14939110 ACCA F1 Accountant in Business Solved Past Papers 0207

8/9/2019 14939110 ACCA F1 Accountant in Business Solved Past Papers 0207

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Accountant inBusinessTime allowed: 2 hoursALL FIFTY questions are compulsory and MUST be attempted.Do NOT open this paper until instructed by the supervisor.This question paper must not be removed from the examination hall.Fundamentals Pilot Paper Knowledge module

Paper F1The Association of Chartered Certified Accountants


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ALL FIFTY questions are compulsory and MUST be attemptedPlease use the Candidate Registration Sheet provided to indicate your chosen answer to each multiple choice question.1 An organisation which restructures through a major de-layering exercise has asa result moved to a shorter scalarchain and a narrower span of control.

Is the above statement true or false?A TrueB False(1 mark)2 Which of the following is the main function of marketing?A To maximise sales volumeB To identify and anticipate customer needsC To persuade potential consumers to convert latent demand into expenditureD To identify suitable outlets for goods and services supplied(2 marks)3 Which one of the following has become an established best practice in corporate governance in recent years?

A An increasingly prominent role for non-executive directorsB An increase in the powers of external auditorsC Greater accountability for directors who are in breach of their fiduciary dutiesD A requirement for all companies to establish an internal audit function(2 marks)4 In a higher education teaching organisation an academic faculty is organised into courses and departments, whereteaching staff report both to course programme managers and to subject specialists, depending on which coursethey teach and upon their particular subject specialism.According to Charles Handys four cultural stereotypes, which of the following describes the above type of

organisational structure?A RoleB TaskC PowerD Person(2 marks)5 At what stage of the planning process should a company carry out a situation analysis?A When converting strategic objectives into tactical plansB When formulating a mission statementC When validating the effectiveness of plans against outcomesD When formulating strategic objectives(2 marks)


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6 Which one of the following is potential advantage of decentralisation?A Greater control by senior managementB Risk reduction in relation to operational decision-makingC More accountability at lower levelsD Consistency of decision-making across the organisation(2 marks)

7 Which one of the following is an example of a internal stakeholder?A A shareholderB An non-executive directorC A managerD A supplier(2 marks)8 According to Mendelow, companies must pay most attention to the needs of whichgroup of stakeholders?A Those with little power and little interest in the companyB Those with a high level of power but little interest in the companyC Those with little power but a high level of interest in the companyD Those with a high level of power and a high level of interest in the company

(2 marks)9 What is the responsibility of a Public Oversight Board?A The establishment of detailed rules on internal audit proceduresB The commissioning of financial reporting standardsC The creation of legislation relating to accounting standardsD The monitoring and enforcement of legal and compliance standards(2 marks)10 The ageing population trend in many European countries is caused by a increasing birth rate and an increasingmortality rate.Is this statement true or false?A TrueB False

(1 mark)11 Which one of the following is consistent with a governments policy objective to expand the level of economicactivity?A An increase in taxationB An increase in interest ratesC An increase in personal savingsD An increase in public expenditure(2 marks)


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12 Martin is an experienced and fully trained shipbuilder, based in a western European city. Due to significanteconomic change in supply and demand conditions for shipbuilding in Martins own country, the shipyard heworked for has closed and he was made redundant. There was no other local demandfor his skills within his own

region and he would have to move to another country to obtain a similar employment, and could only find similarwork locally through undertaking at least a years retraining in a related engineering field.Which of the following describes the type of unemployment that Martin has been affected by?A Structural unemploymentB Cyclical unemploymentC Frictional unemploymentD Marginal unemployment(2 marks)13 When an organisation carries out an environmental scan, it analyses which of

the following?A Strengths, weaknesses, opportunities and threatsB Political, economic, social and technological factorsC Strategic options and choiceD Inbound and outbound logistics(2 marks)14 Which of the following is data protection legislation primarily designed to protect?A All private individuals and corporate entities on whom only regulated data isheldB All private individuals on whom only regulated data is heldC All private individuals on whom any data is heldD All private individuals and corporate entities on whom any data is held

(2 marks)15 Which of the following types of new legislation would provide greater employment opportunities in largecompanies?A New laws on health and safetyB New laws to prevent discrimination in the workplaceC New laws making it more difficult to dismiss employees unfairlyD New laws on higher compensation for employer breaches of employment contracts(2 marks)16 The total level of demand in the economy is made up of consumption, ____________, government expenditure andnet gains from international trade.Which of the following correctly completes the sentence above.A SavingsB TaxationC Investment(1 mark)


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17 Which set of environmental factors does a lobby group intend to directly influence?A PoliticalB TechnologicalC DemographicD Economic

(2 marks)18 Adrian is the manager of a call centre. Consultants have advised him that byreorganising his teams to completehighly specific tasks the call centre will be able to increase the throughput ofwork significantly, as well asincreasing the number of sales calls made to the public. The reorganisation proposals are unpopular with manyworkers, who feel that their jobs will become tedious and repetitive.The proposal to reorganise the work of the call centre utilises principles put forward by which school ofmanagement thought?A The human relations school

B The empirical schoolC The scientific schoolD The administrative school(2 marks)19 The original role of the accounting function was which one of the following?A Providing management informationB Recording financial informationC Maintaining financial controlD Managing funds efficiently(2 marks)20 Tax avoidance is a legal activity whilst tax evasion is an illegal activity.Is this statement true or false?A True

B False(1 mark)21 The system used by a company to record sales and purchases is an example of which of the following?A A transaction processing system.B A management information systemC An office automation systemD A decision support system(2 marks)


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22 The implementation of a budgetary control system in a large organisation would be the responsibility of the internalauditor.Is this statement true or false?A TrueB False

(1 mark)23 Which type of organisation would have the retail prices it charges to personal consumers subject to closescrutiny by a regulator?A A multinational corporationB A multi-divisional conglomerateC A national utilities companyD A financial services provider(2 marks)24 The central bank has announced a 2% increase in interest rates.This decision has the most impact on which department in a large company?A Auditing

B TreasuryC Financial accountingD Production(2 marks)25 The major purpose of the International Accounting Standards Board (IASB) is to ensure consistency in ___________.Which two words complete this sentence?A Financial controlB Corporate reportingC External auditing(1 mark)26 Farrah, Gordon, Helene and Ian work in the finance department of X Co, whichhas separate financial accounting

and management accounting functions. Farrah deals with payroll, the purchase ledger and sales invoicing. Gordonsduties involve inventory valuation, budgetary control and variance analysis. Helene deals with fraud preventionand detection, and internal control. Ian carries out risk assessments, investment appraisals and assists in projectplanning.Which member of the department works in the financial accounts function?A FarrahB GordonC HeleneD Ian(2 marks)


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27 In an economic environment of high price inflation, those who owe money willgain and those who are owed moneywill lose.Is this statement true or false?A TrueB False

(1 mark)28 To whom is the internal auditor primarily accountable?A The directors of the companyB The company as a separate entityC The shareholders of the companyD The employees of the company(2 marks)29 Which one of the following is a DISADVANTAGE of a computerised accounting system over a manual accountingsystem?A A computerised system is more time consuming to operateB The operating costs of a computerised system are higher

C The computerised system is more costly to implementD A computerised system is more error prone(2 marks)30 Calum works in the internal audit department of Z Co. His duties involve theidentification, evaluation and testingof internal controls. He produces reports to senior management on these activities.For which type of audit is Calum responsible?A Operational auditB Transactions auditC Social responsibility auditD Systems audit(2 marks)

31 What is the primary responsibility of the external auditor?A To verify all the financial transactions and supporting documentation of the clientB To ensure that the clients financial statements are reasonably accurate and free from biasC To report all financial irregularities to the shareholders of the clientD To ensure that all the clients financial statements are prepared and submittedto the relevant authorities on time(2 marks)


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32 Which of the following are substantive tests used for in the context of external audit of financial accounts?A To establish whether a figure is correctB To investigate why a figure is incorrectC To investigate whether a figure should be includedD To establish why a figure is excluded

(2 marks)33 In the context of fraud, teeming and lading is most likely to occur in which area of operation?A SalesB Quality controlC Advertising and promotionD Despatch(2 marks)34 In order to establish an effective internal control system that will minimisethe prospect of fraud, which one ofthe following should be considered first?A Recruitment policy and checks on new personnel.

B Identification of areas of potential risk.C Devising of appropriate sanctions for inappropriate behaviour.D Segregation of duties in critical areas(2 marks)35 The leadership style that least acknowledges the contribution that subordinates have to make is ___________.Which word correctly completes this sentence?A AuthoritarianB AutocraticC Assertive(1 mark)36 Renata has attended a leadership development course in which she experienceda self-analysis exercise using

the Blake and Mouton managerial grid. The course leader informed her that the results suggested that Renatademonstrated a 9.1 leadership style, which suggested that she is highly focusedon achieving the objectives ofthe team.What other conclusion may be drawn in relation to Renatas leadership style?A She maximises the involvement of her teamB She demonstrates little concern for people in the teamC She balances the needs of the team with the need to complete the task.D She favours psychologically close managersubordinate relationships(2 marks)


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37 Jackie leads an established team of six workers. In the last month, two haveleft to pursue alternative jobs and onehas commenced maternity leave. Three new staff members have joined Jackies team.Which one of Tuckmans group stages will now occur?A NormingB Forming

C PerformingD Storming(2 marks)38 Richard is a highly enthusiastic member of his team. An extrovert by nature,he is curious and communicative. Heresponds to new challenges positively and has a capacity for contacting people exploring anything new. However,his attention span is short and he tends to become less involved in a task oncehis initial interest has passed.According to Belbins team roles theory, Richard displays the characteristics of which of the following?A Monitor-evaluator

B PlantC Resource-investigatorD Company worker(2 marks)39 Which one of the following statements is correct in relation to monetary rewards in accordance with HerzbergsTwo-Factor theory?A Pay increases are a powerful long-term motivatorB Inadequate monetary rewards are a powerful dissatisfierC Monetary rewards are more important than non-monetary rewardsD Pay can never be used as a motivator(2 marks)40 Which one of the following is a characteristic of a team as opposed to a grou

p?A Members agree with other membersB Members all have equal statusC Members arrive at decisions by consensusD Members work in cooperation(2 marks)41 According to Victor Vroom:Force (or motivation) = _________ x expectancyWhich of the following words completes Vrooms equation.A NeedsB ValenceC Opportunity(1 mark)


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1042 According to Handys shamrock organisation model, which one of the following is becoming progressively lessimportant in contemporary organisations?A The permanent, full-time work forceB The part-time temporary work force

C The role of independent sub-contractorsD The role of technical support functions(2 marks)43 Which pattern of communication is the quickest way to send a message?A The circleB The chainC The YD The wheel(2 marks)44 Poor quality lateral communication will result in which of the following?A Lack of directionB Lack of coordination

C Lack of delegationD Lack of control(2 marks)45 Role playing exercises using video recording and playback would be most effective for which type of training?A Development of selling skillsB Regulation and complianceC Dissemination of technical knowledgeD Introduction of new processes or procedures(2 marks)46 In the context of marketing, the four Ps are price, place, promotion and __________.Which word correctly completes this sentence?

A ProcessesB ProductionC Product(1 mark)


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1147 In relation to employee selection, which type of testing is most appropriatefor assessing the depth of knowledgeof a candidate and the candidates ability to apply that knowledge?A Intelligence testingB Personality testing

C Competence testingD Psychometric testing(2 marks)48 A company has advertised for staff who must be at least 1.88 metres tall andhave been in continuous full-timeemployment for at least five years.Which of the following is the legal term for this unlawful practice?A Direct discriminationB Indirect discriminationC VictimisationD Implied discrimination.(2 marks)

49 Gloria has the responsibility to work with selected management trainees in her organisation. Her objective is to helpthe trainees over the medium to long-term with their personal career development. Supporting and encouragingthem to fulfil their potential is an integral part of her role. Gloria has no involvement in the technical content of thetrainee managers work.Which of the following roles does Gloria fulfil?A BuddyB CounsellorC MentorD Instructor(2 marks)

50 Gils is conducting an appraisal interview with his assistant Jill. He initially invites Jill to talk about the job, heraspirations, expectations and problems. He adopts a non-judgmental approach andoffers suggestions and guidance.This is an example of which approach to performance appraisal?A Tell and sell approachB Tell and listen approachC Problem solving approachD 360 degree approach(2 marks)End of Question Paper


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13Answers


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14Pilot Paper F1 AnswersAccountant in Business1 B 26 A2 B 27 A3 A 28 A

4 B 29 C5 D 30 D6 C 31 B7 C 32 A8 D 33 A9 D 34 B10 B 35 B11 D 36 B12 C 37 B13 B 38 C14 B 39 B15 B 40 C

16 C 41 B17 A 42 A18 C 43 D19 B 44 B20 A 45 A21 A 46 C22 B 47 C23 C 48 B24 B 49 C25 B 50 BRationale for answers1 B The span of control is concerned with the number of subordinates reporting directly to one person. The scalar chain concept

relates to the number of levels in the management structure. Therefore delayering causes a reduction in levels of management,with each manager having more subordinates.2 B The basic principle that underlies marketing is that it is a management process that identifies and anticipates customer needs.The other distractors in the question refer to specific activities undertaken bya marketing function.3 A Successive reports on corporate governance (Cadbury, Higgs, etc.) have highlighted the increasingly prominent role that nonexecutivedirectors should take in large organisations. This has become an established best practice.4 B The task culture is appropriate where organisations can accommodate the flexibility required to adjust management and teamstructures to address the tasks that must be fulfilled. This is very common in large consultancy firms.5 D A situation analysis is carried out when deciding on strategic objectives. The organisation will have already decided on itsmission statement and goals.


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156 C Greater accountability at lower levels will lead to greater empowerment of those taking decisions and hence greater motivationand commitment, but will lead to less control and potentially more inconsistency.7 C A manager is employed by the organisation and is therefore a constituent par

t of it. All the others are known as connectedstakeholders.8 D The organisation must constantly be aware of the needs of stakeholders witha high level of power and the ability to influence theorganisation profoundly. Management decisions must therefore take most account of the needs of this group of stakeholders.9 D The primary aim of a public oversight board is to eliminate or minimise anyactual or potential breaches of legislative requirementsand to ensure compliance with regulations applicable to organisations within their terms of reference.10 B The ageing population trend is caused by decreasing birth rate and a decreasing mortality rate.

11 D An increase in public expenditure should increase the level of consumer demand and hence the level of economic activity. Thiswould also be achieved by other measures, such as a reduction in taxation or a reduction in interest rates.12 C Frictional unemployment arises even when there are unfilled vacancies in the economy. It is because there is never a perfectmatch between the types of job available and their location with the skills of those seeking work and where they live.13 B Any environmental scan analyses the external factors that affect an organisation, often categorised as political, economic, socialand technological factors.14 B Data protection legislation is formulated to protect the interests of datasubjects who are private individuals. Not all data is

regulated.15 B Diversity policies are intended to reduce recruitment and selection policies and processes that enable discrimination to arise onthe basis of gender, race, lifestyle and age, therefore such policies widen access of employment.16 C The components of effective demand in the economy are consumer spending, investment by enterprises, central and localgovernment expenditure and the net gains from international trade.17 A Lobby groups are primarily established to influence political decision takers, such as the government and individuallawmakers.18 C Scientific management principles consider the ways in which the factors ofproduction (land, labour, capital and theentrepreneurial function) can be combined to maximise efficiency in production.The founding principles are based on thework of Frederick Winslow Taylor. The reorganisation of the call centre followsthese principles.19 B The accounting function originated from the need to record transactions completely and accurately. Other requirements naturallyevolved from this at a later stage.20 A Tax avoidance enables the individual or entity to apply legitimate rules toreduce the amount of tax payable. Tax evasion isalways based on a deliberate intent not to pay tax that is lawfully due.21 A A transaction processing system enables all sales and purchase transactionsto be recorded by volume and category.

22 B The implementation of a budgetary control system would be the responsibility of the financial controller in many organisations.The internal auditor is not responsible for implementing systems, but is involve


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d in monitoring the effectiveness of thesesystems.23 C Public ultilities companies often have national or local monopolies and itis therefore necessary for their pricing structures tobe subject to the scrutiny of a regulatory body.24 B An interest rate is the price of money. The output of the treasury functionis directly affected by the price of funds to the

organisation and the returns that can be made from surplus funds.25 B The IASB aims to promote consistency in corporate reporting by creating financial reporting standards to which major businessesare expected to adhere.26 A Payroll, purchase ledger and sales invoicing are core functions within theresponsibility of the financial accountant.27 A Where price inflation is high the value of money reduces consistently overtime. Those who owe money (debtors) therefore payback less capital in real terms, and interest rates seldom adjust adequately tocompensate for this.28 A The internal auditor must have the right to report and is most accountableto the highest level of management (Directors) in

the organisation. They must be free of influence from any individual manager, irrespective of seniority.


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1629 C A computerised system can be costly to set up, though this disadvantage isessentially a short-term issue, as the running costsshould offset this over time. A computer system should also reduce transaction processing time and the incidence of errors.30 D Systems audit is concerned with the effectiveness of the system itself and

not the processes, activities or values of theorganisation.31 B The external auditor has to ensure that the financial statements of the organisation truly reflect the activities of the business inthe relevant accounting period. This assessment should be independent and therefore free from subjectivity on the part of themanagement of the client organisation.32 A Substantive tests verify the accuracy of the financial information.33 A Teeming and lading involves the theft of cash and is a type of fraud that is carried out by manipulating transactions. Therewould be most potential for this fraud within the sales department where cash may be received and remitted.

34 B All control systems should be based on an assessment of areas of risk priorto the consideration of other factors.35 B The Ashridge model identifies four styles: autocratic; authoritarian; consultative; laissez-faire (or participative). The first of theseis the least participative.36 B The Blake and Mouton managerial grid enables leadership styles to be categorised on a nine point scale with reference toconcern for people and concern for production.37 B With the recent departures and the new staff joining the group, it will revert to the forming stage.38 C The words curious and explore confirm that the individual is a resource-investigator.39 B According to Herzberg, money is a hygiene factor (or dissatisfier). Althoug

h it is a powerful short-term motivator, it is questionablewhether each individual increase in monetary reward will have a major long-termeffect. According to Herzberg, A reward oncegiven becomes a right.40 C Consensus implies coming to decisions that are acceptable, paying due regard to the input of all members of the team.41 B Victor Vroom defines valence as the individuals preference for a given outcome.42 A Handys theory suggests that full-time, permanent workers are both expensiveand inflexible in comparison with other elementsof the shamrock. These other elements are part-time workers and independent contractors. A fourth leaf can be getting thecustomer to do the work.43 D The wheel facilitates transmission of the message directly to all receiversand therefore transmits most quickly.44 B Lateral communication is horizontal. Therefore, poor quality communicationwill result in poor coordination between teammembers.45 A Role playing exercises are most effectively used for skills development, including sales training. Other common businessapplications include effective selection interviewing and performance appraisalinterviewing.46 C Product is the fourth component of the marketing mix. This term can also relate to a service as well as tangible products.47 C Competence testing evaluates and validates knowledge and the ability to app

ly these to given situations. It assesses whetherthe individual can actually do specified tasks.48 B A height restriction is a form of indirect discrimination on the grounds of


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gender. On average, men are taller than women.49 C A mentor has a longer-term role than buddies, counsellors or instructors.50 B The tell and listen approach encourages input from the individual, promotingparticipation the process by the appraisee.


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Managing PeoplePART 1MONDAY 9 DECEMBER 2002QUESTION PAPERTime allowed 3 hoursThis paper is divided into two sections

Section A This question is compulsory and MUST beansweredSection B FOUR questions ONLY to be answeredPaper 1.3


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Section A This ONE question is compulsory and MUST be attempted1 The supermarket chain Food is Us has decided to tackle prejudice and discrimination in all its stores by establishinga policy applicable to all its stores. As part of this, it is challenging all employees, especially managers, to examinetheir attitudes towards people of a different race, sex and ability.

The reasons for introducing the policy are threefold. Plainly there is legislation on discrimination which must becomplied with if the company is to avoid the risk of legal action against it. Also, from a marketing point of view, Foodis Us wish to be identified with its customer base by reflecting the racial diversity of the environments in which itoperates. Most positively, the company wants to develop a workforce which can reflect sufficient diversity not only toavoid risk and to maintain its current market position, but also produce the initiatives which will develop the companyin a successful and sustained manner.During the course of the coming year, all store employees will be expected to at

tend an awareness-raising trainingprogramme. This programme is intended to help employees explore their own attitudes and highlight any prejudicesthat these employees might have.The personnel director, Anne Healey, told shop operatives we want to make all ourfront line employees who dealclosely with the members of the public aware of any subconscious prejudices thatthey might have.It is very difficult to quantify the benefits of such specialist training, but itis one of our corporate principles that allpeople are treated fairly by employees, whether they are customers or work colleagues, she added.Initially small groups of employees will attend sessions to raise awareness. The

se sessions, to be held in-store, willtake place during time already set aside for staff training and development.The new policy is to be an extension of Food is Us current equal opportunities scheme for managers. So far morethan 1500 managers have attended one day awareness-raising courses over the past18 months.The same course is to be revised and updated following feedback from previous participants and will also be extendedto include senior executives for the first time.Required:With reference to the above scenario:(a) Equal opportunities encompass many features. For Food is Us(i) What would be the main features of a sex discrimination policy? (10 marks)(ii) What would be the main characteristics of a race relations policy? (6 marks)(b) Why should an organisation like Food is Us have an equal pay policy? (6 marks)(c) What are the key points of a disability discrimination policy? (8 marks)(d) What is the difference between an equal opportunities policy and a managingdiversity initiative within anorganisation? (10 marks)(40 marks)2


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Section B FOUR questions ONLY to be attempted2 In seeking organisational success, some managers are adopting a Theory Z approach to managing.Required:(a) Describe the characteristics of an organisation which uses a Theory Z approach. (10 marks)

(b) Are the ideas of Theory Z universally applicable? (5 marks)(15 marks)3 An organisation is recruiting additional staff and has decided to compare thebenefits of appointing existing internalstaff with that of appointing external candidates.Required:(a) Define and describe the advantages of internal promotion. (5 marks)(b) Define and describe the advantages of external recruitment. (5 marks)(c) Describe three factors that should be taken into account when deciding uponwhether to use recruitmentconsultants. (5 marks)(15 marks)

4 Modern business organisations require trained employees, but individuals approach learning in different ways.Required:(a) Briefly describe the four stages in the experiential learning cycle. (4 marks)(b) Describe the four learning styles identified by Honey and Mumford and theirimplications for trainingprogrammes. (11 marks)(15 marks)5 Motivation is fundamental to the task of management.Required:(a) What is meant by the term process theory of motivation? (5 marks)(b) What is meant by the equity theory of motivation? (5 marks)

(c) Briefly describe the response an individual might have to feelings of negative inequity. (5 marks)(15 marks)3 [P.T.O.


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6 A key part of an accountants job is communicating information to others.Required:(a) Explain the importance of good communication. (5 marks)(b) List five possible barriers to good communication. (5 marks)(c) Describe how these barriers to communication can be overcome. (5 marks)(15 marks)

End of Question Paper4


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Answers


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Part 1 Examination Paper 1.3Managing People December 2002 Answers1 OverviewOrganisations and businesses are made up of many individuals all working together. These individuals have different attitudes,perceptions and learning experiences, which together with gender and personality

differences can be either a good source fordeveloping creativity within an organisation or the root of an organisations problems.Managers need to be aware of the many factors that affect individual differencesand their own attitudes and assumptions. Theyshould recognise individual potential and harness talent to achieve the organisational goals.(a) Equal Opportunities is a generic term which describes the belief that thereshould be an equal chance for all workers in anorganisation to apply and be selected for jobs, to be trained and promoted in employment and to have that employmentterminated fairly. Employers should only discriminate according to ability, expe

rience and potential. All employment decisionsshould be based solely on a persons ability to do the job in question; no consideration should be taken of a persons sex,age, racial origin, disability or marital status.(i) A Sex Discrimination Policy would look at equality in all areas of employment. Such areas would include the selectionprocess, opportunities for training, promotion, the provision of benefits and facilities and dismissal.This policy would deem it wrong to make any form of discrimination within employment matters because of maritalstatus or sex.The policy should cover the three main categories of sex discrimination: directdiscrimination, indirect discrimination and

victimisation.Direct discrimination incorporates the treating of a person on sexual or maritalgrounds less favourably than others wouldbe treated. One act of discrimination is sufficient and must be directed againstan individual. Such as a clause in theemployment contract which states that it would be terminated on marriage.Indirect discrimination consists in applying a term or condition applicable to both sexes but which one sex hasconsiderably smaller ability to comply with it than the other. Such as all applicants for a post must be six feet tall.Victimisation is the discrimination against an individual who has brought proceedings or given evidence in another case.Such persons should not be treated less favourably than any other individual inthe same circumstances.(ii) A race relations policy would adopt the same approach as the sex discrimination policy. However this policy would lookat racial grounds and racial groups. These phrases refer to colour, race, nationality or other ethnic or national origins.The same three categories of direct and indirect discrimination and victimisation can be used.(b) An equal pay policy means that a woman is entitled to identical pay with menand vice versa in respect of like work or workthat is rated as equivalent or equal value to that of a man in the same employment.Like work means work of a broadly similar nature where differences are not of a pr

actical nature. Work rated as equivalentrequires equal pay. This is when work has been evaluated and graded to be equivalent as other work in relation to effort, skill


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and decision-making. Work of equal value is that of a womans to that of a mans inthe same organisation.This should apply equally to men and women.In addition to any statutory equal pay policy and indeed social responsibility toward its workforce, Food is Us would benefitfrom an equal pay policy in other ways. It would avoid the costs and poor publicity that might arise from legal action brought

to enforce the law would be important for a business of this size and profile. In addtion it would project a caring image to itsdiverse customer base and in terms of good people management, attract the best employees from a wider range of sourcesand with more diverse characteristics, and help build its customer base to include a wider constituency.(c) A disability discrimination policy should contain the following key points: a disabled person is defined as a person who has a physical or mental impairmentthat has a substantial and long-term,more than 12 months, adverse effect on his/her ability to carry out normal day to day activities. Severe disfigurement isincluded, as are progressive conditions such as HIV even though the current effe

ct may not be substantial. the effect includes mobility, manual dexterity, physical co-ordination, and lackof ability to lift or speak, hear, see,remember, concentrate, learn or understand or to perceive the risk of physical danger. the policy should also make it clear that it is wrong to discriminate against disabled people in the interviewing andselection process, for promotion, transfer or training and by dismissal. the employer has the duty to make reasonable adjustments to the physical features of the workplace where theyconstitute a hazard to the disabled person.7


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(d) Equal Opportunities and Managing DiversityThere is a new generation of managers within organisations who regard the quality of their people as the distinguishing featureof a successful organisation.People are the single sustainable source of competitive advantage. Nurturing high performance through the development of

people is essential if organisations are to remain viable and competitive.The promotion of equal opportunities has made good business sense. Equal opportunities has been promoted as a keycomponent of good management as well as being legally required, socially desirable and morally right.Managing diversity expands the horizons beyond equality issues and builds on recognised approaches to equal opportunities.It adds new impetus to the development of equal opportunities and the creation of an environment in which enhancedcontributions from all employees will work to the advantage of business, peoplethemselves and society more generally.It offers an opportunity for organisations to develop a workforce to meet their

business goals and to improve approaches tocustomer care.Managing diversity is about having the right person for the job regardless of sex, colour or religion. Essentially the managementof diversity is a quality assurance approach. It helps identify hidden organisational barriers which make it more difficult forpeople who are perceived as being different from the majority of their colleagues to succeed and develop careers.It also helps to effect cultural change and to create an environment in which people from all backgrounds can work togetherharmoniously. The management of diversity combats prejudice, stereotyping, harassment and undignified behaviour.2 Overview

In the search for organisational success, many business organisations have sought to adopt what appear to be successful Japanesemanagement methods. The leading theorist in this field is William Ouchi, who, drawing on earlier work, has described the Japaneseapproach to management as Theory Z.(a) William Ouchi, a Japanese American, has concerned himself with comparing Japanese management techniques withAmerican. Ouchi uses the term Theory Z for firms which use Japanese methods adapted to the Western system. Suchorganisations display certain characteristics: workers and managers trust their superiors a much longer time horizon is the norm; the idea of short-term profit is rejected in favour of long-term growth there is a team approach. Departments see their position within the organisationas a whole a caring, paternal management unhampered by unions, demarcation or professionalprejudices generalised training. Managers learn the business, not just parts of it a flexible organisation structure collective values and company wide rewards slow, but known promotion lifelong employment.(b) Theory Z requires an emphasis on interpersonal skills and group and team working; decisions are based on consensus, but,unlike in Japan from where the idea originates, responsibility remains with the

individual.Trust and informal relationships are the keystone of Theory Z organisations, even though the formal hierarchy and


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organisational traditional structure remain.It is often compared to Macgregors Theory Y approach in that it is seen as a morecaring, sensitive and effective way ofachieving organisational success.The theory is dependent upon the demands of the organisational situation. Some organisations, as a consequence of theirproduct or service do not provide a suitable environment for the use of motivati

onal techniques associated with Theory Z.Its strength lies in the fact that because of improved standards of education and changed social and political values, manyemployees have wider expectations from the workplace and expect to be consultedand to participate.The application of Theory Z will therefore depend upon: the organisational culture, structure and objectives the procedures and practices involved in the organisation the technology, environment and product or service the organisations history and attitude the level of satisfaction that already exists in an individuals task or role.8


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3 OverviewRecruitment of staff, especially if large numbers are involved, may be time consuming and a drain on resources. Additionally, theexpertise may not exist within the organisation, requiring the organisation to seek suitable candidates outside.(a) Internal promotion describes the situation where an organisation has an expl

icit policy to promote from within and wherethere is a clear and transparent career structure. This is typical of many management and administrative staff and of certainsectors of the economy such as the public services.The advantages of internal promotion: it acts as a source of motivation and provides good general morale amongst employees staff seeking promotion are known to the employer inexpensive in terms of time and money training and induction costs are minimised further training can be product and organisational specific the culture of the organisation is understood by the individualillustrates the organisation

s commitment to encouraging the staff the individual will already be familiar with the other members of the organisati

on.(b) External recruitment describes the situation where the organisation decidesto recruit someone from outside the organisationto fill a staff vacancy.The advantages of external recruitment: may be essential if particular skills or expertise are not available within theorganisation is necessary to restore staffing levels or where an organisation urgently needsnew employees can bring new ideas and novel approaches to the organisation and to the specifictask

provide experience and work methods from other employers.(c) Any organisation which is considering the use of external recruitment consultants would make its decision upon the following: the availability, level and appropriateness of expertise available within the organisation and its likely effectiveness the cost of using consultants against the cost involved in using the organisations own staff, recognising the level of thevacancy or vacancies against the consultants fee the particular expertise of the consultants and the appropriate experience withany particular specialised aspect of therecruitment process the level of expertise required of potential employees and therefore the appropriate knowledge required of the consultants the need for impartiality; this may be of particular importance with public sector appointments, organisations withparticular needs of security or impartiality or where it is felt that an external, objective assessment is required the time involved in the consultants needing to learn about the organisation, its requirements and the vacancy orvacancies if there is a ready supply of labour then consultants may be less useful, standard vacancies may be readily filled byadvertising or similar inexpensive means the views of internal staff as to the likely effect of using outside consultants

what effect the use of consultants might have on the need to develop expertise within the organisation, the use ofconsultants will not assist with developing internal organisational expertise


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the likelihood of existing staff to have misgivings about the presence of, or recommendations of, outside consultantswhich can lead to mistrust and rejection of any candidates recruited by the consultants.9


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4 OverviewIndividuals are often reluctant to undertake further learning, especially in theworkplace. It is important therefore that managersunderstand the way in which individuals actually learn, if any training programme is to be succesful.(a) David Kolb suggests that learning is a series of steps based on learning fro

m experience. He suggested that classroom learningis false and that actual learning comes from real life experiences. Learning isexperiential and comes from doing, this ensuresthat learners actually solve problems.Kolbs experiential learning cycle........concrete experiences........testing the observationimplications of andconcepts in new situation reflection........formation of abstract........concepts and generalisationsThe first stage (concrete experiences) is the situation where the person is lear

ning something new.The second stage (observation and and reflection) is so called because the experience is being reviewed.The third stage (concepts and generalisations) is when the experience has been accepted or rejected.The fourth stage (concepts in new situations) is when the person calculates howand when to apply that which has been learned.(b) HONEY AND MUMFORD have identified four learning styles.Theorists are concerned with forming principles or how does this relate to that? They think problems through in a vertical,step by step logical way and tend to be perfectionists who do not rest easy until things are tidy and fit into a rational scheme.Theorists are usually detached, analytical and dedicated to rational objectivity

rather than anything subjective or ambiguous.Often known as CONCLUDING.For them training must be: programmed and structured designed to allow time for analysis provided by others who share the same preference for ideas and analysis.Reflectors are concerned with observation and reflection or I would like time tothink about this. They like to stand back andponder experiences and observe them from many different perspectives. They collect data, both first hand and from others,and prefer to think about it thoroughly before coming to any conclusion. Thoughtful people, they prefer to take back seats inmeetings and discussions. Often known as REVIEWING.Reflectors need an observational approach to training need to work at their own pace do not find learning easy, especially if rushed conclusions are carefully thought out slow, cautious and non-participative.Activists are concerned with actual experience Whats new? Im game for anything. Theyinvolve themselves fully andwithout bias in new experiences, are open minded, not sceptical and this tends to make them enthusiastic about anythingnew. They are gregarious people constantly involving themselves with others but,in so doing, they seek to centre all activitiesaround themselves. Often known as DOING.

Activists have a practical approach to training prefer practical problems, a dislike of theory insist on having hands on training


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enjoy participation and challenge flexible, optimistic tend not to prepare are easily bored.10.......

. ....

....


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Pragmatists are concerned with deliberate testing or How can I apply this in practice? They are keen on trying out ideas,theories and techniques to see if they work in practice, positively search out new ideas and take the first opportunity toexperiment with applications. They are essentially practical, down to earth people who like making practical decisions and

solving problems. Often known as PLANNING.Pragmatists need to see a direct value and link between training and real problems. enjoy learning new techniques and tasks good at finding improved ways of doing things aim to do things better impatient if new ideas are not reflected in practical applications.5 OverviewMotivation is fundamental to the task of management. Many different theories have been presented on how management mightmotivate employees; Adams equity theory is an attempt to bring a more modern approach to the topic, based on the idea of

distributive justice.(a) The process theory of motivation asks the question How can people be motivated?The process theory of motivation does not emphasise the need for fulfilment through work (as in the content theory), butconcentrates upon the processes through which individuals are motivated. They attempt to explain how individuals start,sustain and direct behaviour and assume that individuals are able to select their own goals and means of achieving thosegoals through a process of calculation. Process theory emphasises the importanceof rewards, often financial.(b) Equity theory focuses on the feelings of the individual and how fairly theyfeel they have been treated in comparison with

treatment received by others. It is sometimes referred to as exchange theory; individuals expect certain outcomes in exchangefor certain efforts and contribution to the organisation. When an individual perceives that his or her efforts are equal to othersand the rewards are the same, then equity exists. If the perception is that theefforts and rewards of one person are unequalto others, then there is inequity.(c) When an individual has feelings of negative inequity, he or she can change the amount of effort put into the task change the nature or amount of reward required change the basis of comparison distort the comparisons psychologically leave the work situation or employer.6 OverviewThe need for clear and concise communication and the consequences of poor communication must be understood by a professionwhich exists to provide information to others. Poor communication leads to ineffective control, poor co-ordination and managementfailure.(a) Good communication is important because: individuals know what is expected of them better co-ordination within the organisation improves control of the organisations plans, procedures and staff the instructions of management are understood encourages group and team cohesiveness

can lead to the reduction of stress bias, distortion or omission can be removed secrecy and misunderstanding is reduced or removed


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information is received by appropriate person conflict in the workplace is reduced11


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(b) Barriers to communication include: the personal background of the persons communicating language differences use of jargon different education levelsnoise; that is the message confused by extraneous matters

the perception of individuals conflict within the organisation overload; that is too much information being communicated at once problems of distance basic misunderstanding accidental or deliberate distortion of information.(c) Barriers to communication may be overcome by: consideration of the needs and understanding of recipients careful and clear reporting at all levels express information clearly and concisely not using jargon or abbreviations using more than one communications systemencouraging dialogue rather than monologue ensuring as few links as possible in the communication chain

ensuring feedback.12


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Part 1 Examination Paper 1.3Managing People December 2002 Marking Scheme1 (a) (i) Description of the main features of a sex discrimination policy Up to10 marks(ii) Description of the main characteristics of a race relations policy Up to 6marks

(Maximum for Part (a) 16 marks)(b) Reasons for an equal pay policy Up to 6 marks(Maximum for Part (b) 6 marks)(c) Description of key points of policy and means of discrimination Up to 8 marks(Maximum for Part (c) 8 marks)(d) Discussion and recognition of the differences Up to 10 marks(Maximum for Part (d) 10 marks)(Total for Question 40 marks)2 (a) Description of Theory Z Up to 10 marks(One mark per characteristic) (Maximum for Part (a) 10 marks)(b) Discussion on Theory Z Up to 5 marks

(Maximum for Part (b) 5 marks)(Total for Question 15 marks)3 (a) Description of the advantages of internal recruitment Up to 5 marks(Maximum for Part (a) 5 marks)(b) Description of the advantages of external recruitment Up to 5 marks(Maximum for Part (b) 5 marks)(c) Description of three factors Up to 5 marks(Maximum for Part (c) 5 marks)(Total for Question 15 marks)4 (a) Brief description of the four stages in the experiential learning cycle Upto 4 marks(Maximum for Part (a) 4 marks)(b) Description of the learning styles and their implications for training progr

ammes Up to 11 marks(Maximum for Part (b) 11 marks)(Total for Question 15 marks)5 (a) Description of process theory Up to 5 marks(Maximum for Part (a) 5 marks)(b) Description of equity theory Up to 5 marks(Maximum for Part (b) 5 marks)(c) Description of negative inequity Up to 5 marks(Maximum for Part (c) 5 marks)(Total for Question 15 marks)13


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6 (a) Explanation of the importance of good communication(One mark per factor) Up to 5 marks(Maximum for Part (a) 5 marks)(b) List five barriers to communication(One mark per barrier) Up to 5 marks(Maximum for Part (b) 5 marks)

(c) Description of overcoming barriers(One mark per factor) Up to 5 marks(Maximum for Part (c) 5 marks)(Total for Question 15 marks)14


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Managing PeoplePART 1MONDAY 9 JUNE 2003QUESTION PAPERTime allowed 3 hoursThis paper is divided into two sections

Section A This question is compulsory and MUST beansweredSection B FOUR questions ONLY to be answeredPaper 1.3


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Section A This ONE question is compulsory and MUST be attempted1 Sunshine Sweets is a manufacturer of additive free, organic childrens candies.With the rise in demand for additivefree childrens products, Sunshine Sweets has expanded its production capacity toalmost double what it was twoyears ago and trebled the number of employees. Until recently the board of direc

tors, made up of the two foundersEmma Watkind and Jenna Pain, took charge of day to day business. Both have now allowed management morefreedom than before.Despite success in the market, as the company has grown some problems have begunto arise. Phil Short, the factorymanager has been with the company since the beginning and since the expansion inthe number of employees, findscontrolling and communicating with such a large workforce difficult. He has resorted to pinning notices and memosof all kinds to notice boards, circulating his own reports to colleagues who should not be receiving them and refusing

to organize meetings.The newly appointed production manager Mark Mason is an engineer and deputy to Phil. He has found that he haslittle idea of whats going on in the factory and is finding communication channels are non existent between themanagement team, supervisors and directors. The financial controller, Debbie Purple is equally frustrated and findscommunicating with anyone in the production area of the factory to be almost impossible.In addition, the workforce, despite being well paid and trained, is fragmented and not working together. The rapidexpansion of the company has led to poor internal communication. As a consequence workers are suffering from

absenteeism, low morale and confusion brought about by endless rumours about thefuture of the company. This isbecause the line supervisors are also unaware of what is going on and consequently are unable to communicatemanagements plans and objectives to the workforce, or to make management aware ofthe concerns of the workforce.Required:You are a consultant brought in by the directors to advise on the current problems. They believe the currentproblems stem from poor and mis-directed communication and think that establishing committees will improvecommunication. You have been asked to:(a) Explain the need for good communication within any organisation. (5 marks)(b) Identify five barriers to communication that might exist in Sunshine Sweets.(5 marks)(c) Explain how the barriers identified in (b) can be overcome and identify thealternative methods ofcommunication available to the management. (10 marks)(d) Explain to the management of Sunshine Sweets the importance of communication, the form it takes and thedirections in which it might flow in an organisation. (10 marks)(e) Advise on the suitability of committees as methods of communication, outlining their usefulness andshortcomings. (10 marks)(40 marks)

2


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Section B FOUR questions ONLY to be attempted2 Performance Management is defined as a means of achieving better results by understanding and managing overallorganisational performance.Required:Describe the five stages typically involved in the process of performance manage

ment.(15 marks)3 All organisations need to recruit new employees. An important step in the process is the selection interview.Required:(a) Explain the purpose of the selection interview. (4 marks)(b) Explain the advantages and the disadvantages of:(i) the interview by one person defined as the face to face interview; (6 marks)(ii) the interview with many people defined as the panel interview. (5 marks)(15 marks)4 The health and safety of employees has become increasingly a matter for manage

ment.Required:(a) Briefly describe three hazards to health and safety that might be found in the workplace and demonstratewhy they are hazards. (5 marks)(b) Briefly describe general policies that an organisation might take to avoid risks in the workplace. (10 marks)(15 marks)5 An organisation has decided to create a team oriented approach to business.Required:Describe Tuckmans stages of team development.(15 marks)3 [P.T.O.


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6 Your manager has been called upon to provide advice, guidance and counsellingto employees.Required:(a) Explain what is meant by counselling in the work place. (2 marks)(b) Describe the skills a manager would require to fulfil the role of the counsellor. (7 marks)

(c) Briefly describe three advantages of counselling for the organisation. (6 marks)(15 marks)End of Question Paper4


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Answers


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Part 1 Examination Paper 1.3Managing People June 2003 Answers1 Communication is a core activity of management and the accounting profession.It is the process of transmitting information fromone person to another, or from one organisation to another, or a combination ofboth.

Communication can be described as the process by which ideas and information aretransmitted to others for the purpose ofeffecting a desired result. Ideas and information are the content of the messagecommunicated.(a) The function of communication is to ensure that every member of the organisation knows what is expected of them and toallow an opportunity for feedback. Good communication in an organisation is critical in ensuring coordination and control ofindividuals, groups and departments.The management of Sunshine Sweets need to understand that good communication ensures individuals know what isexpected of them, the correct information is received by the appropriate person

and consequently there is co-ordination withinthe organisation. Good communication ensures that there is control of the organisations plans, procedures and theinstructions to staff by management are understood. Group and team cohesivenessis encouraged and stress can be reduced.Many problems such as bias, distortion and omission can be reduced and removed,as can secrecy, rumour and innuendo,resulting in a reduction of conflict.(b) The need for clear and concise communication and the consequences of poor communication should be understood by themanagement of Sunshine Sweets. Poor communication leads to ineffective control,poor co-ordination and managementfailure. Very often barriers to communication are not recognised as such. In Sun

shine Sweets the directors, managers andstaff are using different phrases and expressions.Barriers to communication are many; the personal background of the persons communicating, including language differences,the use of jargon, especially by different professions and different education levels as is often the case in factories and is thecase here. The concept of organisational noise is often an issue. The message is confused by matters unrelated to the matterin hand, or there is overload, where too much information is being communicated.The different perception of individuals canlead to conflict within the organisation and thus to a communication barrier. The distance between those individualscommunicating with each other is often overlooked in the business environment. This often leads to distortion of informationand thus to misunderstanding between departments and individuals.(c) Communication cannot take place if there are barriers to the communication process. These must be recognised and removed.Barriers to communication can be overcome by a consideration of the needs and understanding of the message recipientswith careful and clear reporting. Information should be expressed clearly, avoiding jargon or abbreviations. The use of morethan one communications system can assist, as does the encouragement of dialoguerather than monologue and ensuringthat there are as few links as possible in the communication chain.Communication can often be improved by identifying appropriate written, verbal o

r electronic methods. Meetings, interviewsand video conferencing involve personal, face to face communication.Telephone, email, faxing and public address systems can be used where personal c


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ommunication methods are difficult.Written communication is often the most suitable and clearest means of communication. This takes the form of memoranda,internal and external reports, forms, notices, house journals, rules and procedures, standard documentation, manuals andjob descriptions.Visual communication is a powerful communication media. Charts, files, slides, v

ideos or films provide an immediate andclear message.Electronic means of communication are increasingly becoming more relevant. Electronic mail, document imaging, telex, fax,internet and email are instantaneous and provide clear communication possibilities.(d) Communication is vital in all organisations and the communication process may take many forms. It is important thatmanagers and supervisors recognise the nature of channels of communication.There are many forms of communication within an organisation, both formal and informal, but in the main, communicatedinformation often flows through quite clear channels and in defined directions.

The direction of the three main informationflows are downwards, upwards and lateral.Downwards communication (or superior-subordinate communication)This form of communication is often the one most easily recognised. Its purposeis to give specific directives, provideinformation about procedures and practices or provide information about the taskin hand. Control of subordinates andinformation about their performance is an important use of downward communication, as is the provision of information onorganisational and departmental objectives.Upwards communication (or subordinate initiated communication) tends to be non directive in nature and generally takestwo forms, personal problems or suggestions or technical feedback as part of the

organisations control system.Lateral or horizontal communication is increasingly important and necessary in modern organisations, especially astraditional communication theory assumes only vertical communication. It can take the form of task co-ordination, such asdepartmental managers or supervisors meeting regularly, problem solving throughdepartmental meetings to resolve an issue,and sharing ideas with other departments. Properly understood, this form of communication can resolve conflict andinterdepartmental friction.7


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(e) One traditional and well tried formal communication method is the establishment of a committee. Properly structured andunderstood, they are a useful method of communication. They can however be wasteful and time consuming if not structuredand managed effectively.A committee is a group of people who meet for a particular purpose. Committees d

iffer from other forms of communication,notably teams, because they are often a permanent part of the organisations structure and communication mechanism.Committees make formal recommendations and are able to make decisions, or if need be, have the authority to delaydecisions if insufficient information is available. Committees provide inter departmental co-ordination, can relay decisions inthe form of briefings, represent different people, departments and disciplines and through their membership provideinformation and feedback to others.Committees are often used as a task force or working party to solve problems byconsultation, through synergy by

brainstorming in an effort to arrive at different or difficult decisions that cannot or will not be made by an individual.If the workforce is fragmented, committees can be useful to bring co-ordinationand the sharing of information and viewpoints.2 Accountants as managers should develop and understand the process that links employee performance with organisational goalsand organisational success. However, before the process of performance management begins the organisation must itself havedeveloped a clear, planned strategy.The process of performance management typically involves five stages:Stage One identify and describe the essential job functions and competencies andrelate them to the objectives of the organisationas laid out in the corporate plan.

Stage Two develop realistic and appropriate performance standards which will form the basis of a performance agreement.This defines the expectations of the individual or team and includes the establishment of performance standards and indicators,together with the skills and competencies needed.Stage Three draw up an individually agreed performance and development plan. This details the action needed to improveperformance and involves identification of areas in need of development, agreement on performance and development and trainingrequirements.Stage Four performance is evaluated throughout the year, counselling and guidance is given as appropriate. Activity requirementsare updated and control action taken. Communicating constructive performance evaluation is important as is the giving andreceiving of feedback about performance.Stage Five the performance review. At an agreed time during the year, actual performance is measured against the agreedperformance plan. The meaningful part of stage five is the planning and providing of education and development opportunities tobuild upon and improve employee performance in the future.3 Interviews are extensively used for the recruitment of new employees, but havebeen criticised for failing to identify appropriatecandidates suitable for the organisation. It is essential that professional accountants recognise both the problems and opportunitiesthat formal selection interviews present.

(a) The purpose of the selection interview is to find the best possible person for the position and who will fit into the organisation.Those conducting the interview must also ensure that the candidate clearly under


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stands the job on offer, the associated careerprospects and that he or she feels that fair treatment has been provided throughout the selection process.In addition, the interview also provides the opportunity to provide a good impression of the organisation, whether thecandidate has been successful or not.(b) (i) The face to face interview is the most common form of interview. In this

situation the candidate is interviewed by asingle representative of the employing organisation.The advantages of such interviews are that they establish an understanding between the participants, are very costeffective for the organisation (as compared with panel interviews) and, becauseof the more personal nature, ensure thatcandidates feel comfortable.The disadvantages however are that the selection relies on the views and impression of a single interviewer which canbe both subjective and biased. In addition, the interviewer may be selective inquestioning and it is easier for thecandidate to hide weaknesses or lack of ability.

(ii) Panel interviews are often used for senior appointments and consist of twoor more interviewers.The advantages of such interviews are that they allow opinion and views to be shared amongst the panel. They havethe authority to reach immediate decisions and provide a more complete picture,hence the problems or any biasinherent in face to face interviews can be removed.The disadvantages however are that they can be difficult to control. Interviewers may deviate or ask irrelevant questionsand they can be easily dominated by a strong personality who is able unduly to influence others. In addition, suchinterviews can often result in disagreement amongst the panel members.8


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4 Health and safety is an issue for all organisations. It is something that hasonly recently become a responsibility for management.Few managers and employees take safety seriously or indeed recognise the dangersin the workplace.(a) All places of work contain hazards, including the accounts or finance office.Work and office based hazards can include

slippery and wet floors, especially after cleaning. Torn and worn floor coverings can lead to slips or falls.In many offices, computer, telephone and electrical leads are left to hang looseover which employees may trip, as they coulddo over obstacles in corridors or stairways used for storage.Poor lighting and unlit areas, especially corridors and stairs can also lead totrips, falls or collision with other objects.Unmarked glass doors are particularly dangerous since not only could employees collide with them, but sufficient force couldcause breakages and significant injury. Filing cabinets which are top heavy, orleft open can fall on to employees whilst thelifting of heavy items, papers and files can often lead to physical injury to th

e back. Perhaps the most dangerous of all is thedeliberate removal of safety guards or screens from machines or machines being operated by untrained staff, which can leadto very serious injury.Other, less obvious physical hazards to employees are the danger from staff using drugs or abusing alcohol, for which theorganisation must have a disciplinary procedure. Computer screens and repetitivestrain injury are other, less obvious dangersbut can be alleviated by screen covers, careful use of computers, breaks and exercise.(b) Management should be aware that appropriate preventative action can reduce the risks in the workplace. These include:Consultative participation The most important and involves formal participation

between management and employees (ortheir representatives) such that health and safety rules are relevant, understood, accepted and followed.Safety rules and instructions Should be formalised, issued to all employees andform part of any training programme.Encourage safety consciousness Ensures that safety forms a part of the culture,practice and duties of all the workforce, thatpride is taken in maintaining a good record of safety.Materials handling A major cause of accident and injury, even in an office environment. Management should ensure thatmaterials handling is minimised or designed for safe working and operation and that appropriate training and equipment isprovided.Satisfactory safety standards - Should be adopted so that everyone is aware of the standards required to maintain a safeworkplace and against which safety measures can be measured.Adoption of an ongoing maintenance programme So that temporary measures to keepequipment working do not prejudicesafety.5 Much has been written about the need for teams and team working; they have todevelop, mature and often eventually terminate.It is possible to identify distinct stages of development through which teams pass.B W Tuckman has described these stages as:Forming the members meet and decide upon the purpose of the team and how it will

operate. At this stage the team is no morethan a collection of individuals, finding out about one another and about the task, although objectives may be unclear. This stage


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is wasteful and time consuming, although essential since the prospective team members are not at this stage comfortable witheach other.Storming the phrase storming is a deliberate reference to this stage which is characterised by conflict. Previous ideas, ideals,norms, attitudes and behaviour is challenged and often rejected. There is competition for the roles within the team. This is a

constructive and often fruitful stage with trust developing. If the individualscome successfully through this stage then a strongerteam will result.Norming the norms under which the team will operate are established. The team issettling down, members investigate ideasand test the reactions of the team as a whole and consequently, norms are established. In addition, it is at this stage that the teamestablishes patterns of behaviour, levels of trust and the methods by which decisions will be taken.Performing the team is now complete and able to perform to its full potential. Difficulties with team roles, individual conflictsand problems of adjustment have been resolved.

Dorminghas been suggested as a final and fifth stage. This is when the team becomes complacent, has lost interest in the task

and exists only for self preservation.(Some students may refer to this final phase as adjourning or mourning.)9


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6 Situations can arise in the workplace which require particular and careful people-centred skills. In such circumstances, professionalaccountants as managers may be called upon to act as counsellors. What constitutes counselling and the sensitive skills requiredin this process is often misunderstood.(a) Counselling can be defined as when a person agrees explicitly to offer time,

advice, guidance and support to another person(or persons) temporarily in the role of client; in the organisational context, the client being a fellow employee or subordinate.It may be used in giving career development advice and in coaching and mentoringstaff.(b) In assuming the role of the counsellor, the manager should be able to: help others to identify problems, issues and possible solutions to problems adopt a passive role and avoid leading or suggesting encourage reflection and discussion of past issues allow the employee to lead and talk around issues use open questions to help the employee explore ideas and feelings maintain active listening and not interrupt the employeespeak only to clarify issues and elicit answers when appropriate(c) For the organisation, the advantages of counselling are that:

it provides a confidential service to the employee to discuss problems allows human resources policy to be developed based upon an understanding of individual problems provides a service to external agencies to assist with personal problems if appropriate prevents under performance and increases commitment demonstrates organisational commitment to the employees demonstrates commitment for particular matters such as career development, redundancy or retirement10


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Part 1 Examination Paper 1.3Managing People June 2003 Marking Scheme1 (a) Brief description of those factors that ensure good communication Up to 5marks(one mark each)(Maximum for Part (a) 5 marks)

(b) Identification of five barriers Up to 5 marks(one mark each)(Maximum for Part (b) 5 marks)(c) Explanation of how communication barriers can be overcome Up to 5 marksIdentification of alternative communication methods Up to 5 marks(Maximum for Part (c) 10 marks)(d) Explanation of different channels Up to 10 marks(Maximum for Part (d) 10 marks)(e) Outline of the usefulness of committees Up to 10 marks(Maximum for Part (e) 10 marks)(Total for Question 40 marks)2 (a) Description of the five stages in performance management Up to 15 marks

(Three marks awarded for description of each of the five stages)(Total for Question 15 marks)3 (a) Explanation of the purpose of the selection interview Up to 4 marks(Maximum for Part (a) 4 marks)(b) Explanation of, and the advantages and the disadvantages(i) the face to face interview Up to 6 marks(ii) the panel interview Up to 5 marks(Maximum for Part (b) 11 marks)(Total for Question 15 marks)4 (a) Brief description of any three hazards that might be found in the workplace Up to 5 marks(Maximum for Part (a) 5 marks)(b) Brief description of preventative action Up to 10 marks

(Maximum for Part (b) 10 marks)(Total for Question 15 marks)5 Description of the five steps in team development Up to 15 marks(Three marks for each step, including dorming)(Total for Question 15 marks)11


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6 (a) Explanation of the term counselling in the workplace Up to 2 marks(Maximum for Part (a) 2 marks)(b) Explanation of the role of the manager as counsellor Up to 7 marks(Maximum for Part (b) 7 marks)(c) Brief description of three advantages of counselling for the organisation Upto 6 marks)

(Two marks for each of the advantages described) (Maximum for Part (c) 6 marks)(Total for Question 15 marks)12


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Managing PeoplePART 1MONDAY 8 DECEMBER 2003QUESTION PAPERTime allowed 3 hoursThis paper is divided into two sections

Section A This ONE question is compulsory and MUST beansweredSection B FOUR questions ONLY to be answeredPaper 1.3


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Section A This ONE question is compulsory and MUST be attempted1 A management consultancy has been employed by Swandiff Local Authority to examine the problems junior staffappear to be having in reaching the performance expected of all staff. The authority employs 8,500 staff in total with25 senior managers, 123 middle managers and some 2,560 employed at junior manage

ment level, mainlysupervisors. The authority has evolved into a traditional, bureaucratic, formalgovernmental type of organisationalstructure.The management consultants decided to hold a series of meetings with all levelsof management. Initially they foundthat the junior managers were unhappy with and sceptical about the value of themeetings; weve seen it all beforewas the main response. After the meetings, the consultants produced a report which identified three main problemareas.Firstly, it became apparent that the level of morale for all staff was low. Lack

of facilities, pressure of work andparticularly reductions in available funds appeared to be the main grievance. There appeared however to be a deeperproblem, that of mistrust between the staff as a whole and senior management. The mistrust appeared to be moreapparent between the senior management and supervisors. The reason for this wasunclear.The second problem appeared to be that the staff as a whole regarded the supervisors as a level of management poorat managing their sections, disregarding or ignoring work practices and performance standards. In response, thesupervisors said that their position in general was unclear; there were no clearlines of authority, command or

responsibility which allowed them to make decisions for their departments. Somesupervisors simply regardedthemselves as menial and unrecognised, referring to funding shortages, unrealistic targets, little recognition of theirposition, no job descriptions and lack of training.Job security was the third issue. Financial cutbacks and changes in service levels had led to rumours of substantialcutbacks in staff. Rumours were especially strong amongst the junior management.New, younger staff would bebetter trained to replace supervisors, more adaptable and better able to use computer systems and the latest availablesoftware packages.In all, the problems had shown themselves in high labour turnover, which in addition to the problems already outlined,were blamed on low salaries, little opportunity for personal advancement and poor working conditions.Required:(a) Using Herzbergs theory of motivation, explain the attitude of the supervisors. (15 marks)(b) What aspects of organisational structure and culture could explain the supervisors attitude at Swandiff LocalAuthority? (10 marks)(c) How could re-training supervisors overcome the problems identified in (a) and (b)? (15 marks)(40 marks)

2


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Section B FOUR questions ONLY to be attempted2 All managers need to understand which activities contribute to organisationalsuccess.Required:Briefly describe and discuss Tom Peters characteristics of successful business.(15 marks)

3 You have been asked to provide guidelines on the structure and content of an advertisement to be used for the futurerecruitment of new staff.Required:(a) What factors need to be taken into account when preparing a recruitment advertisement? (5 marks)(b) Briefly describe five factors which will influence the choice of advertisingmedia. (10 marks)(15 marks)4 Training and development programmes form an important part of improving employee skills.(a) Briefly explain what is meant by the following different types of training a

nd development:(i) Coaching; (5 marks)(ii) Mentoring. (5 marks)(b) Explain five criteria against which the effectiveness of training might generally be evaluated. (5 marks)(15 marks)5 All managers and supervisors need to understand the concept of motivation in the workplace.Required:(a) Explain the content theory of motivation. (5 marks)(b) Explain what is meant by MacGregors (5 marks)(i) Theory X;(ii) Theory Y. (5 marks)

(15 marks)3 [P.T.O.


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6 Communication is vital in all organisations but requires an understanding of appropriate structures andcommunication channels and patterns.Required:(a) Briefly explain the main purposes of the three main formal communication channels in an organisation:

(i) Downwards; (3 marks)(ii) Upwards; (3 marks)(iii) Lateral or horizontal. (3 marks)(b) Briefly explain the characteristics and effectiveness of ANY THREE of the following communication patterns:(i) The Circle;(ii) The Y;(iii) The Wheel;(iv) The All Channel. (6 marks)(15 marks)End of Question Paper4


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Answers


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Part 1 Examination Paper 1.3Managing People December 2003 Answers1 (a) The case illustrates Herzbergs motivation theory, one of the content theories of motivation. These attempt to explain thosefactors which motivate the individual by identifying and satisfying the individuals needs, desires and the goals pursued to

satisfy these desires.This theory of motivation is a two factor, content theory. It is based upon theidea that motivation factors can be separatedinto hygiene factors and motivation factors and is therefore often referred to as a two need system. These two separateneeds are the need to avoid unpleasantness and discomfort and, at the other end ofthe motivational scale, the need forpersonal development.A shortage of those factors which positively encourage employees (motivating factors) will cause those employees to focus onother, non job related factors, the so called hygiene factors. These are illustrated in the case with the attitude of the

supervisors to senior management and their concerns for example with shortages,targets, recognition and training and weveseen it all before.The most important part of this theory of motivation is that the main motivatingfactors are not in the environment but in theintrinsic value and satisfaction gained from the job itself. It follows therefore that the job itself must have challenge, scope forenrichment and be of interest to the job holder. This is not the case in the scenario; there appears to be little or no intrinsicsatisfaction from the supervisors work, illustrated by the supervisors regardingthemselves and their role as menial andunrecognised and their lack of responsibility and decision making powers withintheir own departments.

Motivators (or satisfiers) are those factors directly concerned with the satisfaction gained from the job itself, the sense ofachievement, level of recognition, the intrinsic value felt of the job itself, level of responsibility, opportunities for advancementand the status provided by the job. Motivators lead to satisfaction because of the need for growth and a sense of selfachievement. Clearly, none of this applies to the supervisors at Swandiff.A lack of motivators leads to over concentration on hygiene factors; that is those negative factors which can be seen andtherefore form the basis of complaint and concern.Hygiene (or maintenance) factors lead to job dissatisfaction because of the needto avoid unpleasantness. They are so calledbecause they can in turn be avoided by the use of hygienic methods i.e. they can be prevented. Attention to these hygienefactors prevents dissatisfaction but does not on its own provide motivation. Hygiene factors (or dissatisfiers) are concernedwith those factors associated with, but not directly a part of, the job itself.These can be detected in the scenario; salary andthe perceived differences with others, job security, working conditions, the quality of management, organisational policy andadministration and interpersonal relations.Understanding Herzbergs theory identifies the nature of intrinsic satisfaction that can be obtained from the work itself, drawsattention to job design and makes managers aware that problems of motivation maynot necessarily be directly associated

with the work.(b) Organisations such as Swandiff Local Authority can be described by Handys Rol

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