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The Association of Business Executives Certificate
IB1209

1.1 IB

Introduction to Business
afternoon 2 December 2009

1 Time allowed: 3 hours. 2 Answer any FOUR questions. 3 All questions carry 25 marks. Marks for subdivisions of questions are shown in brackets. 4 No books, dictionaries, notes or any other written materials are allowed in this examination. 5 Calculators, including scientific calculators, are allowed providing they are not programmable and cannot store or recall information. Electronic dictionaries and personal organisers are NOT allowed. All workings should be shown. 6 Candidates who break ABE regulations, or commit any misconduct, will be disqualified from the examinations. 7 Question papers must not be removed from the Examination Hall.

IB1209

© ABE 2009

F/500/3659

Answer any FOUR questions Q1 In a business context, explain the difference between: (a) (b) (c) (d) (e) Inputs and outputs Labour intensive and capital intensive Resource market and intermediate market Primary sector and secondary sector Private sector and public sector

(5 marks each) (Total 25 marks)

Q2

(a)

A young university graduate has started her own fashion design business as a sole trader. Explain to her the advantages and disadvantages of this type of business structure. (16 marks) The fashion business proved successful and an opportunity arose for the graduate to expand the business abroad. At this point, she decided to make her business a private limited company. Identify and explain to her three advantages associated with changing to this type of business structure. (9 marks) (Total 25 marks)

(b)

Q3

(a) (b)

Briefly describe three different pricing methods available to a firm. Define the terms: (i) (ii) Marketing mix Product life cycle

(9 marks)

(6 marks)

(c)

A mobile phone manufacturer is beginning to experience falling sales of its best-selling brand of mobile phone. Show how the firm can use the marketing mix to prevent its sales from declining. (10 marks) (Total 25 marks)

Q4

(a)

Define the following terms, giving examples: (i) (ii) (iii) (iv) Lean production Cell production CAD/CAM Quality circles

(12 marks)

(b)

Explain three benefits and three drawbacks of introducing a JIT production management system. (13 marks) (Total 25 marks)

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Q5

(a)

Businesses are affected by external factors which are beyond their control. Define the following terms and briefly describe one impact that each might have on a business: (i) (ii) (iii) Exchange rate Environmental pressure group The business cycle

(12 marks)

(b)

The economy of a country is entering a period of prolonged recession. Explain how a business which makes products for both the home market and for export could react to minimise the effect on it of this prolonged recession. (13 marks) (Total 25 marks)

Q6

(a) (b)

Describe the role of the HR department within an organisation. Explain the following terms relating to work: (i) (ii) (iii) Overtime Flexi-time Shift working

(8 marks)

(9 marks)

(c)

Identify and outline two advantages and two disadvantages of ‘off the job’ training. (8 marks) (Total 25 marks)

Q7

(a)

Define the following terms and give the formula for calculating each of them: (i) (ii) (iii) Labour absenteeism Labour turnover Labour productivity

(12 marks)

(b)

A firm recently replaced its old batch production system with a new flow production assembly plant. Since the change, the firm has experienced poor employee performance. With reference to the work of Maslow, suggest ways in which this firm might motivate its employees to work to the best of their ability. (13 marks) (Total 25 marks)

IB1209

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Q8

(a)

Define the following financial and accounting terms: (i) (ii) (iii) (iv) Debentures Retained profits Working capital Bank overdraft

(12 marks)

(b)

A firm wishes to borrow £1m to invest in new machinery. Explain why a...
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