REVIEW QUESTIONS chapter 1

1.1

1. What is a business?

A decision-making organization that sells goods and services

The purpose of a business is to get customers.

A business provides for wants and needs

2- Distinguish between goods and services.

A good is a tangible product like a computer, chocolate, or a car

A service is an intangible product like insurance, a haircut, or a bank account

3. Distinguish between customers and consumers of a business

o Consumer - A person who uses what is being sold (eg. phones)

o Customer - A person who buys the company's product (eg. iPhone)

4. What are the four functional areas of a business?

Human Resources - Manages the personnel in a business (eg. hiring, firing, training)

Finance - Manages organization's money

Marketing - Responsible for identifying and satisfying the need and wants of customers in order to gain sales. The functions
4P's

1. Price

2. Product

3. Place

4. Promotion

Operations - this department is in charge of all the processes that use inputs to make sellable products

5. Describe the four business sectors of the economy.

Primary - Responsible for harvesting, extraction, and conversion of natural resources

Secondary - Manufacturing or construction

Tertiary - Provide services

 Quaternary - Intellectual and knowledge based activities (research)

6. What is meant by the chain of production?

 The chain of Production - The 4 sectors are linked in the production of a product the stages in order are:

o Production - primary sector, getting raw materials

o Manufacturing - secondary sector, using raw materials to make a product

o Tertiary or Quaternary input -

o Consumer

7. What is meant by sectoral change?

Sectoral change is when there is a shift in the share of gross domestic product (value of goods and services)

and employment from one business sector to the other one

8. Differentiate between entrepreneurs and intrapreneurs.

Entrepreneurs are owners or operators of an organization who manage, organize, and plan the other

three factors of production. They are risk takers who exploit business opportunities in return for profits

An Intrapreneur is an employee who behaves as an entrepreneur but as an employee within a large business organization. In
capacity, with authority to create innovative products or new processes for the organization.

9. What are the main reasons for starting up a business?

GET CASH

G rowth: Entrepreneurs benefit personally when there is an appreciation in the value of their assets.

E arnings: the potential returns from setting up your own business can easily outweigh the costs, even though the risks are hig

T ransference and inheritance: self-employed entrepreneurs view their business as something that they can pass onto their ch

Challenge: some people might view setting up and running a business as a challenge.

Autonomy: being self-employed means that there is autonomy in how things are done within the organization.

Security: there is usually more job security for someone who is his or her own boss.

Hobbies: some people might want to pursue their passion or to turn their hobby into a business.

10. What are the main steps in starting up a business?

start up by looking for market opportunities (market gaps or niches)

1. Write a business plan: the ideal is officially formulated in a business plan.

2. Obtain start-up capital: starting a business requires money.

3. Obtain business registration: before a business can trade or hire workers, it must satisfy registration and licensing
requirements.

4. Open a business bank account: to facilitate the financial operations of the new business, the owners need to set
up a business account.

5. Marketing: potential customers need to know about the business and its products.

12. What is a business plan and what are the main elements that go into a business plan?

Business plan Is a Report detailing how a business is set out to achieve its goals and objectives.

It’s a useful planning tool as it requires the owners to consider the marketing, financial and human resources of
the business.

.Elements of a business plan

Business – name of the business, type of the business, statement of aims and objectives, details of the owner

Product – details of goods/services, operations and equipment needed, suppliers, price

Market – who you’re selling to, market profile, competition (strengths and weaknesses)

Finance – money, start-up costs

Personnel – employees and workforce, skills

11. What are the problems that new businesses may face?

 Lack of finance - insufficient funds, difficulty in obtaining a loan

 Cash flow problems - The business does not make and use money (for expenses) fast enough
 Marketing - Problems - A business fails to meet the needs and wants of customers or fails to inform them
 Unestablished customer base - attracting customers and keeping them is difficult and takes time
 People Management problems - It can be difficult and expensive to hire and train a proper staff force
 Legalities - All legislation must be properly covered or a penalty fee would have to be paid
 Production Problems - Overproduction or underproduction can both cause problems for a business
 High production costs - A new business needs to buy fixed assets (eg. machines) which can be expensive
 Poor Location
 External influences
1.2

1. Distinguish between the private sector and the public sector.

Businesses in the Private sectors are owned and controlled by private individuals . The main aim of such
businesses is to make profit .
Businesses at the public sector are ran and owned by the governments (e.g. electricity production,
common in planned economies).

2. Compare and contrast the benefits of a partnership with those of a sole trader.

Sole Proprietors An individual who owns a personal business (like a restaurant owner)
Pros : Easy to start, privacy, complete control, all profits are yours
Cons : Very high risk, stress, sole proprietor has to fund everything

Partnership are businesses who consists of 2 or more partners up to 20

Pros Easy to start, more financial strength, shared work
Cons High risk, disagreements, prolonged decisions

3. Why is the concept of limited liability important for investors?

Limited liability is important for investors as it protects their personal assets in case of business failure or
legal liabilities. It ensures that investors are only liable for the amount they have invested in the
company and not personally responsible for the company's debts. This separation of liabilities enhances
investor confidence, encourages risk-taking, and promotes investment in entrepreneurial ventures,
fostering economic growth and innovation.

4. What is the difference between a private limited company and a public limited company?

1-Private Limited Company - capital is raised from family and friends with the approval of the BOD

2-Public Limited Company - shares are sold to the general public through a stock exchange

5. Distinguish between non-profit organizations and non- governmental organizations.

Non-profit organizations (NPOs):

NPOs are entities established for purposes other than generating profit.

They operate in various sectors, including education, healthcare, arts, and social services.

NPOs may generate revenue through donations, grants, and fees, but any surplus is reinvested

back into the organization's mission rather than distributed among shareholders.
 They are often structured as charities, foundations, or associations and rely on volunteer work
and public support.
Non-governmental organizations (NGOs):

 NGOs are independent, non-profit entities that operate outside government structures.
  They are typically focused on addressing social, environmental, and humanitarian issues on a
local, national, or international scale.
 NGOs engage in advocacy, provide services, and work towards specific goals such as human
rights, environmental conservation, or poverty alleviation.
 They can receive funding from various sources, including private donations, grants, and
international organizations.
6. What are social enterprises?

Social enterprises - Revenue generating businesses with social objectives at the core of their operations

7. Outline the benefits of social enterprises from society's point of view.

Social enterprises offer numerous benefits from society's perspective. They address social and
environmental challenges, create positive social impact, employ innovative problem-solving approaches,
empower communities, foster collaboration and partnerships, promote sustainable business practices,
and encourage ethical consumerism. These benefits contribute to inclusive development, social
cohesion, community empowerment, and a more sustainable and socially conscious society.

8. Distinguish between cooperatives, microfinance providers and public-private partnerships.

Cooperatives Businesses that are Owned and run by members (employees and customers)

Everyone has a vote in the business Profits are shared amongst members

. Microfinance providers is a financial Service aimed at low-income members of society to gain access
to essential finance services

Public-Private Partnership :A partnership between the government and members of the private sector

The government Benefits from the dynamics, finance, and efficiency of the private sector alongside public
sector benefits funding and support of government

9. Distinguish between non-governmental organizations (NGOs) and charities.

Non-Governmental Organizations (NGO's) A non-profit social enterprise that operates in the private
sector set-up to benefit society working on various social, environmental, and humanitarian issues

Charities - A non-profit social enterprise that provides voluntary support for a cause. Most important
functions is to raise funds for a cause that is beneficial to society Charities, on the other hand, are a
subset of NGOs with a specific focus on providing direct aid and services to individuals or communities in
need.

10. What is the difference between an operational NGO and an advocacy NGO?

Operational NGO's - they are active in helping others directly often through

relief based projects (UNICEF)

Advocacy NGO's - promote or defend a cause striving to raise awareness (Greenpeace)

1.3

How do mission and vision statements differ from one another?

A vision statement is an organization's long-term aspirations, i.e. where it ultimately wants to be.

A mission statement refers to the declaration of an organization's overall purpose. It forms the
foundation for setting the objectives of a business.

Why are aims and objectives important to business organizations?

 to measure and control a firm's plans.

 To motivate by organizing everyone in a company to reach a common goal.

 To direct a business by providing a clear focus and a basis on which decisions will be made

Differentiate between strategic objectives and tactical objectives.

Strategic objectives are the longer-term goals of a business, such as profit maximization, growth, market
standing and an improved corporate image

Tactical objectives are short-term goals that affect a section of the organization. They are specific goals
that guide the daily functioning of certain departments or operations, e.g. survival and sales revenue
maximization.

Why is there a need for organizations to change objectives?

• Corporate culture (the accepted norms and customs of a business) - Firms with a flexible and
adaptable organizational culture are more likely to have innovative objectives over time.

Age of the business - Newly established firms tend to have break-even and survival as their key
objectives. Established firms might strive for growth and higher market share.

Finance - The amount of available finance will determine the scale of a firm's objectives. For example, a
huge sum of money is needed if the objective is to expand into overseas markets.

Risk profile - If managers and owners have a relatively high willingness and ability to take risks, then
more ambitious objectives are likely to be set, such as the pursuit of new groups may harm a firm's
image if it is not adopting a socially responsible approach to conducting business.

• New technologies - New technologies and innovations (can create many new business opportunities,
thus change organizational objectives. Innovative firms such as Samsung were able to exploit digital
technologies to dominate the smartphone and smart TV industries.

• Crisis management - Businesses may face internal crises such as unexpectedly high rates of staff
absenteeism and staff turnover, falling productivity and motivation problems, liquidity problems
What is meant by ethical objectives ?

Ethical objectives are organizational goals based on moral guidelines, determined by the business
and/or society, which direct and determine decision-making.

What is meant by corporate social responsibility (CSR)?

Corporate social responsibility (CSR) is the consideration of ethical and environmental practices relate to
business activity. A business that adopts CSR acts moral. towards its various stakeholder groups and the
wellbeing o society as a whole.

What are the advantages and disadvantages of ethical behavior and CSR?

1- Improved corporate image :Acting ethically and in a socially responsible way can help to enhance the
corporate image and reputation of a business. Conversely, the media will report unethical business
behavior which could seriously damage the firm's corporate image.

Increased customer loyalty :Customers are more likely to be loyal to a business that does not act
immorally. For example, The Body Shop has established a large customer base worldwide based on its
ethical policy of not testing its products on animals.

Cost cutting: Ethical behavior can help to cut certain costs, e.g. being environmentally friendly can
reduce the amount of (excess) packaging. Socially responsible businesses can benefit from avoiding
litigation costs (expenses associated with legal action taken against a business) due to unethical and
irresponsible business activities.

Improved staff morale and motivation Ethical and socially responsible behaviour can help a business to
attract and retain highly motivated staff. People are more likely to be proud of the business they work
for if it acts ethically and within the law. Thus, it is a driving force for improved productivity and
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Diadvantages

Compliance costs :the costs of being socially responsible are potentially very high, e.g. organic
agricultural products are far more expensive to harvest than genetically modified crops due to the
additional time and money involved.

Lower profits If compliance costs cannot be passed onto consumers in the form of higher prices,
profitability is likely to fall. An ethical dilemma for the business exists when ethical decision-making
involves adopting a less profitable course of action.

Stakeholder conflict Not all stakeholders are keen on the business adopting SR, especially if this
conflicts with other objectives such as profit maximization. Speculative shareholders and financial
investors are more concerned with short term profits than its long term ethical stance. So, managers
may be pressured into pursuing goals other than ethical ones.
 Ethics and SR are subjective Views about what is considered right or wrong depend on the beliefs and
principles held by individuals and society. Legislation can help to provide guidelines about what is
socially accepted.

How does the evolving role and nature of CSR impact on business aims and objectives?

The evolving role of Corporate Social Responsibility (CSR) impacts business aims and objectives in
several ways:

-CSR enhances a company's reputation and brand image, engages stakeholders, mitigates risks, and
fosters employee engagement. It also opens new market opportunities and drives innovation. By
integrating CSR into their strategies, businesses can align with societal and environmental priorities for
sustainable and responsible growth.

What does it mean to set SMART objectives?

Businesses should set SMART objectives because they provide a clear framework for goal setting and
increase the likelihood of success.

SMART stands for Specific, Measurable, Achievable, Relevant, and Time-bound. Setting SMART
objectives ensures that goals are well-defined, quantifiable, realistic, aligned with the company's
mission, and have a specific timeframe for completion.

This approach helps businesses focus their efforts, track progress, make informed decisions, and
improve overall performance.

Why do objectives have changing significance in different situations?

Objectives have changing significance in different situations due to varying contexts and external factors.
Businesses must adapt their objectives to align with market conditions, customer needs, and regulatory
changes. This ensures relevance, strategic alignment, and the ability to respond effectively to evolving
circumstances. Adaptable objectives enable businesses to prioritize and focus on the most significant
goals in a given situation.

10. Outline two recent changes in society's expectations of business behavior

1.4 Stakeholders

1. Explain the difference between internal and external stakeholders.

Internal Stakeholder - Someone who is part of the business with a direct interest in a business because
they are affected by its activities and performance such as employees, manager and directors and
shareholders
External stakeholders of a business are individuals and organizations not part of the organization but
have a direct interest in its activities and performance, e.g. customers, suppliers, pressure groups and
the government.

2. What is the difference between stakeholders and shareholders?

Shareholders (or stockholders) are the owners of a limited liability company. Shares in a company can be
held by individuals and other organizations. Stakeholders are individuals or organizations with a direct
interest (known as a stake) in the activities and performance of a business, e.g. shareholders,
employees, customers and suppliers.

3. Explain why employees are often considered to be the key stakeholders in an organization.

Employees want better pay, improved working conditions, job security, and opportunities

If a business meets those wants then employees are more likely to be more hardworking and loyal

Motivated workforce can lead to increase customer satisfaction since it is your employees that will deal
with your customers Employees are essential for the functioning of a business and preventing a strike is
quite important.

4. Distinguish between a director and a manager of a company

. Mangers are people who oversee the daily operations of a business whereas directors are senior
executives who have been chosen by shareholders to direct the company

They usually aim for profit maximization in order to gain annual bonuses and other perks.

5. Why are stockholders a potentially powerful stakeholder group?

Stockholders have a direct ownership stake in the company through their shares. As owners, they have
the power to influence corporate decision-making through voting rights and exercising control over the
composition of the board of directors. This gives them a significant voice in shaping the company's
strategic direction and key decisions.

6.Why are customers, suppliers and competitors considered to be external stakeholders?

Customers, suppliers, and competitors are considered external stakeholders because they are
individuals outside the organization itself and not directly involved in its internal operations or decision-
making, however they have an interest in the organization’ activities .

7. How might pressure groups affect the success of a business?

Individuals with a common interest who wish to change something about the functioning of a business.
Some possible actions pressure groups can take Boycott and Try to influence the audience . This affect
the Public Relations of a business and can take direct action against a business

8. What is the role of the government as a stakeholder group in business activities?

The government wants to ensure that businesses act in the public interest. They can increase business
activity by reducing interest rates or taxes and might persuade multinational corporations to locate in
their country.

9. Outline the sources of stakeholder conflict in a business.

differences in the varying needs of all its stakeholder groups. Stakeholder conflict exists in situations
where people disagree due to differences in their opinions, thus creating friction between stakeholder
groups of the organization

10. How might businesses resolve stakeholder conflict in the workplace?

Stakeholder mapping is away to assess how much effort must be made to appease a specific
stakeholder group depending on the level of power the stakeholder have over the organization , So
stakeholders with high power of influence will be kept satisfied and make max effort to appease them
whereas stakeholders with lowe power of influence will be kept notified and have min effort to
appease them.

1.5 External Environment

1. What does the acronym STEEPLE analysis stand for?

Social, technological , environmental ,economical, political and ethical .

2. Distinguish between opportunities and threats.

opportunities and threats are factors in the external environment that affect the business decision
making

Opportunities are chances that are to the favor of a business

Threats are risks found that aren’t to the favor of a business

3. Outline the purpose of a STEEPLE analvsis.

STEEPLE is an analysis tool to assess the opportunities and threats of an external business environment.

4. How does the technological environment present both opportunities and threats for businesses?

Advancements in technology can be opportunities or threats. Things such as increased efficiency gains
through robots, quicker product development time due to software, and new products and markets can
be beneficial for a business.
However, technology is not always reliable or secure it can be hacked and it can fail, additionally
technology can quickly become obsolete, it can be costly, and it can cause losses in jobs. When adopting
technologies managers need to consider the costs, the benefits, the human relations impact, and the
recruitment and training of workers to adopt new technologies

5. Why inflation and unemployment are threats for most businesses?

1. Inflation: Inflation refers to the sustained increase in the general price level of goods and
services over time. It terminate the purchasing power of consumers, leading to reduced demand
for products or services. For businesses, inflation can increase the cost of inputs such as raw
materials, labor, and energy, squeezing profit margins. It may also lead to higher interest rates,
impacting borrowing costs and investment decisions. Managing inflation is crucial for businesses
to maintain profitability and pricing competitiveness.

2. Unemployment: High levels of unemployment can negatively affect businesses in multiple ways.
When unemployment rates are high, consumer spending tends to decrease as people have less
disposable income. This can result in reduced demand for goods and services, impacting
business revenues. Additionally, high unemployment can lead to social and economic instability,
affecting consumer confidence and overall market conditions. It may also increase labor supply,
leading to wage pressures and potential labor disputes.

6. How do fluctuations in the exchange rate affect the sales revenues and profits of a business?

Fluctuations in the exchange rate can impact the sales revenues and profits of a business for example
if the businesses engaged in international trade, fluctuations in the exchange rate can directly impact
their competitiveness and profitability. When a business's domestic currency strengthens against foreign
currencies, it can make their exported goods or services more expensive for foreign buyers, potentially
reducing demand and sales revenues. Conversely, a weaker domestic currency can make exported
goods or services more affordable, increasing sales revenues. On the other hand, importers may benefit
from a stronger domestic currency as it reduces the cost of imported goods and improves profit
margins.

7. What are the various stages of the business cycle?

Business Cycle - There are patterns of ups and downs a country goes through in regards to their
economy

 Boom - An increase in the level of economic activity (low unemployment, high profits for
business, lots of trade)

 Recession - A fall in the GDP (increased unemployment, weakened business, reduced trade)
  Trough - The bottom of a recession, a low point in the economy (high rates of unemployment,
difficulties for businesses, low trade, low consumer spending)

 Recovery - Increase in the GDP (reduced unemployment, increased business activity, increased
trade)

8. How does the government influence business activity?

The political stability of a country and their policies directly affects business

 Fiscal policy The use of tax and government spending in order to change business activity.

 Deflationary fiscal policy is used when the economy experiences high rates of economic growth
and inflation so the government slows it down by increasing taxes, and government spending.

 Expansionary fiscal policies are used to boost business activity by doing the opposite
Deflationary fiscal policy

 Monetary Policy Same thing as a fiscal policy but relating to interest rates. However, monetary
policies can also be used to stimulate demand for property and currency of a country because
people who have these things get more money because of interest. But higher interest rates can
reduce trade because of bad exchange rates causing the price of exports to be higher.

9. How does the legal environment provide both opportunities and threats to businesses?

Opportunities: The legal environment offers opportunities for businesses to operate within a framework
of legalizations that promotes fair competition, protect employees rights, ensures consumer rights, and
Social and Environmental protection .legislations enforces contracts. It provides a legal structure that
supports business activities, encourages innovation, and safeguards business interests.

Threats:, the legal environment poses threats to businesses through regulations, compliance
requirements, potential legal disputes, and financial penalties for non-compliance. Businesses need to
navigate complex legal frameworks, stay updated on changing regulations, and allocate resources to
ensure legal compliance, which can be time-consuming and costly.

10. State three ways in which ethical considerations affect business activity.

Ethical :are the moral principles the business takes into consideration in business decision activities

Ethical considerations lead to dedicated, loyal, and highly motivated workforce.

Gain new customers and retaining old ones,

good publicity, and good public relations.

Threat : compliance cost

1.6 Growth and Evolution

1. Using examples, distinguish between economies and diseconomies of scale.

Economies of scale refer to lower average costs of production as a firm operates on a larger scale due to
gains in productive efficiency, e.g. easier and cheaper access to finance.

Diseconomies of scale are the cost disadvantages of growth. Unit costs are likely to eventually rise as a
firm grows due to lack of control, coordination and communication.

2. What is meant by the optimal size of a business?

The optimal size of a business refers to the most advantageous and efficient scale at which a company
can operate to maximize its performance and achieve its goals. It represents the point where the
business achieves the ideal balance between economies of scale and the ability to effectively manage
operations

3. What are the advantages and limitations of small businesses?

 Advantages  Limitations:
 Better able to control costs  Economies of scale
 Relatively low financial risk  Limited resources
 Can access government aid  Limited finance
 Local monopoly power  No Brand Recognition
 Adaptable to changes  Lack of specialization
 Personalized service to customers  Small market share
 Small market size so do not conflict for 
market share with large enterprises

4. Distinguish between internal and external growth.

Internal Organic Growth - A business uses its own capabilities and resources or changes its internal
structure in order to grow such as changing prices, improving products, use more effective promotions,
introduce easy locations Placement Offer preferential Credit investing in a new production factory to
increase production Improved workforce -

External inorganic Growth - External growth (or inorganic growth) occurs when a business grows by
collaborating with, buying up or merging with another firm

.5. Distinguish between joint ventures and strategic alliances.

Strategic alliances are formed when two or more organizations join together to benefit from external
growth, without having to set up a new separate legal entity.

A joint venture is a growth strategy that combines the contributions and responsibilities of two different
organizations in a shared project by forming a separate legal ENTITY.
6. What are the benefits and disadvantages of mergers and acquisitions as forms of external growth?

Advantages of inorganic Growth Disadvantages of inorganic Growth

 Greater market share Job losses due to redundancies
when firms come together
 Economies of Scale  Conflict between the firms in
an M&A
 Synergy (pooling together of resources)  Culture Clash - there will need
to be a change in the people
and the processes both
business are used to
 Survival (allows small businesses to  Loss of control
compete with larger ones)
 Diversification of product mix

6-What is Franchising

Franchise refers to an agreement between a franchisor selling its rights to other businesses (franchisees)
to allow them to sell products under its name in return for a fee and regular payments.

7. What are the advantages and disadvantages of franchising as a method of growth?

1. Rapid Expansion: Franchising allows for accelerated growth by leveraging the capital and efforts
of franchisees.

2. Brand Expansion: Franchisees contribute to brand visibility and market penetration, enhancing
brand recognition.

3. Reduced Risk: Franchisees bear the operational risks and costs, reducing the financial burden on
the franchisor.

4. Motivated Operators: Franchisees are often highly motivated and invested in the success of
their individual locations.

Disadvantages of franchising:

1. Control and Consistency: Maintaining consistent quality and customer experience across
franchise locations can be challenging.

2. Franchisee Relations: Disputes or misalignment with franchisees can strain the franchisor-
franchisee relationship.
 3. Initial Investment and Royalties: Franchisees require upfront investment and ongoing royalty
payments, impacting cash flow.

4. Reputation Management: Negative actions or poor performance by franchisees can affect the
overall brand reputation.

8. What is globalization and how does it impact on business growth and evolution?

Globalization is the growing integration and interdependence of the world's economies, causing
consumers around the globe to have increasingly similar habits and tastes.

Expanded Market Opportunities: Globalization opens up new markets and customer bases for
businesses. With increased access to international markets, companies can expand their customer
reach, tap into new consumer segments, and diversify revenue streams.

2.Access to Resources and Talent: Globalization allows businesses to access a broader pool of resources,
including raw materials, technology, and skilled labor.

Technological Advancements: Globalization is closely intertwined with technological advancements.

Strategic Alliances and Partnerships: Globalization fosters strategic alliances and partnerships between
businesses across borders. Companies can collaborate with international partners to access new
markets, share resources, and combine complementary capabilities.

Socioeconomic and Environmental Considerations: Globalization brings attention to socioeconomic and

environmental issues. This includes promoting fair labor practices, environmental stewardship, and
corporate social responsibility, aligning business growth with societal and environmental well-being.

I 9. What is a multinational company?

A multinational company (MNC) is an organization that operates in two or more countries, with its head
office usually based in the home country.

10. What positive and negative impacts do multinational companies have on host countries?

MNCs create jobs in the host country, but can also cause unemployment. Competition can be beneficial
if it encourages local firms to improve, but it can also lead to higher wages for staff in poorer countries.

MNCs also help to boost the host country's gross domestic product, consumption expenditure, and
export earnings. MNCs have introduced new skills and technology to host countries, increasing the
efficiency of production and intensifying competition in the host country. However, transfers present a
further threat as domestic firms may not have the incentive to innovate or respond to market forces.

1.7 Planning tools

1. What are organizational planning tool?

Organizational planning tools are the various methods that des businesses use to aid their decision-
making, e.g. decision trees, fishbone diagrams, Gantt charts and force field analysis.
 2. What is meant by a cause and effect' (or fishbone) diagram?

Fishbone diagram (or cause and effect model) is an organizational planning tool based on identifying and
dealing with the root causes of a problem or issue facing a business.

3. What is a decision tree and why do businesses use this tool?

Quantitative decision making tool representing available options to a business and showing
probable outcomes By comparing likely financial results from each option, the manager can
minimize risk and maximize profits.

4. Distinguish between chance nodes and decision nodes when constructing decision trees.

Chance nodes are shown as circles.in a decision tree are used to show the probability outcomes of a
decision.

• Decision nodes are shown as squares.in a decision tree are used the decision to be made.

Distinguish between driving forces and restraining forces in a force field analysis

Driving forces in a force field analysis show the benefits of change (such as reduced costs or improved
productivity)

.Restraining forces in a force field analysis show the causes of resistance to change.

5. How are the weights in a force field analysis are assigned?

The weights in a force field analysis are assigned based on the significance of each force and the degree
it can influencing the desired outcome or plan

Typically, higher weights are given to forces that are considered more influential in determining the
success or failure of the desired change.

The weights can be assigned through discussions, consensus-building, expert opinions, or quantitative
assessments, depending on the specific context and requirements of the analysis.

6. What are Gantt charts? And what it is used for

Gantt charts are a visual representation of all the tasks in a particular project plotted against the
timescale. Gantt Chart allows project managers to monitor progress of their project.

7. What is meant by a 'dependency' in a Gantt chart? )

Dependencies in a Gantt chart represent the activities that cannot start until the completion of other
tasks.

8. Why do project managers use Gantt charts?

Project managers use Gantt charts to visually represent project schedules, tasks, and timelines.

They provide a clear overview of project activities, dependencies, and milestones, aiding in planning,
scheduling, and monitoring progress.

Gantt charts help project managers allocate resources, track project timelines, and communicate project
status to stakeholders effectively.

9. What are the differences between operational, tactical and strategic decisions making?

 Operational (daily) – policies, practice, rules, set procedures, etc.

 Tactical (regular/short term issues) – handled by management regarding their respective

departments

 Strategies (long term) – high level decisions made by top management on new directions,
growth, and issues affecting the entire organization or with long term consequences