Topic: Business and Organizational Structures and Choices

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  • 4 Marks

BMF – May 2024 – L1 – SB – Q4c – Business and Organizational Structures and Choices

Distinction between profession and employment based on qualification, nature of work, establishment, and motive.

c. On the basis of qualification, nature of work, establishment, and motive, distinguish between profession and employment. (4 Marks)

The distinction between profession and employment can be made based on the following criteria:

  1. Qualification:
    • Profession: Requires specialized knowledge and skills obtained through formal education and training, often certified by a professional body.
    • Employment: Requires qualifications as determined by the employer, which may vary based on the job requirements but may not necessarily require certification by a professional body.
  2. Nature of Work:
    • Profession: Involves rendering highly skilled services based on the individual’s professional expertise.
    • Employment: Involves performing duties and tasks as defined by the employer, which may not necessarily require a high level of specialization.
  3. Establishment:
    • Profession: Involves membership in a professional body, and practicing the profession often requires adhering to the standards set by that body.
    • Employment: Based on a contract of employment with an employer, where the employee agrees to perform specific tasks in exchange for compensation.
  4. Motive:
    • Profession: The primary motive is to provide services, often with the goal of advancing the professional field.
    • Employment: The primary motive is earning a livelihood by fulfilling the terms of the employment contract.
  • 8 Marks

BMF – May 2024 – L1 – SB – Q4b – Business and Organizational Structures and Choices

Explanation of the advantages and disadvantages of joint ventures.

b. State FOUR advantages and FOUR disadvantages of Joint ventures. (8 Marks)

Advantages of Joint Ventures:

  1. Shared Resources: Partners can pool their resources, including capital, technology, and expertise, to achieve a common goal.
  2. Risk Sharing: The risks of the venture are shared between the partners, reducing individual exposure.
  3. Market Access: Joint ventures allow companies to enter new markets more easily by leveraging the local expertise and connections of the partner.
  4. Temporary Arrangement: A joint venture can be a temporary collaboration, which allows partners to achieve specific objectives without long-term commitments.

Disadvantages of Joint Ventures:

  1. Lack of Flexibility: Decision-making can become complicated when partners have different objectives or management styles.
  2. Unequal Contributions: Partners may contribute unequally in terms of effort, resources, or time, leading to tensions.
  3. Cultural Differences: Differences in corporate culture or management style can lead to conflicts and misunderstandings.
  4. Profit Sharing: Profits must be shared between the partners, which could be less attractive than operating independently.
  • 8 Marks

BMF – May 2024 – L1 – SB – Q4a – Business and Organizational Structures and Choices

Definition of stakeholders and explanation of internal stakeholders of a company.

a. Define the term “Stakeholder.” (2 Marks)
Explain briefly THREE internal stakeholders of a company. (6 Marks)

a. Stakeholder: A stakeholder is any individual, group, or organization that has an interest in or can affect or be affected by the activities, objectives, and policies of a business. Stakeholders can include both internal and external parties.

Internal Stakeholders:

  1. Employees: Employees are crucial stakeholders as they are directly involved in the day-to-day operations of the company and are affected by its success or failure.
  2. Managers: Managers play a key role in decision-making and steering the company towards its objectives. They are responsible for the efficiency and productivity of the company.
  3. Owners/Shareholders: Owners or shareholders have a financial stake in the company’s success and influence major decisions through voting rights and governance structures.
  • 1 Marks

BMF – May 2024 – L1 – SA – Q8 – Business and Organizational Structures and Choices

Identifying the type of organization not limited by predefined boundaries.

An organization that is not defined by, or limited to, the horizontal, vertical, or external boundaries imposed by a predefined structure is called a/an:
A. Matrix organization
B. Boundaryless organization
C. Divisional organization
D. Virtual organization
E. Entrepreneurial organization

Answer:
B. Boundaryless organization

Explanation:
A boundaryless organization is one that seeks to remove the typical barriers found in traditional organizational structures. These include vertical boundaries (between levels of hierarchy), horizontal boundaries (between functional departments), and external boundaries (between the organization and its suppliers or customers). This concept allows for a more flexible and responsive organization.

  • 1 Marks

BMF – May 2024 – L1 – SA – Q3 – Business and Organizational Structures and Choices

Determining the primary focus of an informal organization within a business context.

Which of the following is the focus of an informal organization?
A. Process
B. Plan
C. Work
D. People
E. Organizing

Answer:
D. People

Explanation:
An informal organization focuses on the relationships and social networks that naturally form among individuals in a workplace. These relationships influence communication, collaboration, and the overall work culture, making “people” the central focus of informal organizations, as opposed to formal structures that emphasize tasks, processes, or plans.

  • 1 Marks

BMF – May 2024 – L1 – SA – Q2 – Business and Organizational Structures and Choices

Identifying the owners of a co-operative business organization.

Co-operatives form of business are owned by:
A. Owners
B. Managers
C. Members
D. Investors
E. Governments

Answer:
C. Members

Explanation:
In a co-operative form of business, the ownership and control rest with the members who use the services or products of the co-operative. These members contribute to the capital and share in the profits of the organization. It operates under a democratic structure where each member typically has one vote, regardless of the amount of capital they contribute.

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