BUSINESS BOOKLET QUESTIONS
- Define the term secondary sector
Secondary sector is defined as a particular section of the economy that deals with manufacture of finished goods. It includes several industries that use machinery to transform the products extracted by the primary sector to come up with finished goods and services that are more appealing and more useful to the final consumer.
- Define the term production:
Production is defined as the process of transforming raw materials and other resources through incorporation of manpower’s ideas and knowledge to goods and services that are appreciated and utilized by the final consumers.
- Briefly describe the nature of business activity in the secondary sector:
The nature of business activity in the secondary sector revolves around processing and manufacture of raw materials. In this case, well trained personnel are used in the operation of the machines that perform in the production process. For instance, in a construction, It takes the unity of engineers, architects, masons and quantity surveyors to come up with a building that the owner desires.
- Explain the role of the marketing department in RDB.
Marketing department has the role of advising the other production departments of the company. It understands the nature of the market and has a close contact with the company’s customers. Marketing department knows the customers’ needs and preference and incase of any change in customers’ preference and taste, it is the first to note. It has the role of letting the production department change or produce products that are capable of satisfying the customers. It also informs on the amount of products that are required in the market. In case of any customer complaint about the quality of the product, the marketing department gives directions to the production and the quality assurance department to improve the quality.
- Define the term Company
A company is an entity where a group of people join hands to execute a single business role while contributing in different ways. In a business setting, it is a business entity that can be public limited company or private limited company.
- Define the term public limited company:
Public limited company is a business entity where there is no limit to the number of shareholders. In addition, in this company, in case of any insolvency or problems of liquidations, the shareholders are not liable for the company’s debt.
7 RDB is a privately owned company. Distinguish between privately and publically owned companies
Privately owned company is owned by individuals who might be private investors. It does not include the general public to buy its shares since the investors contribute the finance by themselves. It does not therefore trade in stock and stock exchange. For this reason, the government does not require the company to disclose its financial information. On the other hand publically owned company, sale some part of its shares to the general public. Through this, it is able to gather enough capital for investment. Publically owned company trade in stock and stock exchange and it is therefore bound by law to disclose its financial information to the general public.
8. Distinguish between organizations such as RDB that operate in the private sector and those in the public sector
There are many differences between organizations in the public sector and the ones in the private sector in terms of ownership and its aim. Organizations in the public sector are owned and run by the government. It may include organizations where employees, supervisors, and managers all work for the government while on the other hand, in the private sector; the organization is owned and run by private business operators and may answer to board of directors, owning persons or a single owner. In this case, even the employees are employed by the organization. (http://www.wisegeek.com/what-are-the-differences-between-the-public-sector-and-private-sector.htm)
Secondly, public sector has a duty to serve the public. They are not profit oriented and tend to provide services rather than goods ; private sector on the contrary aim at making profits, compete with the others on the same grounds and do not necessarily aim at serving the public. (http://www.wisegeek.com/what-are-the-differences-between-the-public-sector-and-private-sector.htm)
9. Explain two advantages to Anna Holstein of organizing the new RDB as a public limited company
Public limited company has an advantage of getting large financial boost from the general public. As I have earlier noted, this kind of a company allow the public to buy its shares. This makes it be at a better position of gathering enough capital which the company can even re invest and widen its capacity.
Public limited company is publicly known since the government requires it to disclose beginning with its financial position. In the process, this makes it easy to create a public awareness of its products. Many customers come to learn of its products hence enabling the company to win more of the market share.
10. Explain three reasons why Henrik Holstein might have set up Royal Danish Bearings:
Like any other entrepreneur, Henrik Holstein had dreams and ambitions the thought of setting up Royal Danish bearings could be a way to fulfill her dreams. Secondly, the reason as to why Holstein set up the company might be to make profit. This is a big company and Holstein knew that large lumps of profit can be generated in its running.
Thirdly, it might have been the need to be own boss. Holstein saw that being creative and implementing his own ideas where he is answerable to none but himself was interesting. He therefore decided to start the company.
11. Analyze the problems that RDB may have faced as a start-up business when it was first set up in 1915?
At the early stages, business face several problems: Problems with the flow of cash- This is where the business has scaled up adequate infrastructure to avoid being swamped by the sales but nothing comes up on the other hand. This is where products do not sale as expected and the business has less money to produce other products. This can take long. (http://venturebeat.com/2011/03/09/8-problems-every-startup-should-anticipat)
Sudden change of requirement right in the middle of the cycle- This is a critical situation that affect the business model that had earlier been planned for the business. This might happen due to a sudden change to economy that the firm must adhere to. (http://venturebeat.com/2011/03/09/8-problems-every-startup-should-anticipate)
12. Analyse the extent to which Ownership and control might differ if RDB goes public on Frankfurt Stock Exchange:
When RDB goes public, the first thing that will change is the ownership as there will be an increase in the number of shareholders. Since it is made available to the general public, many people will buy the company’s shares. This does not mean that the previous owner does not own the company. He can actually have a full decide on the percentage of the shares he is willing to give to the public. Holstein may set up board of directors who are going to run the activities of the business. He might be part of the board and still involved in the running of the company.
13. Compare and contrast the objective s of pressure group organizations such as environmental campaigners and private companies such as RDB
The similarity in their objective is that they both aim at providing services to the public while on the other hand, private companies such as RDB aim at making high profits out of the investments while Environmental campaigners are not financial gain oriented.
The impact can be diverse in the sense that if RDB is not involved in environmental campaigns, the general public will view it as not having the interest of the community at heart. The company may also be viewed as the one polluting the environment. This may cost it a lot in terms of the number of customers that may start mistrusting.
15: Analyse the impact of the division between ownership and control on internal and external stakeholders if RDB converts to public limited company.
In this case, the initial owner will lose the kind of ownership and control he has over the external and internal stake holders this due to the change in ownership as there will be an increase in the number of shareholders. This does not mean that the previous owner does not own the company at all but it is such that others owners have come in. Control of internal and external stakeholders will be done by the board of directors who are going to run the activities of the business. The initial owner might be part of this though.
16. Evaluate Anna Hosteins plan to change RDB form private limited company to a public limited company.
This is probably a plot to have a wider view of the company. It is worth in a way since it enables Hostein gather enough finance through sale of company’s shares to the general public. His earlier plan of giving the company a national of international outlook will therefore be possible since the company manages to acquire the required capital. In addition, the company will be at a better position to widen its levels of output and general increase in the number of customers.
17. Define the term Objective:
Objective is the primary goal that makes someone carryout a certain activity. It can be an idea in a business which pushes somebody to invest in a certain business. It can either be shorter or long term objectives.
18: Define the term corporate social responsibility:
Corporate social responsibility is a role a company or an organization plays in strengthening of the society for the impacts of the decisions on the activity on the society, the environment and for its own prosperity. (http://www.mpiweb.org/About/CSR)
19. Define the term vision:
Vision is an aspiration that one has over the life of a business, individual or even the whole world in the long run and it identifies where the organization intends to be in the future or where it should be to best meet the needs of stakeholders. (http://www.slideshare.net/RIZWANKHURRAM/objectives-mission-and-vision)
20. Define the term operational objectives:
Operational objective are short-term or limited goals that are structured to move an organization closer to the realization of its ultimate or long-term goals and is also called tactical objective. (http://www.wisegeek.com/what-are-operational-objectives.htm)
21. Explain the importance of objectives in managing RDB:
Objective is a specific management tool or technique that creates a target for RDB business owners to achieve; the owner can follow up objectives to closely monitor specific company goals that some specific department and individual employees need to undertake. (http://smallbusiness.chron.com/importance-setting-business-objectives-4724.html)
Objectives inform the employees and the management on what the focus of any action they are doing is. This helps the management gather necessary resources and put direct measures to achieve the required goal. Objective enable the organization what need to be done and at what time.
21. Explain the purpose of vision statement to RDB.
Vision statement help to describe the organization’s purpose; it includes organizations values, holds as giving directions for employees behavior, creates inspiration to the employees and finally it inspires the consumers to utilize organizations products hence creating a better marketing strategy. (http://smallbusiness.chron.com/purpose-mission-vision-statements-strategic-planning-13161.html)
22. Using Relevant Examples, distinguish between operational objectives and strategic objective at RDB
Strategic objectives are long term organizational goals that help to convert mission from a broad vision into more specific plans and projects while operational objectives are short term goals that guide day to day activity in line with the general strategies; well differentiated in an example where a firm sets the level of sales for a specific day to be say $15000 as an operational objective aiming at having a total sales of $ 450,000 in a year as its strategic objective.(http://smallbusiness.chron.com/difference-between-strategic-operational-objectives-24572.html)
23. Explain why Anna and Valdemar Hostein may have different views on RDB’s approach to social responsibility.
Social responsibility has its advantage and disadvantage too. In a business setting where most economics have differed in their thought about corporate social responsibility. Adams Smith’s dictum says “I have never known a much good done by those who affected to trade for the public good” (http://www.ehow.com/info_12085937_reasons-businesses-set-ethical-objectives.html). ( http://www.londoninternational.ac.uk/sites/default/files/corporate-social-responsibility-sample-study-guide.pdf) The difference in views is centered on whether the whole idea of social responsibility is economical and may not be in line with the business initial goal of making profit. On the other hand it is only ethical for the company to give back to the society.
24. Examine why RDB, under Anna Holstein’s leadership, would consider ethical objectives.
Ethical objectives in business lead to the organization’s willingness and ability to conduct its activities in a moral manner; this ethical objective promotes positive culture in the business free from bullying and sexual harassment sets clear boundary between the right and the wrong thing and finally reduces misconduct at work place. (http://www.ehow.com/info_12085937_reasons-businesses-set-ethical-objectives.html). This encourages peaceful coexistence hence enabling smooth running of business activities.
25. Examine the reason behind Anna Holtein’s thinking that RDB had to focus on its corporate social responsibility
The aim of setting a social responsibility is to give the organization a good reputation. It portrays care, for both internal and external environments. The employees feel part of the organization while the customers will have the acceptance of the company’s products and services. This helps the business to be at a better position compared to its competitors hence gaining a larger share of the market.
26. Analyze the advantage and disadvantages for RDB in setting ethical objectives.
One of the advantages is that it enables to bring about positive culture in the business leading to high levels of respect among individual workers. Secondly, it tries to bring about a favorable working condition leading to increased levels of efficiency in output due to few cases of misconduct. On the other hand, organizations the disadvantages begin with difficulty in implementation due to inequality. Many employees are at different level in the hierarchy of power and it is difficult to let them be at the same level. Unenforceability, fear of expression among the employees since they are afraid to lose their jobs in case they point out some issues affecting them.
27. Analyze the value of social and environmental audits to the different stakeholders of RDB
Environmental audit; compliance audits and management systems audits together with social audit make several stakeholders in RDB understand and assess the strengths and weaknesses, successes and failures of a the organization’s programme or service, with an aim to make improvements; is also a way of increasing community participation, strengthening links with government and/or service providers, promoting transparency and public accountability, and instilling a sense of responsibility among all those involved. (http://www.pgexchange.org/index.php?option=com_content&view=article&id=142&Itemid=136)
28. Discuss the impact of implementing ethical objectives at RDB
One of the impacts is that it has enabled to bring about positive culture in the company leading to high levels of respect among individual workers. Secondly, it has managed to bring about a favorable working condition leading to increased levels of efficiency in output due to few cases of misconduct. This has also improved employee customer relations leading to increased number of customers which has adversely improved the company’s level of sales.
29. Define the term external stakeholders.
External shareholders are persons or parties who are not a member of the business or organization but they affect the smooth running of the business due to the influence of resources they bring to the company. They may include suppliers, customers or even a party that lends money to the company.
30. Define the term stakeholders
A stakeholder is a person or institution that has an interest in a business system and is potentially contributing in the running of the business. (Elsevier 2008)
31. Identify two external stakeholders of RDB
Two external stakeholders of RDB are:
- Community living around the company
- customers
- suppliers
32. Explain the interests of RDB’s internal stakeholders
Internal stakeholders include shareholders and the employees. Share holders are in the business profitability of RDB. They are interested in knowing progress of the firm and note the amount of dividend they can get at the end. The employees on the other hand are interested in their job security and continuity of the firm. In case RDB Company makes continuous profits, it has a positive impact to the customer’s interest since they are guaranteed of the continuity of the company.
33. Explain the interest of RDB’S external stakeholders.
RDB’s external stakeholders such as such as customers, suppliers and the community around have interest in the company. Customer’s interest is to continuously enjoy the products from the company. It is his wish that the company stays vibrant in the market. The community around have the interest in the employment opportunity brought about by establishment of RDB Company. The suppliers are interested in availability of market for his product that he supplies to the RDB Company.
34. Explain the impact of moving jobs overseas on any two stakeholder groups of RDB
The community around the company is going to be affected. This means that their chances of getting employment opportunity are highly lowered. Since more competent persons may take the jobs vacancies that may arise. Secondly, the current employees of the company will be insecure in terms of their job positions. More competent persons may outsmart them hence replacing them leading to loss of job.
REFERENCE:
Weilkiens, T. (2008). Systems Engineering with SysML/UML: Modeling, Analysis, Design. Burlington: Elsevier
(http://www.pgexchange.org/index.php?option=com_content&view=article&id=142&Itemid=136)
(http://www.ehow.com/info_12085937_reasons-businesses-set-ethical-objectives.html).
(http://www.wisegeek.com/what-are-the-differences-between-the-public-sector-and-private-sector.htm)
