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General Certificate of Education Advanced Level

MANAGEMENT OF BUSINESS                                                                            9198/1

JUNE 2008 SESSION        3 hours

TIME 3 hours


  • Answer all  questions.
  • Write your answers on the separate paper provided.
  • If you use more than one sheet of paper, fasten the sheets together.


  • The number of marks is given  in brackets
[] at the end of each question or part question.
  • The businesses described in the case study are entirely fictitious.
  • You are advised to spend no longer than 2 hours on Section A.
  • You are reminded of the need for good English and clear presentation in your answers.
  • Calculators may be used.
  • Section A [70 Marks]

    Answer all questions.

    1   What are the reasons for public ownership of businesses?   [4]

    2   a) Distinguish between internal and external constraints on businesses.  [4]

         b) Explain the effects of inflation on businesses. [4]

    3   a) Show how any two  elements of the marketing mix  might help in the achieving the marketing objectives of a firm. [4]

        b) List any four  ways in which a business may attempt to extend the maturity phase of a product’s life cycle. [4]

    4. Explain any two  advantages of sale of an equity. [4]

    5 Is a matrix structure always a good organisation structure? [6]

    6  a) Explain the following terms:

                 i) buffer stock,         [2]

                ii) lead time,      [2]

               iii) Economic Order Quantity.  [2]

    7   Distinguish between piece rate and time rate as methods of payment.  [4]

    8 How might a Theory X manager’s beliefs be portrayed in his style of leadership? [4]

    9 State and explain any three groups of accounting ratios. [4]

    10 A firm has four departments whose profit/(loss) is shown in the statement below.

    Dept A
    $ 000
    Dept B
    $ 000
    Dept C
    $ 000
    Dept D
    $ 000
    $ 000
    Sales 300400150100950
    Total Costs25045011080890

      a) Show the difference between profit and contribution.   [2]

      b) Calculate the contribution of any two departments.  [4]

    11 Should manages always use quantitative techniques only in decision making?  [5]

    12 How might management satisfy the esteem needs of a worker?  [4]

    Read the following Case Study and answer all  questions below.

    Frontline Garments

    Frontline Garments is a small-sized business producing fabrics and specialising in ladies garments. Te business is located in the residential areas of Kuwadzana suburb in the outskirts of Harare, and is the only one in the trade. Mr Kufa, the owner of the business, is the Managing Director. His wife and his eldest daughter are the Marketing Manager and Accountant respectively.

    The business has been doing well, receiving orders from the local chain stores and also individuals. The market share has been increasing since the last three months when the wife signed contracts with two major chain stores in the city centre. The workers now had to work in shifts  to meet the increasing demand. Mr Kufa suggested increasing the number of workers but feared increase in costs associated with the move. The costs include labour costs, additional equipment and factory space.

    The Chief Supervisor in the sewing department complained about the increase in machine breakdown due to excessive use. In order to cover maintenance costs, Mrs Kufa suggested increasing the price for fabrics and ladies garments by 30%. However, she feared loss of customers.

    13   a) Why may Frontline Garments be satisfied with operating in the Kuwadzana residential area? [3]

           b) Discuss the benefits that can be enjoyed by Frontline Garments if it expands. [7]

    14  How can the Government assist small and medium enterprises in your country? [10]

    15  Examine the issues Frontline Garments has to consider if it were to convert into a public limited company. [10]

    To access more exams go to the Business Studies Exam page.