Section 2 – Applied Business Question – 80 marks

● The ABQ 2020 will be based on:

Unit 2 – Enterprise

Unit 3 – Management 1

Unit 4 – Management 2

● The ABQ is the only entirely compulsory question on the paper and accounts for 20% of your exam.

● Students have approximately 40 minutes to answer this section of the paper.

● It is clear that the short questions and the ABQ carry the

same marks (80) but students must spend longer on the ABQ due to the fact that it involves more concentration and they are required to articulate developed answers.

● The average mark for the ABQ is 67% or 54/80 marks.

● If students do not manage their timing correctly huge errors could be made.

● The ABQ tries to give students the answers to the questions with specifically placed links that students should be able to pick out, so remember the answers are in the text.

● It is VITAL that students make reference to the text in their answers and each point they make should be supported with a relevant quote.

● In 2015, 2010 and 2005 the ABQ was also based on units 2, 3 and 4. Therefore, it is important that students fully complete all three of these ABQs as practice, including as many relevant past mock exam questions as possible.

Tips for approaching the ABQ

● Firstly, read the questions and highlight keywords.

● Secondly, read through the ABQ case study and ensure that you highlight possible quotes relevant to the

questions. Each part of the question (A, B, C) is usually in relation to each unit, so having indepth knowledge of all three units is vital:

Likely sections

(A) 20 marks (Unit 2)

(B) 30 marks (Unit 3)

(C) 30 marks (Unit 4)

● Timing: 40 minutes break down to eight minutes reading and preparation and 32 minutes writing. It is crucial that you stick to this recommended timing and do not exceed the maximum of 40 minutes allowed.

● When practising ABQs use THREE different coloured highlighters for each part of the question (A, B, C). This will allow you to clearly spot the linkages between the text and the question and ensures you include a correct link (quote) for each part.

● To decide on the number of points to give in a section, like with the long questions in Section 3, a good rule of thumb is to divide the total number of marks in each section by 5. For example: 20 marks = 4 fully developed points @ 5 marks each.

● Ensure you begin each part of the ABQ on a new page.

● Ensure you understand the outcome verb (the question cue) within the question.

● Most questions in the ABQ require the same layout:

State (State your point, with a red pen/underline)

Explain (with two points/sentences of relevant information).

Link (direct quote from text). This quote cannot be just one word, it needs to be a full sentence. Do not use the same quote twice in the same part of the question.

Here are some questions that have appeared in past ABQs, from the following topics in:

Unit 2: Enterprise

Explain the term entrepreneur.

Outline the benefits for _______________ of becoming an entrepreneur.

Illustrate what it means to be an entrepreneur with reference to _______________

Explain the term ‘intrapreneur’.

Illustrate, using examples from the above text, how ‘intrapreneurship’ benefits _______________

Do you think that _______________ displayed enterprising skills/ characteristics? Explain your answer with reference to the text of the ABQ.

Illustrate, using examples from the above text, four enterprising characteristics/skills shown by _______________.

Unit 3: Management Skills

Evaluate how _______________ can use her management skills to ensure the continued success of her hotel. Refer to the above text in your answer.

Evaluate _______________ management skills with a view to his improving his business. Support your answer with reference to the above text.

Management Activities

Evaluate the management activities involved in the operation of _______________

Define the management activity of planning.

Explain the elements of a SWOT analysis and conduct the SWOT prepared by_______________

Evaluate the effectiveness of the systems of management control in operation at _______________

Discuss three types of management control that you would recommend _______________ put in place to secure the future of _______________

Discuss how management activities can help _______________ improve the performance of the business.

Define the management activity of ‘planning’ Illustrate how different types of planning benefit _______________

Unit 4: Human Resource Management

Evaluate _______________ effectiveness as a human resource manager.

Change Management

Advise _______________ on the strategies that will help her to manage the changes that have to take place if the business is to succeed.

Discuss the impact that investment in technology has had on_______________ . Refer to the above text in your answer. Evaluate the effectiveness of the approach taken by _______________to help _______________ Ltd adapt to change.

Outline briefly the difference between ‘a controller manager’ and ‘a facilitator manager’.

Evaluate _______________ approach to managing the _______________. Household & Business Manager (Insurance/Taxation/ Finance/Cashflow)

Describe the types of insurance appropriate to the context described above.

Identify and describe the most appropriate sources of finance to meet the needs of ______________________

Identify and describe the most appropriate sources of finance for_______________ . (Refer to short-, medium- and long-term sources of finance in your answer.)

Outline the importance of preparing a cashflow forecast for _______________.

APPLIED BUSINESS QUESTION 2015 Based on Units 2, 3 & 4 Harte Shoes Ltd

Harte Shoes Ltd is a small, family-run manufacturing business, located in Monaghan, which has operated in the highly competitive footwear industry since the 1970s. At its peak the company employed highly skilled shoe makers and a very effective sales team. Martin Harte, the owner, began to realise that the centuries-old footwear industry was in decline, largely as a result of cheaper imports from manufacturers in Eastern Europe. He decided to review the company’s corporate strategy in order to make his company viable in the future.

His solution was based on the ever-increasing popularity of Irish dance worldwide. The outstanding success of productions such as Riverdance, Lord of the Dance and the popularity of competitions such as the Irish Dance World Championships has seen a global increase in the numbers of girls and boys learning Irish dancing. Martin’s goal was to create a range of soft and hard dance shoes, using the finest and most durable leather, and so well engineered that they would provide protection and comfort for Irish dancers worldwide.

He sought the assistance of Enterprise Ireland’s ‘Get Export Ready’ scheme. Enterprise Ireland appointed Christine Landers, a development adviser, to Harte Shoes Ltd and she carried out a SWOT analysis. From this, it was clear that Harte Shoes Ltd had manufacturing expertise and that growing markets exist in the UK, the US and Australia due to the global popularity of Irish dancing. However, she noted the lack of a computer aided design (CAD) system to assist with the production of shoes, especially in light of the fact that competitors from Eastern Europe had invested heavily in information and communications technology (ICT). She also noted the absence of a quality website to facilitate online selling.

Martin discussed the SWOT analysis with existing employees and at that meeting a way forward was agreed. Martin invested a further €50,000 into the business to be used for modernising plant and equipment. Grant aid received from Enterprise Ireland was used for a new CAD system and a website was

established to showcase the new brand and to get orders from clients. Employees were given the required training and development through up-skilling courses organised by the company. Significant productivity improvements were achieved by introducing bonus shares for employees and offering a fair redundancy scheme.

Martin was delighted with the innovative approach adopted by the design team in creating a range of quality hard and soft dance shoes. He welcomed their suggestions on the technical aspects of manufacturing hard dance shoes, which included fibreglass heels and toes to increase the clicking sound, so important to Irish dance. His team developed a newly patented production technique enabling them to produce a dance shoe that is the lightest and loudest in the marketplace.

(A) Do you think that Martin Harte displayed enterprising skills/characteristics? Explain your answer with reference to the text of the ABQ. (20 marks) (B) (i) Define the management activity of planning.

(ii) Explain the elements of a SWOT analysis and conduct the

SWOT prepared by Christine Landers. (30 marks) (C) Evaluate the effectiveness of the approach taken by Martin to help Harte Shoes Ltd adapt to change. (30 marks)

(80 marks)

Sample answer (A) UNIT 2 20 MARKS

Yes I believe Martin Harte displayed enterprising skills/ characteristics. 2 marks

Any 3 @ 6 marks each (2+2+2) (state, explain, relevant link)

Innovative/creative: The entrepreneur must be “visionary” and have a constant urge to develop new ideas or find a better way of doing things. Entrepreneurs like Martin Harte show imagination, resourcefulness and readiness to undertake new projects. They think outside the box to develop new products or new versions of existing products. Link: “His solution was based on the ever-increasing popularity of Irish dance worldwide”.

Identify opportunities: To become successful, entrepreneurs like Martin Harte learn how to identify new opportunities. They do this by learning to be future-focused and proactive, by trying to anticipate changes to see what opportunities may arise for them, instead of waiting for somebody else to make the first move.

Link: “Martin’s goal was to create a range of soft and hard dance shoes, using the finest and most durable leather and so well engineered that they would provide protection and comfort for Irish dancers worldwide.”

Risk-taker: Entrepreneurs are realistic risk-takers, as they take a personal and financial risk in setting up a new business with no guarantee of success. They are not afraid of failing, but they are only willing to take risks (such as giving up a job, investing money) if they think the probability of success is reasonably high, like Martin Harte did when he invested money into his new business. If the product is successful in the market place the risk pays off and the entrepreneur makes a profit.

Link: “Martin invested a further €50,000 into the business to be used for modernising plant and equipment.”

Human relations: A successful entrepreneur must establish trust and build good working relationships with all the stakeholders in their enterprise. This requires entrepreneurs such as Martin Harte, to learn good social skills (ability to get on easily with people), good communication skills (ability to speak to investors, managers, workers and customers) and good listening skills (open to feedback even if it is negative).

Link: “He sought the assistance of Enterprise Ireland’s ‘Get Export Ready’ scheme.”

(B) UNIT 3 30 MARKS

(i) Planning is the setting down of specific goals and

objectives and the putting in place of strategies that allow the achievement of the stated goals and objectives of the business. Planning is important as it allows a clear direction to be set for the business. 6 marks (ii)

Explain SWOT/Conduct SWOT (Name • Explain • Link) (Link must relate to the correct element)

4 @ 6 marks each (2+2+2)

1. Strengths: represent the internal strengths of the firm and are the things that the firm is good at doing or important assets it possesses that give it an advantage over competitors. A firm should defend and take advantage of its strengths. 2 marks Skilled workforce: Harte shoes Ltd has always had a strength in its skilled and effective staff. They employed highly skilled shoe makers and a very effective sales team. They have manufacturing expertise that can be built upon.

2 marks

Link: “At its peak the company employed highly skilled shoe makers and a very effective sales team” 2 marks

OR “It was clear that Harte Shoes Ltd had manufacturing expertise.”

2. Weaknesses: are the firm’s internal weaknesses and are the things the business has underdeveloped, does poorly or lacks and which put it at a competitive disadvantage. Weaknesses should be fixed or remedied as quickly as possible, in order to protect the business. 2 marks Insufficient technologies: Harte Shoes Ltd lacks the up-to-date technology that is required to keep up with international competitors. It has not invested in a computer aided design system, which would aid the company in competing with its Eastern European competitors, and it has no proper website to enable it to sell online.

Link: “She noted the lack of a computer aided design system (CAD) to assist with the production of shoes, especially in the light of the fact that competitors from Eastern Europe had invested heavily in information and communications technology” 2 marks

OR “She also noted the absence of a quality website to facilitate online selling.”

3. Opportunities: represent the firm’s external opportunities which it could use to its advantage. They offer the possibility of assisting or expanding the business. They should be exploited, where possible. 2 marks Global markets: Irish dancing is becoming popular on a global scale, and this is a huge opportunity for Harte Shoes Ltd in providing dance shoes in these markets. It should exploit this opportunity by exporting to markets such as the UK and the US. 2 marks

Link: “…growing markets exist in the UK, the US and Australia due to the global popularity of Irish dancing.”

2 marks

4. Threats: are the external challenges which could undermine the ability of the business to achieve its goals or jeopardise the business. Threats should be defended against. 2 marks European competition: there are European competitors which are operating extremely efficiently and have invested heavily in modern information and communications technology. This is a threat that must be defended against, if Harte Shoes Ltd wants to remain competitive in the market.

2 marks Link: “.... competitors from Eastern Europe had invested heavily in information and communications technology (ICT).” 2 marks (C) UNIT 4 30 MARKS

3 change strategies @ 10 marks each (state, explain, link, evaluate) (3+3+3+1)

Note: Strategies/elements for managing change in a business include:

✔ Consultation/communication

✔ Remuneration (rewards)

✔ Training

✔ Employee participation

✔ Employee empowerment

✔ Teamwork

✔ Total quality management (TQM)

1. Consultation 3 marks

Management must consult with trade unions and employees about the need for change, when and how it will take place and what effects it may have on employees. They must be provided with the opportunity to understand and appreciate fully the implications of change, such as consulting with staff early on in the process, before any plans for the change begin. 3 marks

Link: “Martin discussed the SWOT analysis with existing employees and at that meeting a way forward was agreed”

3 marks

Or “He welcomed their suggestions on the technical aspects of manufacturing hard dance shoes which included fibreglass heels and toes to increase the clicking sound, so important to Irish dance.”

Evaluation: I believe that Martin communicates and consults with his staff about the need for change very effectively. This gave his staff the opportunity to become involved and committed to the change process, before and during it, greatly increasing the chance of success. 1 mark

2. Remuneration (rewards) 3 marks Negotiations must take place with workers, supervisors and HR managers so that changes in work practices, such as possible redundancies and the introduction of new technology, take place without damaging industrial relations. There should be some remuneration (reward) for the workers if they commit to the change process and cooperate, such as bonuses, pension agreements and share ownership options. 3 marks

Link: “Significant productivity improvements were achieved by introducing bonus shares for employees and offering a fair redundancy scheme.” 3 marks Evaluation: I believe that Martin effectively uses a reward system in order to ensure his workers are committed to the change process. Offering financial rewards such as bonus shares has improved employee productivity, as they are being sufficiently remunerated for their increased efforts.

1 mark

3. Total quality management (TQM): 3 marks

Total quality management (TQM) is an approach to management which aims to maximise quality in all aspects of a firm’s operations. It aims to get all staff involved in continuously looking for ways to improve the quality of a firm’s products and services. 3 marks

Link: “His team developed a newly patented production technique enabling them to produce a dance shoe that is the lightest and loudest in the marketplace.” 3 marks

OR “Martin’s goal was to create a range of soft and hard dance shoes, using the finest and most durable leather, and so well engineered that they would provide protection and comfort for Irish dancers worldwide.”

Evaluation: I believe that Martin’s approach to total quality management has helped to effectively implement the changes in his business. He and his staff are constantly striving for improved quality, which will have the benefit of improved quality to customers, increased sales and profitability. 1 mark