EXAMINATION : FOUNDATION LEVEL

SUBJECT : BUSINESS AND MANAGEMENT

CODE : A2

EXAMINATION DATE : TUESDAY, 1ST NOVEMBER, 2022

TIME ALLOWED : THREE HOURS (2:00 P.M. – 5:00 P.M)

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GENERAL INSTRUCTIONS

1. There are FOUR questions in this paper.

2. Answer ALL questions.

3. Marks are shown at the end of each question.

4. Presentation, clarity of expression, logic of arguments and the use of lucid English will
be taken into account in the assessment of candidates’ answers.

5. This question paper comprises 6 printed pages.

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QUESTION 1

(a) For each of the questions given below, choose the most correct answer among the four
given alternatives. Indicate your answer by writing the appropriate letter A, B, C or D
in your answer booklet.
(i) The main types of business organizations are:
A. cooperatives, partnerships, companies and sole traders.
B. limited company, sole traders, public company.
C. partnerships, sole proprietors, private limited company and cooperatives.
D. cooperatives, limited companies, partnerships and sole traders.

(ii) Whatever medium, a number of questions must be decided about an

organization’s advertising efforts. Below are the basic questions except:
A. what message do we want to put across?
B. what are the best media for our purposes?
C. how can we monitor advisements?
D. when should we time our advertisement?
(iii) Identify an advantage of decentralized organization design from the following:
A. Prevent senior management overload.
B. Speed up operational decisions.
C. Do not require great coordination by senior management.
D. Enables local management to be flexible in their approach to decisions.
(iv) Identify the four key arguments that have been offered to encourage organization
to act in socially responsible manner.
E. Moral obligations, sustainability, license to operate and reputation.
F. Moral obligation, sustainability, cooperation and reputation.
G. Moral obligations, interests, sustainability and reputation.
H. Moral obligations, interests, cooperation and reputation.

(v) Business entities employ internal auditors to assure business control system is
working and outsource independent auditors to ensure that:
A. international accounting standards are adhered to.
B. financial statements reflect financial position.
C. business entities policies are safeguarded.
D. provide employment to independent auditors.
(vi) According to Herzberg’s motivation – Hygiene theory, these are most important
motivators for employees in organization except:
A. advertisement
B. recognition
C. growth
D. supervision

(vii) Operational plan and functional plan differ in the following ways:
A. Time horizon, specificity and participants who develop them.
B. Specificity, participants who develop them and operations.
C. Time horizon, specificity and operations.
D. Time horizon, concentration and participants who developed them.
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 (viii) Managers must use the continuum that encompasses the following so as to
understand the essence of Social Corporate Responsibilities:
A. Economic, legal, ethical and community responsibilities.
B. Economic, community, discretionary and ethical responsibilities
C. Discretionary, ethical, economic and legal responsibilities.
D. Economic, legal, community and discretionary responsibilities.
(ix) The following statements are correct about ordinary shareholders except:
A. ordinary shareholders are risky than preference shareholders.
B. ordinary shareholders have no right to vote board members.
C. ordinary shareholders are paid dividends before debtors.
D. ordinary shareholders are paid after preference shareholders.
(x) In the Boston Consulting Group matrix (BCG) as product portfolio analysis, a
growing market but without a high market share is stated in:
A. dog
B. star
C. cash cow
D. questions mark
(20 marks)

(b) For each of the following statements, state whether the statement is true or false.
Indicate your answer by writing “TRUE” for the correct statement and “FALSE” for
the incorrect statement in your answer booklet.
(i) An inventory backorder is when a customer places an order or makes a purchase
while the stock is not available.

(ii) Conglomerate diversification is a way of diversifying business into the areas that
are related to the current business.

(iii) Guerrilla offensive allows the firm to increase the promotional activities
occasionally by reducing price to win a big order.

(iv) A joint stock company is a form of business entity that enjoys a continuous and
stable life.

(v) Objective represents managerial commitment to achieve specified results in a

long-term. (10 marks)

(c) Given the following items, you are required to pair each item from LIST A with the
statement from LIST B appropriately. In pairing the items with statements, write the
roman number in list A with the corresponding letter from list B in your answer booklet:
LIST A
i. Assembly line production system
ii. Work measurement
iii. Capacity requirements planning
iv. Vision
v. Productivity objective

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 LIST B
A. Helps in evaluating performance of the employee and the work group.

B. Business ability to plan the customers’ preference, branding tools and package
design.

C. It is represented by a statement that communicates both purpose and values of the

business.

D. It is the process through which a company determines if its manufacturing ability

can meet the production goals.

E. Minimum utilization of production resources at lower costs.

F. It is a statement that tries to establish the measurement of cost per unit of

production.

G. Assists the firm to reduce labour costs because unskilled workers are trained to
perform specific tasks.
(10 marks)
(Total: 40 marks)

QUESTION 2

(a) (i) What are limited companies? (1 mark)

(ii) Highlight three (3) differences between public and private limited companies.
(3 marks)

(iii) Mwaka January, a retired accountant and other two retired friends, formed a
partnership business in Mbeya with the aim of providing consultancy on accounting
services named “WAJUMBE Accounting Consultants Co.”

REQUIRED:

Identify and explain any four (4) merits and demerits WAJUMBE Accounting
Consultants Co. are likely to get from their business. (4 marks)

(b) (i) Describe any three (3) types of organizational structure. (3 marks)
(ii) Show five (5) key organizational factors that are essential in configuring
organization structure. (3 marks)

(c) Highlight four (4) major responsibilities of board of directors as a management body of an
organization. (6 marks)
(Total: 20 marks)

QUESTION 3
(a) A customer is an individual or business that purchases another company’s goods or
services. Customers are important because they drive revenues, without them, business
cannot continue to exist.
REQUIRED:

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 (i) Distinguish the term ‘potential customers’ from ‘targeted market’. (2 marks)
(ii) Why is it important to have a clear understanding of targeted customers? Explain
four (4) reasons. (4 marks)

(iii) Identify and describe four (4) marketing tactics which can be used to get an insight
of the targeted customers. (4 marks)

(c) Various studies point out that due to advancement in technology, different companies
have adopted innovative ways of developing massive products. The studies identify also
a number of issues related to production management that lead to the failure of
organization to achieve expected profits associated with quality issues. The production
staff believe that the high levels of rejects are beyond their control and that the products
are unresolved when the Product Development (PD) team handed them over to
manufacturing staff, while the PD team believe that the products are either
manufactured by incompetent staff or production procedures are not followed. Due to
this puzzle the managers intend to resolve the issues by searching for solutions. As an
expert in production management, you are given the task of providing key
recommendations for handling issues in this scenario.

REQUIRED:
(i) Explain the concept of ‘quality assurance.’ (1 mark)

(ii) Distinguish “quality assurance” from “quality compliance” in the production

process. (2 marks)

(c) Illustrate how the principles of materials handling can assist in effective production
management. (4 marks)

(d) Explain critically how Total Quality Management (TQM) contributes to product quality.
(3 marks)
(Total: 20 marks)

QUESTION 4

(a) What is a ‘Business Information System’ (BIS)? (2 marks)

(b) Explain four (4) Functional Information Systems (FISs) in a business firm.
(10 marks)

(c) (i) What is ‘business ethics’? (2 marks)

(ii) Elaborate any three (3) business ethical approaches that should be considered
by business organizational decision makers. (6 marks)
(Total: 20 marks)

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