ZIMBABWE SCHOOL EXAMINATIONS COUNCIL
General Certificate of Education Advanced Level
BUSINESS STUDIES 9198/1
NOVEMBER 2008 SESSION 3 hours
TIME 3 hours
INSTRUCTIONS TO CANDIDATES
- Answer all questions.
- Write your answers on the separate paper provided.
- If you use more than one sheet of paper, fasten the sheets together.
INFORMATION FOR CANDIDATES
- The number of marks is given in brackets
Section A [70 Marks]
Answer all questions.
1 The free market enterprise is one of the basic economic systems. State any two others. 
2 a) What is a multinational company? 
b) Why may the government of your country limit the entry of multinational companies in the country? 
3 Explain the influence of any two elements of macro environment of the business of your choice. 
4 Why may fear lead to resistance to change in an organisation? 
5 Explain any three communication problems that lie with the receiver. 
6 a) Distinguish between authority and responsibility. 
b) Explain any two kinds of power which a manager may possess. 
7 a) What do you understand by the following terms?
i) recruitment 
ii) selection 
8 Explain any two factors leading to relocation of an industry. 
9 Pardon Electronics Limited is a multinational company planning to introduce a new brand of mobile phones in Zimbabwe. Advise the firm on any two possible pricing strategies to adopt. 
10 Comment on the usefulness of any two sources of finance. 
11 a) Distinguish between fixed and variable costs. 
b) Graphically illustrate the following:
i) break-even point,
ii) margin of safety 
12 Discuss the value and limitations of the payback method in investment appraisal. 
Section B [30 Marks]
Read the following Case Study and answer all questions below.
J.B. Booksellers Ltd is a supplier of educational materials in Zimbabwe. The firm offers materials for use by primary and secondary schools and tertiary level institutions (colleges and universities).The textbooks offered for sale are made to look different in terms of top-cover design, pictorial illustrations, quality of paper and size of print. The books appeal very well to the targeted readers.
The organisational design for J.B. Booksellers Ltd is made in such a way that all activities concerned with the production of primary and secondary textbooks are grouped in one department while those for tertiary level institutions are in another. Various functional managers are employed by the organisation to man each department. The firm recorded remarkable success in its operations as evidenced by the ever-increasing sales figures.
Sales Figures for J.B. Booksellers Ltd
|Year||Primary and Secondary Books||Tertiary Level Books|
Despite the rising levels of sales between year 2000 and 2005, management has been worried about rising administrative costs which have resulted in the organisation making marginal profits. The gross profit margins, net profit margins and return on capital employed were below the expectations of the financial manager.
13 a) With reference to the case-study, explain the following terms.
i) market segmentation, 
ii) Product differentiation 
b) How useful is the concept of market segmentation to a producer of textbooks? 
14 a) Draw the possible organisation structure for J.B. Booksellers Ltd. 
b) Using evidence in the case study, comment on the meris and demerits of such an organisation structure. 
15 To what extent is ration analysis useful in the management of a business like J.B. Booksellers Limited? 
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