BUSINESS MANAGEMENT 1A MODULE GUIDE 2014 (First

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IIE Module GuideBMNG5111BUSINESS MANAGEMENT 1AMODULE GUIDE 2014(First Edition: 2012)This manual enjoys copyright under the Berne Convention. In terms of the CopyrightAct, no 98 of 1978, no part of this manual may be reproduced or transmitted in anyform or by any means, electronic or mechanical, including photocopying, recording orby any other information storage and retrieval system without permission in writingfrom the proprietor.The Independent Institute of Education (Pty) Ltd isregistered with the Department of Higher Education andTraining as a private further and higher education andtraining institution under the Further Education and Training Colleges Act, 2006 (reg.no. 2009/FE07/003, prov. to 31/12/2014) and the Higher Education Act, 1997 (reg.no. 2007/HE07/002). The Independent Institute of Education (Pty) Ltd 2014 - Page 1 of 130

IIE Module GuideBMNG5111DID YOU KNOW?Student PortalThe full-service Student Portal provides you with access to your academicadministrative information, including: an online calendar, timetable, academic results, module content, financial account, and so much more!Module Guides or Module ManualsWhen you log into the Student Portal, the ‘Module Information’ page displays the‘Module Purpose’ and ‘Textbook Information’ including the online ‘Module Guides or‘Module Manuals’ and assignments for each module for which you are registered.Supplementary MaterialsFor certain modules, electronic supplementary material is available to you via the‘Supplementary Module Material’ link.Module Discussion ForumThe ‘Module Discussion Forum’ may be used by your lecturer to discuss any topicswith you related to any supplementary materials and activities such as ICE, etc.To view, print and annotate these related PDF documents, download AdobeReader at following link below:www.adobe.com/products/reader.html The Independent Institute of Education (Pty) Ltd 2014 - Page 2 of 130

IIE Module GuideBMNG5111IIE Library Online DatabasesThe following Library Online Databases are available to you. Please contact yourlibrarian if you are unable to access any of these.EBSCOhostThis database contains full text online articles.http://search.ebscohost.com/User name and password: Please ask the librarianInmagicThe Online Public Access Catalogue. Here you will be able tosearch for books that are available in all the IIE campus pac.aspxNo password requiredSABINETThis database will provide you with books available in otherlibraries across South Africa.http://reference.sabinet.co.za/sacatUser name and password: Please ask the librariane-BraryThis database provides access to full text online books, some ofwhich form part of the IIE recommended reading lists.http://site.ebrary.com/lib/iiezaPassword: Use your Student Number The Independent Institute of Education (Pty) Ltd 2014 - Page 3 of 130

IIE Module GuideBMNG5111Table of ContentsDID YOU KNOW? . 2Using this Guide . 6Introduction . 7Module Resources . 8Module Purpose . 8Module Outcomes . 8Module Pacer . 9Assessments . 15Glossary of Key Terms for this Module . 17Learning Unit 1: The Business World and Business Management. 271 Key Concepts Covered in this Learning Unit . 272 Recommended Additional Reading . 333 Recommended Digital Engagement and Activities . 334 Interactive Work Space . 33Learning Unit 2: Entrepreneurship . 361 Key Concepts Covered in this Learning Unit . 362 Recommended Additional Reading . 463 Recommended Digital Engagement and Activities . 474 Interactive Work Space . 48Learning Unit 3: Establishing a Business. 501 Key Concepts Covered in this Learning Unit . 502 Recommended Additional Reading . 593 Recommended Digital Engagement and Activities . 604 Interactive Work Space . 60Learning Unit 4: The Business Environment . 631 Key Concepts Covered in this Learning Unit . 632 Recommended Additional Reading . 733 Recommended Digital Engagement and Activities . 734 Interactive Work Space . 74Learning Unit 5: Corporate Social Responsibility . 761 Key Concepts Covered in this Learning Unit . 762 Recommended Additional Reading . 833 Recommended Digital Engagement and Activities . 834 Interactive Work Space . 83Learning Unit 6: Introduction to General Management . 861 Key Concepts Covered in this Learning Unit . 862 Recommended Additional Reading . 893 Recommended Digital Engagement and Activities . 904 Interactive Work Space . 90Learning Unit 7: Planning . 921 Key Concepts Covered in this Learning Unit . 922 Recommended Additional Reading . 993 Recommended Digital Engagement and Activities .1004 Interactive Work Space .100Learning Unit 8: Organising .103 The Independent Institute of Education (Pty) Ltd 2014 - Page 4 of 130

IIE Module GuideBMNG51111 Key Concepts Covered in this Learning Unit .1032 Recommended Additional Reading .1083 Recommended Digital Engagement and Activities .1084 Interactive Work Space .109Learning Unit 9: Leading .1111 Key Concepts Covered in this Learning Unit .1112 Recommended Additional Reading .1173 Recommended Digital Engagement and Activities .1174 Interactive Work Space .118Learning Unit 10: Controlling .1201 Key Concepts Covered in this Learning Unit .1202 Recommended Additional Reading .1233 Recommended Digital Engagement and Activities .1244 Interactive Work Space .124Bibliography .126Plagiarism .127 The Independent Institute of Education (Pty) Ltd 2014 - Page 5 of 130

IIE Module GuideBMNG5111Using this GuideThis guide has been developed to support your use of the textbook prescribed forthis module. There may be occasions when the textbook does not provide sufficientdetail regarding a particular idea or principle. In such instances, there may beconsiderable additional detail included in the guide. However, this guide should notbe used as a stand-alone textbook, as the bulk of the information that you will needto engage with will be covered in the prescribed textbook.In addition, each Learning Unit in this guide could contain three (3) different types ofengagement, referred to as Interactive Work Spaces, as listed below:1.Izimvo Exchange – Izimvo is an isiXhosa word for ideas and so this is theexchanging or sharing of ideas. These are in-class debates or discussionslinked to the subject matter and/ or current affairs.2.Activities – These are varied interactions in which you can engage with thesubject matter.3.Revision Exercises – These are questions/ tasks based on theory.The purpose of the Interactive Work Space is to provide opportunities for you toengage with the subject matter in the Learning Unit both in and outside theclassroom in preparation for assessments. In different modules there would be moreor less emphasis on the different types of engagement, depending on the nature andobjectives of the particular module. The Independent Institute of Education (Pty) Ltd 2014 - Page 6 of 130

IIE Module GuideBMNG5111IntroductionThis module will introduce you to the field of business management. The rapidlychanging and competitive context within which a business operates will be examinedand the purpose of a business in society discussed. The exciting field ofentrepreneurship will be investigated and the decisions relating to starting a businessexplored. You will also learn about the contemporary issues relating to corporatesocial responsibility.Learning Units 6–10 focus on the primary functions of management. You will discussvarious management processes and principles which will lay a foundation forunderstanding what managers do and why it is so important. The success ofbusiness organisations relies on how well management is able to use resourceseffectively and adapt to changes in the business environment. This module willprepare you for your journey to becoming a successful business manager.This module guide has been structured in such a way as to guide you through yourprescribed textbook, draw attention to important information and explain keyconcepts. Activities are provided for you to engage with the material.Please note that you are expected to read and research beyond your prescribedtextbook and this module guide. This is necessary to enhance your own learning andunderstanding. Useful references are provided to assist you in developing a deeperunderstanding of the content. The Independent Institute of Education (Pty) Ltd 2014 - Page 7 of 130

IIE Module GuideBMNG5111Module ResourcesPrescribed Book forthis ModuleRecommendedAdditional ReadingDigital and WebResourcesErasmus, BJ, Strydom, JW and Rudansky-Kloppers, S. 2013.Introduction to business management. 9th edition. Cape Town:Oxford University Press.Please note that this Module Guide is intended to support yourlearning – the content of this module is in the prescribedtextbook. You will not succeed in this module if you focus onthis Module Guide only.You will be referred to additional reading in your Module Guide.Access to the Internet will be a requirement for this module.This module has additional digital resources available – log onto the Student Portal, and follow the links to SupplementaryDigital MaterialOther Web Resources and Web links you could access areprovided throughout this module guide.Students should however be keeping up to date with businessnews through websites such as: Bloomberg. 2013. [Online] Available at:http://www.bloomberg.com/ [Accessed 11 December2013].; Business Day. s.a. [Online] Available at:http://www.bdlive.co.za/ [Accessed 11 December 2013].; Fin24. 2013. [Online] Available at: http://www.fin24.com/[Accessed 11 December 2013].; Moneyweb. 2013. [Online] Available at:http://www.moneyweb.co.za [Accessed 11 December2013].Module PurposeThe purpose of this module is to provide students with a broad introduction to thefield of business management and the business environment. Students will developan understanding of the basic management activities involved in the establishmentand on-going management of a business.Module OutcomesMO1MO2MO3MO4Demonstrate knowledge and understanding of the concepts, principlesand practices of management in the business world.Apply knowledge of management activities in a business context.Evaluate the impact that different business environments have on thebusiness and managerial roles.Explain the role that corporate social responsibility plays in anorganisation. The Independent Institute of Education (Pty) Ltd 2014 - Page 8 of 130

IIE Module GuideBMNG5111Module PacerCode BMNG5111Learning Unit 1Sessions: 1–4Related Outcomes: MO1Learning Unit 2Sessions: 5–8Related Outcomes: MO1Hour Sessions38Theme: The Business World andBusiness ManagementObjectives: Explain, in your own words,the role which businessorganisations play in makingavailable products andservices for society; Describe the needs of societyand its limited resources; Distinguish between the maineconomic systems in theworld; Distinguish between thedifferent need-satisfyinginstitutions of the marketeconomy and theircontributions towardssatisfying the needs ofsociety; Describe and comment onthe nature of businessmanagement and itsdevelopment as a science; Distinguish between andcomment on the differentbusiness managementfunctions.Theme: EntrepreneurshipObjectives: Explain entrepreneurship inyour own words; Explain the role ofentrepreneurship and smallbusinesses in the economy; Discuss the state ofentrepreneurship in SouthAfrica; Distinguish between thedifferent entrepreneurial traitsand characteristics; The Independent Institute of Education (Pty) Ltd 2014 - Page 9 of 130Credits12Notes on this LUNotes on this LU

IIE Module GuideLearning Unit 2Sessions: 5–8Related Outcomes: MO1Learning Unit 3Sessions: 9–12Related Outcomes: MO1Learning Unit 4Sessions: 13–16Related Outcomes: MO3BMNG5111Theme: EntrepreneurshipNotes on this LU(CONTINUED)Objectives: Comment on the skills,resources and industryexperience required tobecome an entrepreneur; Distinguish between andcomment on the differentelements of theentrepreneurial process; Distinguish between andcomment on the differentways in which to enter thebusiness world; Explain what a feasibilitystudy is and its value to theentrepreneur.Theme: Establishing a Business Notes on this LUObjectives: Understand and explain thekey aspects to be consideredwhen choosing the form ofownership of a new business; Distinguish between the mainforms of enterprises found inSouth Africa; Explain the objectives andimportance of, and need for abusiness plan; Describe and comment on theaspects to be included in abusiness plan; Identify and discuss thelocation factors of a business.Theme: The BusinessNotes on this LUEnvironmentObjectives: Explain, in your own words,the meaning of environmentalchange; Explain the composition andcharacteristics of thebusiness environmentalmodel; The Independent Institute of Education (Pty) Ltd 2014 - Page 10 of 130

IIE Module GuideLearning Unit 4Sessions: 13–16Related Outcomes: MO3Learning Unit 5Sessions: 17–19Related Outcomes: MO4BMNG5111Theme: The BusinessEnvironment (CONTINUED)Objectives: Distinguish between anddiscuss the sub-environmentsof the environmental model; Describe and comment onhow each of theenvironmental variables in themicro, market and macroenvironments influence anindustry or businessorganisation; Distinguish between andcomment on the differencesbetween opportunities,threats, strengths andweaknesses; Discuss how and whyenvironmental scanning isconducted.Theme: Corporate SocialResponsibilityObjectives: Explain “corporate socialresponsibility” (CSR) in yourown words; Explain the rationale forimplementing CSRprogrammes in businessorganisations; Explain corporategovernance; Distinguish between thestakeholders of a businessorganisation (company); Provide reasons why it isimportant for a businessorganisation to engage withits stakeholders and how toengage with stakeholders; Describe the concept“sustainable development” inyour own words; Explain the contribution ofCSR to sustainabledevelopment. The Independent Institute of Education (Pty) Ltd 2014 - Page 11 of 130Notes on this LUNotes on this LU

IIE Module GuideLearning Unit 6Sessions: 20–23Related Outcomes: MO1Learning Unit 7Sessions: 24–27Related Outcomes: MO2BMNG5111Theme: Introduction to GeneralManagementObjectives: Explain the role ofmanagement in business; Describe the fourfundamental managementfunctions; Explain the managementprocess; Discuss the different levelsand functional areas ofmanagement; Describe the skills needed atdifferent levels ofmanagement; Discuss the various roles ofmanagers; Explain the development ofmanagement theory and thevarious schools of thought inmanagement.Theme: PlanningObjectives: Explain, in your own words,the nature of planning as amanagement task; Describe the importance ofplanning as the first step inthe management process; Distinguish between theelements in the planningprocess; Evaluate whether goals aremeaningful; Describe and comment ongoals, distinguish betweenthe different organisationalgoals, and discuss thehierarchy of goals; Differentiate betweenstrategic, functional andoperational planning; Differentiate and comment onthe different strategies thatcould be implemented toaccomplish different goals. The Independent Institute of Education (Pty) Ltd 2014 - Page 12 of 130Notes on this LUNotes on this LU

IIE Module GuideLearning Unit 8Sessions: 28–31Related Outcomes: MO2Learning Unit 9Sessions: 32–35Related Outcomes: MO2BMNG5111Theme: OrganisingNotes on this LUObjectives: Describe and comment on theimportance of organising as amanagement task; Discuss the fundamentals oforganising; Explain and comment on“informal organisation”; Distinguish between andcomment on the factors thatinfluence organising.Theme: LeadingNotes on this LUObjectives: Describe “leadership” in yourown words; Distinguish betweenleadership and management; Distinguish between thedifferent components ofleadership; Describe and comment on themajor leadership theories; Identify and discusscontemporary leadershipissues and emergingapproaches to leadership; Explain why it is important formanagers to understand themotivations for employeebehaviour; Differentiate between andcomment on groups andteams in the organisation; Describe a simplecommunication model, in yourown words. The Independent Institute of Education (Pty) Ltd 2014 - Page 13 of 130

IIE Module GuideLearning Unit 10Sessions: 36–38Related Outcomes: MO2BMNG5111Theme: ControllingNotes on this LUObjectives: Explain “management control”in your own words; Provide an overview of thepurpose of control; Distinguish between theelements of the controlprocess and how the controlprocess functions; Distinguish between thedifferent types of control; Distinguish between andcomment on thecharacteristics of an effectivecontrol system. The Independent Institute of Education (Pty) Ltd 2014 - Page 14 of 130

IIE Module GuideBMNG5111AssessmentsIntegrated Curriculum Engagement (ICE)Minimum number of ICE activities to completeWeighting towards the final module mark410%Assignments/ ProjectsWeightingDurationSubmit afterLearning Units coveredResources requiredAssignment25%10 hoursLU5LU1–5The prescribed textbook and at least four other relevanttextbooks, e-books or articles. You will require libraryand web access.Tests/ ExaminationWeightingDurationTotal marksOpen/ closed bookResources requiredLearning Units coveredTest30%1 hour60Closed bookN/ALU1–5Assessment Preparation GuidelinesFormat of the Assessment(The Focus/ Approach/Objectives)AssignmentThis assignment will challengeyou to do some independentreading and research on thematerial covered.This assignment has beendesigned with two questionstyles in mind, the first being anessay to offer critical debate andsource integration. The secondquestion is a practical-basedquestion to ensure that youapply your theoreticalknowledge to a case study.Examination35%2 hours120Closed bookN/ALU1–10Preparation Hints(How to Prepare, Resources toUse, etc.)You will need to start preparationwell in advance. Consult therecommended additionalreadings in the relevant learningunits. The Independent Institute of Education (Pty) Ltd 2014 - Page 15 of 130

IIE Module GuideBMNG5111Assessment Preparation GuidelinesFormat of the Assessment(The Focus/ Approach/Objectives)TestQuestions will be theory-based,and will consist of a variety offormats. There may be limitedmultiple choice and/ or matchthe-column questions, but themajority of questions will consistof short questions and longerparagraph questions. Practicalexamples may be requestedand a case study may beincluded.ExaminationQuestions will be theory-based,and will consist of a variety offormats. There may be limitedmultiple choice and/ or matchthe-column questions, but themajority of questions will consistof short questions and longerparagraph questions. Practicalexamples may be requestedand a case study may beincluded.Preparation Hints(How to Prepare, Resources toUse, etc.)To prepare effectively for thistest you can include the followingin your preparation: Ensure that you workthrough all the revisionquestions and activities inthe LUs tested; Check if you are confidentthat you could answerquestions relating to all ofthe learning objectives forthe LUs tested.To prepare effectively for thisexamination you can include thefollowing in your preparation: Ensure that you workthrough all the revisionquestions and activities inthe LUs tested; Check if you are confidentthat you could answerquestions relating to all ofthe learning objectives forthe LUs tested. The Independent Institute of Education (Pty) Ltd 2014 - Page 16 of 130

IIE Module GuideBMNG5111Glossary of Key Terms for this ModuleTermAchievementmotivationAuthorityBudgetary controlBusinessenvironmentBusiness ethicsBusiness planBusiness trustBusiness worldCapital (Limitedresource ofsociety/ factor ofproductionDefinitionOne of the traits of an entrepreneurwhich refers to a person’s higher-thanaverage need to achieve (Erasmus et al,2013).This is the right to command or giveorders (Erasmus et al, 2013).A formal plan expressed in financialterms that indicates how resources are tobe allocated to different activities(Erasmus et al, 2013).Described as “all the factors or variables,both inside as well as outside thebusiness organisation, which mayinfluence the continued and successfulexistence of the business organisation”(Erasmus et al, 2013).A subset of ethics that focuses ondeciding between right and wrong at theworkplace and in business generally(Erasmus et al, 2013).A written document that spells out wherethe business is heading and explains indetail how it is going to reach thatdestination. (Nieman & Nieuwenhuizen,2009, p.103).An increasingly popular but complex formof enterprise managed by trustees for thebenefit of beneficiaries. It has uniquecharacteristics that distinguish it fromother forms of enterprise. (Erasmus et al,2013).“ a complex system of individuals andbusiness organisations, that in a marketeconomy, involves the activity oftransforming resources into products andservices in order to meet peoples’ needs”(Erasmus, et al, 2013).“ buildings, machinery, cash registers,computers and other products produced,not for final consumption, but for makingpossible the further production of finalconsumer products” (Erasmus et al,2013). The Independent Institute of Education (Pty) Ltd 2014 - Page 17 of 130My Notes

IIE Module preneurship(also known asIntrapreneurship)Corporate socialinvestment (CSI)BMNG5111DefinitionType of economic system where thestate owns and controls the community’sresources or factors of production.Individuals own no land, factories orequipment (Erasmus et al, 2013).Businesses compete with each other fora share of the market, labour, capital andmaterials. In the market environment,competition is the situation wherebusinesses offering more or less thesame product or service compete for thepatronage of the same customers(Erasmus et al, 2013).An uncommon form of business usedwhen certain economic advantages canbe obtained through joint action bymembers. In South Africa they are mainlyfound in agriculture where farmersbenefit financially from buying and sellingthrough being part of a co-operativesociety (Erasmus et al, 2013).Recognises corporations as legalpersons with certain rights andresponsibilities in the same way thatindividual citizens have rights andresponsibilities as members of acommunity. As a legal entity, acorporation has certain rights and isbound by responsibilities (Erasmus et al,2013).Entrepreneurship that takes place withinan existing business.A company’s commitment to invest pretax profits in community-based projects.CSI does not refer to a company’scontribution to society through its corebusiness activities or local businessdevelopment (Erasmus, et al, 2013). The Independent Institute of Education (Pty) Ltd 2014 - Page 18 of 130My Notes

IIE Module GuideBMNG5111TermDefinitionCorrective actionRequired in situations where actualachievements do not match the requiredstandards (Erasmus et al, 2013).The creation of something new, such asa new business, by developing a newproduct or service. Basically creativityinvolves new ideas but includesinnovation which is the application ofthese new ideas (Erasmus et al, 2013).Assigning responsibility and authority forachieving organisational goals (Erasmuset al, 2013).Process of grouping activities intodepartments (Erasmus et al, 2013).In inventory management, it is the mostefficient quantity to order whenconsidering both inventory carrying costsand inventory ordering costs (Erasmus etal, 2013).Society must choose how it will use itsscarce resources to maximum effect inorder to satisfy its needs (Erasmus et al,2013).The process of identifying, creating orsensing an opportunity where others donot see it and finding and combiningresources to pursue the opportunity untilit becomes a successful business(Erasmus et al, 2013).“The act of initiating, creating, building,expanding and sustaining a venture,building an entrepreneurial team, andgathering the necessary resources toexploit an opportunity in the marketplacefor long-term wealth and capital gain”(Van Aardt et al, 2011, p.4).The process by which individuals pursueopportunities without regard to resourcesthey currently control (Erasmus, et onomicordering repreneurshipEntrepreneurship The Independent Institute of Education (Pty) Ltd 2014 - Page 19 of 130My Notes

IIE Module Free resourcesInformal tionThe process of measurement, projectionand evaluation of environmental change(Erasmus et al, 2013).The expectation that an idea oropportunity will survive and become asuccessful business venture (Erasmus etal, 2013).A business concept that is bought from afranchisor that gives the franchisee (theperson who purchases the concept) theright to operate a business, using thefranchise company’s name, products andsystems (Erasmus et al, 2013).An economic system that is based on thedemand for goods and services that areproduced by private organisationsseeking profit. The state, therefore, hasminimum interference in the market(Erasmus et al, 2013).An organisational structure that isdesigned based on activities belonging toeach management function beinggrouped together (Erasmus et al, 2013).Two or more individuals who regularlyinteract with one another and who workfor a common purpose (Erasmus et al,2013).The physical and mental talents andskills of people employed to createproducts and services (Erasmus et al,2013).Groups that form due to