Fundamentals of Business Administration IP23 WiSe-2023 PDF

Fundamentals of Business Administration IP23 WiSe-2023 Written Exam “Fundamentals of Business Administration” Jalyschko, Marianna IP23 WiSe-2023 Duration: 90 min. Number of total points: 75 Tasks 1- 25:...

Fundamentals of Business Administration IP23 WiSe-2023 Written Exam “Fundamentals of Business Administration” Jalyschko, Marianna IP23 WiSe-2023 Duration: 90 min. Number of total points: 75 Tasks 1- 25: multiple choice questions, where two or more answers are right (25 x 2 points = 50 points) Task 26: 17 points Task 27: 8 points The usage of calculator is allowed. *************************************************************** 1 - Which of the following statements regarding economic principles are correct? o The maximum principle is characterized by maximal input. o The minimum principle states that the maximum possible result must be obtained with the minimum possible expenditures of resources. o The optimum principle is the choice of the most beneficial option. o Example of a minimum principle: the company looks for a 200 qm warehouse for the cheapest price. 2 - Which of the following statements regarding economic indicators are correct? o Efficiency is the capacity of intervention to produce maximum output for a given input. o Effectiveness is the measurement for profitability. o Productivity is the relation of input to output. o Example of a labor productivity: working result is 80 pieces within 8 working hours. The labor productivity is 10 pieces/hour. 3 - Which of the following statements regarding operational turnover process are correct? o Operational turnover process consists of five steps: purchasing of financial resources, purchasing of production factors, production of finished and intermediate goods, calculation of total costs for produced units, repayment of credits and loans. o Operational turnover process consists of five steps: purchasing of financial resources, purchasing of production factors, production of finished and intermediate goods, marketing and sales of products, repayment of credits and loans. o Production factors include consumable and non-consumable resources, such as licenses and patents. o The main production factors for the industrial company are consumable and non- consumable resources and for the service company are human resources. 1  Fundamentals of Business Administration IP23 WiSe-2023 4 - Which of the following statements regarding the small and medium-sized enterprises (SME) are correct? o SME are defined by European Commission as follows: staff headcount < 250 employees and turnover ≤ € 50 mln. or total balance sheet ≤ € 43 mln. o SME are defined by European Commission as follows: staff headcount < 50 employees and turnover ≤ € 10 mln. or total balance sheet ≤ € 10 mln. o SMEs can receive help from EU business-support programs for research, competitiveness and innovation. o SME must fulfil extra strong requirements concerning administration and taxation. 5 - What are the characteristics of the private limited company? o The liability is unlimited for managers. o The liability is limited for shareholders. o The distribution of earnings is even between all shareholders. o The company is governed by the managing directors board, which is controlled by shareholders’ meeting. 6 - What are the advantages of the stock corporation? o Easier to raise capital o Higher reputation o Higher costs and higher capital requirement (50,000 €) o Stronger position of executive board compared to managing board of private limited company. 7 – Which of the following statements regarding company diversifications are correct? o Horizontal diversification means enlargement of existing product portfolio by related products that are on the same performance level. o Backward or forward integration is applicable for horizontal integration. o Vertical integration occurs when firms undertake operations at different stages of the value chain. o Lateral diversification means starting of new business which relates to the core business. 8 - Which of the following statements regarding levels of internationalization are correct? o Subsidiary is the strongest level of internationalization, which requires the largest investments and management performance in the host country. o Franchising requires more investment in the host country as a Joint Venture. o Doing export requires the lowest investment in the home country. o Joint Venture is a foundation of a legally independent company with a partner from the host country. 9 - Which of the following statements regarding departmentalization are correct? o Advantage of the divisional organization is multiplication of high management positions. o Disadvantages of the divisional organization are high administrative expenditure and potential divergence of divisional and corporate objectives. o Advantage of the functional organization is specialization in e.g. R&D, Purchasing, Production and Marketing. A disadvantage is a lack of strategic thinking. 2  Fundamentals of Business Administration IP23 WiSe-2023 o Divisional organization requires availability of largely independent sectors - strategic business units. 10 - Which of the following statements regarding (de)centralization are correct? o Centralization is the degree to which decisions take place at the lower levels of the organization. o Centralization is recommended when organization is facing a crisis. o Trends to more centralization occur due to the desire to be more flexible and responsive to dynamic changes in the company’s environment. o Decentralization will work when lower-level managers are capable and experienced at making decisions. 11 – In the Boston Consulting Group Matrix companies are divided in four groups depending on the relative market share and annual real rate of market growth. Which of the following statements are correct? o Cash Cows are very stable and bring high earnings. o Poor Dogs are less stable than cash cows, but it is recommended to invest in these companies as they have growth potential. o Rising Stars are unstable but growing. The strategy is to analyze whether business can grow or will degenerate into a dog. o The earnings by the Question Marks are low, unstable but growing. 12 - Which of the following statements regarding competitive strategies are correct? o Differentiation strategy is based on the differentiation between markets where the products are sold. o Cost leadership strategy is based on the reduction of costs and increase of efficiency. o Focus strategy involves a cost or differentiation advantage in a narrow segment or niche. o Cost leadership strategy and differentiation strategy are applicable for the narrow market. 13 - Which of the following statements regarding the SWOT analysis are correct? o SWOT analysis allows to make a strategic analysis of the company’s external and internal factors. o Internal factors are opportunities & threats and external are strengths & weaknesses. o Opportunities & threats examine economic, demographic, political, legal, sociocultural, technological, and global components. o Strengths & weaknesses provide information about the organization’s competitors and markets. 14 - Which of the following statements regarding management functions are correct? o Management functions include planning, organizing, leading and controlling. o Planning determines what needs to be done, how it will be done, and who is to do it. o Leading means monitoring of activities to ensure that they are accomplished as planned. o Management involves coordinating and overseeing the work activities of others, so their activities are completed efficiently and effectively. 15 - Which of the following statements regarding planning are correct? o Regarding the time frame, the plans are divided in strategic and operational planning. o Planning provides direction, reduces uncertainty and minimizes waste and redundancy. 3  Fundamentals of Business Administration IP23 WiSe-2023 o Regarding specificity, the plans are divided into specific and directional plans. o Specific plans are flexible and set out general guidelines. 16 - Which of the following statements regarding strategic and operational planning are correct? o Strategic planning involves all hierarchy levels and operational planning focuses on the top hierarchy level. o Strategic planning solves usually unstructured and complex problems and operational planning good structured and repetitive problems. o Information needed for strategic planning is internal and for operational planning primarily external. o Operational planning contains in scope all functional departments. 17 - Which of the following statements regarding the Balanced Scorecard are correct? o The customer-oriented targets answer the question: How do we have to treat our customers to achieve our financial goals? o The customer-oriented targets can be measured with the sales growth and defect rate. o The employee-oriented targets can be measured with the percentage of employees that participate in annual training seminars, as well as employee retention and satisfaction. o The process-oriented targets answer the question: How can we make sure to have financial success? 18 – Which of the following statements regarding corporate culture are correct? o Corporate culture according to Edgar Schein’s model looks like an iceberg. It contains visible aspects like norm, standard, rules, principles, language and rituals. As well as hidden aspects like basic assumptions about truth, time, people and social relationships. o Negative aspects of a strong corporate culture are higher orientation and fast implementation of decisions. o Positive aspects of a strong corporate culture are cementation of traditional values and missions and rejection of new perspectives. o The saying of Peter Drucker that “Culture eats strategy for breakfast” means that corporate culture can “allow” or not implementation of the desired strategy. 19 - Which of the following statements regarding financial and managerial accounting are correct? o Managerial accounting is based on the legal requirements and includes bookkeeping and drafting of financial statement. o Financial statements deliver information about past transactions and events. o Financial accounting serves primarily internal decision makers such as top management. o Examples of financial statements are Balance Sheet, Income Statement, Cash Flow Statement and Statement of Stockholders’ Equity. 20 – Which of the following statements regarding balance sheet are correct? o Balance sheet equation states: Assets =(equals) Liabilities –(minus) Owners’ equity. o Assets are represented by current and non-current assets. Current assets include tangible, intangible and financial assets. o Non-current assets are the long-term assets with an expectation to use more than one year. o Accounts receivables are booked when the customer buys goods on credit. 4  Fundamentals of Business Administration IP23 WiSe-2023 21 – Which of the following statements regarding financial accounting are correct? o Retained earnings, which represent accumulated profits less accumulated losses and dividends, are part of the non-current liabilities. o Current liabilities include short-term provisions, short-term borrowings and accounts payables. o Purchase of inventory on credit will affect the Inventory-account in credit and Accounts Payable in debit. o Purchase of inventory on credit will affect the Inventory-account in debit and Accounts Payable in credit. 22 – Which of the following statements financial accounting are correct? o The main accounting rules of the IFRS framework are relevance and faithful representation. o If the revenue of the company is 220,000€ and the expenses 150,000€, the income is 70,000€. o Positive income means decrease of owner’s equity and negative income - increase of owner’s equity. o Income statement is a report of all revenues and expenses accumulated starting from the foundation of the company. 23 – Which of the following statements regarding cash flow statement are correct? o Cash flow statement consists of three parts: cash flow from operating, investing and selling activities. o Cash flow statement determines the company’s ability to pay interests, dividends, and debts when they are due. o Cash inflows for the operating activities include collections from customers and cash payments to suppliers. o Cash inflows and outflows to and from investing activities include selling and purchasing of property, plant and equipment. 24 – Which of the following statements regarding cost differentiation are correct? o Variable costs change in proportion to changes in volume of produced products. Fixed costs are constant in total. o Total costs at any volume are the sum of fixed costs, variable costs at that volume and the number of produced units. o Examples of variable costs are the rent costs, administration costs and costs for utilities. o Direct costs can be directly allocated to the products. Indirect costs usually allocated to the products using special allocation keys. 25 - Which of the following statements regarding the Cost-Volume-Profit analysis are correct? o Profit-sensitivity analysis answers questions about how profits would change if the direct costs are changed. o Target-profit analysis can be used to determine the sales necessary to earn a target profit. o Break-even refers to the point at which a company makes profit. o If the total fixed costs decrease while the selling price per unit, the variable cost per unit, and the sales volume remain the same, less units will be needed to be sold for the company to break-even. 5  Fundamentals of Business Administration IP23 WiSe-2023 26 – Make strategic analysis of the company of your choice according to the Porter’s Five Forces Framework. Explain each of the five strategic forces and provide examples. Conclude, which strategic force is the most powerful in that company and why? (17 points: 3 points per strategic force, 2 points for conclusion) 27 – Calculate the breakeven point. (8 points) The company “Chocolate Dreams” produces boxes of chocolate. Selling price per box is 10€ Variable costs are 5€ Fixed costs are 3,000€ 1. Calculate the break-even point of the company in units sold. (3 points) 2. Which profit or loss will the company make, if the selling price will be lowered to €8 and the units sold will increase by 20% compared to the break-even units sold? (5 points) 6