Grade 12 Commerce: Business studies

In this unit, 'Nature and significance of management', you learn to describe management functions. You work with exam-style questions and written reasoning. You see it, say it, then do it alone.

• Read the idea in 'Nature and significance of management' and tie it to a small real business, such as a school shop or a family stall.
• Write the rule or format in your own words and keep one clean example.
• Use it: describe management functions. Work from source papers or a short story of transactions.
• Check it: totals agree, each entry has a reason, and every figure can be traced.

Step by step.

1. Step 1, Describe management as the process of getting things done with and through people to achieve goals. Features: goal directed, a continuous process, all-pervasive in every organisation, multi-dimensional (work, people, operations) and a group activity. A bakery owner who plans, assigns bakers and checks quality is managing.
2. Step 2, Describe the levels. Top management (directors, chief executive) sets overall aims. Middle management (department heads) turns them into departmental plans. Lower or supervisory management (supervisors) guides workers daily. In a bakery chain, the head office decides to grow, a branch manager plans stock, and the shift supervisor directs bakers.
3. Step 3, Describe the five functions in order. Planning: decide to bake 500 loaves a day. Organising: assign ovens, tasks and people. Staffing: hire and train bakers. Directing: guide, motivate and communicate. Controlling: compare real output with the plan and correct gaps. Each function supports the next.
4. Step 4, Describe effectiveness and efficiency. Effectiveness is completing the task: target 500 loaves and 450 baked gives 450 / 500 = 90 percent. Efficiency is doing it with few inputs: if 100 kg of flour was standard but only 90 kg was used for those loaves, resources were saved. A good manager aims at both together.
5. Step 5, Describe coordination and significance. Coordination links the efforts of departments so they pull together, as when the oven team and delivery van team time their work. Management achieves group goals, raises efficiency, creates a dynamic organisation, helps people grow and contributes to society.
6. Step 6, Your turn: name the function in each: (a) decide the monthly sales target, (b) compare actual sales with the target. Also find effectiveness if 400 of a 500 target is reached. Answer: (a) planning, (b) controlling. Effectiveness = 400 / 500 = 80 percent.

Activity. About 40 to 50 minutes of class work, then one short practice task for home. Keep evidence: a timed paper and an error log.

Standard to meet. Describe management functions: at least 70 percent on an exam-style task, with the method shown.

In this unit, 'Principles of management and planning', you learn to apply management principles and planning. You work with exam-style questions and written reasoning. You see it, say it, then do it alone.

• Read the idea in 'Principles of management and planning' and tie it to a small real business, such as a school shop or a family stall.
• Write the rule or format in your own words and keep one clean example.
• Use it: apply management principles and planning. Work from source papers or a short story of transactions.
• Check it: totals agree, each entry has a reason, and every figure can be traced.

Step by step.

1. Step 1, Apply the general principles of management, which are flexible guides, not fixed laws. Division of work: split jobs by skill. Authority and responsibility go together. Discipline: follow agreed rules. Unity of command: one worker takes orders from one boss. Unity of direction: one plan for one group of activities. Pick the one a case breaks.
2. Step 2, Apply the principles of scientific management: use science, not rule of thumb; promote harmony, not discord; promote cooperation, not individualism; aim for maximum output, not restricted output; develop each worker to the fullest. If standard time is 30 minutes per unit, a worker should make 480 / 30 = 16 units in an 8-hour shift.
3. Step 3, Apply planning, which means deciding in advance what to do, how and when. Its steps: set objectives, develop premises, identify alternatives, evaluate them, select one, implement, and follow up. Example: a bakery wants to raise sales from 200 to 250 loaves a day, an increase of 50 / 200 = 25 percent.
4. Step 4, Apply the steps to the bakery. Premises: assume demand stays steady and flour prices change little. Alternatives: advertise, open longer, add a delivery service. Evaluate cost and effect, and choose delivery. Implement by buying a van, then follow up by checking sales weekly against the 250 target.
5. Step 5, Apply the types of plans from broad to specific. Objective: the end to be reached. Strategy: the broad approach. Policy: a general guide to decisions. Procedure: the steps in order. Method: how one step is done. Rule: a strict do or do not. Programme: a set of activities. Budget: a plan in figures.
6. Step 6, Your turn: a worker gets orders from two different supervisors. Which principle is broken, and how long should 15 units take at 30 minutes each? Answer: unity of command is broken. 15 x 30 = 450 minutes, which is 7.5 hours. The fix is one supervisor giving the orders.

Activity. About 40 to 50 minutes of class work, then one short practice task for home. Keep evidence: a timed paper and an error log.

Standard to meet. Apply management principles and planning: at least 70 percent on an exam-style task, with the method shown.

In this unit, 'Organising, staffing and directing', you learn to describe organising, staffing, motivation and leadership. You work with exam-style questions and written reasoning. You see it, say it, then do it alone.

• Read the idea in 'Organising, staffing and directing' and tie it to a small real business, such as a school shop or a family stall.
• Write the rule or format in your own words and keep one clean example.
• Use it: describe organising, staffing, motivation and leadership. Work from source papers or a short story of transactions.
• Check it: totals agree, each entry has a reason, and every figure can be traced.

Step by step.

1. Step 1, Organising: divide the work, group jobs into departments and set who reports to whom. A firm has 120 workers and a span of control of 8, so it needs 120 / 8 = 15 supervisors. Those 15 supervisors, with a span of 5, report to 3 managers, and the 3 managers report to one director.
2. Step 2, Delegation passes authority (the right to decide) and responsibility (the duty to do the task) down the chain, but accountability stays with the manager. In a centralised firm the owner decides most things; in a decentralised firm branch managers decide. Line managers direct operations; staff specialists, such as an accountant, only advise.
3. Step 3, Staffing means planning for people, recruiting, selecting, placing and training them. A bakery has 12 workers and 3 leave in a year, so labour turnover is 3 / 12 = 25 percent. It advertises, receives 40 applications, shortlists 10 for interview and appoints 3. Induction then helps new staff settle in.
4. Step 4, Motivation drives people to work well. Needs are met in steps: basic pay and food, then safety and secure work, then belonging, then respect, then personal growth. Pay and good conditions prevent unhappiness; achievement, recognition and responsibility create real motivation. Use bonuses, praise, training and job enrichment together.
5. Step 5, Leadership style should fit the situation. An autocratic leader decides alone, which suits a fire evacuation. A democratic leader consults the team, which suits planning a new shift pattern. A laissez-faire leader gives freedom, which suits skilled designers. Directing also needs clear communication and fair supervision.
6. Step 6, Your turn: a factory has 72 employees and a span of control of 6. How many supervisors does it need? Which leadership style suits an emergency drill? Answer: 72 / 6 = 12 supervisors; an autocratic style, because quick clear orders save time and keep people safe.

Activity. About 40 to 50 minutes of class work, then one short practice task for home. Keep evidence: a timed paper and an error log.

Standard to meet. Describe organising, staffing, motivation and leadership: at least 70 percent on an exam-style task, with the method shown.

In this unit, 'Controlling and financial management', you learn to explain control, finance decisions and markets. You work with exam-style questions and written reasoning. You see it, say it, then do it alone.

• Read the idea in 'Controlling and financial management' and tie it to a small real business, such as a school shop or a family stall.
• Write the rule or format in your own words and keep one clean example.
• Use it: explain control, finance decisions and markets. Work from source papers or a short story of transactions.
• Check it: totals agree, each entry has a reason, and every figure can be traced.

Step by step.

1. Step 1, Control has four steps: set standards, measure actual performance, compare the two, and take corrective action. A workshop sets a standard of 500 units a day. Actual output is 450, so the variance is 500 - 450 = 50 units short, or 50 / 500 = 10 percent below standard. Managers then check machines and training.
2. Step 2, Budgetary control compares planned and actual figures. Budgeted costs are 20,000 and actual costs are 22,500, so the variance is 2,500 adverse, which is 2,500 / 20,000 = 12.5 percent over budget. A variance is a signal to investigate the cause, not automatically a failure.
3. Step 3, Financial management makes three decisions: what to invest in, how to finance it and how much profit to pay out as dividends. A firm funds itself with 400,000 of loans and 600,000 of owners' equity. Debt share is 400,000 / 1,000,000 = 40 percent, and 10 percent interest costs 40,000 x 10 / 100 = 4,000 each year whatever the profit.
4. Step 4, Judge an investment with payback. A machine costs 120,000 and brings in 40,000 extra cash a year, so payback is 120,000 / 40,000 = 3 years. Compare it with a second machine that pays back in 5 years. The shorter payback carries less risk, though it ignores cash after the payback date.
5. Step 5, Financial markets link savers and borrowers. The money market trades short-term funds, such as treasury bills under one year; the capital market trades shares and bonds. A share costing 5 pays a dividend of 0.40, so the yield is 0.40 / 5 = 8 percent, and 1,000 shares earn 400. Secondary markets let owners resell.
6. Step 6, Your turn: sales were budgeted at 80,000 and actual sales were 72,000. Find the variance. A project costs 90,000 and returns 30,000 a year. Find the payback. Answer: variance 8,000 adverse, which is 10 percent below budget; payback is 90,000 / 30,000 = 3 years.

Activity. About 40 to 50 minutes of class work, then one short practice task for home. Keep evidence: a timed paper and an error log.

Standard to meet. Explain control, finance decisions and markets: at least 70 percent on an exam-style task, with the method shown.

In this unit, 'Marketing management and consumer protection', you learn to apply the marketing mix and consumer rights. You work with exam-style questions and written reasoning. You see it, say it, then do it alone.

• Read the idea in 'Marketing management and consumer protection' and tie it to a small real business, such as a school shop or a family stall.
• Write the rule or format in your own words and keep one clean example.
• Use it: apply the marketing mix and consumer rights. Work from source papers or a short story of transactions.
• Check it: totals agree, each entry has a reason, and every figure can be traced.

Step by step.

1. Step 1, Apply the marketing mix, the 4 Ps, to one product: a reusable water bottle. Product means the design, quality and brand. Price means what the buyer pays. Place means where and how it is sold. Promotion means how people hear about it. Decide each P for one clear target group, for example students.
2. Step 2, Set the price. Cost to make is 8. A 50 percent mark-up gives 8 x 1.5 = 12. If fixed costs are 6,000, each bottle adds a contribution of 12 - 8 = 4, so break-even is 6,000 / 4 = 1,500 bottles. Selling more than 1,500 makes a profit; fewer makes a loss.
3. Step 3, Choose a channel of distribution. Direct selling by website keeps the whole price. Selling through a retailer adds a middleman: the retailer buys at 12 and adds a 30 percent mark-up, so the shelf price is 12 x 1.3 = 15.60. A longer chain reaches more buyers but raises the price.
4. Step 4, Plan promotion with the AIDA idea: gain Attention, build Interest, create Desire and prompt Action. Tools are advertising, personal selling, sales promotion and public relations. A 5,000 advertising budget that reaches 20,000 people costs 5,000 / 20,000 = 0.25 per person, a figure that lets you compare options.
5. Step 5, Consumer rights protect buyers: safety, information, choice, being heard and redress. If a kettle overheats, the right to safety is broken. If an advert promises a five-year life and it fails in one, the right to correct information is broken. Remedies are repair, replacement or refund, and a complaint to the seller or a consumer body.
6. Step 6, Your turn: a product costs 20 to make and you add a 40 percent mark-up. Find the price. A food label leaves out a nut warning. Which right is broken? Answer: 20 x 1.4 = 28; the rights to information and to safety, because an allergic buyer could be harmed.

Activity. About 40 to 50 minutes of class work, then one short practice task for home. Keep evidence: a timed paper and an error log.

Standard to meet. Apply the marketing mix and consumer rights: at least 70 percent on an exam-style task, with the method shown.

On the slide: L1 Basic · What a business does

Notes: Name what a business makes or sells, who buys it and what it needs to start. Notes: pick a local bakery; learners list its inputs, its customers and one risk, using no formal terms yet.

On the slide: L2 Awareness · Ownership and aims

Notes: Explain sole trader, partnership and company forms and the idea of limited liability. Notes: an owner invests 10,000 and the business fails owing 40,000; a sole trader may owe the rest personally, a company shareholder loses at most 10,000.

On the slide: L3 Foundation · Marketing mix and break-even

Notes: Apply product, price, place and promotion to a case and calculate break-even. Notes: fixed costs 6,000, price 20 and variable cost 8 give contribution 12 per unit, so break-even is 500 units; learners test a price of 22.

On the slide: L4 Practitioner · People and labour turnover

Notes: Compare leadership styles and calculate labour turnover with a view on cause. Notes: 6 leavers from an average of 120 staff is 5 per cent; learners suggest two causes, one pay related and one not, and say what evidence would separate them.

On the slide: L5 Specialist · Investment appraisal

Notes: Calculate payback and average return and recommend whether to invest. Notes: an outlay of 50,000 with cash inflows of 20,000 a year pays back in 2.5 years; learners say what the method ignores, such as cash after year 3.

This course: Grade 12 Commerce Business studies is at this level. Its units include Nature and significance of management; Principles of management and planning; Organising, staffing and directing; Controlling and financial management and more.

On the slide: L6 Advanced · Discounted cash flow and strategy

Notes: Evaluate a project using net present value and link it to strategic fit. Notes: an outlay of 100,000 and inflows of 40,000 for three years at 10 per cent give a present value of about 99,474, so NPV is about minus 526; test sensitivity to the rate.

On the slide: L7 Super expert · Cost of capital and governance

Notes: Create a recommendation on a merger using weighted cost of capital, synergy and board oversight. Notes: 60 per cent equity at 10 per cent and 40 per cent debt at 5 per cent after tax gives 8 per cent; accept only if risk-adjusted synergies beat it.