Business- Tutorial 2

Essay Questions

1)Define the term ‘business ethics. Who determines whether a business activity is ethical?

The define of the business ethics is as principles and standards that determine acceptable conduct in
business organizations. The organization and stakeholders determine whether a business activity is
ethical. The stakeholders include customer, suppliers, competitors, government regulators, interest
group, and the public as well each individual’s personal principles and value.

2) Differentiate between ethics and social responsibility.

Ethics is the principles and standards that determine acceptable conduct in the business
organization. Social responsibility is a business’s obligation to maximize its positive impact and
minimize its negative impact on society.

3) What responsibilities does a business have toward its employees?

Provide a safe workplace to employees.

Pay them adequately for the time they work

Keep employees informed of what is happening in the company

Listen to their complaint and treat them fairly.

4) What are a business’s responsibilities toward the community in which it operates?

Many businesses want to make their communities better places for everyone to live and work. The
most common way is through donations to local and national charitable organization.
Tutorial 4

1)Advantages of corporation

Limited liability

-The owners have limited liability providing protection to shareholders in that the corporation’s
assets and liabilities are separate from its owners.

Ease of transfer of ownership

-Ownership can be easily transferred.

Perpetual life

-Corporations usually last forever, extending beyond the life of its owners.

External sources of funds

-Raising money is easier than for other forms of business.

Expansion potential

-Expansion into new businesses is simpler because of ability of the company to expand into national
and international markets.

Disadvantages

Double taxation

-The owners pay a second tax on any profits received as dividends

Forming a corporation

-Forming a corporation can be expensive.

Disclosure of information

-Corporations must make information available to their owners, usually through an annual report to
shareholders.

Employee-owner separation

-Employees are not stockholders of the company for which they work. This separation of owners and
employees may cause employees to feel that their work benefits only the owners.

2) Differentiate among the different types of corporations. Can you supply an example of

each type?

The type of corporations is private corporation and public corporation.

Private corporation is owned by just one or a few people closely involved in managing the business.
No stock is sold to public. The example of private corporation is Petronas Sdn.Bhd.

Public corporation is a corporation whose stock anyone may buy, sell, or trade. Public owned
corporations must disclose financial information to the public. The example of public corporation is
Public Bank Berhad.
3) Contrast how profits are distributed in sole proprietorships, partnerships, and corporations.

In sole proprietorship, profits are distributed belong exclusively to the owner.

In a partnership, profits are distributed to the partners

In corporation, profit is distributed to stockholders which is ownership.

4) Compare the liability of the owners of partnerships, sole proprietorships, and corporations.

Sole proprietorships have unlimited liability. The business is unable to pay creditors, the
owner will have to use their own money.
The general partnerships, each partner has unlimited liability for the debts business. Limited
partnership has at least one general partner, who has unlimited liability and at least one
limited partner is limited liability to investment.
Profits are distributed to the owners in the proportions specified in the articles of partnership.
The owners of the corporations have limited liability, which means their potential loss is
limited to their original investment, and the loss does not fall on its stockholders.
Tutorial 5

1)What is management?

Management is a process designed to achieve an organization’s objectives by using its resources

effectively and efficiently in a changing environment. Effectively is having the intended result.
Efficiently is accomplishing objectives with a minimum of resources.

2) Name the FOUR (4) functions of management. Briefly describe each function.

The four functions of management are planning, organizing, directing, and controlling.

Planning is the process of determining the organization’s objectives and deciding how to accomplish
them.

Organizing is the arranging of resources and activities to accomplish objectives in an efficient and
effective manner.

Directing refers to motivating and leading employees to achieve organizational objectives.

Controlling is the process of evaluating and correcting activities to keep the organization on course.

3) Identify the THREE (3) levels of management. What is the focus of managers of each level?

Top management includes the president and other top executives of a business, such as chief
executive officer (CEO), chief financial officer (CFO), and chief operations officer (COO), who have
overall responsibility for the organization.
Top management spend most of their time planning such as make strategic decision, they decide
whether to add product, and sell unprofitable business segment.
Second is middle management. They responsible for tactical and operational planning that implements
the general guidelines established by top management. Middle management is more narrowly focused
and involved in the specific operation of the organization.
The last level of management is first-line management. They responsible for implementing the plans
established by middle management. They spend most of their time directing and controlling.

4) What are the areas of management?

-Financial manager

Financial manager is focus on obtaining the money needed for the successful operation of the
organization and using that money in accordance with organizational goals.

-Production and Operations Manager

This manager will develop and administer the activities involved in transforming resources into
goods, services, and ideas for the marketplace.

-Human Resources Manager

They handle the staffing function and deal with employees in a formalized manner.

-Marketing Manager
Responsible for planning, pricing, and promoting products and making them available to customers
through distribution.

-Information Technology (IT) Manager

Responsible for implementing, maintaining, and controlling technology applications in business.

-Administrative Manager

They manage an entire business or a major segment of a business.

Tutorial 6

1.How are managers classified on the basis of their leadership styles?

Autocratic leaders make all the decisions and then tell employees what must be done and how to do
it.

Democratic leaders involve their employees in decisions. The manager presents a situation and
encourages his or her subordinates (lower-level workers) to express opinions and contribute ideas.

Free-rein leaders let their employees work without much interference (involvement). The manager
sets performance standards and allows employees to find their own ways to meet them.

2.What are some of the skills needed by managers?

Technical expertise is the specialized knowledge and training required to perform jobs related to
their area of management.

Conceptual skills is ability to think creatively, ability to formulate ideas.

The ability to think in abstract terms and to see how parts fit together to form the whole, are needed
by all managers, but particularly top-level managers.

Human relations are the ability to deal with people, both inside and outside the organization.

3. You are a manager of a firm that manufactures conventional ovens. Over the past several

years, sales of many of your products have declined; this year your losses may be quite

large. Using the steps of the decision-making process, briefly describe how you arrive at a

strategy for correcting the situation.

Step 1: Defining the decision situation

-Situations may be positive or negative

- Situations calling for small-scale decisions occur without warning

- Large-scale decisions generally occur after some warning signs

- Once a situation is recognized, management must define it

-The decision in this situation is correcting or change the declined in the sales of manufactures
conventional ovens. The second decision is increasing the sales. (Positive situations)

Step 2: Developing options

-A list of possible courses of actions should include both standard and creative plans

-Brainstorming is a technique in which group members spontaneously suggest ideas to solve a

problem, is an effective way to encourage creativity and explore a variety of options.

-Solve the problems why the sales of products have declined because of the products of oven has
many competitor. Next, do advertising or promotion to consumers can help to increase the products
of oven sales.

Step 3: Analysing Options

-Management must look at the practicality and appropriateness of each option.

- When assessing appropriateness, the decision maker should consider whether the proposed option
adequately addresses the situation.

Step 4: Select best option

-Often a subjective procedure

-The best option always relates to analysing risks and trade-offs

Manager can use a best decision to increase sales

Step 5: Implement the decision

-Can be simple or very complex

-Prepare for unexpected consequences

Step 6: Monitoring the consequences

-Did the decision accomplish the desired result?

Tutorial 7

1.A consumer electronics company wants to implement a multisegment approach to market

segmentation. What requirements must be met to ensure that the strategy is successful?

3.Discuss any FIVE (5) functions of marketing. How does an organisation use marketing activity to
achieve its objective?
Buying
-Everyone who shops for products such as, consumers, stores, businesses and governments decide
whether and what to buy.

Selling

- Marketers usually view selling as a persuasive activity that is accomplished through promotion. For
example, advertising, personal selling, sales promotion, publicity, and packaging.

Transporting is the process of moving products from the seller to the buyer.

Storing is part of the physical distribution of products and includes warehousing goods.

Financing: For many products, especially large items such as automobiles, refrigerators, and new

homes, the marketer arranges credit to expedite the purchase.

4.Explain the FOUR (4) components of the marketing mix.

The four components of the marketing mix are product, price, distribution, and promotion. Product
is a complex mix of tangible and intangible attributes that provide satisfaction and benefits. Good is
a physical entity you can touch such as book. Service is the application of human and mechanical
efforts to people or objects to provide intangible benefits to customers such as haircuts. Idea is an
be a concept, philosophy, image such as political parties.

Price is a value placed on an object exchanged between a buyer and a seller. The buyer exchanges
purchasing power from income and credit for the satisfaction of utility associated with a product.
Price can be changed quickly to stimulate demand or respond to competitors’ actions.

Distribution is making products available to customers in the quantities desired. Distribution also can
call as place. Intermediaries usually wholesalers and retailers, perform many of the activities
required to move products efficiently from producers to consumers or industrial buyers.
Promotion is a persuasive form of communication that attempts to expedite a marketing exchange
by influencing individuals, groups, and organizations to accept goods, services, and ideas. For
example, advertising, personal selling, publicity, and sales promotion. Digital advertising on websites
and social media sites are growing such as Facebook and Instagram.

5.What is marketing concept? Why is it so important?

Marketing concept is an idea that organization should try to satisfy customers’ needs through
coordinated activities that also allow it to achieve its own goals.

6. what is a marketing strategy?

Marketing strategy is a plan of action for developing, pricing, distributing, and promoting
products that meet the needs of specific customers.
Selecting a target market. Market is a group of people who have a need, purchasing power,
and the desire and authority to spend money on goods, services, and ideas. Target market is
a more specific group of consumers on whose needs and wants a company focuses its
marketing efforts.

7.Briefly describe the factors that influence buying behaviour . How does understanding buying
behaviour help marketers?
Buying behavior refers to the decision processes and actions of people who purchase and use
products. Buying behavior is includes both consumer and business buying behavior.

Psychological and social variables are important to an understanding of buying behavior.

Psychological Variables of Buying Behavior

Perception is the process by which a person selects, organizes, and interprets information received
from his or her senses, as when experiencing an advertisement or touching a product to better
understand it. Personality refers to the organization of an individual’s distinguishing character traits,
attitudes, or habits.

Social Variables of Buying Behavior

Social roles which are a set of expectations for individuals based on some position they occupy.

Reference groups include families, professional groups, and other groups with whom buyers

identify and whose values or attitudes they adopt. Social classes are determined by ranking people
into higher or lower positions of respect.
Tutorial 8

1. How do businesses and the society benefit from marketing?

Marketing drives a consumer economy, promoting goods and services and targeting consumers
most likely to become buyers.

The society benefit from marketing is increasing sales for a business that employees successful
marketing strategies translate into expansion, higher tax revenue for governments.

-Can give a business a significant competitive advantage, many consumers prefer to purchase from
socially responsible company.

-Can lead to ability to charge more for our products as it benefits society

New and better products

-Marketing encourages business to provide products and services that consumers want.

2. Discuss the psychological variables of buying behavior.

-Perception is the proses by which a person selects, organizes, and interprets information received
from his or her senses, as when touching a product to better understand it.

-Motivation is an inner drive that directs a person’s behavior toward goals.

-Learning brings about changes in a person’s behavior based on information and experience.

-Attitude is knowledge and positive or negative feelings about something.

-Personality refers to the organization of an individual’s distinguishing character traits, attitudes, or

habits.
Tutorial 9

1)List any three types of power that are available to a manager and explain what they mean.

Legitimate Power

-The authority that a manager has by virtue of his or her position in an organizational hierarchy For
example, leader has power to hire new employees, assign project, monitor their work, appraisal
performance.

Reward Power

-The ability of a manager to give or stop tangible such as pay bonuses and intangible rewards .

Expert Power

-Power that is based on special knowledge, skills, and expertise that a leader possesses.

2) Explain what a “trait model” of leadership is. Name at least four traits related to effective
leadership, and briefly explain how each could help a leader perform his or her job better.

Trait Model is identifying personal characteristics that cause effective leadership. Many “traits” are
the result of skills and knowledge and effective leaders do not necessarily possess all of these traits.

Intelligence- This trait helps managers understand complex issues and solve problems.

Knowledge and expertise-Help managers make good decisions and discover ways to increase
efficiency and effectiveness.

Self -confidence-Contributes to managers’ effectively influencing subordinates and persisting when

faced with difficulties.

Integrity and honesty- Helps managers behave ethically and earn their subordinates’ trust and
confidence

3)Explain with examples what the “behaviour model” of leadership.

Behavior model is identifying the two basic types of behavior that many leaders engage in to
influence their subordinates such as consideration and initiating structure.

Consideration-Behavior indicating that a manager trusts, respects, and cares about subordinates

Initiating Structure-Behavior that managers engage in to ensure that work gets done, subordinates
perform their jobs acceptably, and the organization is efficient and effective
Tutorial 10

1)Explain what is meant by the concept of ‘leadership’. Explain the three ways in which
transformational leadership occurs.

Leadership is the process by which a person exerts influence over other people and inspires,

motivates and directs their activities to help achieve group or organizational goals.

Three ways in transformational leadership:

-Makes subordinates aware of the importance of their jobs and performance to the organization.

-Makes subordinates aware of their own needs for personal growth and development

-Motivates workers to work for the good of the organization.

2) Kimo, a plant superintendent, watches his production manager waste a lot of managerial

resources. There are supervisors watching over employees who are experts at their jobs and enjoy

doing them. These supervisors do little to help the workers, other than shouting out reminders

about things the workers already know. Kimo remembers the concept behind the leader substitute

model and realizes it directly applies to this situation. Explain the leader substitutes model and how

Kimo can use it to advise his managers.

-Leader substitutes model can help Kimo by encourage the supervisors to act as leader. A
characteristic of a subordinate of a situation that acts in place of the influence of a leader and makes
leadership unnecessary.

3) Path-goal theory identifies four types of behaviors in which leaders can engage in order to

motivate their subordinates. Discuss these types of behaviors and give one specific management

example of how a manager could act according to each of these.

-Directive Behaviors

Setting goals, assigning tasks, showing subordinates how to complete tasks, and taking concrete
steps to improve performance.

Manger can set a goal and showing subordinates how to complete tasks when workers have
difficulty to complete task.

- Supportive Behavior

Expressing concern for subordinates and looking out for their best interests.

When workers faced high level of stress or emotions, manager can listen to any complaints from
their employees and help them reduce their stress.

-Participative Behavior

Giving subordinates a say in matters that affect them

Manager can allow the subordinates to get involved in decision making. Manager can agree with
their suggest.

-Achievement-Oriented Behavior

Setting very challenging goals, believing in workers’ abilities

Manager can motivate employees through recognition. Manager who pushes employees to work
hard on a specific project and has faith that their employee will be able to complete it. 
4) Explain Fiedler’s Theory of Leadership and the eight leadership situations identified with varying
favourability of leading.
Tutorial 11

1)What is an organizational structure? How does it develop?

Organizational structure is the arrangement of positions within an organization

Structure is developed when:

Managers assign work tasks to specific individuals or groups

Coordinate activities to reach the firm’s objectives

2) Identify FOUR (4) types of departmentalisation and give an example of each type.

Functional Departmentalization is the grouping of jobs that perform similar functional

activities, such as finance, manufacturing, marketing, and human resources.

Product Departmentalization is the organization of jobs in relation to the products of the firm.

For example, manager Television, Microwave, oven and, washing.

Geographic Departmentalization is the grouping of jobs according to geographic location,

such as state, region, and country. For example, manager Malaysia, Singapore, China, and Taiwan.

Customer Departmentalization is the grouping of jobs around the needs of various types of
customers. For example, Senior manager Schools students, universities and public.

3) Distinguish between centralisation and decentralisation. Under what circumstances is

each appropriate?

Centralized organizations

-Authority is concentrated at the top; little decision-making delegated to lower levels

When decisions to be made are risky and when low level managers are not highly skilled in decision
making.

Decentralized organizations

-Decision-making authority delegated as far down the chain of command as possible

Complex or unpredictable environments. Face intense competition.

4) Define span of management. Why do some organisations have narrow spans and others wide
spans?

-Span of Management is the number of subordinates who report to a particular manager

-A wide span of management is when a manager directly supervises a very large number of
employees, fewer management layers are needed to conduct the organizations activities.

-A narrow span of management is when a manager directly supervises only a few subordinates,
many layers are then made of management are necessary to carry out the operations of the
business. 

5) Discuss the different forms of organisational structure.

Line Structure

-Simplest organizational structure

-Direct lines of authority extend from top management to employees at the lowest levels

Line-and-Staff Structure

-Traditional line relationship between superiors and subordinates

-Specialized managers assist line managers

Multidivisional Structure

-Organizes departments into larger groups called divisions

Advantages-Permits delegation of decision-making authority

Disadvantages- creates work duplication

Matrix Structure

-Sets up teams from different departments; creates two or more intersecting lines of authority

Advantages-Provides flexibility, enhanced cooperation, creativity

Disadvantages-Generally expensive and quite complex

Tutorial 12

1) Define human relations and explain its role in business.

Human relations is the study of the behaviour of individuals and groups in organizational settings.

Involves motivating employees to achieve organizational objectives efficiently and effectively.

Human relations is the process of training employees, addressing their needs, fostering a workplace
culture and resolving conflicts between different employees or between employees and
management.

2) What are Herzberg’s hygiene and motivational factors? How can managers use them to

motivate workers?

Herzberg’s hygiene factors

-Which relate to the work setting and not to the content of the work, include adequate wages,
comfortable and safe working conditions, fair company policies, and job security.

-These factors do not necessarily motivate employees to excel, but their absence may be a potential
source of dissatisfaction and high turnover.

-Employees safety and comfort are clearly hygiene factors

Motivators factors

-Which relate to the content of the work itself, include achievement, recognition, involvement,
responsibility, and advancement.

-The absence of motivational factors may not result in dissatisfaction, but their presence is likely to
motivate employee to excel.

-Many companies are beginning to employ methods to give employees more responsibility and
control and to involve them more in their work, which serves to motivate them to higher levels of
productivity and quality.

3) Explain Maslow’s hierarchy of needs. What does it tell us about employee motivation?

Maslow’s Hierarchy of Needs is a theory that arranges the five basic needs of people such as
physiological, security, social, esteem, and self-actualization.

Physiological needs

-The most basic and first needs to be satisfied, are the essentials for living-water, food, shelter, and
clothing. According to Maslow, human gives all their efforts to satisfying physiological needs until

they are met.

Security needs

-Relate to protecting yourself from physical and economic harm. Actions that may be taken to

achieve security include reporting a dangerous workplace condition to management, maintaining

safety equipment and purchasing insurance with income protection in the event the employees
become unable to work.
Social needs

-Are the need for love, companionship, and friendship- the desire for acceptance by others.

-To fulfil social needs, a person may try many things including making friends with a co-worker,
joining a group, volunteering at a hospital, throwing a party, and so on.

Esteem needs

-Relate to self- respect and respect from others.

-One aspect of esteem needs is competition – the need to feel that you can do something better
than anyone else.

Competition often motivates people to increase their productivity.

-Esteem needs are not as easily satisfied as the needs at lower levels in Maslow’s hierarchy because
they do not always provide tangible evidence of success.

Self-actualisation

-At the top of Maslow’s hierarchy, mean being the best that can be reach maximum potential

-Self-actualisation involves maximising potential

4) Contrast the assumptions of Theory X and Theory Y.

 \

• The application - In the first stage of the selection process, the individual fills out an application form
and perhaps has a brief interview. - The application forms asks for the applicant’ name, address,
telephone number, education, and previous work experiences. - The goal of this stage of the selection
process is to get acquainted with the applicants and to weed out those who are obviously not
qualified for the job. • The interview - The next phase of the selection process involves in
3) What is the role of benefits? Name some examples of benefits
• Benefits are nonfinancial forms of compensation provided to employees, such as pension plans for
retirement, health , disability and life insurance; holidays and paid days off for vacation or illness;
credit union membership; heath programs; child care • Benefits increase employee security and their
morale and motivation.