Gr 12 Business Studies Exam Paper 2020 June

CURRICULUM: FET Paper 1 Business Business Environments Operations  GR 12 BUSINESS STUDIES – QP 1 TOPICS TOPICS MAIN TOPIC Weeks Question Question TERM TERM TERM...

CURRICULUM: FET Paper 1 Business Business Environments Operations  GR 12 BUSINESS STUDIES – QP 1 TOPICS TOPICS MAIN TOPIC Weeks Question Question TERM TERM TERM Paper 1 Paper 2 1 2 3 1 Impact of recent Business legislation on Environments 3 X X business 2 Developing of Business Business Environments 3 X X Strategies 3 Business Sectors Business 1 X X Environments 4 Human Business Resources Operations 2 X X Function 5 Quality of Business 1 X X Performance Operations 2020 June Exams; Trial Exams & Final NSC Exams Structure of QP Paper 1 Time 2 Hrs Marks 150 Section A [Compulsory] Question 1: MCQs; Matching Column: Choose correct answer – Bus Environments & Business Operations: 30 Marks Section B [Answer 2 questions] Question 2: Bus Environments: 40 Marks Question 3: Bus Operations: 40 Marks Question 4: Environments & Operations 40 Marks Section C: [Answer One question] Question 5: Bus Environments: 40 Marks Question 6: Bus Operations: 40 Marks Date Started Date Ended  2 Date Started Date Ended  3 BUSINESS ENVIRONMENTS Concepts C O L L E C T I V E A G R E E M E N T E M R H A U R Q C C O L L E C T I V E B A R G A I N I N G Y T B D M K M V L R D Y R X C V L E A V E O J I L L J O V E R T I M E P V H B H U D K N B F Y K R O T A L U G E R T I D E R C L A N O I T A N B X J C B S T C A Y R O T A N I M I R C S I D W Y Y P C P E N A L T I E S R Q O P W L O D V L A I Q Y M T C A N O I T C E T O R P R E M U S N O C W J A K R O W F O S R U O H E N Y N Z P U L P C N V J P A P C I U Y M E C N A I L P M O C N O N B F C R M A N A G E M E N T C O N T R O L J S R F C S A B A R G A I N I N G C O U N C I L S E H L A N U B I R T R E M U S N O C L A N O I T A N D V Z T C A T N E M P O L E V E D S L L I K S B G S F X F B C E A A I R B Z R Z S B E Q L M G W A C I D E E S U Q C H J L B R D J S C S W K W E D G V A G V G Y X E S V O T V D A L N B Q M G B I N V P I L L A R S R G X F G T M O A F Z A S F O F G K B V V O Q L E V C M E H G D I E K F Y I C K C F J F A Z G F N Y U S N P G O L B Y G T A H J M J I H D O B L W T Q D M Y J T P W B N V C B D S I D P F S X P O Z E Q Y R J G M L L B S M L E V Y T C A S N O I T A L E R R U O B A L E P N A T I O N A L C R E D I T A C T Z C Z M M M E Ownership Management Control CCMA Bargaining Councils Collective Agreement Collective Bargaining PDIs levy Pillars SETAs Non-compliance Penalties Discriminatory Acts Compliance Overtime Leave Hours of work National Consumer Tribunal National Credit Regulator Consumer Protection Act National Credit Act BBBEE COIDA BCEA Labour Relations Act Skills Development Act Date Started Date Ended IMPACT OF RECENT LEGISLATION ON BUSINESSES CONTENT DETAILS FOR TEACHING, LEARNING AND ASSESSMENT PURPOSES Explain/Outline the purpose of each Act Outline/Discuss/Recommend the rights of the LRA on employers and employees/rights of consumer rights according to the NCA and CPA. Explain the National Skills Development Strategy and the Human Resource Development Strategy (i.e. Sector Education and Training Authorities). Outline/Explain the role of SETA’s Explain how SETA’s are funded. Discuss the impact of each Act on businesses. Outline the BBBEE pillars Explain the implications of BBBEE pillars on businesses. Explain penalties/consequences for non-compliance with the Acts. Outline/Explain actions regarded as discriminatory by the various Acts. Suggest/Recommend ways in which businesses can comply with the Acts. 1 THE SKILLS DEVELOPMENT ACT Purpose of the Skills Development Act Develops the skills of people in South Africa in order to improve productivity. Invests in education and training of workers. Improves the chances of getting a job for previously disadvantaged people Encourages workers to participate in learning programmes. Redresses imbalances of the past through education and training Impact of the SDA on business Positives/Advantages Trains employees to improve productivity in the workplace. Promotes self-employment and black entrepreneurship Increases the return on investment in education and training. Business could become globally more competitive. Increases the number of skilled employees in areas where these skills are scarce. Date Started Date Ended  5 Negative/Disadvantages Increases cost as the process requires a large amount of paper work. Implementation of the SDA can be difficult to monitor and control. Skills programmes may not always address training needs of employees. Skills Development Levy could be an extra burden to financially struggling businesses. It may be monitored and controlled by government departments that do not have education and training as their key priorities. Discriminatory actions according to the SDA Preventing employees from signing for a learnership due to their age or position in the workplace. Unfair promotion of skills and development/training to certain employees. Providing employment services for gain without being registered as an employer. Furnishing false information in any prescribed document. Penalties for non-compliance Businesses that do not pay the Skills Development Levy may not offer learnerships/claim grants from the SDA. A labour inspector could order the business to stop operating should the business be found guilty of illegal practices. Ways in which businesses can comply with the SDA Employers who collect PAYE should register with SETAs. One per cent of an employer's payroll has to be paid over to the SETA. Businesses should register with SARS in the area in which their business is classified (in terms of the SETA). Employers should submit a workplace skills plan and provide evidence that it was implemented. Businesses with more than 50 employees must appoint a skills development facilitator. Role/functions of SETAs Report to the Director General. Promote and establishes learnerships. Collect levies and pays out grants as required. Provide accreditation for skills development facilitators. Register learnership agreements/learning programmes. Approve workplace skills plans and annual training reports Date Started Date Ended  6 Funding of SETAs Skills Development levies paid by employers e.g. 80% is distributed to the different SETA and 20% is paid into the National Skills Fund. Donations and grants from the public Surplus funds from government institutions Funds received from rendering their services.. National Skills Development Strategy and the Human Resource Development Strategy National Skills Development Human Resources Development Strategy Strategy Encourages good quality training in the - Addresses skills shortages in the South workplace to ensure on-going African workforce. development of skills. - Provides for the participation of - Aims at achieving faster economic government, organised business and growth/higher employment levels and reduced labour. levels of poverty. - Improves social development - Promotes social development/social justice through economic development. and helps to alleviate poverty. - Indicates how SETAs should use the - Develops short term and long term workforce money allocated from the Skills skills. Development Levy. - Increases/Improves access to training - Improves the supply of skills. programmes. - Builds/Provides career/vocational - Increases employee participation in lifelong guidance/training centres. learning. Date Started Date Ended  7 2 LABOUR RELATIONS ACT/LRA Purpose of the Labour Relations Provides a framework/structure for labour relations between employers and employees. Promotes collective bargaining at the workplace. Promotes workplace forums to accommodate employees in decision making. Establishes Labour Courts and Labour Appeal Courts. Promotes simple procedures for the registration of trade unions and employer organisations. Impact of the LRA on business Positives/Advantages Promotes a healthy relationship between the employer and employees Protects the rights of businesses in labour related issues. Labour disputes are settled quicker and are less expensive. Protect employers who embark on lawful lock-outs when negotiations between parties fail. LRA provides for the principles of collective bargaining and puts structures in place with which disputes in the workplace can be settled. Provides specific guidelines for employers on correct and fair disciplinary procedures. Negatives/Disadvantages Productivity may decrease if employees are allowed to participate in the activities of trade unions during work time. Costs of labour increases because of legal strikes Reduced global competitiveness due to lower productivity Employers may have to disclose information about workplace issues to union representatives that could be the core of their competitive advantage. Employers may not dismiss employees at will, as procedures have to be followed. Discriminatory actions according to the LRA Unfair/Illegal dismissal of employees. Cancellation of employees' contracts by a new employer when a business is sold Refusing the establishment of workplace forums. Refusing to give workplace forum members paid time off for attending meetings during working hours. Forcing employees to give up trade union membership. Preventing employees from joining trade unions. Date Started Date Ended  8 Penalties for non-compliance with the LRA The employer may be forced to enter into a dispute resolution process. Businesses will be fined if they fail to comply with the agreements reached during the dispute resolution process. Businesses that fail to comply with this Act may risk financial costs e.g. legal/CCMA fees and fines. Ways in which businesses can comply with the LRA Businesses must allow employees to form trade unions/participate in union activities/legal strikes. Allow/Support the establishment of workplace forums. Employees should not be unfairly/illegally dismissed Employers should not breach/ignore any collective agreement Disclose all relevant information required by trade union representatives to do their jobs effectively. Date Started Date Ended  9 3 EMPLOYMENT EQUITY ACT /EEA Purpose of the EEA This Act states that employees who do the same work (work of equal value) must be paid equally (equal pay). No discrimination on grounds of gender in the workplace. Promotes equal opportunity and fair treatment in the workplace. Provides for employees to refer unresolved disputes to the CCMA. Protects employees from victimisation if they exercise the rights given to them by the EEA. Impact of the EEA on business Positives/Advantages Promotes equal opportunity and fair treatment in the workplace. Provides all employees with an equal opportunity to be selected/appointed/ promoted in a position. Provides employees with legal recourse if they believe they have been unfairly discriminated against. Motivates employees because the workforce is more diverse/representative/inclusive Encourages diversity in business by employing people from various racial backgrounds. Encourages consultation between employer and employees. Negatives/Disadvantages Increased administration burden, as businesses must compile/submit employment equity reports every two years. Expensive to train/employ someone who knows little about the Act. Fines/Penalties for non-compliant businesses may be expensive for the business. Employers have to appoint one or more senior managers to ensure the implementation of the plan, which increases salary expenditure Businesses must submit a compliance certificate before they can conduct business with state businesses Penalties for non-compliance with the EEA Businesses may be taken to the Labour Court for prosecution. Fines may be imposed on businesses that fail to comply with its reporting obligations. The Department of Labour may block non-compliant companies from doing business with the government. Date Started Date Ended  10 Discriminatory actions according to the EEA Not employing a young woman because she would want to have children in future. Refusing to employ a person because he/she has strong religious beliefs/has a disability Doing HIV testing unless justified by the Labour Court. Denying people access to the workforce based on gender/race/culture/etc. and treating them unfairly. Ways in which businesses can comply with the EEA Businesses must guard against discriminatory appointments. Promote equal opportunities and fair treatment Reasonable accommodation of people from designated groups Ensure that there is equal representation of all racial groups in every level of employment. Submit the employment equity plan to the Department of Labour Retain designated groups, including skills development of such groups. Date Started Date Ended  11 4 Basic Conditions of Employment Act/BCEA Purpose of the BCEA Provides clear terms and conditions of employment for employers and employees. Set minimum requirements/standards for the employment contract. Regulates the right to fair labour practices as set out in the Constitution. Adheres to the rules and regulations set out by the International Labour Organisation Impact of the BCEA Positives/Advantages Creates a framework of acceptable employment practices e.g., work hours, leave, etc. Promotes fair treatment of employees in business. Encourages consultation between employers and employees. Outlines minimum requirements that form the basis of employment contracts. Work hours are specified so that the employer cannot exploit employees. Negative/Disadvantages Developing/Drafting a formal/legal employment contract may be time-consuming/costly. Businesses may regard employment contracts negative and may not implement it, which result in non-compliance/penalties. No employer may force an employee to work more than 45 hours in a week. This may result in reduced productivity. Hiring cheap labour is no longer possible, so businesses cannot exploit workers. BCEA forces businesses to comply with many legal requirements, which may increase labour costs.. Discriminatory actions according to the BCEA Forbidding workers to discuss wages/salaries with co-workers. Preventing workers from having access to employment contracts. Refusing to accept a valid medical certificate of a sick worker. Refusing to grant a worker family responsibility leave to support a sick family member Penalties businesses may face for not complying with the BCEA Labour inspectors may serve a compliance order by writing to the Department of Labour The Director General may agree/change/cancel the compliance order. Labour inspectors may investigate/inspect/ask questions about complaints and remove records as evidence. Businesses may be taken to the labour court for a ruling. Date Started Date Ended  12 Ways in which businesses can comply with the BCEA Workers should only work 9 hours per day in a 5-day work week. /8 hours per day in a 6- day work week. /Overtime should not exceed 10 hours per week. They must have a break of 60 minutes after five hours of work Workers can take up to six weeks paid sick leave during a 36-month cycle Businesses should not employ children under the age of 16. Workers must receive double if they work during public holidays/Sunday Provisions of the BCEA 1 Work hours Workers may not work for more than 45 hours in any week. Workers may work nine hours a day if they work five days or less per week/eight hours a day√ if they work more than five days a week. Night work performed after 18:00 and before 6:00 the next day by agreement, must be compensated by allowance/reduction of work hours. Ordinary work hours may be extended by agreement√ by a maximum of 15 minutes per day/maximum of sixty minutes per week to complete duties when serving the public. Ordinary work hours may be reduced√ to a maximum of 40 hours per week/8 hours per day. 2 Overtime Workers must agree to work overtime. Workers cannot work more than three hours’ overtime per day/10 hours per week. Overtime must be compensated as follows: One and half times the normal rate of pay for overtime worked on week days and Saturdays. Double the normal rate of pay for overtime worked on Sundays and public holidays. Overtime must be paid either at specified rate for overtime or an employee may agree to receive paid time off. Minister of Labour may prescribe the maximum permitted working hours, including overtime, for health and safety reasons for a certain category of work. 3 Annual leave Workers are entitled to: 21 consecutive days’ annual leave per year/One day for every 17 days worked√/One hour for every 17 hours worked. An employer can only pay a worker in lieu of leave if that worker leaves the job. Date Started Date Ended  13 4 Sick leave Workers are entitled to: Six weeks paid sick leave in a period of 36 months/1 day paid sick leave for every 26 days worked during the first six months of employment. A medical certificate may be required before paying an employee who is absent for more than two consecutive days/who is frequently absent. 5 Maternity leave A pregnant employee is entitled to four consecutive months' leave. A pregnant employee may not be allowed to perform work that is hazardous to her unborn child. The starting date is usually any time from four weeks before the expected date of birth or on advice of a doctor/midwife. 6 Family Three to five (3 to 5) days paid leave per year on request in the event responsibility of the death of the employee's spouse/life partner/parent/ adoptive leave parent/ grandparent/child/adoptive child/grandchild/sibling. An employer may require reasonable proof, before granting this leave. Male employees are entitled to a maximum of three/five day’s paternity leave when his child is born 7 Meal breaks Workers must have a meal break of 60 minute after five continuous and rest hours of work. periods This can be reduced to 30 minutes by written agreement, when working less than 6 hours per day. A worker must have a daily rest period of 12 continuous hours/a weekly rest period of 36 continuous hours which must include Sundays. 8 Public holidays Workers must be paid for any public holidays that fall on a working day. Work on public holidays is by agreement and paid at double the rate 9 Termination of A contract of employment may only be terminated following one employment week’s notice, if the worker has been employed for six months or less. A minimum of four weeks’ notice must be given, if the worker has been employed for a year or longer. The employee must be given notice in writing. An employee who is retrenched/ dismissed for restructuring reasons is entitled to one week’s severance pay for every year of service. 10 Child and It is illegal to employ a child younger than 15 years of age. forced labour It is also illegal to force someone to work. Businesses may employ children over the age of 15 years, if employment is not harmful to their health/well-being/education/moral and social development/ minors under 18 years of age may not do dangerous work/work meant for an adult. Date Started Date Ended  14 5 Compensation for Occupational Injuries & Diseases Act/COIDA Purpose of COIDA Provides a comprehensive protection to employees who injured in the course of performing their duties. COIDA applies to all casual and full-time workers who become ill/injured/ disabled/killed due to a workplace accident/disease It excludes workers who are guilty of wilful misconduct/workers working outside South Africa for at least twelve months/members of the SA Defence Force/Police services. It provides for the establishment of a Compensation Board whose function is to advise the Minister of Labour on the application/provisions of COIDA. Impact of the COIDA on businesses Positives/Advantages Promotes safety in the workplace. Creates a framework for acceptable employment practices and safety regulations. Supply administrative guidelines/mechanisms for dealing with/processing claims. Eliminates time and costs spent on lengthy civil court proceedings. Employers are protected from financial burden should an accident occur in the workplace provided that the employer was not negligent Claiming processes are relatively simple. Negative/Disadvantages Claiming processes can be time consuming. Procedures required by this Act may be costly as paperwork places an extra administrative burden on businesses. Implementation processes/procedures required by the Act may be expensive. Employers have to register all their workers/make annual contributions to COIDA, which may result in cash flow problems. Employers may be forced to pay heavy penalties if they are found guilty of negligence/not enforcing safety measures. Workers who are temporarily/permanently employed in foreign countries are not covered. Domestic/Military workers are not covered. Discriminatory actions according to COIDA Employers who bribe/prevent employees from reporting the accident/injury. Providing false information about previous, serious accidents/occupational diseases. Employers who do not contribute to the Compensation fund. Employers who do not allow claims for injuries, discriminates against injured employees. Employers that take too long to process claims/delay the claiming process. Date Started Date Ended  15 Penalties for non-compliance with COIDA Businesses can be fined for refusing to lodge the claim/contravening the Act. Businesses can be forced to make large payments if it did not take the necessary precautions according to the Act. They may be forced to pay any recovery costs required by the Compensation Fund. Employees may take businesses to court for not registering them with the Commissioner of the Compensation Fund. If businesses are found guilty of any misconduct, they will have to pay large penalties/face imprisonment. Ways in which businesses can comply with the COIDA Businesses should provide a healthy/safe working environment. Register with the Compensation Commissioner and provide the particulars of the business. Keep records of employees' income and details of work for four years. Report all incidents causing death/injury/illness of employees. Submit returns of earnings by no later than 1 March annually. Levies must be paid to the Compensation Fund. Date Started Date Ended  16 6 Broad Based Black Economic Empowerment Act/BBBEE Purpose of BBBEE Enable wealth to be spread more broadly across all population groups. Outline areas that would give the government a platform for bringing equitable spread of wealth. Allows for the development of Codes of Good Practice. It aims at targeting inequality in the South African economy. Impact of the BBBEE on businesses Positives/Advantages Encourages businesses to address the demands for redress/equity directly. Provides a variety of business codes to improve employment equity. A good BEE rating improves the image of the business. Promotes enterprise development, by developing entrepreneurial skills of PDI’s. Businesses that comply with BBBEE regarding the pillars will be rated high on the BEE scorecard/may get government tenders/may attract other BBBEE business partners/- suppliers. Encourages businesses to address the demands for redress/ equity directly. Provides for human resources development through training and development. Negative/Disadvantages Businesses that want to do business with the government must have their BEE status assessed annually. Processes may lead to corruption/nepotism if not monitored properly. Investment/Ownership issues can cause unhappiness amongst existing share- holders/owners. Businesses have to go through the process of having their BBBEE compliance measured/verified by an independent BEE verification agency. Provides for preferential procurement, so certain businesses may be excluded from supplying goods/services. Discriminatory actions according to BBBEE Failing to implement affirmative action to meet BBBEE responsibilities. Promoting unsuitable people into a management positions at the expense of qualified PDP’s. Refusing to award tenders to black suppliers who are BEE compliant. Date Started Date Ended  17 Penalties for non-compliance with the BBBEE Businesses may face imprisonment for non-compliance and fronting practices. The penalty could be a fine of up to 10% of the company’s annual turnover. A business can be banned from participating in government contracts for a period of 10 years. Business licenses may not be renewed and authorisations may not be issued Government will cancel any contract awarded that was based on false information regarding B-BBEE status. Ways in which businesses can comply with the BBBEE Businesses must appoint black people in managerial positions Businesses must sell shares to black employees/people. Send black people for black for skill development training. Outsource their services to BEE compliant suppliers. Implement affirmative action when making appointments. BBBEE PILLARS OLD PILLARS REVISED PILLARS Management Management control Employment Equity Skills development Skills development Ownership Ownership Preferential procurement/Supplier development Enterprise and supplier development (ESD) Enterprise development Social responsibility Socio-economic development/social responsibility Date Started Date Ended  18 IMPLICATIONS OF BBBEE PILLARS ON BUSINESSES 2 Management Business must ensure that transformation is implemented at all control levels. Appoint black people in senior executive positions/to management. Involve black people in the decision-making processes. Ensure that black females are represented in management. Businesses are directly penalised for not implementing this pillar. 2 Skills Business must engage black employees in skills development development initiatives. Provide learnerships and learning programmes to black employees. Business must contribute 1% of their payroll to fund the skills development programmes. Business benefits from the increased pool of skilled/trained workers. 3 Ownership Business should include black people in shareholding/partnerships/franchises. Exempted Micro Enterprises (EMEs) with an ownership of 50% or more of black people are promoted to level 3 of the BEE scorecard. More opportunities are created for black people to become owners/ entrepreneurs. Encourage small black investors to invest in big companies and share ownership. Large businesses should form joint ventures with small black owned businesses and share business risks. 4 Enterprise Business must create jobs as ESD promotes local manufacturing. and supplier Businesses are encouraged to invest/support black owned development SMMEs. (ESD) Contribution can be monetary, e.g. loans/investments/donations. Contribution can be non-monetary, e.g. consulting services/advice/entrepreneurial programmes, etc. Outsource services to suppliers that are BBBEE compliant. Identify black owned suppliers that are able to supply goods and services. Develop the business skills of small/black owned suppliers, e.g. sales techniques, legal advice, etc. Support the cash flow of small suppliers by offering them preferential terms of payment. Businesses should invest in/support black owned SMMEs. Date Started Date Ended  19 5 Social Businesses should CSI focus on critical areas which can affect responsibility/ growth and development in the country e.g. environmental Socio- awareness/education/ housing, poverty/unemployment etc. economic They should distribute scarce CSI resources to selected development beneficiaries in the community. Date Started Date Ended  20 7 National Credit Act Purpose of the NCA Promotes the social and financial interest of consumers. Promote a fair but competitive credit market. Ensure that consumers know what is included in their credit contracts. Prevent discrimination and ensure credit is available to all consumers. Makes provision for the establishment of the NCR. Ensure registrations of credit bureau and debt counselling services. Impact of the NCA on businesses Positives/Advantages The whole credit process is transparent e.g. both businesses and customers know their responsibilities Authorised credit providers may attract more customers. Lower bad debts resulting in better cash flow. Increases cash sales as credit can only be granted to qualifying customers Protects businesses against non-paying consumers. Negative/Disadvantages Businesses can no longer carry out credit marketing. Leads to loss of sales as many consumers may no longer qualify to buy on credit. The paperwork and administrative process required by the act are costly and time consuming. The business needs to appoint additional staff to deal with the extra administration. Should the credit agreement be declared reckless, the business could forfeit the outstanding debt and the goods that were sold. Discriminatory actions according to the NCA Refusing credit to customers based on gender/race. Charging different interest rates to customers based on gender/race Blacklisting customers without making efforts to recover the debt Date Started Date Ended  21 Penalties/consequences for non-compliance with the NCA The court may declare the granting of credit by the business reckless and may order consumers not to repay the credit/or part thereof to the business. The business may not demand payment, sue or attach the client’s/consumers salaries/assets. Ways in which businesses can comply with the NCA Credit providers must be registered with the National Credit Regulator. Businesses must submit an annual compliance report to the National Credit Regulator. Conduct affordability assessment to ensure the consumer has the ability to meet his/her obligation. Conduct a credit check with a registered credit bureau and could also consult the National Credit Register. Verify the identity of clients, report suspicious transactions/train staff on their obligations in terms of FICA. Disclose all costs of loan/No hidden costs should be charged/added.. Consumer rights in term of the NCA Consumers have a right to: Apply for credit and to be free from discrimination. Obtain reasons for credit being refused Receive pre-agreement documentation before concluding any credit transaction. Fair and responsible marketing. Choose which goods they will buy and return such goods if they are not satisfied. Receive Information in plain and understandable language. Receive documents as required by the Act. Access and challenge credit records and information. Date Started Date Ended  22 8 Consumer Protection Act Purpose of the Consumer Protection Act Promote and protect the economic interests of consumers by providing access to information. Promotes fair/accessible and sustainable places for people to sell their products Establishes national standards to protect consumers Provides guidelines for better consumer information and to prohibit unfair business practices Promotes responsible consumer behaviour Promotes consistent laws relating to consumer transaction and agreement Establishes a National Consumer Commission (NCC) Impact of the CPA on businesses Positives/Advantages Enables businesses to resolve disputes fairly through the National Consumer Commission/Consumer Court/Industrial ombudsmen Businesses may build a good image if they ensure that they do not violate consumer rights. May gain consumer loyalty, if they comply with CPA. Businesses may be safeguarded from dishonest competitors. Businesses may be protected if they are regarded as consumers Prevents larger businesses from undermining smaller ones. Negatives/Disadvantages Confidential business information may become available to competitors They have to disclose more information about their products and processes/services Businesses may feel unnecessarily burdened by legal processes Penalties for non-compliance may be very high Staff need to be trained /Legal experts need to be consulted, which can increase costs Many business documents need to be simplified /revamped at extra cost as consumers have a right to receive contracts in simple/understandable language. Discriminatory actions according to the CPA Denying customers proper information about the product/services. Varying the quality of goods when selling in different areas. Prioritising any consumer group over another when marketing/selling Charging unfair prices for the same goods and services. Treating customers differently based on gender/age/race. Date Started Date Ended  23 Ways in which businesses can comply with the CPA Disclose prices of all products on sale. Provide adequate training to staff on the CPA. Ensure that goods/services offered are standardised/of the same quality. Comply with the requirements regarding promotional competitions. Display the name of the business on all business documents, e.g. invoices/contracts. All agreements must provide for a five-day cooling off period. Consumer rights of the Consumer Protection Act Right to choose Consumers have the right to: choose suppliers and/or goods. shop around for the best prices. reject goods that are unsafe/defective for a full refund. cancel/renew fixed term agreements. request written quotations and cost estimates. Right to privacy and Consumers have the right to stop/restrict unwanted direct confidentiality marketing. They can object to unwanted promotional e-mails/telesales. They have the right to stop/lodge complaints about the sharing of their personal details. Right to fair and Suppliers may not use physical force or harass customers. honest dealings Suppliers may not give misleading/false information. Businesses may not promote pyramid schemes and/or chain- letter schemes Businesses may not overbook/oversell goods/services and then not honour the agreement. Right to information Contracts and agreements should be in plain language and about products and easy to understand. agreements/Right to Businesses should display prices which are fully inclusive disclosure and disclosing all costs. information for the same product are displayed, consumers should pay the lower price. Right to Businesses should not mislead consumers on pricing, fair/responsible benefits/uses of goods. marketing/promotion Consumers may cancel purchases made through direct marketing within five working days/cooling off-period. All information related to the country of origin/expiry dates/ingredients of the products should be disclosed/clearly labelled. Date Started Date Ended  24 Right to Consumers have the right to be protected in lay-bye accountability from agreements. suppliers Businesses should honour credit vouchers and prepaid services. Right to Businesses should provide consumers with written notices of fair/just/reasonable clauses that may limit consumer rights. terms and Businesses may not market/sell goods at unfair prices. conditions Right to equality in Businesses should not limit access to goods and services. the consumer Quality of goods may not vary when supplied to different market place consumers. Businesses may not charge different prices for the same goods/services. No discrimination should occur when businesses market products and services in different areas/places. Right to return Goods that are unsafe/ defective may be replaced by the goods/have goods supplier. replaced/claim a Faulty items may be returned for a full refund. refund They may return faulty items if the fault occurs within six months after purchasing the item. Right to complain Consumers may use various methods/channels to complain about poor quality goods/services. They can complain via customer care desks/consumer hotlines/ombudsman etc. Right to fair Consumers may demand quality services/goods. value/good They may receive an implied/written warranty. quality/safety Cancel /renew fixed term agreements. To be informed about hazardous/dangerous products Reject goods that are not the same as the sample marketed Return faulty items if the fault occurs within six months after purchasing the item Date Started Date Ended  25 CONSOLIDATION 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Date Started Date Ended  26 BUSINESS ENVIRONMENTS Date Started Date Ended  27 Date Started Date Ended  28 Concepts U D Y R A C B P L A N O F A C T I O N O F L S S T Q G Q M I S S I O N S T A T E M E N T O P R X N N E S S R F N V Z E E O I S Q A T P R R E X M E O T T T T B O K W G L V K T R H F J T W S V A M I A C N N Z I E Z C F B I A I E S T W A T R R P T R U A E D T O S W G D F S E F Y L G R L Z K O A T D R C K C F A X L T C Z N G O U B D E W E L R S O T N V A N W I J T O U I E D R B V O Y T E G E R N O R E L Q M D B F W L A F T V E K J P V E T P E C B V U I M P Q P K S Q K E O R G U E E T A E W M S I L M S S T R A T E G Y D T A U N D N L T E M D T N E M E T A T S N O I S I V Q E T I U U N A L C R E H O R I Z O N T A L C O N T C L M T T G B E M I N T E G R A T I O N A I S R U A R I E F X R P S R E I L P P U S L J L P R A D T O T V H M R O V C H A L L E N G E S A R O T O N F S I L V O I R E T R E N C H M E N T F T I R O F B S L A C I T R E V D R A W K C A B A I O P Z Z U N S E C R O F E V I F S R E T R O P T N I I M S E W U E C O N G L O M E R A T E Q B E F O R A R T M A R K E T D E V E L O P M E N T P K Y O Z A N S F Y G E T A R T S T N E M E L P M I Q H O S I M N O I T A C I F I S R E V I D Y O P B S T R A T E G Y E V A L U A T I O N U N F C B Strategy Evaluation Liquidation Retrenchment Defensive Horizontal integration Backward Vertical Forward Vertical Integration Conglomerate Horizontal Concentric Diversification Product development Market development Market penetration Intensive Porter's Five Forces PESTLE SWOT New entrants Substitute products Competitors Buyers Suppliers Date Started Date Ended  29 Corrective action Implement strategy Formulate strategy Mission statement Vision statement Challenge Plan of Action Strategy Learners must know the following: Define a strategy Outline/Describe/Explain/Discuss the strategic management process. Apply the strategic management process to solve business-related problems. Identify business challenges from given case studies. Identify and describe/explain/discuss the different types of business strategies. Devise/Develop/Analyse/Formulate strategies to overcome challenges from given scenarios of businesses and make recommendations for improvement. Explain how/when businesses can apply each type of business strategy. Evaluate the effectiveness (positives) of each type of business strategy. Analyse case studies and apply the following industrial analysis tools to analyse the challenges of the business environment: - SWOT analysis - Porter's Five Forces - PESTLE analysis Recommend business strategies to address challenges identified from given case studies/scenarios. Outline/Explain/Recommend activities/steps in strategy evaluation. Date Started Date Ended  30 Definition of a strategy A strategy is a long term plan of action to achieve a goal. A strategy is a plan of action to address an opportunity or to solve a problem. The business needs a strategy to achieve its vision and mission. Steps in developing a strategy Application of SWOT analysis/PESTLE/Porter's Five Forces/environmental scanning of the business environments. Formulate strategies to meet objectives/Develop measurable strategic goals/ objectives. Implement strategies using action plans, etc. Evaluation of strategies/Compare the expected performance with the actual performance/ Measure business performance in order to determine the reasons for deviations and analyse these reasons, etc. The strategic management process Have a clear vision, a mission statement and measurable/realistic objectives in place. Identify opportunities/weaknesses/strengths/threats by conducting environ-mental scanning/situational analysis. Tools available for environmental scanning may include a SWOT analysis/Porter's Five Forces model/PESTLE analysis/industrial analysis tools. Formulate alternative strategies to respond to the challenges. (This involves different types of business strategies) Develop (an) action plan(s), including the tasks to be done/deadlines to be met/resources to be procured, etc. Implement selected strategies by communicating it to all stakeholders/organising the business's resources/motivating staff. Continuously evaluate/monitor/measure strategies in order to take corrective action. (This involves steps in evaluating a strategy) Date Started Date Ended  31 SWOT ANALYSIS Example of a scenario that requires learners to compile a SWOT analysis DAVE DIGITAL SOUND (DDS) DDS specialises in selling radios and car sound systems. They employ qualified sound engineers. The business does not have sufficient capital to buy and sell sound systems that cater for large events. Businesses in the same industry are closing down due to ineffective marketing campaigns. DDS is located in a high crime area. SWOT analysis of Dave Digital Sound DDS STRENGTHS WEAKNESSES DDS employs qualified sound The business does not have sufficient capital to engineers. buy/sell sound systems that DDS specialises in selling radios cater for large events. and car sound systems. OPPORTUNITIES THREATS Businesses in the same industry are DDS is located in a high crime area. closing down due to ineffective marketing campaigns. NOTE: You need to quote verbatim (as is) from the scenario, otherwise you will lose marks for writing incomplete quotes or for writing a summary of the scenario. Date Started Date Ended  32 PORTERS’ FIVE FORCES MODEL Five Forces Explanation Power of suppliers A business must assess the power of suppliers to influence prices. The more powerful the suppliers, the less control the business has over them. The smaller the number of suppliers, the more powerful they may be as the choice of suppliers may be limited. The business should identify the kind of power its suppliers have in terms of the quality of products/services/reliability/ability to make prompt deliveries. Power of buyers Buyers buying in bulk can bargain for prices in their favour. If a business is dealing with a few powerful buyers, they are often able to dictate their terms to the business. If buyers can do without the business’s products, then they have more power to determine the prices and terms of sale The business must assess how easy it is for buyers/customers to drive prices down. This will depend on the number of buyers/the importance of each buyer to the business and the cost of switching to other products. Power of competitors/ Competitive rivalry refers to the number of competitors and their ability to influence/control the market. Competitive If competitors have a unique product/service, then they will rivalry have greater power. A business with many competitors in the same market has very little power in their market. Businesses must draw up a competitor's profile so that they can determine their own strength as well as that of competitors. Threat of Substitute products or services are different substitution/substitutes products/services that satisfy the same needs of consumers and can be used to replace one another. If the business’s product can be easily substituted, it weakens the power of the business in the market. Substitute products may cause the business to completely lose its market share. Unique products will not be threatened by substitute products. Date Started Date Ended  33 Threat/Barriers of new New entrants are other businesses that are selling the entrants to the market same/similar products in the existing market for the first time. The power will depend on how easy it is for new businesses to enter the market. New competitors can quickly/easily enter the market, if it takes little time/ money to enter the market. If there are a few suppliers of a product/service but many buyers, it may be easy to enter the market. If the business is highly profitable, it will attract potential competitors that want to benefit from high profits. If the barriers to enter the market are low, then it is easy for new businesses to enter the market/industry. NOTE: The main aim of Porter’s Five Forces model is to analyse the business position in the market. This is more of a research study done by businesses. Do not focus on recommendations as this is not required at this stage Date Started Date Ended  34 2 PESTLE ANALYSIS NOTE: You need to name the PESTLE factor, identify challenges of each factor and make recommend ways businesses can deal with the identified challenges as explained in the table below: FACTOR CHALLENGE RECOMMENDATIONS Political Some government policies may Research recent government affect businesses policies Consumer rights organisations Network and lobby with the NGOs may prevent businesses from and all consumer rights selling products if they do not organisations. meet certain requirements. Trade agreements may prevent Trade only with countries that have businesses from importing some favourable trade agreements with medicine/products. the government. Economic Inflation/Interest rates may Consider decreasing profit margins negatively impact on business. rather than increasing product Loans may be expensive due to prices. high interest rates. Borrow money from financial institutions when interest rates are favourable. Fluctuations in foreign currency Consider exchange rates when may restrict import. trading with other countries Social Customers may not be able to Sell substitute/generic products at afford products due to low lower prices. income levels. Learn local languages/Hire Businesses may not be employees who are well conversant conversant with the local with the local language. language of their customers. Technological May not keep up with/be aware Continuous research on the latest of the latest technology. available technology/equipment in Employees may not be skilled to the market. operate/maintain new Train existing/appoint new technology/ equipment. employees to maintain/use new Businesses may not be able to equipment. afford new technology. Compare prices/Select suitable May not be able to cater for/ suppliers for new equipment at afford online transactions/e- reasonable prices. commerce. Businesses must be geared for online trading/e-commerce Legal Consider certain Acts that may Comply with all relevant legislation have a direct impact on a that may impact on businesses. business, e.g. the CPA/BCEA. Comply with the legal requirements Legal requirements for operating for operating businesses, e.g. certain types of businesses licence/trade mark time-consuming. registration/patents. Date Started Date Ended  35 High legal costs involved in Budget for high legal establishment obtaining a licence/trade costs. mark/patent may prevent some establishments. Legalities of business contracts may limit business operations Businesses must know the legalities of business contracts so that they comply with all the requirements. Environmental Chemicals/Ingredients in Chemicals/Ingredients should be business’ products may be clearly indicated on labels/packaging harmful to customers. to inform customers about possible side effects/correct use of products. Measures to dispose of Implement cost effective measures business waste may be to dispose of medical waste. expensive. Implement recycling measures to Packaging of some products prevent pollution of the may not be environmentally environment/Use packaging that is friendly may not be recyclable. re-usable/recyclable. Types of business strategies Integration strategies Forward integration The business combines business with or take over its distributors. Involves expansion of business activities to gain control over the direct distribution of the products. Backward integration The business combines business with or take over its suppliers. The aim is to decrease the business’s dependency on the supplier Horizontal integration A business takes control of/ incorporates other businesses in the same industry/which produce/sell the same goods/services. The aim is to reduce the threat of competition /substitute products/services. Date Started Date Ended  36 Intensive strategies Market penetration New products penetrate an existing market at a low price, until it is well known to the customers and then the prices increases. It is a growth strategy where businesses focus on selling existing products to existing markets. Focuses on gaining a larger share of the market by reducing prices to increase sales/increasing advertising and promotion. Market Development It is a growth strategy where businesses aim to sell its existing products in new markets. This strategy involves finding new markets and new ways to distribute product. Product Development It is a growth strategy where businesses aim to introduce new products into existing markets/modifies an existing product. Businesses generate new ideas and develop new products/services Diversification strategies Concentric diversification The business adds a new product or service that is related to existing products and which will appeal to new customers. Occurs when a business wants to increase its product range and markets. Horizontal diversification The business adds new products or services that are unrelated/ different to existing products, but which may appeal to existing/current customers. Occurs when a business acquires or merges with a business that is at the same production stage, but it may offer a different product Conglomerate diversification The business adds new products or services that are unrelated to existing products which may appeal to new groups of customers. Conglomerate diversification means that a business grows into new products, services and markets. Occurs when a business wants to increase its product range and markets. Date Started Date Ended  37 Types of defensive strategies Divestiture/ Divestment The business disposes/sells some assets/divisions that are no longer profitable/ productive. Businesses may sell off divisions/product lines with slow growth potential. The business sells ownership by decreasing the number of shareholders. Unproductive assets are sold to pay off debts. Process used to withdraw its investment in another business (divesting). Retrenchment Terminating the employment contracts of employees for operational reasons. Decreasing the number of product lines/Closing certain departments may result in some workers becoming redundant. Liquidation All assets are sold to pay creditors due to a lack of capital/cash flow. Selling the entire business in order to pay all liabilities/close down the business. Companies in financial difficulty may apply for business rescue to avoid liquidation. Creditors may apply for forced liquidation in order to have their claims settled. Advantages of intensive strategies Increased market share reduces the business's vulnerability to actions of competitors. Increase in sales/income and profitability. Improved service delivery may improve business image. Businesses may have more control over the prices of products/services. Gain loyal customers through effective promotion campaigns. Decrease in prices may influence customers to buy more products. Advantages of diversification strategies Increase sales and business growth. Diversification into a number of industries or product line can help create a balance during economic fluctuations. More products can be sold to existing customers and additional more new markets can be established. Businesses gain more technological capabilities through product modification. Improves the business brand and image. Reduces the risk of relying only on one product. Date Started Date Ended  38 Steps in evaluating a strategy Examine the underlying basis of a business strategy. Look forward and backwards into the implementation process. Compare the expected results in order to determine the reasons for deviations and analyse these reasons. Take corrective action so that deviations may be corrected. Set specific dates for control and follow up. Draw up a table of the advantages and disadvantages of a strategy. Decide on the desired outcome. Consider the impact of the strategic implementation in the internal and external environments of the business. Date Started Date Ended  39 Consolidation Date Started Date Ended  40 BUSINESS ENVIRONMENTS Date Started Date Ended  41 Concepts T Q I S L N T Y H S A A T Q J D T M E S M G F X O A F S A O X R L V B G E F Y J F M N I H N W A R G Z E C C E A N M A J R I D G J X S X F I E L G X M C I O U I I O X A U S C K V S T B S R E O A Q Z R G N C T A I C D T H I Z I H C T E U B E N O S U O T K R S T S O C E M O I G U R C T A P I K E O L R N E L R W C U R N G J F D A R C N A S N C S O O O T E E P I R I P A K M O N U A K G A O I E N L I E V V H N T E M O C A R S O F I R T I V R H M T C E N P T S S M C C R P P S U N I I S R L C R A N L O Y E L G F Z H K D O E N G C O I E A E J R C T C O R A R O D C E E R R A Q U N V S N T S E O N Q L M N A R O I T H T L M M L A Q I O D E N N E E O E O W E K V S S V A J W T L M N I L C E S M C R D I M S Z I M I C R O X U C P S T E O G T E N T I T A T P L V N R U G M R U R U A G N Y R G E N A A T R O S W I X T W F E L I R S A D G U A U O R S E Y L O L F M A C R O T M A I L A R C N L C I I R P I C D A O N M Y H U A N N F R E T A F L E N I I T I N W I Y U C N R R C A Z Y N I M N L S A A A I E Z X L C W E H E Y E G Y O E O A I U V G L B C T J P L E O B R W V S R O A L N Q X F N R S S A Y R G F J W S I V R D O C K K T W D Q D O U I L K C O C H I X W Legal Technological Social Political Civil Society Intermediaries Organisational resources Management levels Organisational structure Organisational culture Mission Vision Influence No control Full control Market Macro Micro Fisheries Forestry Agriculture Insurance Banking Transport Services Energy generation Construction Date Started Date Ended  42 Manufacturing Convert Finished products Natural resources Raw materials Secondary Tertiary Primary The learner must know the following: Name THREE types of business sectors Identify/Name a business sector from given scenarios/ statements Identify the business environment from given scenarios/ statements and state the extent to which a business may control each of these environments Classify a business challenge according to the THREE business environments from given scenarios State the extent of control businesses has over each environment e.g. micro: full control, market: little control, macro: no control. Introduction Learners are supposed to select a business from each sector and describe the three environments related to these sectors and the extent to which a business can control these environments. They are supposed to describe the three business environments related to the three business economic sectors and give an explanation of the extent to which a business can control these environments. Date Started Date Ended  43 Business sectors Business sectors are sub divisions/subsets of economic activities, e.g. primary, secondary and tertiary. Types of business sectors Primary sector This sector deals with extraction of raw materials and natural resources Natural resources which are not man made like coal, gold, fish and livestock are extracted from this sector Examples the primary sector industries; mining, mining, fishing, agriculture, forestry and farming Secondary sector This business sector is responsible for changing the raw materials acquired from the primary sector into useful products. It includes the manufacturing factories, construction and energy generation Examples of the secondary sector industries; manufacturing, clothing, food processing, building and construction are found in this sector. Tertiary sector This sector renders services to the public and businesses. It includes services from transport, banking, legal and health. Examples of the tertiary sector industries; distribution, banking, insurance, tourism, transportation, entertainment, retail and legal services. Business environments, possible challenges and the extent of control Business Possible challenges Extent of control environment Micro Difficult employees Full control Lack of vision and mission Lack of adequate management skills Unions, strikes and go-slows Market Competition Little/partial/limited control Shortages of supply Demographics and psychographics Socio-cultural factors Macro Change in income levels No control Contemporary legislation Labour restrictions Date Started Date Ended  44 Political changes Interest rates Socio-economic issues HIV and AIDS Globalisation and International challenges NOTE: You will only be able to identify the business sectors and environments from given scenarios and statements if you understand the meaning and examples of each business sector and business environment. Examples of how the business sectors and their business environments can be assessed Example 1: Business in the primary sector Read the scenario below and answer the questions that follow: DUKA MINES (DM) Duka Mines specialises in the extraction of platinum. Their suppliers of mining equipment have increased their prices by more than 20%. The supervisor does not have a good working relationship with his employees. DM can no longer export their products due to an increase in the exchange rate. You need to identify the business sector in which Duka Mines operates and motivate your answer by quoting from the scenario. Duka Mines is operating in the primary sector because the business specialises in the extraction of mines. You need to quote challenges from the above scenario, classify EACH challenge according to business environment and state the extent of control DM has over EACH business environment BUSINESS EXTENT OF CHALLENGES CONTROL ENVIRONMENTS 1. Their suppliers of mining equipment - Market environment - Partial/Limited/ have increased their prices by more Little control/No than 20%. control, but can influence 2. The supervisor does not have a - Micro environment - Full control good working relationship with his employees. Date Started Date Ended  45 3. DM can no longer export their - Macro environment - No control products due to an increase in the exchange rate. NOTE THE FOLLOWING MARKING PRINCIPLES THAT WILL BE USED TO MARK THIS TOPIC: You will not be awarded marks for challenges that are not fully quoted from the scenario You will not be awarded marks for business environments if it is not linked to the challenges. You will not be awarded marks for the extent of control if it is not linked to the business environment. You will not be awarded marks for the extent of control if the business environment is not mentioned. Example 2: Business in the secondary sector Read the scenario below and answer the questions that follow: SUPER ENERGY ENTERPRISE (SEE) Super Energy Enterprise produces maize meal and instant soft porridge. They buy their raw material from Early Bird Maize Farm which is out of stock sometimes. SEE employees are regularly absent from work. The local government has instructed the management of SEE to register their products with the South African Bureau for Standards. Name the business sector in which Super Energy Enterprise is operating Secondary sector Identify THREE challenges for SEE's business and classify EACH challenge according to the business environment. CHALLENGE BUSINESS ENVIRONME NT (a) SEE employees are regularly absent from work Micro (b) They buy their raw material from Early Bird Maize Farm which is Market out of stock sometimes. (c) The local government has instructed the management of SEE to Macro register their products with the South African Bureau of Standards. Date Started Date Ended  46 Example 3: Business in the tertiary sector Read the scenario below and answer the questions that follow: TIMOTHY LEGAL SERVICES (TLS) Timothy Legal Services (TLS) is situated at the Pretoria CBD. TLS’s assistant lawyers are not trained to handle criminal cases. Another law firm, Mbuzi Inc. has set up a law practice in the same office block as TLS. TLS can no longer pay their bank loan due to an increase in interest rates. Name the business sector in which TLS is operating. Motivate your answer by quoting from the scenario above. Business sector: Tertiary sector Motivation: Timothy Legal Services (TLS) is situated at the Pretoria CBD Identify THREE challenges for TLS business and classify EACH challenge according to the business environment. State the extent of control TLS has over EACH business environment CHALLENGE BUSINESS EXTENT OF CONTROL ENVIRONMENT TLS’s assistant lawyers are not trained to Micro Full control handle criminal cases. Another law firm, Mbuzi Inc. has set up a Market Partial/Limited/ Little law practice in the same office block as control/No control, but can TLS. influence TLS can no longer service their bank loan Macro No control due to an increase in interest rates. NOTE: Sometimes the examiner may ask you to just name three business environments and explain the extent of control businesses have over EACH business environment e.g. BUSINESS ENVIRONMENTS EXTENT OF CONTROL Micro environment Full control Market environment Partial/Limited/ Little control/No control, but can influence Macro environment No control Date Started Date Ended  47 CONSOLIDATION ACTIVITY Date Started Date Ended  48 BUSINESS OPERATIONS Date Started Date Ended  49 Concepts P L P E X T E R N A L R E C R U I T M E N T J H P H L R V X E Y F J F O X U S T U E T S E E O U X U A W X N M Y R I L P N T M Y G E M J Y M B M E T C N P O P M P N P S O F E G B L V X B V S A R C E E M I L N R T L R I X V X E N L A B C P N U A M M V T O H R E V J T N G G P O C D G D E R D R E P E P Y P O R G A A X A A V L J B T H C E E T N L I I E S F N T E N L W S H C W F H G I S C N T O M R E I V A R I I X H U V T T N L N F O O O P Y R C B T R L J T M P X P L E R C N I I U R C R M R S E N C R I T R E E N V W R J F N C R P F O E F E N X U E U F E I R N O L A F O I A C N O C N I D E J S C W F T D T E S I C J B A T E O N E T N B F X C R N L E O J F L I T E C R I A I O D C T O I D C U V O D N N Y P A O C S T O C T I U O E J T R T I O I Y J F B X M T N U U N T C T R N R C S D S T J C R S C X W G N E I D J I E A E T V N M A H M L T A D J T S S B Y D D N V L N X R I G T T W E W F L A P S H X W A H X G I E I A A E J J S W N J N A J W E E C N L D U P T S M W C W U D O X T H H S X F Y N S R H T V X I S R C T X A A X D X I N T E R V I E W E R M T E L E C S X A L G P W Y H X U O C E H P V I S W S R T C X R U Y I D V J O B A N A L Y S I S X P X SDA Pension Employee benefits Time related Salary determination Termination of contract Legalities Employment contracts Training Placement procedure Induction Interviewer Interview Selection procedure External recruitment Internal recruitment Job analysis Job specification Job description Human resource activities Date Started Date Ended  50 The learner must know the following: Explain/Elaborate on the meaning of recruitment. RECRUITMENT Outline/Discuss/Explain the recruitment procedure. Explain the meaning of a job analysis Distinguish/Explain the differences between job description and job specification as components of a job analysis Identify job description and job specification from given statements/scenarios Discuss/Explain the impact of internal and external recruitment. (Recruitment methods/types) Identify methods/types of recruitment from given scenarios/state Give examples of sources of internal and external recruitment. SELECTION Outline/Discuss/Explain the selection procedure. Explain the meaning of screening as part of the selection procedure. Discuss/Explain the purpose of an interview. Outline/Explain/Discuss the role of the interviewer before and during the interview. Outline/Explain/Discuss the role of the interviewee during the interview. Define/Elaborate on the meaning of an employment contract. Outline/Explain/Discuss the legal requirements/legalities of the employment contract. Evaluate an employment contract from given scenario and make recommendations for improvement. Outline/Discuss the details/aspects/contents of an employment contract. Outline/Discuss/Explain the reasons for the termination of an employment contract. INDUCTION Define/Elaborate on the meaning of induction Discuss/Explain the purpose of induction. Discuss/Explain the advantages/benefits of induction. Outline aspects that must be included in the induction programme. Evaluate an induction programme from given scenarios and make recommendations for improvement. PLACEMENT Outline/Explain the placement procedure Discuss/explain the importance of training/skills development in HRM Distinguish/Explain the differences between piece meal and time- FRINGE related. Date Started Date Ended  51 BENEFITS Explain the link between salary determination and the Basic Conditions of Employment Act. COMPULSORY Outline/Give examples of employee benefits e.g. BENEFITS o Pension o Medical aid o Provident fund o Allowances Compulsory benefits: Benefits required by law, e.g. UIF, etc. Explain/Discuss/Evaluate advantages/positives and/or disadvantages/negatives of fringe benefits to business. ACTS Discuss the implication of Acts like the LRA/ BCEA/EEA/SDA on the human resources function. 2 HUMAN RESOURCES ACTIVITIES Meaning of recruitment Recruitment is the process used by business to identify vacancies in the business and attract suitable candidates for it. It aims at finding candidates who have the necessary knowledge/ experience/ qualification to fill the vacancy. Recruitment procedure The human resource manager (HRM) should prepare the job description in order to identify recruitment needs. HRM should indicate the job specification/description/key performance areas to attract suitable candidates. Prepare a job analysis, which includes job specification and job description. A decision whether to recruit internally should be made to identify suitable candidates from within the business. If internal recruitment is unsuccessful, external recruitment should be considered. If the external recruitment is done, the relevant recruitment source should be selected, e.g. recruitment agencies, tertiary institutions, newspapers, The advertisement should be prepared with the relevant information, e.g. the name of the company, contact details, contact person, etc. Place the advertisement in the appropriate media that will ensure that the best candidates apply. Date Started Date Ended  52 Differences between job description and job-specification Job Description Job Specification Describes duties/responsibilities of a Specifies the minimum acceptable personal specific job/summary of the nature /type of qualities/ skills/ qualifications needed for the job. the job. Written description of the job and its Written description of specific qualifications/ skills/ requirements experience needed for the job. Describes key performance areas/ tasks for Describes key requirements of the person who will a specific job, e.g. job title/working fill the position, e.g. formal qualifications/willingness conditions/relationship of the job with other to travel/work unusual hours, etc. jobs in the business, etc. TYPES/METHODS OF RECRUITMENT Internal Recruitment Refers to the use of internal sources to advertise vacancies inside the business. The following SOURCES of internal recruitment can be used: Sources of Internal recruitment Internal e-mails/Intranet/web sites to staff Word of mouth Business newsletter/circulars Internal/management referrals Notice board of the business Internal bulletins Recommendation of current employees Head hunting within the business/organisational database External Recruitment Refers to the use of external sources to advertise vacancies outside the business. The following SOURCES of external recruitment can be used: Sources of external recruitment Recruitment agencies Bill boards Printed media, e.g. newspapers/flyers Electronic media, e.g. radio/TV Social media/Social networks/Internet/Business websites Recruitment agencies Walk-ins Head hunting Professional associations Networking Educational/Training institutions Posters/Bill boards just outside the business Date Started Date Ended  53 Impact of Internal Recruitment Positives/Advantages Cheaper/Quicker to fill the post. Placement is easy, as management knows the employees' skills/personality/ experience/strengths. Provides opportunities for career paths within the business. The employee already has an understanding of how the business operates. / Induction/Training is not always necessary. Negative/Disadvantages The promotion of an employee could cause resentment among other employees. The number of applicants from which to choose is limited to existing staff only. It may close the door to new ideas from outsiders. The business has to spend more money on training/developing existing employees on the new position. Employees who are not promoted may feel demotivated. Impact of External Recruitment Positives/Advantages New candidates bring new talents/ideas/experiences/skills into the business. There is a larger pool of candidates to choose from. It may help the business to meet affirmative action and BBBEE targets. Minimises unhappiness/conflict amongst current employees who may have applied for the post. Negatives/Disadvantages External sources can be expensive, e.g. recruitment agencies' fees/advertisements in newspapers/magazine