IB Business Management Test classroom

UNIDAD EDUCATIVA TOMÁS MORO Individuals and Societies: Business and Management HL Semester One Exam 2015 - 2016 Name: …………………………………………………… Grade: Second Year of Baccalaureate 30 minutes

Date: …………………………………………….. A–B–C–D

Duration of the Test: 1 hr

General Instructions:  Verify that your cell phone is turned off and inside your backpack (Not in your pencil case).

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Verify that there is nothing written on the desk. If so, report to the teacher now. Any marks found on the desk subsequently will be assumed to be done by the student working at that desk.

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Verify that there are no materials that are not permitted during the examination on your desk.

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Remember that any instance of cheating or academic fraud will receive the corresponding sanction.

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It is prohibited to talk under any circumstances during the exam.

For each of the following sections, circle the correct answer for the multiple choice questions and write short answers in the spaces provided. Part I: Topic 1.1 Business Organization and Environment and Stakeholders

1)

What is a business? a. Non tangible products that are sold to the general public. b. Physical goods that are used by industry to aid in production of other goods and services c. An organization that uses resources to provide products or services to customers

2) a. b. c. d.

An organization that is protected by limited liability and is able to sell its shares to the general public on a stock exchange would be called what? Public Limited Company Public Sector Company Private Limited Company Private Sector Company

a. b. c. d. e.

Three examples of internal stakeholders. Customers, Suppliers, Government Shareholders, Government, Managers Managers, Workers, Competitors Shareholders, Workers, Customers Managers, Workers, Shareholders

3)

4)

Entrepreneurs typically have these types of characteristics:. a. They are risk takers b. They are innovators

c. They are visionaries d. All of the above e. None of the above

5)

Study the data below and answer the questions that follow. A, B, and C represent three countries: Germany, Pakistan and China (although not necessarily in that order). Structure of employment (%) A B C Agriculture 9 1 22 Manufacturing 47 28 24 Services 44 71 54

 a) Identify the countries A, B and C.

(3 points)

b) Use the data in the table to justify your answer to part a).

(7 points)

Part 2: Topic 1.2 Types of Organizations 1) Which of these is not an advantage of sole traders? a. Unlimited liability b. Few legal formalities c. Being your own boss d. Privacy

2) Which advantage(s) do Partnerships enjoy? a. Financial privacy b. Division of labour c. a. and b. d. None of the above 3) Which of the following is true about corporations: a. They enjoy unlimited liability b. Lack of continuity c. They can easily raise finance d. All of the above 4) Limited liability could best be described as: a. A tax benefit for corporations b. The benefit of being your own boss c. The ability to buy products more cheaply ‘al por mayor’ d. A legal protection for the owners of businesses Part 3: objectives

Topic

1.3

Organizational

c. Opportunity vision statement of an d. Threat organization is defined as: a. A simple declaration of theFor the following activity, please answer underlying purpose of anin the space provided. organization’s existence 6) The Ansoff Matrix b. The main reason for a business to Use the Ansoff matrix to explain the growth operate strategies in the following cases. Write the c. A statement that outlines ananswer in the space: organization’s aspirations for the future a) Cadbury, the chocolate manufacturer, launches new products under the name d. None of the above of Crème Eggs, Flake, Crunchie, and Heroes in order to compete with existing For the following multiple choice rivals. _________________ questions, identify in each case where you would place the given situation in b) Nissan, a mass market car the SWOT matrix by circling the correct manufacturer, launches a new line of answer: cars under the Infinit brand to cater to rich customers. __________________________ 2) The new president of Ecuador has lifted the existing laws limiting c) Tesco, the world’s second largest companies’ abilities to invest in retailer, expands to provide petrol and Ecuador. financial services to its customers. _______________________ a. Strength b. Weakness c. Opportunity Part 4: Topic 1.4 Stakeholder Conflict d. Threat 1) The

3) Our company was the first in the industry to provide a particular product and we are known as the first of its kind. a. Strength b. Weakness c. Opportunity d. Threat

1) In

the space provided, explain three examples of stakeholder conflict of interest. (6 points)

4) One of our chief competitors hasPart 5: Topic 1.5 External Environment recently gone out of business. a. Strength b. Weakness c. Opportunity d. Threat

For the following activity, identify the situation given as either Social, Technological, Economical, Environmental, Political, Legal or Ethical by writing the word in the space 5) One of our locations in Cuencaprovided. You are tasked with recently was closed for making identifying characteristics of the external someone sick with bad foodenvironment for a company that is because our cleanliness policy isconsidering opening operations in a new country. (1 point each) not very good.

a. Strength b. Weakness

a. The country’s overwhelming majority

c. The poor regulation in the public

are Hindus. This means that they are mostly vegetarian. ________________ b. The newly elected president is said to be open to better trade relations with neighbouring Pakistan. ____________

transport sector has led to widespread pollution. _________________ d. New manufacturing job opportunities are allowing poorer families to make more money than ever before. _______

Part 6: Topic 1.6 Growth and Evolution Please circle the best answer for each of the following questions.

1) Which of the following is the best definition of economies of scale? a. The impact of globalization on the growth and evolution of business b. The lower average costs of production as a firm operates on a larger scale c. The impact of multi-national corporations on host countries d. The effect of inorganic growth on more economically developed countries 2) Internal growth can best be described as: a. Growth that occurs through alliances or mergers with other organizations b. Growth that occurs inside of the organization example: more employees c. Growth that occurs when a business uses its own resources and capabilities to grow d. None of the above

3) Which of the following is not an example of economies of scale? a. Organic economies b. Financial economies c. Risk-bearing economies d. Purchasing economies e. All of the above are examples of economies of scale Part 6 Continued.

4) Diseconomies of scale can best be described as: a. An increase in overall productivity within an industry. Example: the internet has created a huge cost savings for businesses involved in E-commerce b. A particular region or country is highly regarded and has a trustworthy reputation for producing a given product c. One of the effects of good hiring policies inside of an organization d. Higher unit costs as a firm continues to increase in size

5) The following are all benefits to an organization being large except: a. Brand recognition b. Lower prices c. Diseconomies of scale d. Customer loyalty

Part 7: Topic 1.7 Organizational Planning Tools

1) The following data refers to an activity. Please answer the following questions in the space below.

Activit Preceding y Activity A B A C A D B E C F D and E G A H G and F

Duratio n 4 6 7 12 9 3 16 3

a) Draw the network for the data provided. (6 points) b) Use the duration times to calculate the EST and the LFT of each activity. (6 points) c) Identify the critical path. (2 points) d) Explain the importance of the critical path

Part 7 continued

2) Expansion decision: The owner of a petrol station is planning to expand the business. The two options are to build a forecourt to sell petrol or to construct a showroom to sell cars. The estimated building costs are: petrol forecourt – $100, 000; car showroom – $150, 000. The forecast economic consequences or pay-offs during the expected lives of these investments will depend on the level of demand in the economy, as shown in the table below. The probability of demand being low during the life span of these investments is 0.2 and the probability of high demand is 0.8. Deman Petrol d Forecourt High 500,000 Low 400,000

Car Showroom 800,000 200,000

a) 1 Show these options on a decision tree, adding the pay-offs and probabilities. Calculate the expected value of both investments and recommend which option should be taken. (12 points) b) State three other factors that you consider might influence the business owner’s final decision. (3 points)

Unidad Educativa Tomás Moro Business Management II Bach All Courses Semester 1 Exam Rubric Part 1: Business Organization and Environment Multiple Choice Student can obtain 1 point per multiple choice question by circling or underlining the best option of the options provided. Question 5 – Short answer. Student is evaluated by the correct use of the command terms Justify and Identify. Question section a) asks students to identify 3 countries for 3 points. Part b) asks them to justify why they have chosen the stated country as their answer. The answer to part b) should include some previous knowledge about the countries in question. Part 2: Types of Organizations Multiple Choice Student can obtain 1 point per multiple choice question by circling or underlining the best option of the options provided.

Part 3: Organizational Objectives Multiple Choice Student can obtain 1 point per multiple choice question by circling or underlining the best option of the options provided. Question 6 asks students to fill in the blanks with the growth strategies featured in the Ansoff matrix. They will receive 1 point for each correct answer written in the corresponding space. Part 4: Stakeholder Conflict Short answer. Student will be awarded 6 points maximum for using the command term explain correctly in the explanation of three types of stakeholder conflict. For each correctly identified stakeholder conflict with explanation, 2 points will be awarded. Part 5: External Environment Students will be awarded one point each for identifying and correctly placing the appropriate feature of the SWOT analysis in the space provided. Part 6: Growth and Evolution Multiple Choice Student can obtain 1 point per multiple choice question by circling or underlining the best option of the options provided. Part 7: Organizational Planning Tools Critical path analysis. Student will be awarded the maximum of 6 points for part a) if no errors exist in the network diagram and the graphic is properly labeled. For minor problems with labeling or graphing, a grade of between 4 and 5 will be awarded. For major flaws that exhibit a lack of understanding of the network diagram in relation to the critical path analysis, a lower band of 0-1 or 2-3 will be awarded depending on the severity of the errors.

Unidad Educativa Tomás Moro Business Management II Bach All Courses Semester 1 Exam Rubric Part 7: continued In the second section, b), students are asked to calculate the EST´s and the LFT´s correctly for each activity in the network diagram. Correct placement and calculation of all EST and LFT figures will be awarded the full 6 points. Minor calculation errors will be marked only once and will not affect the marking for the rest of the figure. In section c) students will be awarded 2 points for correctly identifying the critical path with red hash marks. In section d), the student will be awarded 5-6 points for the correct use of Business Management terminology, using the command term Explain correctly, and providing support to justify their answer. A band of 3-4 points will be awarded for

quality answers that do not properly use the glossary command term. A band of 12 will be used for students who lack fundamental understanding of the terms and concepts. In the final question, the students will be awarded full points for correctly drawing and labeling the decision tree, including correct calculations, and choosing the best option. A band of 9-11 points will be applied for students with minimal or minor graphing errors or labeling problems. A band of 6-8 will be applied for errors in calculations that significantly affect the outcome. A band of 1-5 will be applied for answers that don’t meet the above criteria. For the second part of the final question, the student will be awarded 1 point each for correctly stated factor requested in the question.