MAC2601 EXAM PACK

Contents MODULE NOTES ............................................................................................................................................ 2 Past Exam papers ........................................................................................................................................ 58 SOLUTIONS .................................................................................................................................................. 66 Oct/Nov 2013 .............................................................................................................................................. 72 SOLUTIONS .................................................................................................................................................. 79 MAC2601 EXAM PACK 2 MODULE NOTES § Entities exist to fulfil a certain purpose or mission. Entities cover a gap in fulfilling the needs of people for a return/ profit. § When organizations are started, the owners/founders have an idea of how they want the entity to be like in a number of years and that will be the vision of the company. § The mission of the company will be to fulfil that ideal and the mission is encapsulated in a mission statement. The mission statement § The mission statement of the company defines the purpose of the organisation by broadly starting why the company / organisation exists. § The mission statement of the organisation is formulated by the Top management of the company/organisation (The Board) deems it fit. § A mission statement should have the following characteristics § Should inspire change within the organisation although the mission itself does not change. § Should be long term in nature as it will not change. § Should be easy to understand and communicate. § The Benefits of having a well-articulated mission statement includes the following § Describes what the organisation is about § It reveals the areas in which the company is operating e.g. technology/ internment. § Provides a guiding philosophy about the direction the organisation should take. § It enables communication of a common culture through the whole organisation. Core Value § Are the principle that guide an organisation by describing how every employees are expected to behave? 3 § Core values reflect what the organisation stands for and should be visible in the day to day behaviour of all employees of the organisation, independent of the current environment, they do not change over time but remain the same. § It is important that leaders of companies are seen to be leaders in uphold the core values of the core values of the company, and constantly communicate them to their span of control. Vision statement § It is the blue print of where the company wants to go in future. § Gives a clear picture of what the organisation wants to ultimately become in future. § It is made in cognisance with the opportunities and threats faced by the organisation or those that it will face. Strategy § It is the way which an organisation goes about to fulfil its vision or goals (objectives). § Strategy can be devised in the long term or in the short term, sometimes short term strategies are known as tactics. § Elements of strategy are as follows: i. Choice of activities – is important in that it should differentiate the organisation from its competitors and create a competitive advantage for the company. ii. Trade - offs – organisations should choose specific actions supposed to other actions. It also necessitates that decisions be made about which decisions not to follow/choose. iii. Fit-activities/decisions made should fit one another in order to lead to success iv. Change – strategy should change in response to changes in circumstances. v. Strategy formulation is both a conceptual and analytical thought process and should display a broad conceptual and analytical thought process and should display a broad conceptual knowledge of the operating environment of the organisation and should take the organisations core values into account. Competitive strategies