsi, Toyota VS Honda
- Influenced by the other four forces and cost-product differentiation

Threat of substitute products:
- Affected by cost changes or trends
- Internet open new ways to meet customer needs
- Low cost airline tickets VS travel agencies

Bargaining power of buyers:
- Few buyer, many suppliers. Goods are standardised. (High buyer power) - Buyer gets more information about the car they want to buy; accident before?

Bargaining power of suppliers:
- Many buyers, few suppliers. Highly valued products. (High supplier power) - Airplane engine suppliers will have great power due to lack of competition - Internet helps the suppliers to reach end users and greater number of buyers

QUESTION 3 (12.5 marks)
What is the difference between organisational structure and organisational design? Outline the six elements of organisational design.

Organisational structure is a framework that defines the way tasks are assigned, the formalization of reporting relationships and the effectiveness of coordination of employees across departments. It is an expression of who is performing various tasks and how they are related to one another whereas organisational design is the process of reshaping or changing the organisation structure. Organisation leaders develop plans to function or perform better.

Six elements are:
1) Work Specialisation – A.k.a Division of labour. Main idea is to divide the jobs so that everything is not done by one individual. Employees can focus on doing specific functions in their own department allowing them to effectively and efficiently specialise in that particular job.

2) Chain Of Command – Line of authority from the upper level of organisation to lower level of organisation and classifies who reports to whom. Unity of command where each employee is held accountable to only one supervisor. Scalar Command defined line of authority that refers to all employees.

3) Responsibility, authority & delegation – Authority is the legitimate right of managers to issue orders, make decisions and allocate resources. Responsibility is the duty to perform a task an employee is assigned to and usually comes with authority for managers. Delegation is the transfer of authority to a lower level position in the hierarchy.

4) Span of management – Refers to the number of employees reporting to a...
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