business short questions 2015-2007

In a legal context, consideration means

5. Consideration means that some advantage or benefit must move from one party in a contract to another party. Money is the most common form of consideration as it is real and legal.

Maslow identified, in his hierarchical model, 'self-actualisation' as a human need. Self-actualisation means Name two other human needs he also identified:

7. (a) Self-actualisation means being personally fulfilled having developed one's own capabilities and talents to the highest possible level. Physiological Safety.

Identify a suitable source of finance for the purchase of a delivery van in a new business enterprise. Give two reasons for your choice.

A Medium term sources of finance for the purchase of a delivery van required: Hire-Purchase: a. No security is required. b. Easier to obtain than other sources of finance. c. Same consumer rights as a cash purchaser. Medium Term Loan: a. The interest on the loan is tax deductible and large amounts of finance may be raised. b. May be flexibility in the amount and timing of payments/can be arranged to suit ability to pay.

Explain the term 'Short-term finance'.

Short-term finance is finance that is available for a period of up to one year. It should be repaid within twelve months.

Explain the term exchange rate.

This is the price of one currency expressed in terms of another currency.

List five grounds under which employment discrimination is outlawed in Ireland.

1 Gender 2 Marital Status 3 Family Status 4 Sexual orientation 5 Religious Belief 6 Age 7 Disability 8 Race 9 Membership of the Travelling community

Intrapreneurship is

1. (a) Intrapreneurship means engaging in entrepreneurial activities from inside an organisation and turning them into profitable activities/.An intrapreneur works for a business or organisation and comes up with new ideas/new ways of solving problems/ ways of saving money/ways of increasing revenue.

Explain the term 'Constructive Dismissal'

Constructive dismissal arises where you the employee terminate your contract of employment, with or without prior notice, due to the conduct of your employer. Even though the employee has not actually been dismissed he can claim unfair dismissal against his employer, under the terms of the Unfair Dismissals Act of 2007. In a constructive dismissal situation it is up to the employee to prove that the resignation was justified. Your employer's conduct, however, must be such that it would have been reasonable for you to terminate your contract without giving notice.

Outline two features of a matrix organisation structure:

It is a team based structure with expertise drawn from different departments e.g. marketing, finance, information technology, production etc. Team members are answerable to the project leader who is responsible for co-ordinating team effort and ensuring task completion. It is generally set up to carry out specific projects such as product development. All team members have an input into decision making/problem solving. Team can achieve greater output/productivity (synergy). Each employee can have two managers, the project manager and the functional manager which could lead to confusion and conflict. Highly specialised employees and equipment are shared by departments.

Outline two characteristics of a private limited company:

The shareholders have limited liability, which means that they are only responsible for the debts of the company, up to their original investment in it, if it goes bankrupt A private limited company is incorporated which means it has a separate legal existence from its owners and can sue and be sued in its own right. Following the enactment of the Investment Funds and Miscellaneous Provisions Acts 2006, private companies are now entitled to have from 1 to 99 shareholders. Private limited companies have continuity of existence which means that the company does not end in the event of changes such as the death of a shareholder/ director. Shareholders have one vote per share at the AGM.

Explain the terms 'desk research' and 'field research'. Use one example of each to support your answer.

(a) Desk Research is: Research based on secondary sources of information i.e. research that has already been conducted by others. Internal and external sources of information may be used in desk research. Example: The total number of cars sold in the first quarter of 2009 can be found through the research conducted and published by the CSO or Society of the Irish Motor Industry (SIMI). Internal Sources of Information: Company Reports, Management Accounts, Marketing Plan, Company Strategy, Customer Feedback etc External Sources of Information: Websites (e.g. for financial information www.finfacts.ie, Irish Finance Portal), Reports from state agencies (e.g. CSO, Enterprise Ireland, ESRI, FÁS), business publications and newspapers, IMI, Trade Associations (e.g. Society of Irish Motor Industry), Industry experts etc. (b) Field Research is: Research based on primary sources of information. Field research (primary research) seeks to discover new detailed information about the target market. Market research methods used may include: Example: Car dealership checking satisfaction rating of customer purchasing new car in relation to car and experience of dealership may use questionnaire (i) Questionnaires (ii) Observation (iii) Sampling (iv) Personal Interviews etc.

Distinguish between 'Public Liability' and 'Fidelity Guarantee' as types of insurance.

(a) Public Liability Insurance is: Insurance cover for the business which protects the business against claims by members of the public for injury or loss resulting either from an accident on the business premises or the actions (or inactions through negligence) of the business. (b) Fidelity Guarantee Insurance is: Insurance cover for the business which protects the business against financial losses, as a result of theft or fraud by an employee.

Outline the purpose of a company's 'Articles of Association'.

(a) The Articles of Association is the internal 'rule book' /internal rules/regulations that every incorporated firm must have and work by. It sets out the rules and regulations governing the internal workings under which a company will operate and its relations with its shareholders.

Illustrate the difference between the insurance principles 'Insurable Interest' and 'Indemnity'.

(a) The policy holder must benefit by the continued existence of the object and suffer by its loss. The owner of property has insurable/personal interest in the property. Insurable interest is determined by monetary (pecuniary) value. Example: Everyone has an insurable interest in their own personal possessions e.g. house,but your next door neighbour would not normally have an insurable interest in your house. (b) An insurer indemnifies the person taking out the insurance against a loss happening. There can be no profit from insurance, only recovery of the actual loss. The contract is for the reinstatement of the actual property insured, i.e. putting the claimant in the same financial position, as far as possible, as was the case prior to the accident or loss. Example: A 3 year old car insured for €15,000, but with a market value of €10,000 is written off in an accident. The maximum compensation for the loss suffered is €10,000.

State two functions of either FÁS OR the County Enterprise Boards (CEBs).

(b) FAS-Any two functions • Training of skilled personnel for industry, • Apprenticeships, Mentoring. • Recruitment service to Job seekers • Community Enterprise Programme-Advice on business start-ups/training/recruitment and selection of staff/grants for feasibility studies etc CEBs (County Enterprise Boards) -Any two functions • Information and advice on setting up/expanding small businesses • Provides Grants for capital costs/employment/feasibility • Mentoring programmes • Helps with training.

Outline two ways the Government could encourage business activity in Ireland.

(i) A low corporation tax rate of 12.5% encourages foreign direct investment, thereby increasing businesses in Ireland Low personal taxation in the form of lower PAYE and DIRT gives employees and consumers more disposable income and increases the demand for the goods and services provided by business. (ii) Improved infrastructure such as roads, airports, ports, telecommunications and broadband allow business to operate efficiently and encourages business activity and job creation. (iii) More Education and Training provided by State agencies such as FÁS can ensure a steady supply of skilled workers to meet the needs of business. (iv) Grant aid for business start-up and expansion e.g. County and city enterprise boards give up to €20,000 feasibility/innovation grants where entrepreneurs match at least 50% of the costs. Business expansion grants of up to €80,000 are available for sole traders, partnerships, community or limited companies. SEED and BES schemes for companies exporting or companies having export potential. (v) Better regulatory environment encourages the growth and expansion of business.

) Outline two other elements of a legally binding contract.

(i) Agreement (Offer and Acceptance) (ii) Intention to Contract (iii) Capacity to Contract (iv) Legality of Form (v) Legality of Purpose (vi) Consent to contract

List three items of information included in the 'Articles of Association'.

(i) Capital: The amount of share capital/The different classes of shares. (ii) Regulations re Meetings: Procedures at company meetings/Procedure/Notice for calling the company meetings etc. (iii) Directors: Powers and duties of directors/Procedures/rules for appointing and removing directors. (iv) Shares: Voting rights, Issue of shares, Transfer of shares. (v) Dividends: Declaration of Dividends, Distribution of profits.

b) Describe two benefits of community development.

(i) Creates employment and thereby increases spending in the local economy (ii) Spin off jobs e.g. transport, education (iii) Promotes an enterprise culture/encourages new ideas/new businesses in community (iv) Empowers local community and generates a sense of pride within the community (v) Creates confidence/community spirit in the community/growth and prosperity in local area.

Name two other EU decision-making institutions.

(i) European Commission (ii) European Parliament (iii) European Court of Justice (iv) European Council (v) European Court of Auditors

9. Outline three grounds for fair dismissal under the terms of Unfair Dismissals Act 1977/93.

(i) Incompetence on the part of the employee. The employee lacks ability to carry out required duties (poor work performance; failure to meet set targets). (ii) Qualifications (misrepresentation by the employee). Lack of formal technical or professional qualifications as appropriate for the work the employee was employed to do/misleading employer in relation to qualifications. (iii) Misconduct by the employee. Improper /unacceptable behaviour by the employee e.g. theft, substance abuse, violence at work. (iv) Redundancy. Due to closure, competition, decline in demand, cutbacks (fair procedures applied). (v) Incapability refers to employee's attendance i.e. persistent lateness, absenteeism or extended sick leave (vi) Legal Reasons. If continuation of the job was to break the law in some way e.g. if an employee's work visa expired etc.

Outline two reasons why retailers use 'Own - brand products':

(i) The retailer can request the manufacturer to make the goods to certain specifications e.g. quality, size, shape etc. Greater control over distribution channels/can seek bigger discounts from suppliers. (ii) The retailer can generally sell 'own- brands' at a cheaper price than the market leader and other brands/ 'value for money'. (iii) It can lead to customer loyalty to the retail outlet/shop, rather than the product, thereby increasing other product sales. (Tesco expects to sell over €200m in Irish products as part of its own-label ranges in Ireland and in the UK in 2011) (iv) Easily recognised and require very little advertising. (v) A large range of products can be sold under the own-brand label. (vi) They can increase the profit margin they earn from products, due to lower costs.

Outline two implications for management when a company develops its own website:

- Communication: The website provides opportunities for instant communication, both internally and externally. The Website can be used by management to communicate with customers, suppliers and staff. - E-business. Customers can buy on-line (i.e. online payments) and credit card payments can be taken. - Enhanced reputation of the business creating a positive image with consumers. Sales should increase with ordering possible 24/7, gaining an advantage over the competition. - Growth in potential customers who can be reached at minimal cost. It allows for global advertising as a website can reach a worldwide market. - Online support service can be provided to customers i.e. responding to various concerns or queries. - Staff training in web design/web maintenance and operation. - Capital investment will be required to set up the web site. You have to buy your own domain name.

Outline two impacts on Irish Exporters to the UK market, if the euro (€) increases in value relative to the UK pound sterling (£).

-Irish exports to the UK become more expensive/less competitive/lower profit margins if the euro increases in value relative to the Pound Sterling. It will be more expensive for UK customers to buy Irish beef or other Irish goods if the euro increases in value relative to the pound sterling. As a result sales to the UK will fall/Exports from Ireland will decrease. Job losses may occur/ Possible closure of firm. -Cheaper raw materials/inputs and therefore reduction in business costs for the Irish exporting firms, who may be dependent on foreign raw material imports. -Exporters may have to change markets/export to other EU countries

Outline two benefits of meetings as a method of communication.

1. 2. 3. 4. 5. 6. Distinguish between two types of meeting which are common in a business. AGM (Annual General Meeting). This is a meeting of the shareholders of a company. It is held once a year. At the AGM, shareholders can ask the directors questions, the chairperson gives an address, directors are elected, auditors are appointed and accounts are presented. EGM (Extraordinary General Meeting). This occurs when a matter of such importance arises that the business cannot wait until the next AGM to discuss the issue. Board Meeting. These are regular meetings held by the board of directors of the company. Tactical planning, strategic planning and review of company performance are often on the agenda of a board meeting. Management/executive meetings/ad hoc. Meeting held by various managers in the business to deal with operational issues/immediate problems. Outline two benefits of meetings as a method of communication. Meetings allow discussions to take place on different proposals which in turn allow for good, effective decision-making/ co-ordination of the work of various departments. Meetings allow information to be disseminated to the various stakeholders in the company, e.g. a meeting of management and the employees of the firm regarding industrial relations issues. Meetings are creative forums, e.g. a brainstorming session during the idea generation stage of the product development process. Meetings are appropriate when sensitive or confidential issues are being discussed e.g. redundancy, dismissal of staff and business contraction/expansion. Meeting allow for feedback to be given and received. A written record (i.e. minutes) of decisions can be made for future reference.

Outline two strategies management could use to help employees adapt to change.

1. Management need to communicate clearly why change is necessary and the consequences of not taking any action. For example, management could point out that increased competition may lead to a loss of market share and redundancies and that a change in work practices involving greater productivity is a strategy that could prevent this. It will reduce uncertainty and tensions among employees. 2. Management needs to consult with the employees before introducing change so that employees will be more willing to accept the changes introduced (inputting into the decisions being made). 3. Management needs to reward employees for embracing change e.g. bonus payments and wage increases for accepting and using new technology.

Draft a typical Agenda for the AGM of a Private Limited Company.

1. Minutes of the 200x AGM 2. Matters Arising from the Minutes 3. Chairperson's Report 4. Auditors report and accounts 5. Declaration of Dividend 6. Appointment of Auditors 7. Election/reappointment of Directors 8. Motions 9. A.O.B.

Outline two types of industrial action that employees could take in an attempt to get employers to meet their demands.

1. Official Strike where the employees do not enter their workplace and do not do their work. An official strike involves a secret ballot, proper notification to the employer (i.e. one week's notice) and sanction by ICTU. Work stoppage or token strike is where the employees stop work for a short period of time to highlight their concerns. 2. Work to rule where employees only undertake the exact jobs written in their job description/contract. No flexibility is provided by staff to meet urgent/unforeseen requirements. 3. Overtime ban where workers refuse to do overtime. This can cause major disruption, especially at peak trading times e.g. A toy shop at Christmas..

Outline two factors that affect the width of the span of control in a business:

1. Skill of manager/management style: An experienced, confident and able manager can operate a wide span of control. 2. Skill of the workforce: When employees are trusted because of their skill sets and motivation, a wide span of control may operate. 3. The nature of the work/type of product or service: When the work involved is repetitive, requiring little responsibility, decision-making or skill, a wide span of control is appropriate. If the work involved requires a high level of expertise a narrow span of control is appropriate.

Illustrate the difference between a merger and a strategic alliance.

A merger is a friendly or voluntary amalgamation of two or more businesses for their mutual benefit. A single new legal entity is formed. Example Glanbia plc was formed in 1997 out of the merger of Avonmore Foods plc and Waterford Foods plc. A strategic alliance: When two or more independent firms agree to co-operate and share resources and expertise for the mutual benefit of all parties involved. The firms remain completely independent legally and each firm maintains its own separate trading identity. Starbucks partnered with Barnes and Nobles bookstores in Example: 1993 to provide in-house coffee shops, benefiting both retailers / Mazda and Toyota sharing technology resources etc.

Distinguish between a merger and a franchise as methods of business expansion.

A merger is a friendly or voluntary amalgamation/joining together of two or more firms for their mutual benefit. A single new legal entity is formed once it is approved by shareholders. e.g. Irish Permanent and Trustee Savings Bank merged to form Permanent TSB. Avonmore Co-op and Waterford Foods merged to form Glanbia plc. A Franchise is a business arrangement whereby the franchisor (the existing business with the proven business model) grants a contractual licence/permission to the franchisee (person setting up the business) to use its name, logo and business idea in return for a fee or a percentage of profits or sales. The franchisor can expand his business without having to invest further capital or take additional risks as these are passed onto the franchisee in the contractual arrangement. Some franchises in Ireland include, The Zip Yard, Gloria Jean's Coffees, McDonalds and GEMS.

Illustrate the difference between a 'strategic alliance' and a 'takeover' as methods of business expansion.

A strategic alliance: When two or more independent firms agree to co-operate and share resources and expertise for the mutual benefit of all parties involved. The firms remain completely independent legally and each firm maintains its own separate trading identity. The firms benefit from the sharing of resources and talent that otherwise they wouldn't have access to. Either party can end the arrangement easily if they choose to do so. A takeover: This occurs when one company purchases 51% or more of the shares in another company in either a hostile or friendly manner. The acquiring company obtains control of the other company, which could lose its identity after the acquisition and becomes part of the acquiring company. The cost of the takeover can be very expensive.

Illustrate your understanding of the term Trading Bloc.

A trading bloc is a group of countries who agree to form a free trade area or common market or customs union. They remove trade barriers for goods and services traded among themselves. Examples: • The European Union (EU) • The North American Free Trade Agreement (NAFTA).

What is a trading bloc? _ Give two examples

A trading bloc is a group of countries who agree to form a free trade area, common market or customs union in order to eliminate or reduce barriers to trade. The European Union (EU) • The North American Free Trade Agreement (NAFTA).

Distinguish between two types of meetings which are common in a business.

AGM (Annual General Meeting). This is a meeting of the shareholders of a company. It is held once a year. At the AGM, shareholders can ask the directors questions, the chairperson gives an address, directors are elected, auditors are appointed and accounts are presented. EGM (Extraordinary General Meeting). This occurs when a matter of such importance arises that the business cannot wait until the next AGM to discuss the issue. Board Meeting. These are regular meetings held by the board of directors of the company. Tactical planning, strategic planning and review of company performance are often on the agenda of a board meeting. Management/executive meetings/ad hoc. Meeting held by various managers in the business to deal with operational issues/immediate problems.

An EU directive is

An EU directive is a legal instrument to implement and enforce EU law in member states which obliges members to change their national laws within a time limit/deadline. An EU directive aims to harmonise laws in the Union by attempting to get rid of differences between national laws e.g. The Waste Electrical and Electronic Equipment Directive.

Illustrate your understanding of the term 'Indigenous firm'.

An indigenous firm is an Irish/ native/ locally based business that has been established and is owned/managed by Irish people/residents. They produce goods and/or provide services in Ireland. These Irish owners have a direct personal interest in the survival and growth of the firm. Its principal place of business is in Ireland. e.g. Stira Stairs, Supermacs, Easons, Smyths Toys, Irish Times.

In relation to the law of contract distinguish between the terms 'offer' and 'invitation to treat'.

An offer is a promise by the person making the offer to be bound by the contract, if the offer is accepted properly. An Invitation to Treat is only an invitation for someone to make an offer, which can be either accepted or rejected. Goods on display are only inviting customers to make an offer. They can do so by bringing the goods to the checkout and offering to buy them.

Name one leadership style.

Autocratic/Democratic/Laissez Faire

Using the following data, calculate (i) Balance of Trade, (ii) Balance of Payments. State in each case whether it is a surplus or deficit. (Show your workings.) Visible Exports €50bn Invisible Imports €40bn Visible Imports €30bn Invisible Exports€35bn

Balance of Trade = Visible Exports - Visible Imports = €50bn - €30bn = €20bn surplus Balance of Invisible Trade = Invisible exports - Invisible Imports = €35bn - €40bn = (€5bn) deficit Balance of Payments = Balance of Trade + Balance of Invisible Trade = €20bn + (€5bn) = €15bn surplus

Illustrate how a manager adopting this leadership style might manage the process of change in a business.

Change is implemented by intimidating workers into accepting change e.g. threatening redundancies etc. Change is implemented by having a consultative process with employees e.g. calling a meeting and discussing and seeking opinions and views of staff with a view to reaching a compromise. Less engaged in the process of change and adopts a 'hands-off' approach.

Outline two current trends affecting this sector in Ireland:

Commodities such as beef and milk are commanding higher prices on world markets as demand increases due to global population growth. Cóillte the state agency operating in forestry, land based businesses, renewable energy and panel products may be privatised along with other businesses such as Electric Ireland. As a result of overfishing the EU has introduced fish quotas in an attempt to conserve fish stocks. Gas deposits discovered in the Fermanagh/Leitrim border may be mined using 'fracking' a controversial mining technique. The Corrib natural gas field has also proved controversial. Developments in the area of wind energy and solar power. Continued growth in organic food production capitalising on Ireland's green image worldwide. Restriction on turf cutting due to EU environmental directive.

(a) Explain the term 'Community Development'.

Community Development is: A voluntary or professional effort to support and develop the social and economic activity of a local community for the benefit of the community e.g. Leader Programmes, local partnership programmes, Local club/society etc.

Explain the legal term 'consideration'.

Consideration means that some advantage or benefit must move from one party of the contract to the other party. Consideration refers to what changes hands (is exchanged) between buyer and seller e.g. the purchase of a CD for €20 from your local music shop. The buyer gives €20 to the seller and in return gets a CD. Consideration may refer to money or goods of any value exchanged between parties. It is a necessary prerequisite for a valid contract.

Outline two methods of promoting intrapreneurship:

Create a culture within the organisation where it's okay to make mistakes/think independently. Resource provider: Make resources available to help employees to pursue their ideas (e.g. finance, time). Financial rewards for effort and creativity: These rewards could involve a mixture of pay, incentives and benefits. Teamwork encourages creativity among employees as it facilitates brain storming sessions as part of the product development process etc.

Define the term delegation.

Delegation involves the assignment of authority/power to another person. It is generally assigned from a manager to a subordinate, to undertake a specific work task or project. The accountability for the particular task/project is also assigned.

Name a state owned enterprise in the production category Explain two reasons for state involvement in this category:

ESB Essential service Economic Infrastructure //development.

Distinguish between a 'Directive' and a 'Regulation' as legislative instruments within the EU.

EU Directive: This is a legal instrument used to implement and enforce an EU law in member states. It obliges member states to change their national laws to allow for EU rules, within a certain time limit. It is binding only as to the results to be achieved; leaving member states to choose, within prescribed limits, the means by which the rules and targets are to be attained. They are used to bring different national laws into line with each other and are common in matters affecting the operation of the Single Market (e.g. product safety standards, WEEE (Waste, electrical, and electronic equipment Directive), Health and Safety at work Directive.) EU Regulation: This is a legislative act of the EU which becomes enforceable immediately as law in its entirety in all member states simultaneously. They take precedence over national laws. They are self-executing and do not require any implementing measures. EU institutions can enforce a regulation throughout the EU.

Identify two parties in business and describe a competitive relationship between them:

Employers and Employees Competitive relationship (describe): parties with different aims, win/lose relationship e.g. claim for pay increase.

Outline two benefits of local business for a local community.

Employment/jobs direct employment in the community (in the business itself) Spin-off businesses- employment in spin-off businesses such as transport, suppliers, cleaning services etc. Increased disposable incomes leading to an improved standard of living, leading to increased spending in the local community thereby encouraging other businesses. Growth in local services to meet the needs of local businesses (taxi services, banks, credit unions etc.). Local people in the community can avail of these services. Community spirit and quality of life. Successful local business improves community spirit and social interaction between citizens. Taxation: Local rates, taxes and service charges contribute to development of local infrastructure. Culture of enterprise: encourages more businesses to develop.

Illustrate your understanding of the term enterprise.

Enterprise is being innovative and creative while taking personal/financial risk to achieve ones goal. Business Enterprise - Diversification into new markets/new products/ Facebook-Mark Zuckerberg/Xbox-Microsoft /iPad-Apple

Explain what is meant by the term 'Exchange rate'.

Exchange rate is the price at which a currency can be exchanged for another i.e. the price/value of the currency of one country in terms of the currency of another country.

FDI HRM USC ECB CGT

FDI Foreign Direct Investment HRM Human Resource Management USC Universal Social Charge ECB European Central Bank CGT Capital Gains Tax

In break-even analysis a distinction is made between 'Fixed Costs' and 'Variable Costs'. Explain these terms, and give one example in each case.

Fixed costs remain the same irrespective of the level of output; Examples: rent, loan repayments, insurance. Variable costs fluctuate/change directly with the level of output; Examples: direct wages, raw materials, energy costs.

Distinguish between the following taxation forms: Form P45 and Form P60.

Form P45 is: Issued by an employer to an employee on the cessation of employment. The form provides details of the amount of Gross Pay, Tax and PRSI paid by the employee up to the date of leaving employment. The Form P45 will be required by the employee when: (i) Entering new employment - the new employer will require the form P45 to calculate the correct amount of tax payable (ii) Claiming social welfare benefits or a tax refund. (b) Form P60 is: Issued by an employer to an employee after the end of the financial /tax (calendar) year. The Form P60 shows Gross Pay, Income Tax and PRSI paid by the employee in the specified financial year. The Form P60 will be required by the employee when: (i) Claiming refund on overpaid tax - employees should check their Form P60 against their Tax Credits to ensure they have not been overtaxed. (ii) Claiming refund on PRSI contributions overpaid (in excess of pay ceiling). (iii) Claiming refund on Health contribution where income was below the relevant threshold.

Outline its possible impact on Ireland's economic development.

Fuels economic growth/Creates employment/Earns foreign currency for the country/Generates extra revenue for the government/Essential raw materials and finished goods can be imported/Improved standard of living/Wider choice and lower prices for consumers.

From the following figures calculate the net pay of Hazel Dunne. Gross Pay €50,000, Tax Credits €6,000 Standard Tax Rate 20% Higher Tax Rate 41% Cut-off Point €36,400

Gross Pay 50,000 36,400 Taxed at 20%= 7280 13,600 Taxed at 41%= 5576 Gross Tax = 12856 Less Credits= 6000 Tax Payable= 6,856 Net Pay= 43,144 (1)

DescribetwopossibleriskswhichexchangeratescouldpresentforbusinessesinIreland:

If the euro increases in value relative to $ Irish exports are more expensive abroad/less competitive, which is bad for Irish business as sales and profits decrease. expensive, increasing costs for businesses e.g. imports of oil, which is a raw material for businesses, may result in businesses increasing their prices or reducing their profit margins.

Illustrate what is meant by the term 'invisible imports', with reference to the Irish economy.

Invisible imports are foreign services purchased by Irish customers/residents. e.g. financial services provided by foreign firms/ Irish residents holidaying abroad.

Explain the term 'interest rate'.

It is the price that has to be paid by the borrower for the use of the money/or the reward for money saved, expressed as a percentage. The cost of borrowed money expressed as a % of the amount borrowed/ or the return on money saved over a period of time expressed as a % of the amount borrowed.

Explain the term 'span of control'

It refers to the number of people / subordinates that report directly to one manager/ supervisor in a hierarchy.

Contrast 'job production' and 'batch production', giving one appropriate example in each case.

Job Production Refers to the production of a single customised product e.g. a bespoke oak kitchen, wedding dress etc. Batch Production Refers to the production of certain quantities of identical products at the same time/in one production run e.g. loaves of brown bread, school textbooks etc.

State two tax credits a person may be entitled to.

Personal Tax credit (single, married, widowed) PAYE Tax credit Age Tax credit Incapacitated Child Dependant Relative Blind Person etc.

State two benefits of promoting the development of 'Indigenous firms' for the Irish economy.

Loyalty: they are loyal and are more likely to remain in Ireland, even in times of recession. They have a loyalty to the local economy. (They are not footloose) Profit Distribution: They re-invest their profits in Ireland, and spend within the economy. Local benefits: They help other businesses in their locality and nationally, by buying raw materials and services from them. This creates 'spin off' business/improved infrastructure. Entrerpreneurship: If they prove to be successful, indigenous firms may stimulate other entrepreneurs to set up business and this generates a culture of local industrial/service development. Less dependence on foreign transnational companies: By encouraging "internationally traded indigenous industry" Ireland lessens its dependence on foreign transnational companies to create work and wealth in the economy. Foreign Trade: Many indigenous firms are involved in the export services sector and thereby improve Ireland's Balance of Payments. Employment: Tend to be more labour intensive than transnationals/employment may be more stable than that provided by transnationals. Taxation: Source of revenue for the Government through VAT, Corporation Tax etc

Outline two benefits of delegation within a business:

Manager is not required to do all the work and has more time for strategic planning. Task/project may be completed to a higher standard due to the level of personal accountability provided by delegation. Increased employee motivation from job enrichment/ improved staff morale/more challenging work. Effective time-management tool/ managers can prioritise tasks that need their attention. Higher skilled workforce will allow greater management flexibility. May improve the work-life balance for the manager.

What do the letters NCA stand for

National Consumer Agency

Using the figures below, calculate the Net Profit Percentage (Margin) of Auburn Publishing Ltd for 2014: Sales Gross Profit Expenses €50,000 €22,000 €12,000 (b) If the Net Profit Percentage for 2013 was 25%, outline how management could use this information in making decisions.

Net profit/Sales X 100 Gross Profit 22,000 - Expenses 12,000 = Net Profit of €10,000 Net Profit 10,000 / Sales 50,000 = 20% The Net Margin has fallen by 5% showing that the firm's profitability has decreased and that it may be time for management to control its costs by deciding for example to cut wages, source cheaper raw materials or it should try to increase sales revenue.

State two examples of intrapreneurship:

New work methods, new production process, new organisational techniques etc.

Explain what is meant by the term 'Open Economy'.

Open Economy (a) An open economy is one in which people including businesses can trade in goods and services (i.e. Importing and Exporting) and borrow and lend in world financial markets. A measure of a country's openness is the fraction of GDP devoted to imports and exports.

What do the letters PAYE stand for?

Pay As You Earn

outline two possible implications for a business if a manager adopts McGregor's Theory X approach to managing:

Possible Implications: - Demotivated workforce as a result of the autocratic approach, lack of consultation and empowerment. Lack of trust; no delegation; low morale. - High labour turnover and re -training costs for the company. - Industrial relations problems, impacting on productivity/output. Poor time management because the Theory X manager will not delegate tasks, resulting in possible overwork and stress for the manager. - Low quality of work/output; low quality of goods/services; lack of incentives provided to be entrepreneurial, to do things differently, and to take an interest in the work.

Distinguish between primary picketing and secondary picketing as types of industrial action available to employees.

Primary picketing. According to the Industrial Relations Act 1990 it is lawful for worker to walk up and down with placards at a place where their employer works or carries on business provided the picketing is for the purpose of peacefully communicating information. Secondary picketing. The act provides that secondary picketing (i.e. picketing of an employer, other than the primary employer involved in the dispute) is lawful only in situations where it is reasonable for those workers picketing to believe that the second employer was acting to frustrate the industrial action by directly assisting their employer.

Outline two main features of the PAYE tax system:

Progressive (Falls heaviest on high income earners) Efficient (Business collects the tax for the exchequer) Direct (It is a direct tax on income earned from employment) Form based (P12A, P60, P45, P12, P21) etc.

"The goal of the World Trade Organisation (WTO) is to reduce protectionism and allow free trade." Illustrate your understanding of the underlined term.

Protectionism Protectionism refers to trade barriers imposed by governments. It is Government actions and policies that restrict or restrain international trade. It may be done for economic reasons with the intention of protecting native businesses and jobs from foreign competition or for political reasons or for health reasons. Examples include tariffs, quotas, administrative barriers, embargoes.

Distinguish between 'Prototype Development' and 'Test Marketing' as stages in the development process of a new product.

Prototype development is the creation of the first working model/mock-up/sample of a new product /producing an update/improvement of an existing product. This cycle is the only method for refining the original design to create a fully functioning product. Test marketing is a trial on a small basis during product development to determine how people respond/react to a new product or respond/react to a change in an existing product. It can be used to see whether or not the public will buy the product, how the product may need to be adjusted to make it appealing to the public, and how members of the public interact with the product.

Distinguish between a Quota and a Tariff as barriers to free trade between countries.

Quota: is a physical restriction/limit on the number of units of a good that may be imported/exported. Quotas discourage imports and/or encourage sales of domestically produced goods. Tariff: this is a tax on the value/price of goods imported. As a result imports will be more expensive and they will be less competitive on the domestic market.

R&D PLC IBEC EGM DIRT

R&D Research and Development PLC Public Limited Company IBEC Irish Business and Employers' Confederation EGM Extraordinary General Meeting DIRT Deposit Interest Retention Tax

Using the figures below calculate the ROI for 'Natural Options Ltd.'. (Show your workings.) Net Profit Ordinary Share Capital Reserves Long Term Loan € 57,000 € 140,000 € 56,000 € 24,000

ROI = __Net Profit____ x 100 Capital Employed = __________€57,000_________ €140,000 + €56,000 + €24,000 = 25.91% or 26%

Explain the term 'Return on Investment' (ROI).

ROI is the net profit a business generates from the total finance used by the business (capital employed). It measures the profitability of a business, compared with the money invested in it.

Outline two rights of a 'Data Subject' under the terms of the Data Protection Acts, 1988 and 2003.

Right of individuals not to be subjected to automated decision making: Important decisions about DS, such as rating of work performance, creditworthiness, or reliability, may not be made solely by computer automated means, unless the consent to this is given/ human input into such decisions. Right to complain to the Data Protection Commissioner when some data controllers are not complying with the Data Protection Act. Right of access to own files: The right to get a copy of the data held by the Data controller within forty days of a written request. Right to have any errors corrected: inaccurate information held by the Data Controller about DS can be rectified or erased. Right to compensation: if inaccurate information held causes suffering or financial loss e.g. refusal of a loan or job promotion. Right to Privacy under Data Protection and Privacy in Telecommunications Regulations to prevent your data from being used for direct marketing purposes.

Outline two functions of the Labour Relations Commission.

Rights Commissioner service. They investigate disputes, grievances and claims that individuals or small groups of workers refer under specific legislation and issue the findings of their investigations in the form of either decisions or non-binding recommendations. Rights Commissioners can only deal with disputes about unfair dismissal, suspension, maternity leave and disciplinary procedures. Conciliation Service. Conciliation is a voluntary process in which the parties to a dispute agree to avail of a neutral and impartial third party to assist them in resolving their differences. The Labour Relations Commission provides a conciliation service by making available Industrial Relations Officers of the Commission to chair 'conciliation conferences'. Solutions are reached only by consensus, whether by negotiation and agreements facilitated between the parties themselves, or by the parties agreeing to settlement terms proposed by the conciliation officer.

Explain the term span of control and outline a situation where a narrow span of control may be appropriate.

Span of Control refers to the number of people / subordinates that report directly to one manager/ supervisor in a hierarchy. A narrow span of control would be more appropriate when the work involved requires a high level of expertise/ where nature of work is complex/ workers or management lack experience etc.

Forming, storming, norming and performing are stages in team development. Outline your understanding of storming and norming.

Storming: Team members test relationships and tensions/Conflicts frequently arise/Members try to establish their positions on a team/Members may act as individuals and resist other views/Differences are challenged. Norming : Constructive relationships and ways of working together emerge/ Ground Rules and procedures are agreed and there is an increased focus on the task at hand/Greater sense of trust develops between team members.

Distinguish between Strategic Planning and Tactical Planning. Give one example in each case.

Strategic Planning/ Corporate: Strategic plans are developed over the long term. Emphasis is on growth/improvements in the organisation. Drawn up by top management. Examples - Entry into foreign markets/Product diversification/ Changing the structure of the business/ Increase in the Market share. Tactical Planning/Functional: Short term, specific plans. Tend to relate to a particular function of a business. Drawn up by senior management. Examples -New advertising campaign/a new branch of the business/ a changed stock control system.

What do the letters SWOT stand for? Explain its use in business:

Strengths, Weaknesses, Opportunities and Threats planning/decision-making situations • product or service development.

Explain the difference between the terms tax rates and tax credits.

Tax rates: Income is taxed at two different rates. The rate at which tax is paid depends on the level of taxable income. The current tax rates are the standard rate of 20% up to a certain income and the higher rate of 41%. The standard or lower rate of 20% applies to the tax band of €32,800 and the higher rate 41% applies to the balance of taxable income. Tax credits: Gross Tax less Tax Credits = Tax Payable. Under the tax credit system a taxpayer is entitled to tax credits/range of allowances depending on each person's personal circumstances, which can change from year to year e.g. married person's tax credit or civil partner's tax credit , employee (PAYE) tax credit etc. These tax credits are used to reduce tax liability calculated on gross pay. Tax credits are non- refundable. However, any unused tax credits in a pay week or month are carried forward to subsequent pay period(s) within the tax year. Examples of tax credits include: Blind Credit, Dependent Relative Credit, Guide Dog Allowance, Home Carer Credit, Incapacitated Child Credit, One Parent Family Credit, PAYE Credit, Widow/Widower's Credit.

Explain the role of the Council of Ministers in EU decision-making.

The Council of Ministers must adopt all legislation before it becomes law (key decision- making body of the EU). The Council of Ministers is comprised of ministers from governments of each EU member state. The topics on the agenda determine which minister attends. Most decisions are made by majority voting. However, unanimous agreement is required for certain issues such as taxation, launching new common policies, allowing new countries to join the EU etc.

Define the term primary sector.

The primary sector (extractive) is a category of industry based on the natural resources of a country such as agriculture, forestry, fishing, mining, energy.

Define the 'secondary sector' and outline two current trends affecting this sector in Ireland.

The secondary sector includes Manufacturing, Agribusiness and Construction businesses - that manufacture products from the materials produced by the primary sector (Agriculture, Forestry, Fishing and Mining). Takes raw materials, processes raw materials and produces finished goods. Example: Kerry Group - Food Products. Current Trends: (i) Decline in employment in Secondary Sector - downsizing and closures have resulted in an increase in unemployment, particularly in relation to Manufacturing and Construction (ii) Increased competition- challenge faced by Agribusiness Sector in food market from foreign retailers i.e... Lidl and Aldi (iii) Increased wage rates in Ireland over the past few years has resulted in loss of competitiveness - relocation of some manufacturing businesses to low cost economies etc

Outline two possible economic impacts of low interest rates for Irish businesses.

There may be increased consumer spending as a result of the availability of cheaper credit from financial institutions leading to an increase in demand for business products and services/increase in business profits. Repayments on loans and servicing of debt will fall leading to lower business costs. The business may become more competitive and sales, exports and profits should increase. Investment and business expansion as a consequence of cheaper loans; allows businesses to grow and develop new products and services leading to increased employment. Possible economies of scale. Impact on savings- very low rates may discourage savings and may encourage consumer spending leading to increased business profits.

Explain the meaning of the term 'Own - brand products'.

These are products sold by retailers/multiples under the retailer's own name and logo. They are known as 'retailer brands'. Large multiples such as Tesco's and Dunnes use own label brands e.g. Tesco milk, Dunnes 'Honey and nut flakes' cereal.

Illustrate the difference between 'enterprise' and 'management'

To be enterprising is to have the ability to generate new ideas, to identify an opportunity and to have the confidence, motivation and determination to take the risk to turn the idea into reality - to act as agents of change. Example: Bill Cullen, Chairman and owner of Renault Ireland Management is the process of getting objectives and activities completed efficiently and effectively with and through other people. The key activities of management include planning, organising and controlling. Example: Declan Kidney, Irish Rugby Coach

Outline two functions of the NCA:

To provide information to consumers on their rights in relation to the purchase of goods and services - leaflets, website, telephone line. To enforce the relevant consumer law and encourage compliance, e.g. on-the-spot penalties and prohibition orders. To investigate suspected offences under any of the relevant laws, e.g. the NCA has the power to enter premises to gather evidence, with the support of the Gardaí if necessary. To prohibit false pricing, e.g. goods advertised as being reduced in a sale must have been on sale at the higher price for twenty eight consecutive days sometime in the last three months. To refer cases to the Director of Public Prosecutions where appropriate.

Illustrate a business situation where 'short-term finance' would be appropriate.

Trade credit could be used to purchase stock for resale.

John O'Neill owned a house worth €350,000 and had insured it for €300,000 when a fire caused a partial loss of €63,000. Calculate the amount the insurance company will pay. (Show your workings.) Name the principle of insurance that applies in (a) above.

Value insured divided by value of house all x by loss = Compensation House Value €350,000. House Insured for € 300,000 or 6/7ths. of its value Partial Loss €63,000 x 6/7 = €54,000 (compensation) Principle of Indemnity.

Differentiate between Working Capital and Equity Capital.

Working Capital: Short term source of finance. It is used for the day-to-day running/immediate debts of the business. Working Capital is financed out of short term sources of finance, e.g. bank overdrafts, because both debtors and stocks turn into cash in the short term. Equity Capital: Long term source of finance. Permanent Capital of a company used to finance permanent assets of a business. The benefit for companies of using equity capital as a long-term source of finance is that there is no commitment to the equity shareholders that they will receive a dividend each year.

The following information is supplied by Canon Ltd. - Forecasted Output (Sales) 60,000 units - Fixed Costs €48,000 - Selling price per unit €5 - Variable Costs per unit €2 Using the information provided calculate the following: (a) Total Revenue at forecasted output (b) Total Costs of production at forecasted output (c) Profit at forecasted output (d) Breakeven point (BEP) in units

Workings Answer (a) Sales 60,000 x €5 €300,000 (b) FC €48,000 + (VC €2 x €60,000) €168,000 (c) €300,000 - €168,000 €132,000 (d) B/E Formula 48,000 divided by 5-2 =16000

Using the figures below calculate the Current Ratio for 'Sentry Ltd'. (Show your workings) Debtors Bank Overdraft Cash Creditors Closing Stock €12,000 €20,000 €15,000 €50,000 € 8,000 Comment on the liquidity position of Sentry Ltd:

Workings Current Ratio is CA: CL CA 12000 + 15000 + 8000 = €35000 CL 20000 + 50000 = €70000 Current Ratio = €35,000: €70,000 Answer: 0.5:1 Comment on the liquidity position of Sentry Ltd: Sentry Ltd has not managed to attain the recommended current ratio of 2:1. Sentry Ltd is not liquid and is overtrading i.e. it cannot pay its debts as they arise. Sentry Ltd will have difficulty in raising cash quickly and paying its bills as they fall due. Maintaining a healthy working capital is essential to a businesses' cash flow. However, this was not the case for Sentry Ltd with only €0.50 available to pay for every €1 of liabilities.

Outline two benefits of community initiatives in the development of a local community.

• Direct employment • Spin-off jobs e.g. transport, education, entertainment. • Opportunities for personal and skills development e.g. youth training, apprenticeship training, training for the long term unemployed etc. • Growth and prosperity in the local area. . • Improved physical appearance of the area/tidy towns.