ACCA - CAT | Paper T5 Managing People and Systems Solved Past Papers

Certified ACCounting teChniCiAn exAminAtion

SAmple multiple ChoiCe queStionS – June 2009

Paper T5 Managing People and Systems

Section A onlyAll questions are compulsory

Note: Section B of the actual exam paper will contain five written questions

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the following questions are typical of those that will appear in Section A of the examination paper from June 2009 onwards. there will be a total of twelve questions in section A, three from each of the first four syllabus sections as indicated below.

All questions in Section A will be worth two marks each.

Syllabus section 1 the business and accounting environment

1 Which of the following is an acronym used to describe the key elements of an organisation’s external environment?

A PERT

B PEST

C SWOT

d SPAM (2 marks)

2 Henry Mintzberg categorised five basic components of an organisation.

Which tWo the following statements describes the work of the technostructure of an organisation? 1 designing systems 2 organising and controlling work 3 Standardising work 4 Securing inputs

A 1 and 2

B 1 and 3

C 2 and 3

d 3 and 4 (2 marks)

3 Which of the following is a correct definition of the term ‘span of control’?

A The number of employees reporting to one manager

B The number of managers to whom one employee reports

C The number of levels in the hierarchy

d The number of employees at each level of the organisation (2 marks)

Syllabus section 2effective management of business and accounting systems

4 to whom is the internal auditor accountable?

A The directors of the company

B The employees of the company

C The shareholders of the company

d The external auditors of the company (2 marks)



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5 SPAMSOAP is a mnemonic for the types of internal control employed by an organisation.

Which tWo of the following are types of internal control included in SpAmSoAp? 1 output 2 Arithmetic 3 preventative 4 physical

A 1 and 2

B 1 and 3

C 2 and 3

d 2 and 4 (2 marks)

6 Which of the following are typical responsibilities of the financial accountant in a large organisation? 1 inventory valuation 2 Sales invoicing 3 project appraisal 4 payroll

A 1 and 2

B 2 and 4

C 1 and 4

d 3 and 4 (2 marks)

Syllabus section 3management theory, principles and techniques

7 Who was responsible for developing the ‘Situational leadership’ model?

A Blake and Mouton

B Katz and Kahn

C Hersey and Blanchard

d Tannenbaum and Schmidt (2 marks)

8 Which of the following statements accurately describes a multi-disciplinary team?

A All team members collaboratively decide how to organise their work

B All team members have different skills and specialisms which they pool

C All team members can perform any and all of the group’s tasks

d All team members are jointly responsible for the leadership of the team (2 marks)



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9 Which tWo of the following are examples of content theories of motivation? 1 maslow’s hierarchy of needs 2 Vroom’s expectancy theory 3 herzberg’s two factor theory 4 Adam’s equity theory

A 1 and 2

B 2 and 4

C 3 and 3

d 1 and 3 (2 marks)

Syllabus section 4individual effectiveness at work

10 Which tWo of the following are examples of ‘on the job’ training 1 formal training courses 2 mentoring by a colleague 3 Self study courses 4 Secondments to other departments

A 1 and 2

B 2 and 3

C 3 and 4

d 2 and 4 (2 marks)

11 if a manager in the purchasing department requests the help of the human resources director in preparing for a difficult appraisal, what direction is the communication flow?

A Vertical

B Horizontal

C Lateral

d Diagonal (2 marks)

12 Honey and Mumford classified four different learning styles.

Which of the following statements accurately describes the reflector?

A Prefers to understand principles

B Prefers to think things through first

C Prefers to try things ‘hands on’

d Prefers to see practical examples (2 marks)

end of Sample questions



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Answers



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Sample multiple Choice question paper t5 Answersmanaging people and Systems

1 B

2 B

3 A

4 A

5 D

6 B

7 C

8 B

9 D

10 D

11 D

12 B



Managing Peopleand Systems

ACCA CERTIFIED ACCOUNTING TECHNICIAN EXAMINATION

ADVANCED LEVEL

FRIDAY 11 JUNE 2004

QUESTION PAPER

Time allowed 2 hours

ALL FIVE questions are compulsory and MUST be answered

Do not open this paper until instructed by the supervisor

This question paper must not be removed from the examinationhall

The Association of Chartered Certified Accountants

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Section A – ALL FIVE questions are compulsory and MUST be attempted

1 Organisations can be described as open systems, interacting with a variety of different stakeholders in an everchanging environment.

Required:

(a) Explain what you understand by the term ‘stakeholders’. (2 marks)

(b) Identify and describe three key stakeholders of an organisation and briefly explain their relationship with theorganisation. (6 marks)

(c) Identify and briefly explain the key external environmental influences which might impact on anyorganisation and its stakeholders. (6 marks)

(d) Give examples of how any two of the influences you have described in part (c) might impact on yourorganisation, or an organisation with which you are familiar. (6 marks)

(20 marks)

2 You have been asked to undertake a review of how the purchasing of stationery and computer consumables isundertaken within your organisation, or one with which you are familiar, with a view to controlling the process moreeffectively.

Required:

(a) Identify and explain the key stages in the purchasing cycle that you might expect to see when undertakingthis review. (8 marks)

(b) Make recommendations to your manager about the type of controls which could be implemented at three ofthe stages you have identified above. (12 marks)

(20 marks)

3 Effective team working is an increasingly important aspect of organisational life.

Required:

(a) Outline the key characteristics/features of effective teams. (8 marks)

(b) Identify and explain the key stages of group development as identified by Tuckman. Your explanation shouldinclude reference to the role of the group leader at each stage. (12 marks)

(20 marks)

4 You have been asked by your manager to write instructions for a new member of staff who is taking up their firstappointment since leaving college.

Required:

(a) Write a memo to the new member of staff which identifies and explains how to use three different approachesto personal work planning. (10 marks)

(b) Explain the main techniques and tools the new member of staff could use to help them manage their timeas effectively as possible. (10 marks)

(20 marks)

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5 The International Labour Organisation estimates that each year, more than two million people die of work relatedaccidents and illnesses.

Required:

(a) Outline the role of training in raising awareness of health and safety issues. (8 marks)

(b) Describe the respective roles and responsibilities of senior management, the supervisor and the individual inpromoting health and safety within the organisation. (12 marks)

(20 marks)

End of Question Paper

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Answers





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ACCA Certified Accounting Technician Examination – Paper T5Managing People and Systems June 2004 Answers

1 (a) A stakeholder is someone who has the ability to influence an organisation and can in turn be influenced by it. Stakeholderscan also be considered as those individuals who depend on the organisation in some way and on whom in turn, theorganisation depends e.g. shareholders. Stakeholders have varying degrees of power and can vary in importance to theorganisation depending on this power and their ability and desire to use it. Stakeholders can be individuals or groups ofindividuals, in which case they would be referred to as a coalition.

(b) Key stakeholders of an organisation are: shareholders, employees, customers, suppliers and the local community.Shareholders are the owners of the firm and a source of finance and in some cases expertise. Organisations need to satisfythe expectations of the shareholders. These expectations may be a requirement for the payment of a dividend which showsa satisfactory return on investment, or they may be in terms of the survival and growth of the firm. Employees at all levelsare important stakeholders. They provide the firm with the knowledge, skills and expertise to meet the requirements of theowners. In turn, the organisation rewards them appropriately through remuneration packages and opportunities for career andpersonal development. Customers are important stakeholders in that they transact with the organisation for whatever goodsor services it is providing. The organisation needs to respond to the needs of customers in terms of the types of products andservices they expect to be able to purchase or receive in order to retain customer loyalty. Suppliers are an importantstakeholder in that they provide the goods and services needed by an organisation to carry out its business. Suppliers expectto be treated fairly and equitably at all stages of the purchasing cycle e.g. to be given as much information as possible whenpreparing a quotation; to be paid as per the agreed terms of payment. The organisation needs to be a good citizen within thelocal community. It takes from the community in terms of labour and resources and has the potential to give back to thecommunity in terms of its support for local projects and also providing incomes for those that it employs.

(c) The key environmental influences which might impact on an organisation and its stakeholders can be examined using aPESTEL analysis. This is a mnemonic for the following key factors, all of which can be considered regionally, nationally orinternationally. Some of these factors may overlap and can be considered in more than one category.

(i) Political e.g. government policies on imports and exports;

(ii) Economic e.g. tax changes, interest rates, exchange rates;

(iii) Social e.g. changing age profiles, increased incidence of overseas travel, increasingly diverse work groups;

(iv) Technological e.g. impact of the internet, developments in mobile communications technology;

(v) Environmental e.g. issues associated with the production of genetically modified food, powerful lobby groups;

(vi) Legal e.g. legislation affecting employment, health and safety legislation.

(d) Considering a medium sized manufacturing firm, selling its products in international markets as the example, two influenceswhich might impact on this organisation are technological and economic.

(i) Technological. Factors such as the technology available to help the firm communicate more effectively with its customerse.g. e-mail and the use of websites, or developing process technologies which might require them to make capitalinvestments in new equipment in order to keep up with competitors.

(ii) Economic. Factors such as potential changes in government policies with regard to exporting to the countries where theydo business, or changes which may enable them to open up new markets. Factors such as exchange rates which willaffect the price of their goods overseas and of any supplies being purchased from international sources.

This is a very general example, indicative of the depth of answer required for this part of the question. Students will chooseexamples from their own organisations and markers will need to use their professional judgement as to the appropriatenessof the factors that are chosen.



2 (a) The purchasing cycle is considered to begin when a specific need for goods or services is identified and ends when the needhas been met and payment has been made. The various stages in this cycle will vary depending on the nature of the itembeing purchased, the size and structure of the organisation and also the position which purchasing holds within theorganisation. Typically, purchasing systems within any purchasing cycle can be grouped into four main headings:

OriginatingSourcingOrderingCompleting

The key stages in the purchasing cycle that one might expect to see in any review of a purchasing system are as follows:

OriginatingIdentification of needPreparation of authorised requisitionLink to appropriate budget

SourcingRequest for quotation (RFQ) sent to approved suppliersQuotations received and analysedNegotiation (if appropriate) and mutual agreement on price, delivery and all commercial terms and conditionsMost appropriate supplier selected

OrderingPurchase order issuedPurchase order acknowledged

CompletingDelivery takes place/work completedInvoice receivedInvoice checkedPayment madePerformance evaluation/supplier appraisal and review

(b) Stationery and computer consumables are frequent, but usually considered to be relatively minor, purchases withinorganisations – nevertheless, given the nature of these items it is important that their purchase is effectively managed andcontrolled. Recommendations about the type of controls at each of these stages could be as follows:

OriginatingTypical checks would ascertain that a legitimate signatory had authorised the purchase requisition and that he/she was notexceeding authorised spend levels. The originator of the requisition should not have any involvement in the checking of therequisition in accordance with the principle of segregation of duties associated with task execution and control. Other checkswould include quantity details and delivery address.

SourcingTypical checks would ensure that only approved suppliers were sent the RFQ and that all suppliers on the approved supplierlist had been duly audited and appraised. All potential suppliers should receive the same information. There should be clearcriteria for the evaluation of quotations to ensure that suppliers are compared and evaluated objectively. Selected suppliersmust meet predetermined criteria.

OrderingTypical checks would ensure that only authorised purchase orders are issued by authorised individuals up to agreed amounts.All acknowledgements should be carefully checked for accuracy against the purchase and any discrepancies raised with thesupplier for correction.

CompletingTypical checks would ensure that the invoice value and the order value match and that payment is then made in accordancewith the agreed terms of payment.

Throughout all of the above it is important that wherever possible there is a segregation of duties and responsibilities. Oneindividual should not be in a position to record and process a complete transaction.

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3 (a) There are many definitions of teams and groups. A team as defined by Katzenbach and Smith (1993) ‘is a small number ofpeople with complementary skills who are committed to a common purpose, performance goals and approach for which theyhold themselves mutually accountable’. According to Mullins (1999) the underlying feature of an effective team or work groupis ‘a spirit of cooperation in which members work well together as a united team’ This is apparent when:

(i) Group members have a belief in shared aims and objectives(ii) Members show a sense of commitment to the group(iii) Members accept group values and norms(iv) There is a feeling of mutual trust and dependency(v) There is full participation in decision making(vi) Decision making is by consensus(vii) There is a free flow of information and open communications(viii) Disagreements can be aired and resolved(ix) Conflicts are resolved by members themselves

(b) The key stages of group development as identified by Tuckman are forming, storming, norming and performing. Later writersadded two stages to Tuckman’s model – dorming and mourning/adjourning.

(i) Forming – the initial formation of the group. Group members get to know one another and test out behaviours to findout what is acceptable to other group members and to find out the nature of the situation and the task. Each memberwishes to impress his or her personality on the group. The leader generally acts as a facilitator – helping people to getto know one another and also to understand collectively the nature of the task. The leader has a concern for both taskand team but at this early stage of team development is more likely to focus on team issues. Group members tend tobe very dependent on the leader.

(ii) Storming – characterised by a lack of unity and the emergence of open conflict as members have now got to know oneanother better and are prepared to put forward ideas. If the team is developing effectively this can be a very productivephase as more realistic targets are often set and trust between team members increases. The leader tries to resolve anyconflicts that may arise and as a consequence is often much more heavily involved with team issues rather than taskissues. Because of the dominant role that the leader often needs to take at this stage it is likely that there may beresistance to the leader from other group members.

(iii) Norming – a general understanding of one’s own role and the role of others. A sense of unity develops as the group‘settles down’. Differences are accommodated. Group cohesion develops and there is mutual support and cooperation.The group acquires a sense of identity. The leader is no longer required to facilitate team processes and resolve conflictand the leadership role changes to one of being much more focused on the task. This involves the leader in coordinatingactivities and tasks to ensure that the work is completed and the overall team objectives can be met.

(iv) Performing – interpersonal problems are resolved and the team begin to focus on the task in hand and how to achievetheir goal. The leadership role is much less in evidence at this stage of development as all team members including theleader are focused on completing the task and achieving the agreed objectives. The leader is likely to merge with therest of the group.

(v) Dorming – once a group has been performing well for some time, it may become complacent and fall back into self-maintenance functions, at the expense of the task. The role of the leader would be one of trying to keep the groupfocused on the task, but this is sometimes difficult, or indeed may not happen, as the leader has merged with the restof the group at the previous stage.

(vi) Mourning/Adjourning – the group sees itself as having fulfilled its purpose. This can be a stage of confusion, sadnessand anxiety as the group disbands and breaks up. There is evaluation of its achievements and gradual withdrawal ofgroup members. The leader can be important in the evaluation of the group’s performance. If the group is to continueand go on to a new task – it will need to renegotiate aims and roles and will return to the forming stage and the groupwill once again be very dependent on the leader.

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4 (a) The following should be set out in the form of a memo as per the requirements of the question. There are a number ofapproaches to personal work planning that you might find useful including producing lists, prioritising and scheduling. Inaddition to these main approaches there are a number of other techniques that you might include e.g. diaries and timetablesand a variety of charts.

(i) Producing lists – these are useful ways of identifying and remembering what needs to be done and of monitoring theprogress you have made with your daily workload or a set of specific tasks. It is usually best to make a list at the startof a day or at the start of a project. Try to stick to the list you have made and don’t get involved with things that are noton your list. If necessary add them to your list.

(ii) Prioritising – this is about deciding which aspects of your work, or which specific tasks areas are more important thanothers. Some aspects of your work will need prompt attention whereas others can often wait. Important or essential workneeds to be given a higher priority than other work. A piece of work or task is usually considered high priority if it hasto be completed by a certain time or if other tasks or people depend on it.

(iii) Scheduling – is about planning and controlling priorities and deadlines. A schedule establishes a timescale for a logicalsequence of tasks. Scheduling involves making sure that everyone is aware of the schedule in good time. The scheduleshould be realistic in terms of the time allocated for each task. It is important to be able to make allowances for anyunexpected events and to revisit the schedule if necessary.

(iv) Action plans – set out a programme of work or action.

(v) Timetables – the information you have for your action plan or from your diary might be formatted as a timetable for easeof reference.

(vi) Charts – these are useful for longer term schedules and again, make activities easier to see – especially in relation toeach other.

(vii) Gantt charts – are used to display progress and to show the amount of time allocated to a particular task.

(viii) Diaries – like timetables these are to remind you of key events and activities, remind you of any advance planning thatneeds to be undertaken or any follow up actions and to help you coordinate your efforts more effectively.

There is potential for some overlap in the responses to part (a) and part (b) of the question depending on the approach takenby the student. Should any of the latter points included in the suggested answer to part (a) above, also be included in part(b) of a student response – this should be rewarded accordingly.

(b) There are a number of things to bear in mind when trying to manage your time effectively. Firstly it is important to recognisethat your use of time can be affected by the nature of the job you are doing, by your own personality and also by yourcolleagues and how they influence you and place demands upon you. When planning your time you will need to identify yourkey tasks – those tasks that are most relevant to achieving your objectives. This is like sorting out what you must do, whatyou could do and what you would like to do. Once you have identified your key tasks you need to prioritise these in terms oftheir importance, the time needed to complete them and against any deadlines or specific time spans. Once you haveprioritised you can then schedule your work, or set out a timetable for completion. It is sometimes helpful to assign start andend times to tasks. It is important to include ways of controlling your time and the plans you have made for using it effectively.This means that you will need to minimise disruption by unexpected events and requests. It is also important to monitor howyou actually use your time – keep a note of how you spent your time and how valuable you think time spent on specificactivities was. Also make a note of typical interruptions so that you can develop strategies for either avoiding these or dealingwith them as effectively as possible if they cannot be avoided.

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5 (a) Training has a key role to play in the area of health and safety and can be seen as an important preventative measure. Healthand safety training should be an important aspect of an induction programme for all new members of staff. They should beadvised of their own responsibilities and those of their colleagues and the organisation. Attention should be drawn to particularhazards or safety issues associated with the specific industry in which they are working, within their workplace or within thespecific context of their own particular work environment. Training should also take place following a transfer to a new job ordepartment or following any relocation or change in working methods. Refresher training should take place at regularintervals. Special courses should be arranged whenever new equipment or changes to working methods or processes areintroduced. Formal training can be reinforced in many ways including the use of notice boards, electronic bulletin boards andstaff handbooks.

(b) Roles of senior management, the supervisor and the individual

(i) Senior management is responsible for developing and implementing policies and can ensure that appropriate proceduresare in place for carrying out risk assessments and safety audits. Management can also ensure that a coordinatedapproach to health and safety issues is maintained across the organisation. They also have a duty to monitor andevaluate health and safety and for taking any necessary corrective action.

(ii) Supervisors – can have most influence as they are in immediate control of a situation and are usually in a position totake immediate action. They need to be vigilant and safety conscious at all times. They are also directly responsible forensuring that individuals are conscious of health and safety hazards and do not take unnecessary risks. Supervisors arelikely to be responsible for maintaining and updating any safety manuals and notices in conjunction with HRdepartments. They should ensure that all employees under their supervision are aware of things like fire exits andlocation of fire extinguishers, safety equipment and of the named first aider in the area.

(iii) Individuals – should be aware of safe working practices. Individuals have a responsibility for their own safety and forthat of their fellow workers. They should carry out instructions associated with maintaining health and safety e.g. thewearing of protective clothing, or the use of safety guards when operating machinery. Individuals should ensure that theyare up to date with the location of fire exits and fire extinguishers, safety equipment and of the named first aider in thearea.

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ACCA Certified Accounting Technician Examination – Paper T5Managing People and Systems June 2004 Marking Scheme

1 (a) 2 marks for a clearly articulated definition, including reference to power, influence and dependency. (2 marks)

(b) 1 mark for each identified stakeholder. (3 marks)1 mark per brief explanation and their relationship with the organisation. (3 marks)

(c) 1 mark for each influence identified and one for a brief explanation up to a maximum of 2 marks per influence. (6 marks)

(d) 3 marks for each appropriate example. (6 marks)

(Total 20 marks)

2 (a) 2 marks for each stage identified and explained up to a maximum of 8 marks. (8 marks)

(b) 2 marks each for each type of control identified and two marks for each type of control explained at each of the three stagesnominated by the student, up to a maximum of 4 marks per stage. (12 marks)

(Total 20 marks)

3 (a) 1 mark for each characteristic or feature identified – up to a maximum of 8. (8 marks)

(b) 0.5 marks for each of the stages identified, up to a maximum of 2 marks (2 marks)

1.5 marks for offering explanation about each of the stages, up to a maximum of 6 marks. (6 marks)

1 mark for appropriate reference to the role of the leader at each stage, up to a maximum of 4 marks. (4 marks)

(Total 20 marks)

4 (a) 0.5 marks for each approach identified. (1.5 marks)

2.5 marks for outlining how to use each of any three approaches effectively up to a maximum of 7.5 marks (2.5 x 3).(7.5 marks)

1 mark for using the correct format as identified in the question i.e. a memo. (1 mark)

(b) 2 marks for each main technique or tool explained up to maximum of 10 marks. (10 marks)

(Total 20 marks)

5 (a) 1 mark for each point identified up to a maximum of 8 marks. (8 marks)

(b) 1 mark each for identifying the key roles and responsibilities within each of the three categories up to a maximum of 4 markswithin each category. (12 marks)

(Total 20 marks)

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ADVANCED LEVEL

FRIDAY 10 DECEMBER 2004

QUESTION PAPER






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ALL FIVE questions are compulsory and MUST be attempted

1 The accounting function is one of several key functions within an organisation, all of which integrate to ensure thatthe organisation is able to deliver its products or services as efficiently and effectively as possible.

Required:

(a) Explain the purpose of the accounting function within an organisation and identify and briefly describe howit interacts with ANY TWO OTHER functional areas. (8 marks)

(b) Identify and describe the key factors which might affect the type of accounting system used within anorganisation. (6 marks)

(c) Explain how you would expect the accounting function to be affected if the organisation has its operationsin a number of different countries. (6 marks)

(20 marks)

2 Effective management control systems are an essential feature of all organisations.

Required:

(a) Identify and briefly describe the features of a good internal control system. (8 marks)

(b) Outline the major limitations of internal control systems. (4 marks)

(c) Explain how the limitations of internal controls identified in part (b) above might be overcome, usingexamples. (8 marks)

(20 marks)

3 An understanding of organisational culture is important because it can explain much of what happens in organisationsand can also provide insights into how organisational effectiveness might be improved.

Required:

(a) Explain what you understand by the term ‘organisation culture’. (4 marks)

(b) Charles Handy’s classification identifies four distinct cultural types. Identify these four types and fully explainany two of these. (10 marks)

(c) Identify and describe any two factors which might influence the development of an organisation’s culture.(6 marks)

(20 marks)

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4 Ineffective communication is frequently cited as being a major contributor to poor performance within organisations.

Required:

(a) Distinguish between formal and informal methods of communication used within organisations. (8 marks)

(b) Explain the advantages and disadvantages of formal communications. (6 marks)

(c) Explain the advantages and disadvantages of informal communications. (6 marks)

(20 marks)

5 All employees, at whatever level, have a responsibility not only for their own safety in the workplace, but also for thosearound them.

Required:

(a) Identify and describe typical activities in which accidents might happen or where there may be risk orpotential danger to employees. (10 marks)

(b) What advice would you give to a new employee to enable them to minimise their exposure to safety hazardsand risks in the workplace, thereby ensuring as safe a working environment as possible? (10 marks)

(20 marks)


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Answers





ACCA Certified Accounting Technician Examination – Paper T5Managing People and Systems December 2004 Answers

1 (a) The purpose of the accounting function is to make sure that all of the organisation’s business transactions are recorded andprocessed accurately and securely and that the relevant information about business transactions is made available tomanagement and appropriate external authorities as required.

The accounting function interacts with a number of different departments. Some of these and the types of interactions whichmight take place are as follows: senior management requesting information provided by the accounting function via differenttypes of reports; personnel or HR departments in terms of wages and salaries; the purchasing department who will authoriseinvoices for payment and require suppliers to be paid and all purchase ledger transactions; the sales department regardingpayments received and any bad debts and all sales ledger transactions; the stores departments in terms of stock movementsand stock control issues.

(b) The key factors which might affect the type of accounting system used within an organisation are the type and size oforganisation, organisation structure and regulations – both internal and external. A small organisation like a local generalgrocery store will have a relatively simple accounting system compared to a large multi-national organisation operating in anumber of different sites with a larger range of products and services. Service businesses (such as a solicitor’s practice) willneed accounting systems which enable them to record time spent on particular jobs or with particular clients whereas amanufacturing organisation will need to account for units of sales and will need to monitor the costs associated with theprovision of raw materials and the supply of labour needed in the manufacturing process. Organisations operating in thepublic sector will be concerned with recording revenues and the monitoring of expenditure. The organisation structure willdetermine whether or not accounts are prepared on an area basis by area staff or the extent to which accounting staff are ina separate department. Internal and external regulations are an important factor affecting the accounting systems. Manybusinesses set out their own accounting rules and procedures and some aim to achieve external verification of their qualityprocesses. In addition, accounting work has to comply with a range of external regulations and appropriate procedures needto be in place to ensure that the organisation complies with these as required.

(c) There are a number of ways in which the accounting function might be affected if the firm operates in a variety of differentcountries. Doing business in different currencies will present issues of recording information and reporting information, forexample customers might want to pay in local currency but the business might have to pay for imported supplies in a differentcurrency – this will need to be recorded carefully. Comparison between different parts of the business may be difficult and itmay be necessary to convert to a single currency to facilitate this. There may be different legal, taxation and accountingrequirements in different countries and this will determine how accounting information is prepared and reported. Differingeconomic conditions raise issues about accounting for inflation – especially when dealing with those countries that have veryhigh levels of inflation.

2 (a) An internal control system seeks to ensure that an organisation achieves its objectives and guards against the risks whichmay threaten its existence. The characteristics of a good control system are that it should be acceptable to those it serves;appropriate to the needs of the organisation; matched to the capabilities of those that use it; accessible to non-experts orfunctional specialists; adaptable and capable of change if necessary; action oriented (i.e. should prompt corrective action)and affordable in terms of the overall cost for the benefits gained. In terms of appropriateness this means that it should be fitfor purpose – neither overly complex nor unduly simple; it should be capable of effectively controlling the specific transactionsrelevant to the business for which it has been designed. In terms of accessibility it should be of use to a variety of organisationmembers outside the accounting function – it should be easy to use and understand and it should provide concise andrelevant information to those that need it. It is important that any control system is capable of change in today’s businessenvironment. All organisations need to be able to respond to change and the internal control system should be able toaccommodate the circumstances and environment in which the organisation is operating, such that business transactionscontinue to be controlled effectively and appropriate and timely information is provided. It is important that the internal controlsystem is action oriented and does not exist for its own sake. This means that it needs to highlight areas where action needsto be taken or changes made and should encourage proactive as well as reactive management responses. Finally it shouldbe affordable, this means that it should not be overly time consuming for those that need to work with it nor should itunnecessarily duplicate areas of work or information provided or required. The overall costs of operating and maintaining theinternal control system effectively should not outweigh the benefits that it provides to the organisation.

(b) The major limitations of an internal control system are associated with the human element necessary to ensure that they areapplied properly and honestly. Internal controls rely on the honesty and integrity of those that apply them and if people aredishonest and wish to avoid them, there are ways in which they can do so. For example, managers can override the controlsthey have set up themselves or abuse authorisation controls. People can work together to abuse those controls throughdishonest collusion. Also the warnings given by control systems may not be acted upon because of complacency or ignorance.

(c) Segregation of duties is concerned with separating executive tasks from control tasks. One individual should not be able torecord and process a complete transaction. A simple example of this is highlighted when considering the recording andbanking of cash. Cash may be received by the organisation through the post; it will need to be recorded as received and thenat some point taken to the bank. It would not be good practice for these activities and duties to be performed by the same

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person – the duties need to be segregated. If they are not segregated there is an opportunity for a dishonest person to receivethe cash, fail to record its receipt and then keep the cash without anyone else being aware that any cash had ever beenreceived into the business. This can be partially overcome by ensuring careful employee selection procedures, by checkingreferences, by clear guidelines set out at induction and ongoing training and staff development. In addition, both internal andexternal audits can be used to demonstrate how some of these limitations can be exposed. Clear and heavy sanctions shouldbe in place for use in any instances of dishonesty and collusion leading to the abuse of any internal control systems. Controlsystems should be continually reviewed for the relevance of their procedures and messages and staff reminded of the riskswhich they seek to guard against.

3 (a) There are many different definitions of culture, some examples are as follows: ‘the collection of traditions, values, policies,beliefs and attitudes that constitute a pervasive context for everything we do and think in an organisation’ (McLean andMarshall); ‘the pattern of basic assumptions that a given group has invented, discovered or developed in learning to cope withits problems of external adaptation and internal integration’ (Edgar Schein). Culture then can be seen to be a collection of theorganisation’s past achievements, current ambitions, attitudes, values and assumptions. More simply it is often described as‘the way we do things around here’. Culture gives an organisation a sense of identity. The formal culture of the organisationis often seen as the ‘party line’. All definitions and explanations of culture emphasise that it is concerned with abstractconcepts and themes like values and norms and as such it is difficult to articulate and often difficult to recognise.

(b) Charles Handy’s classification is based on Harrison’s ‘organisation ideologies’. Handy used the word culture as opposed toideology as it was perceived to convey a feeling of deep seated and more pervasive way of doing things. His four types are:the power/club culture, the role culture, the task culture, and the person culture. The power/club culture is dependent on acentral power source which controls the organisation. The rays of influence emanate from the centre and hence there is littleneed for formal rules and procedures. The organisation relies on interpersonal relationships and communications rather thanhierarchy and power structures. It is typically found in small entrepreneurial firms, small family firms and small businessescontrolled by the owner/manager. As the organisation increases in size this culture is less evident as the powerful rays ofinfluence cease to reach all members of the organisation and there then becomes a need for more formality which comeswith the introduction of systems and procedures. The role culture is typified by large bureaucratic organisations. Work iscontrolled by procedures and rules. Power is associated with positions and not people. It is based on order and rationality.The role culture is often represented diagrammatically as a Greek temple, with the pillars representing the functionalspecialisms within the organisation, all of which are controlled centrally by the senior managers. In addition to the strengthof the functional ‘pillars’ the role culture needs a stable external environment to survive. The task culture reflects a teamapproach to getting a job completed. It often consists of people who solve problems in teams or specially formed work groups.Each person makes a contribution based on their own area of expertise and shares this with the team or group for the overallbenefit of the task in hand. Status and job titles are not considered to be important in the task culture – the overall objectiveis to ensure that the job or task or project is satisfactorily completed. Influence is based on expert power rather than onposition or personal power. Often, the team or group will be disbanded once the job or project is completed. Controlling canbe difficult in this culture and is usually achieved by senior management through the appropriate allocation of tasks, peopleand resources. A task culture thrives in organisations that are faced with frequent changes, as they are good at adapting andproblem solving. The person culture exists to serve the individuals within the organisation and is one of the most unusual inHandy’s typology. All rules and procedures within the organisation exist to meet the needs of the individuals within it and canbe changed as those needs change. A good example of a person culture would be that which might exist in a smallprofessional business e.g. solicitors’ or dentists’ partnerships.

(c) There are many factors which might affect the way in which an organisation culture develops. These include, but are notnecessarily limited to: the history of the organisation, the overall purpose of the organisation, the technology employed by theorganisation, organisation size, location, the leaders and key decision makers in the organisation and the overall operatingenvironment. The history of the organisation can be important in shaping the organisation culture because this will reflect theway in which the organisation was originally formed and also any key events in its development e.g. a merger or a takeoveror a change in overall focus of the organisation. The overall purpose of the organisation and its goals and objectives influencethe culture in that this will include the types of markets that the firm operates in, the type of products or services it offers andthe types of customers it engages with. The key technology employed by the organisation can be important in influencingculture because this will determine ways of working and interacting with others. The organisation size can be importantbecause this will determine the degree of formality and bureaucracy within the organisation and also the communicationprocesses. The location of the organisation can be important. For example a firm situated in a busy city centre may facedifferent issues in terms of staffing, types of customers etc than one located on a purpose built business park. The leadersand key decision makers can be important influences on culture and their own style or way of doing things is often reflectedin the organisation as a whole. People identify with visionary leaders and often treat them as role models for their ownbehaviour. Finally, the overall operating environment is important because it can determine the rate of change that theorganisation needs to deal with or the degree of uncertainty within the environment. Issues of stability and dynamism areimportant aspects of the external environment which might affect the overall culture of an organisation.

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4 (a) All organisations are likely to use some combination of formal and informal communications. Formal communication channelsand systems are usually set up by management within the organisation and would include regular meetings, formalpresentations and conferences where both written and verbal information can be presented. These will be considered to belegitimate forms of communication and will be sanctioned by the organisation i.e. they will be officially recognised by theorganisation. The larger the organisation, the more likely it is to have more formal communication channels and systems.Informal communication channels are much less structured and would include informal telephone conversations, discussionsin the staff canteen or any other form of informal contact with colleagues, supervisors and managers. Informalcommunications usually take place outside of the more formal organisation structures and processes that have been set upby management.

(b) Some of the advantages of formal communication are that they are recognised by all members of the organisation, they formpart of the overall command and control structure of the organisation, they are based on legitimate and accepted power baseswithin the organisation; they provide effective co-ordinating mechanisms, they provide records and evidence of points ofagreement and disagreement and of decisions made, they are transparent and available for all. However, there are alsodisadvantages to formal communications and some of these are as follows: they can be time consuming and involve anunnecessary amount of people; they may act merely as a ‘rubber stamp’ for issues and procedures that have been agreedinformally; they can become unwieldy.

(c) The advantages of informal communications are that they are more flexible and responsive, they permit speedier decision-making, they permit all members of the organisation to contribute and participate, and they can identify issues of concernwithin the organisation. The disadvantages include the fact that they may conflict with the formal communication system andrecipients may receive mixed messages; they may be used subversively, they may be biased and inconsistent, they mayencourage rumours, or they may lead to too much information being available and cease to be effective co-ordinatingmechanisms.

5 (a) There are many activities which are undertaken in the workplace which can give rise to hazards and risks and whereaccidents can easily happen. Whilst many of the ones that you are likely to come across will be in the office environment,there are a variety of other situations that you may need to be aware of, e.g. those that might occur in a manufacturingenvironment. The broad range of activities which might give rise to hazards and risks include, but are not limited to, thefollowing:

General maintenance of building and fabric – involving use of ladders or roof work where there is potential for people tofall from high buildings or constructions.

Using certain types of equipment e.g. VDUs where there is potential for eyestrain or repetitive strain injury associatedwith the continued use of a keyboard or a mouse.

Using badly designed workspaces and office accommodation, where posture may be affected or there is potential forfalls or tripping over electrical or computer connections; or where light is inappropriate.

Using electricity, hand tools or extension leads where there is potential for electric shock or physical harm if using theequipment incorrectly.

Carrying and/or lifting equipment which might lead to muscle strain or damage to the spine if not carried out correctly.

Receiving raw materials – involving lifting or carrying, again having the potential to cause muscle damage or damage tothe spine.

Stacking or storing material – there may be falling materials.

Moving material – using forklift trucks or lifting equipment.

Operating machinery, where it is important that appropriate guards and shields are correctly deployed and where it isimportant to operate the machine within specified operational limits in terms of speed, or running time.

Not wearing protective clothing and equipment for example ear defenders, safety glasses, protective footwear or usingappropriate barrier creams when using certain substances.

Dealing with emergencies, this is especially important as it is when dealing with emergency situations that standardprocedures and ways of working are often inadvertently ignored or forgotten.

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(b) All new employees should attend any health and safety training offered as part of their induction programme and employeesshould be encouraged to update their knowledge and the information provided on a regular basis. This can be done byattending further training or by reading notice boards or any safety bulletins which may be issued. They should be fully awareof any procedures associated with evacuation in the event of accidents or fire and this will include familiarisation with thelocation of fire escapes, fire extinguishers and any other safety equipment. They should make themselves aware of thenominated first aider in their area. They should be aware of any specific hazards associated with the nature of their work i.e.exposure to substances hazardous to health, unsafe operating practices, potential dangers when using machinery and liftingequipment and the possible hazards of using computers. They should wear protective clothing if necessary e.g. gloves, eyeshields or ear defenders and ensure that they adopt safe seating positions and avoid repetitive strain injuries by havingadequate and regular breaks from work stations during the working day. These measures should be provided and promotedby the organisation as necessary but all employees have a responsibility to ensure that they are made available andappropriately used.

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ACCA Certified Accounting Technician Examination – Paper T5Managing People and Systems December 2004 Marking Scheme

1 (a) 2 marks for a clear explanation which includes reference to recording, processing and providing information. 1/2 mark for identifying key functional areas up to a maximum of 2 marks. 2 marks for each brief description of how the accounting function interacts with both functions identified up to a maximum of 4 marks. 8 marks

(b) 1/2 a mark for each factor identified up to a maximum of 2 marks. 1 mark each for appropriate description and explanation of key factors up to a maximum of 4 marks. 6 marks

(c) 1·5 marks for each area explained up to a maximum of 6 marks. 6 marks

Total 20 marks

2 (a) 1 mark for identifying specific features up to a maximum of 4 marks. 1 mark each for a brief description of those identified up to a maximum of 4 marks. 8 marks

(b) 1 mark for each limitation up to a maximum of 4 marks. 4 marks

(c) 2 marks for each brief discussion of how these might be overcome, up to a maximum of 4 marks. 2 marks each for an appropriate and clearly explained example, up to a maximum of 4 marks. 8 marks

Total 20 marks

3 (a) 1 mark for a clearly articulated and well written definition of culture and 1/2 a mark for including any of the following points in an explanation (up to a maximum of 3 marks): values, assumptions, norms, ‘way we do things around here’, beliefs, attitudes, shared expectations, shared goals. 4 marks

(b) 1/2 mark for each type identified, up to a maximum of 2 marks. 4 marks each for a full explanation of any 2 of the 4 types identified. Explanation should include but not necessarily be limited to inclusion of typical type of environment, degree of flexibility, ability to cope with change, type of structure, sources of power, control mechanisms, inclusion of examples etc. 10 marks

(c) 1 mark for each factor identified. 2 marks for appropriate description of factors identified. 6 marks

Total 20 marks

4 (a) 4 marks each for a clear explanation of formal and informal communications. 8 marks

(b) 2 marks for each advantage and disadvantage identified up to a maximum of 6 marks. 6 marks

(c) 2 marks for each advantage and disadvantage identified up to a maximum of 6 marks. 6 marks

Total 20 marks

5 (a) 1 mark each for identifying typical activities up to a maximum of 5 marks. 1 mark each for brief description of activities identified and for the use of simple examples, up to a maximum of 5 marks. 10 marks

(b) 2 marks for each piece of appropriate advice offered. 10 marks

Total 20 marks

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ADVANCED LEVEL

FRIDAY 10 JUNE 2005

QUESTION PAPER






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Section A – ALL FIVE questions are compulsory and MUST be attempted

1 Organisation structures are the framework for getting work done efficiently and effectively. Businesses are organisedand structured in a variety of different ways and as well as ‘tall’ or ‘flat’ structures, a matrix structure is adopted bysome organisations.

Required:

(a) What do you understand by the term ‘matrix structure’? (4 marks)

(b) Identify and briefly explain four key advantages of a matrix structure. (8 marks)

(c) Identify and briefly explain four key disadvantages of a matrix structure. (8 marks)

(20 marks)

2 Legislation requires that the accounts of a public limited company must be audited.

Required:

(a) Explain the role of an external auditor. (3 marks)

(b) What is the purpose of the external auditor’s report and what would you expect to be included in it?(8 marks)

(c) What are the three main differences between the internal and the external auditor? (9 marks)

(20 marks)

3 Henri Fayol was a key contributor to the classical view of management and identified five functions of managementwhich apply to any organisation. These are planning, organising, commanding, coordinating and controlling.

Required:

(a) What are the key characteristics of the classical view of management? (10 marks)

(b) Fully explain what is involved in any two of Fayol’s five functions. (10 marks)

(20 marks)

4 Conflict in organisations is often considered to be inevitable and can have positive as well as negative outcomes.

Required:

(a) Identify and explain the key sources of conflict in organisations. (12 marks)

(b) Explain the win-win approach to resolving conflict and contrast this approach with win-lose and lose-loseapproaches. (8 marks)

(20 marks)

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5 Data in the workplace is potentially at risk of security breaches. It can be damaged, lost or stolen in the same waythat equipment and valuables can.

Required:

(a) Outline and briefly explain the potential risks to data held in organisations, including data that is held ortransmitted electronically. (10 marks)

(b) Identify ways in which the risks to data identified in (a) can be reduced or avoided. (10 marks)

(20 marks)


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Answers






1 (a) A matrix structure is likely to be found in contracting, research and development and consultancy and essentially ‘crosses’functional and product/project organisation so that staff in different functional or regional departments are responsible to boththeir department manager and also to a product or project manager. They are responsible to their departmental or functionalmanager for activities specific to the department or function and to the project manager for activities specifically relating tothe product or project. Typically, staff from various disciplines are assigned to projects. While engaged on the projectindividuals will be responsible on a day-to-day basis to the project leader but will continue to be functionally responsible tothe head of their department.

(b) The key advantages of a matrix structure are: it enables the organisation to quickly assemble teams consisting of people withthe most appropriate expertise and experience; it allows speed of response and flexibility; it provides a variety of experiencesto team members; it supports inter-disciplinary co-operation and multi-functional working; it develops tolerance of ambiguity;it encourages team members to see the broader picture rather than over focus on their own specific department or functionalarea; it encourages greater market and customer awareness, it brings conflicts out into the open.

(c) The key disadvantages of a matrix structure are: it can be fragmented; it can be difficult to develop and maintain commitmentto the organisation; it requires individuals to be responsible to two bosses simultaneously; it needs careful planning; it canlack continuity; it can lead to competition and conflict between managers; staff can have conflicting demands; decisionmaking can be slower.

2 (a) The external auditor is usually a firm of chartered or certified accountants whose role is to undertake an independentexamination of the financial statements of an organisation and to express an opinion on those financial statements. If theorganisation is a limited company, external audit means statutory audit, under for example the Companies Act 1985 in theUK.

(b) The purpose of the external auditor’s report is to summarise their conclusions on the company’s financial statements to theshareholders. The report must state whether in the auditor’s opinion: – The balance sheet is a true and fair view of the financial state of affairs of the company at the end of the financial year.

The words true and fair are generally used together rather than separately and the term is generally considered to mean‘reasonably accurate and free from bias or distortion’

– The profit and loss account or income statement gives a true and fair view of the financial performance of the companyfor the financial year being audited.

– The financial statements have been properly prepared in accordance with Companies Act 1985, or other similarlegislation.

(c) There are three main differences between the internal and the external auditor:– Appointment. External auditors are appointed by the shareholders and must be independent of the company whereas

internal auditors are employees of the organisation– Responsibility. External auditors are responsible to the owners, who can be shareholders, the public or parliament

whereas internal auditors are responsible to senior management– Objectives. The objectives for external auditors are defined by law whereas those for internal auditors are set by

management and the audit process is a key part of evaluating the effectiveness of the management control system inthe light of risks identified.

3 (a) The classical theorists were primarily concerned with the maintenance of control from the top of an organisation. They wroteat a time when relatively little was understood about the ways in which organisation design can affect human motivation andabout the human relations aspects of management and work organisation. The classical school of management held the viewthat there were universal principles that can be applied to all organisations. Management was seen as a matter of controllingresources and processes rather than people. Classical theory focuses on the efficient structuring of organisations. Henri Fayolwas one of the most influential classical theorists – a French industrialist who pioneered ideas about how organisations mightbest be structured – he advocated that there should be division of labour i.e. the practice of dividing work into specialisedtasks that enable people to specialise in what they do best. Other important elements of the classical school were the ideasof limited spans of control (i.e. number of direct subordinates) – typically a limit of three to six were recommended and alsothat there should be a limited number of hierarchical levels. Spans of control were to be limited so that it was possible toretain adequate supervisory control over subordinates, sufficient communication with them and adequate coordinationbetween their activities. A restricted number of hierarchical levels were advocated so that loss of control down a hierarchyand any dilution of instructions before they reached the required level were minimised.

(b) Planning involves working out, in broad outline, the things that need to be done and the methods for doing them toaccomplish the overall purpose set for the organisation. This involves setting objectives and the procedures for ensuring thatthe objectives are achieved. This can be for the whole organisation or for a part of it. Organising involves setting up andstaffing the most appropriate form of organisation to achieve its overall aims and objectives. This will include grouping taskand activities into jobs for individuals and groups, creating groups of jobs into sections and departments and delegatingauthority to carry out jobs. Commanding involves giving instructions to others to carry out tasks where the manager has

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authority over decisions and responsibility for performance. This also involves exercising leadership to motivate people to worktogether to the best of their ability as part of a team. Coordinating involves harmonising the activities of individuals and groupswithin the organisation and integrating various parts of the work. Controlling involves measuring, monitoring and correcting,as necessary, the progress of work in relation to the overall plan – this will include the activities of individuals and groups.

4 (a) Conflict takes place in organisations because they function by means of adjustments and compromises. People’s views oftenconflict because individuals and teams have their own goals, interests and priorities which may not always be compatible. Inaddition there can be personality clashes. Conflict can arise when there is change because change may be seen as a threatto be challenged or resisted. Power and resources in organisations are limited and people compete for them - this can alsolead to conflict. There may also be differences and incompatibilities of work methods, timescales and working style so thatindividuals or teams frustrate each other with apparent lack of co-ordination. Poor communication can often lead to conflict.

(b) This approach suggests that there are three basic ways in which a conflict or problem can be worked out: win-lose, lose-loseor win-win. Firstly, win-lose – this is quite common and describes a situation where one party gets what it wants at theexpense of the other party. Secondly, lose-lose – this describes a situation where neither party gets what it really wanted - inessence a poor compromise. This is often a common outcome to resolving conflict. Thirdly, win-win – this is not necessarilycommon but working towards it often leads to the best solution. It describes a situation where both parties get as close aspossible to what they really want. It is critical to this approach to fully understand what both parties really want, and whatthey really don’t mind giving up.

5 (a) The main risks to data are as follows:

(i) human error – individuals can lose, damage or incorrectly input or store data;

(ii) technical problems – data can be lost or corrupted when equipment fails;

(iii) catastrophic events such as natural disasters or accidents such as fire or burst pipes can break or destroy data storageand transmission facilities;

(iv) malicious damage by individuals inside or outside the organisation who deliberately attempt to damage or tamper withdata;

(v) industrial espionage or sabotage by individuals who deliberately attempt to steal or damage data and information fromthe organisation with a view to commercial gain;

(vi) dishonesty by those who may wish to access information for personal gain;

(vii) when data is transmitted over a network or a telecommunications line, especially the internet, there may be additionalspecific security dangers which arise because the data is carried by third party carriers and is outside the direct controlof the organisation;

(viii) additional dangers include the following: corruptions from viruses, the possibility of inadvertently overwriting someoneelse’s data, unauthorised individuals being able to access parts of the network, risks from hackers, the downloading ofinaccurate or imperfect information or information being intercepted leading to loss of service;

(ix) in addition to the above, all organisations have a responsibility to ensure that data is adequately protected against anybreaches of confidentiality.

(b) There are a number of ways in which the risks to data identified above can be minimised. Risks of human error can bereduced by checks and controls, systematic procedures, ongoing employee training and also appropriate supervision. Rigorousrecruitment and selection procedures go some way to ensuring that staff employed are honest and trustworthy and will notengage in malicious acts or any form of espionage. Risk of malicious damage can also be minimised by controlling access,both physically (using locks and security checks) and electronically (using passwords, encryption of data, anti-virus softwareetc). Risks of disaster are difficult to foresee, but contingency plans may be made, including off-site back-up storage of files,emergency power generators and adequate insurance for any loss or damage to data and associated systems. Organisationsshould take care to ensure that paper files or computer disks are not left where they are generally accessible. Safes,strongboxes and filing cabinets should be locked when not in use. Passwords should be used where advised and should notbe shared. Confidential information should not be copied or transmitted without specific authorisation and appropriate securitymeasures. It is important to ensure that appropriate communication channels are selected to protect data where necessary.Back-up systems are important to minimise the risks associated with data held electronically. E-mail, intranets and theInternet mean that computer systems are increasingly connected over telecommunications lines and these are rarelycompletely secure. Use of passwords and userprofiles make an important contribution to minimising risk. A password is aunique code a person uses to enter the system. For a password system to be effective, passwords should be changed regularly,difficult to guess, confidential and hidden. A user profile in a networked system only allows certain people access to certainfiles. Records can be kept of access to files, so that a trail can be left of unauthorised attempts at entry. Despite passwordsand user profiles, expert hackers may still be able to enter the system. Keeping track of any attempts made can alert managersto repeated attempts to break into the system or of any emerging patterns. Use of anti-virus software which can detect anderadicate viruses is an important way to minimise risks to electronic data. Latest upgrades should be used to ensure that anynew viruses could be dealt with. Organisations must also guard against the introduction of unauthorised software to theirsystems as many viruses are spread on pirated versions of popular software. Any disks received from outside should bechecked to ensure that they are virus free. Systems should also make use of firewalls to ensure the safety and security of theirdata.

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1 (a) 4 marks for clear explanation of matrix structure 4 marks

(b) 2 marks for each advantage up to a maximum of 8 marks

(c) 2 marks for each disadvantage up to a maximum of 8 marks

Total 20 marks

2 (a) 3 marks for a clear explanation of the role 3 marks

(b) 2 marks for the purpose of the report. 2 marks for each item included up to a maximum of 8 marks

(c) 3 marks for each difference identified up to a maximum of 9 marks

Total 20 marks

3 (a) 10 marks for clear explanation of classical management, to include control issues, spans of control, hierarchy, universal rules, top down, and consideration of human aspects. 10 marks

(b) 5 marks for each full explanation of any two functions. 10 marks

Total 20 marks

4 (a) 2 marks per valid point made about each source of conflict identified up to a maximum of 12 marks

(b) 3 marks for clear description of win-win, 2·5 marks for contrast with win-lose, 2·5 marks for contrast with lose-lose. 8 marks

Total 20 marks

5 (a) 2 marks per valid point made about each potential risk identified and explained up to a maximum of 10 marks

(b) 2 marks per valid point made about each method of minimising risk explained up to a maximum of 10 marks

Total 20 marks

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ADVANCED LEVEL


QUESTION PAPER






Pape

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1 Planning is an important business process and can be critical to an organisation’s success.

Required:

(a) Give two reasons why business planning is important to managers in organisations. (4 marks)

(b) Explain two main differences between strategic planning and tactical planning. (4 marks)

(c) Identify and briefly describe four elements that you might expect to see in an organisation’s human resourceplan. (12 marks)

(20 marks)

2 All business and accounting systems require formal controls if they are to be useful and effective within anorganisation: the payroll system is one example.

Required:

(a) Explain the purpose of a payroll system. (2 marks)

(b) What information relating to individual employees would you expect to be held on a payroll file? (6 marks)

(c) Identify and explain four key controls relating to wages and salaries. (12 marks)

(20 marks)

3 Delegation of authority is the process whereby a superior devolves to the subordinate part of his or her own authorityto make decisions.

Required:

(a) Give three reasons why a manager or supervisor might delegate some of their authority to their subordinates.(6 marks)

(b) What factors should a manager or supervisor take into account when deciding whether or not to delegate?(6 marks)

(c) Briefly give four reasons why many managers and supervisors are reluctant to delegate. (8 marks)

(20 marks)

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4 One of the main purposes of an effective appraisal system is to improve individual and organisational performance.

Required:

(a) Identify the four key stages of the appraisal interview process. (4 marks)

(b) Provide a full explanation of the kind of activities and actions you would expect to take place at any two ofthe stages you have identified in part (a) above. (8 marks)

(c) Identify and explain two potential disadvantages of an appraisal scheme. (8 marks)

(20 marks)

5 Security aims to prevent others from illegally accessing, stealing and damaging the property of an organisation and/orthe people who work in it.

Required:

(a) Identify and explain the three basic principles of effective security. (12 marks)

(b) Provide two examples of who or what might be particularly at risk in a business organisation. (4 marks)

(c) Provide two examples of particular locations within an organisation that might be at risk. (4 marks)

(20 marks)


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Answers






1 (a) If individuals and groups within organisations are to be effective in working for the achievement of the organisation’sobjectives, they need to know what it is they are expected to do. Planning is important to managers because it enables themto identify the objectives for which they are responsible, enables them to organise how to achieve them and then helps themto measure if they are being successful in achieving those objectives.

(b) Strategic planning involves making decisions about what business the organisation should be in and what its overall objectivesshould be. Strategic planning is long term and considers where the business wants to be in two to three years time – longerin some cases. This involves a consideration of environmental factors, current and potential competitors, declining andemerging markets, possible technological change, etc. Strategic planning deals with many variables and a high level ofuncertainty. The strategic plan is likely to be amended in the light of new developments. Tactical planning involves makingdecisions about how an organisation should go about achieving the overall objectives determined by the strategic plan.Tactical planning considers a much shorter time period, for instance a year, and decides what needs to be done within thatyear to implement the strategic plan. At this level, planning will involve deciding upon expansion targets, market penetration,asset purchases, financing requirements and any improvements which need to be made to efficiency.

(c) The human resource plan of an organisation is prepared on the basis of the analysis of its future human resource and skillsrequirements. Depending on the organisation’s requirements and the availability of skills within the organisation which canbe developed or deployed, the human resource plan could include the following elements:

(i) Recruitment plan – which considers the numbers and types of people/skills and when these are required, along with atarget recruitment programme for both internal and external appointments.

(ii) Training and development plan – which considers the skills needing to be developed, the number of trainees requiredand also programmes for retraining if appropriate.

(iii) Succession plan – which includes programmes for identification and development of individuals for promotion and plansfor replacements for key management posts.

(iv) Productivity plan – which considers programmes for improving productivity or reducing staffing costs and also developsproductivity targets.

(v) Retention plan – which identifies the actions necessary to reduce avoidable staff turnover or wastage and includes areview of working terms and conditions.

(vi) Redundancy plan – which considers policies for selection and timing of redundancies, timetable for union consultationif appropriate and budgets for redundancy payments.

(vii) Reward plan – which considers salary structure and plans for merit or performance related pay and also salary rises overtime.

2 (a) The purpose of a payroll system is to compute the gross and net wages and salaries of all employees, to produce payslips,cheques and/or listings sent to banks instructing them to make payments and to account for all statutory and non-statutorydeductions.

(b) Payroll files will consist of an individual record for each employee which includes both standing and variable (sometimescalled transactional) data. Standing data will include personal details e.g. name, employee number, job grade, address etc aswell as the rate of pay for the employee, details of any deductions, their tax code and their holiday entitlement. Variable ortransactional data will include gross pay to date, tax to date and pension contributions if applicable.

(c) The four main aims of any control system relating to a payroll system are concerned with the following areas:

(i) Setting of wages and salaries. This includes ensuring that employees are only paid for work that they have done andthat gross pay has been calculated correctly and appropriately authorised.

(ii) Recording of wages and salaries. This includes making sure that gross and net pay and deductions are accuratelyrecorded on the payroll; that the wages and salaries actually paid are recorded correctly in the bank and cash recordsand general ledger.

(iii) Payment of wages and salaries. This means ensuring that the correct employees are paid.

(iv) Deductions. This includes making sure that the statutory and non-statutory deductions have been calculated correctlyand are authorised and that the correct amounts are paid to the taxation authorities (and also into pension schemes ifappropriate).

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3 (a) Managers and supervisors might need to delegate authority for a number of reasons, including the following. There arephysical and mental limitations to the workload of any one individual in authority and it may be necessary to delegate toensure that the workload can be effectively managed. Managers and supervisors may wish to delegate in order that they arefree to concentrate on the aspects of their work which only they are competent to do (e.g. detailed planning or aspects ofbudgeting). The increasing size and complexity of many of today’s organisations demands increasing specialisation andeffective delegation is one way of developing this. Managers also need to consider that delegation provide subordinates withdevelopment opportunities.

(b) The decision of whether or not it is appropriate to delegate authority is an important one and there are a number of factorswhich may need to be taken into consideration. It is always important that authority resides where it is best placed to beexercised effectively. The manager or supervisor will need to be confident that the subordinate has the necessary experienceand expertise to undertake the task. The manager will also need to trust the reliability and competence of the subordinate toundertake the task or make the decision. The task or decision should be within the capability of the subordinate and he orshe must be consulted and be prepared to accept it.

(c) Many managers and supervisors are reluctant to delegate and attempt to do many routine tasks themselves as well as moreimportant ones. Some of the reasons for this might be as follows:

(i) They may have low confidence and trust in the abilities of their staff;

(ii) They may believe that they are the only one capable of doing the task properly;

(iii) They may wish to keep enjoyable parts of the job to themselves;

(iv) Some managers feel more powerful by retaining their decision making privileges;

(v) They may fear that their subordinates will use the authority poorly;

(vi) They may not wish to take on the additional burden of being accountable for any mistakes that their subordinates mightmake while executing the task;

(vii) They may believe that their subordinates do not wish to have broader decision making responsibilities;

(viii) They may wish to ‘stay in touch’ with the department or team and feel that any act of delegation removes them fromthe day to day activities;

(ix) They may feel threatened and be unwilling to admit that assistants have developed to the extent that they could performsome of the manager’s duties. They may feel threatened by this sense of redundancy.

(x) There may be poor control and communication in the organisation so that the manager feels he has to do everythinghimself in order to retain control and responsibility for the tasks;

(xi) There may be an organisational culture which has failed in the past to recognise and reward effective delegation. In thisclimate the manager may feel that delegation is seen as shirking responsibility;

(xii) There may be a lack of understanding about what delegation involves;

(xiii) There may be a lack of training and development of managers in the skills needed for effective delegation;

(xiv) Managers and supervisors may have had poor experiences of delegating to others.

4 (a) The four key stages of an appraisal interview are: prior preparation, the interview itself, gaining commitment and follow upactions.

(b) There are a number of activities and actions that might take place at each of the four stages.

(i) Prior preparation. At the preparation stage it is important that the appraiser ensures that the time and place planned forthe interview are appropriate and that there will be no interruptions. The appraiser should ensure that he/she has all ofthe information needed to be able to conduct the interview effectively e.g. he/she should review the employee’s historyand any previously agreed targets or objectives. Other sources of feedback should be consulted if necessary e.g. liaisonwith other work teams or consultation with other department managers if the appraisee has been involved in more thanone area of the business. Finally it is important that the appraisee is given time to prepare and to undertake their ownself-appraisal before the interview and to gather any information that they may need.

(ii) The interview itself. It is important that the interview is seen as a two way process and exchange. The appraiser mustbe able to demonstrate effective listening skills. The employee should be encouraged to share views freely and to reviewhis/her work performance objectively and honestly. Any problems or development needs should be identified.

(iii) Gain commitment. At this stage it is important to agree a plan of action that both parties can agree and commit to. Theremay be actions for both parties and it is important that these are recorded accurately. Usually at this stage all of theassociated appraisal documentation is completed and development plans are put in place.

(iv) Follow up. This is an important stage of the appraisal interview process and involves making sure that any agreed actionsare carried out and that progress is monitored. It also involves making sure that both parties are kept informed ofprogress.

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(c) There can be many reasons why the outcomes of an appraisal system are not satisfactory, including the following. There canbe uncertainty, lack of clarity and lack of a shared understanding regarding the overall objectives of the appraisal system.Sometimes appraisals are seen as confrontational or as an opportunity to tackle major problems which have not been dealtwith effectively in the past. This means that the overall purpose and objective of the appraisal is not achieved and people donot approach the appraisal with a positive attitude. In these circumstances the outcomes are not always satisfactory e.g. it isnot always possible to reach agreement on performance levels or to get objective feedback. Feedback at an appraisal is oftendelivered badly, the appraisal may be based on most recent performance and not on the whole year and there can be a lackof attention to the development needs of the employee.

Sometimes appraisal can be seen as a one sided process, where the interview provides an opportunity for the manager to sitin judgement on the employee. This can lead to the employee feeling threatened and he/she is put on the defensive. In somecases, the introduction of an appraisal system can lead to increased labour turnover.

Appraisal can sometimes be seen as nothing more than an informal, friendly chat with no real purpose or outcome. Somemanagers may be embarrassed by the need to give feedback and may do so inappropriately. In some organisations, theappraisal system is over bureaucratic and involves a great deal of form filling. This can lead to it being seen only as a formfilling exercise, with no real outcomes. In some cases, organisations do not allocate sufficient resources to the appraisalsystem; this means that development needs might be identified but cannot be fulfilled. The underlying purpose of theappraisal, to improve individual and organisational performance, can be overlooked.

5 (a) The three basic principles of security are delay, checking and alarm. Delay means providing appropriate lines of defencebefore vulnerable areas and items can be reached. This could include some or all of the following: making sure that outerdoors to the main building are securely locked and bolted, ensuring that there is a secure, staffed reception area for visitors,ensuring that all offices are locked and where appropriate, guarded, by making sure that filing cabinets are lockable and arekept locked when not in use and finally by providing safes.

The second principle of security is checking – this means having appropriate procedures for authorised access to vulnerableareas or items. This could include some or all of the following: making sure that authorised staff can be clearly identified eitherby a uniform or an identity badge, (preferably showing a photograph), by ensuring that all visitors are checked in, escortedwhile they are on the premises and checked out on departure, by always ensuring that any unauthorised visitors on thepremises are challenged, by the use of personal pass words or swipe cards to gain authorised access to different parts of theorganisation and finally by seeking appropriate authorisation before access to files can be allowed.

The third principle of effective security is alarm. This means making sure that there are adequate procedures for alertingthose responsible for responding to security breaches. This could include some or all of the following: ensuring that buildingsare fitted with electronic security alarms and by carefully controlling access to entry codes, by training all individuals in theorganisation to be alert to potential security breaches and to be aware of the procedures for reporting them and throughensuring that computer systems have the ability to warn of any unauthorised attempts to access files. Internal security is alsoimportant and organisations should ensure that they have effective recruitment, selection and screening systems for all staffand security staff in particular.

(b) Items that are valuable, portable and easily saleable are particular security risks in an organisation, for example smallequipment such as computers, printers, video and television equipment; vehicles or office furniture. Documentation such asownership documents e.g. share certificates or title deeds and cash and cheques are also vulnerable. Other vulnerable itemsinclude security devices like pass cards and keys or information stored in portable form e.g. paper files, floppy discs and CDRoms. The types of people who might be at particular risk in an organisation are: front line security staff e.g. security guardsand reception staff, staff with custody of important assets e.g. counter staff in banks. Key personnel may also be at risk ofintimidation for the purposes of obtaining cash, assets or security codes.

(c) The following are some of the most vulnerable areas or locations in an organisation: all public or open areas (such asentrances, hallways, parking areas, toilets, stairways and lifts), especially if they are unattended, all points of entry and exit(doors, windows, gates and lifts), all unattended areas (store rooms), unlit areas, and reception areas. Points of transit orstorage outside the organisation’s premises can also be a source of security risk e.g. valuable items may be taken out of theoffice e.g. cash for banking, products for delivery, laptop computers for working at home. Finally any areas where at-risk itemsand data might be concentrated also pose a security risk e.g. store rooms, computer rooms, offices, file stores etc – especiallyif they are located near points of entry or exit or busy public areas.

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1 (a) 2 marks for each reason given. 4 marks

(b) 2 marks for each difference explained. 4 marks

(c) 1 mark for each element identified and a further 2 marks for each element subsequently explained. 12 marksTotal 20 marks

2 (a) 2 marks for a clear explanation of the purpose. 2 marks

(b) 1 mark for each item of information included up to a maximum of 6 marks. 6 marks

(c) 1 mark for each aim identified up to 4 marks and a further 2 marks for each aim appropriately explained. 12 marksTotal 20 marks

3 (a) 2 marks for each reason given. 6 marks

(b) 1 mark for each factor identified up to a maximum of 6 marks. 6 marks

(c) 2 marks for each reason identified up to a maximum of 8 marks. 8 marksTotal 20 marks

4 (a) 1 mark for each stage identified. 4 marks

(b) 4 marks for each full explanation. 8 marks

(c) 1 mark for each reason identified and further 3 marks for the explanation of each reason. 8 marksTotal 20 marks

5 (a) 1 mark for each principle identified up to a maximum of 3 marks and a further 3 marks for an explanation of each of the three principles. 12 marks

(b) 2 marks for each example provided. 4 marks

(c) 2 marks for each example provided 4 marksTotal 20 marks

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ADVANCED LEVEL

FRIDAY 9 JUNE 2006

QUESTION PAPER






Pape

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1 Every organisation interacts with its external environment.

Required:

(a) Identify four external environmental influences which can affect any organisation. (8 marks)

(b) Explain fully, with the use of examples, how any two of those external influences identified in part (a) above,might affect your own organisation, or one with which you are familiar. (12 marks)

(20 marks)

2 Management information is used for a wide variety of purposes. Three main functions of management wheremanagement information can be useful are planning, control and decision-making.

Required:

(a) Explain how management information can assist in each of the three areas identified above. (12 marks)

(b) Identify and describe four key internal sources of management information. (8 marks)

(20 marks)

3 Robert Blake and Jane Mouton carried out research (The Ohio State Leadership Studies) into managerial behaviourand developed a grid to explain their findings.

Required:

(a) What are the two essential dimensions of Blake and Mouton’s managerial grid? (4 marks)

(b) Identify and explain any two of the styles of management shown in the grid. (10 marks)

(c) Identify and briefly explain two practical applications of the grid. (6 marks)

(20 marks)

4 Communication underpins everything you do at work. Effective communication is a two way process and is oftenshown as a cycle.

Required:

(a) Explain, with the aid of a diagram, the communication process/cycle. (8 marks)

(b) Identify four barriers to effective communication. (4 marks)

(c) Identify four ways in which management could improve communication in an organisation. (8 marks)

(20 marks)

2



5 The International Labour Organisation (ILO) has never accepted that disease and injury are an inevitable part ofworking life.

Required:

(a) Identify four reasons why health and safety should be important to all organisations. (4 marks)

(b) What responsibilities do individuals have to ensure a healthy and safe working environment? (8 marks)

(c) What responsibilities do organisations have to ensure a healthy and safe working environment? (8 marks)

(20 marks)


3



Answers



ACCA Certified Accounting Technician Examination – Paper T5 June 2006 AnswersManaging People and Systems

1 (a) Any four of the following might be identified: political, economic, sociocultural, technological, ecological, legal, demographic.

(b) Answers will vary depending on which two factors candidates chose to explain more fully and also on the type of employingorganisation and the examples used.

(i) Political – government policy affects the whole economy and governments are responsible for creating and maintaininga stable framework in which business can be done. The quality of government policy is important in providing physical,social and market infrastructures. Businesses operating internationally need to satisfy themselves that the politicalenvironment in any countries in which they may wish to operate is satisfactory. Other political factors includegovernment stability, taxation policy, foreign trade polices and social welfare policies.

(ii) Economic – the economic environment is an important influence at local and national level. It will include overall growthor fall in gross domestic product which will have an impact on the demand for goods and services. An understandingof local trends e.g. types of industry in the area, office/factory rents, labour rate and house prices will be important forfirms wishing to invest in an area or seeking to relocate their business. Inflation can have an impact on businessdecisions – often wage inflation compensates for price inflation. Interest rates determine how much it costs to borrowmoney – some businesses carry a high level of debt – or may wish to borrow funds in order to undertake a majorinvestment. Other economic factors include: general business cycles, money supply, unemployment, and disposableincome.

(iii) Sociocultural – this embraces a number of areas including demographics (see below) and also the implications oftechnology on working patterns. There is now a greater emphasis on work–life balance issues and this can impact onemployment polices and approaches to managing work. The increased incidence of out of town supermarkets and retailcentres in some countries has implications for town centre developments and transportation links. Other socioculturalfactors include income distribution, social mobility, lifestyle changes, consumerism and levels of education.

(iv) Technological – technology enables new products and processes to be developed as well as affecting the ways in whichsome services can be provided e.g. companies selling easily transportable goods like books and CDs are havingincreasing success over the internet. Technology can also affect the way in which some firms are managed through bettercommunication methods or by enabling home working. The education sector has been affected by the growing use ofinternet technology over the past few years – some course materials for students are now available electronically andsome of these enable interaction with tutors and with other students; lectures can be delivered via video links to multipleaudiences simultaneously. This has implications for the skills and resources required by organisations who are in thebusiness of education and training. Other technological factors include government spending on research, speed oftechnology transfer and rates of product and process obsolescence.

(v) Ecological/Ethical – this is a growing area and will include approaches to waste disposal, pollution, energy consumptionand corporate social responsibility (CSR) issues within the supply chain. New markets for products and services areopening up in this area and new industries are developing to serve these. This kind of development could be importantfor a company which manufactures and supplies traditional packaging products which may be required to modify theirmanufacturing processes or material used to ensure that the end products can be disposed of appropriately. Similarly,an organisation which undertakes manufacturing in a low labour cost country will need to satisfy itself that theemployment conditions of the employees is satisfactory and does not contravene any legal requirements. With theincreasing emphasis on the CSR agenda, this is becoming an important business issue for many organisations.

(vi) Legal – the legal environment is often included in a discussion of the political environment as it is within thisenvironment that laws are made. However, for many organisations, the legal or regulatory framework within which theyoperate is so important that it is considered as a separate and distinct category. Legal factors include: the overall generallegal framework which will determine the basic ways of doing business, ownership issues, right and responsibilities;health and safety, data protection issues, environmental considerations like pollution control, and waste disposal andspecific laws surrounding tax payments or competition law dealing with cartels and price fixing. Some legal andregulatory factors will affect particular industries, particularly if the public interest is served – for example, in the UKthere are specific regulations which influence price and market access in the areas of electricity, gas,telecommunications, water and rail transport.

(vii) Demographic – this is often included as part of the social environment, but for some organisations it is often a crucialissue and is worthy of separate consideration. Some important demographic factors are: growth (or decline) of nationalpopulation, changes in the age distribution of the population, concentration of population into certain geographical areas,ethnicity, household and family structure, employment trends and increases or decreases in the overall standard of living.An example of the effect of a demographic factor would be an organisation which specialises in the provision of servicesto the elderly: in the UK, demographic shifts have led to an increasingly ageing population and this can have a majorimpact on the resources that the organisation might need to enable them to continue to offer an appropriate level ofservice to this group.

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2 (a) Three main functions of management where management information can be useful are as follows:

(i) Planning: management needs to decide what the objectives of the company are and how they can be achieved.Management information is used to help management to plan the resources that a business will require and how theywill be used.

(ii) Control: once management puts a plan of action into operation, there needs to be some control over the business’sactivities to make sure that they are carrying out the original plans.

(iii) Decision-making: management at all levels within an organisation takes decisions. Decision-making always involves achoice between alternatives. It is the role of the management accountant to provide information so that managementcan reach an informed decision.

Management information is also needed for pricing, valuing stock, assessing profitability and deciding on the purchase ofcapital assets.

(b) Primary sources of management information include sales invoices and purchase invoices. These also provide information forthe financial accounts of a company. In many organisations this information will be keyed into a computer system and willbe coded so that information can be provided in the specific categories required. For example, if the organisation is dividedinto different business units, information about costs and income must be coded to the correct business unit. In a factorywhich makes different products, raw materials must be coded to the product which uses them. Errors in coding will lead toinaccurate information which may have an impact on management planning, control and decision-making. Other sources ofinformation may include reports from various departments of the organisation including: timesheets, employee and wagesand salary information from the human resources department; goods received notes and materials requisition notes from thewarehouse; and price lists (in-house and also suppliers).

3 (a) Blake and Mouton carried out research into managerial behaviour and observed two basic dimensions of leadership: (1)concern for production (or task performance) and (2) concern for people. Along each of these two dimensions managers couldbe located at any point on a continuum from very low concern to a very high concern. Blake and Mouton observed that thetwo concerns did not seem to correlate either positively or negatively – for example a high concern in one dimension did notseem to imply a high or low concern in the other dimension. Individual managers could reflect varying degrees of concern forpeople or concern for task.

(b) The five styles of management can be seen on the grid which follows. This plots a manager’s style in terms of concern forpeople and concern for production.

(i) (9:9) – the ‘team management style’ this combines deep concern for people with a clear concern for production. This isa high performance manager who achieves high work achievements through ‘leading’ committed people who identifythemselves with organisational aims.

(ii) (1:9) – the ‘country club management style’, this manager is too concerned with people and often gets very little workdone. The manager is very attentive to staff needs and has developed satisfying relationships. However, little attentionis paid to achieving results.

(iii) (9:1) – ‘task management style’, this is too concerned with production and creates an atmosphere of low morale. Thisapproach shows almost total concentration on achieving results. People’s needs are virtually ignored.

8

(team) 9.91.9 (country club)

1.1 (impoverished)(task) 9.1

1 2 3 4 5 6 7 8 9

1

2

3

4

5

6

7

8

9

Concern for productionLow High

Low

High

Conc

ern

for

peop

le

The managerial grid

5.5(middle road)



(iv) (1:1) – ‘impoverished management style’, – this has no concern for either people or output.

(v) (5:5) – ‘middle-of–the-road management style’, (sometimes also referred to as the dampened pendulum), this showssome concern for people and some concern for production. The manager adopting this style will achieve adequateperformance through balancing the necessity to get results while maintaining the morale of people at a satisfactory level.

There are a number of practical applications of the managerial grid. These include:

(i) As a training aid(ii) As a management development tool(iii) As part of an appraisal(iv) Enables managers to reflect on and assess the appropriateness of their own management style in different situations and

circumstances.

4 (a) Communication is the transmission and exchange of information and is a two way process. Signals or messages are sent bythe communicator and received by the other party who sends back some form of confirmation that the message has beenreceived and understood. Encoding and decoding are important elements within the communication process/cycle; words aremerely the symbols or ‘stand-ins’ for your ideas and intentions in communicating. In other situations, a gesture, pictures,symbols or numbers will be the most appropriate to use. Whatever codes are used, it is important that they are understoodby both parties. Feedback is another important element in the communications cycle. It is the reaction of the receiver thatindicates to the sender that the message has (or has not) been received and enables him or her to assess whether the messagehas been understood and correctly interpreted. Feedback can range from a smile or a nod to a blank look or a shrug of theshoulders. Feedback can also range from the desired action being taken to no action, or the wrong action, being taken. Thecommunications process/cycle is often represented diagrammatically as follows:

(b) There can be many barriers to effective communication including the following

(i) Distortion – this is the term used for a process through which the meaning of a message is lost in the coding or decodingstages. Misunderstandings may arise from technical or ambiguous language, misinterpretation of symbols and tones ofvoice.

(ii) Noise – this refers to general interference in the environment of communication which prevents the message gettingthrough clearly. This might be physical noise e.g. passing traffic or machinery operation, technical noise e.g. a badinternet connection or a poor telephone line, social noise e.g. differences in personalities, status or education orpsychological noise e.g. anger, stress or prejudice which can distort what is heard.

(iii) Misunderstandings, due to lack of clarity or poor explanation.

(iv) Non-verbal signs e.g. gestures or facial expressions which contradict the verbal message.

(v) Failure to give feedback.

(vi) Overload – a person being given too much information to digest in the time available.

(vii) People only hearing what they want to hear- i.e. being selective in how they receive the message.

(viii) Differences in social, cultural or educational background.

(ix) Poor communication skills on the part of either the sender or the recipient or both.

9

➡SENDER

InformationIdeas

AttitudesNeeds

ENCODEDMESSAGE(words,symbols,sounds,

gestures etc)

➡MEDIUM

LetterPoster

DiscussionEtc

DECODEDMESSAGE

(Information.ideas,

attitudes,needs)

➡RECEIVER

Under-standingof message

and/or responserequired

➡

CHANNEL

(phone line, postal services, noticeboard, interviews etc)

FEEDBACKMessage received and

understood?



(c) There are many ways in which the communication system in an organsation could be improved. Depending on the problem,some measures might be as follows:

(i) Encourage, facilitate and reward effective communication. Status and functional barriers can be minimised by improvingopportunities for formal and informal networking and feedback. This means creating a culture where effectivecommunication can take place.

(ii) Give training and guidance in basic communication skills, including consideration of recipients, listening and givingfeedback.

(iii) Minimise the potential for misunderstanding. Make people aware of the differences in culture and perception and teachthem to consider others’ viewpoints.

(iv) Adapt technology systems and procedures to make communication easier; making it more effective through clear mobilephone reception for example or by making it faster by providing laptops for e-mailing instructions or decisions, makingit more consistent through regular reporting routines and making it more efficient through reporting by exception.

(v) Manage conflict and politics in the organisation so that no basic unwillingness exists between business units ordepartments.

(vi) Establish communication channels and mechanisms in all directions; regular staff or briefing meetings, in-housenewsletters or journals. Upward communicating should be particularly encouraged, using mechanisms such as internalmeetings, suggestion schemes, open door access to managers and regular performance feedback sessions.

(vii) Communication is generally improved when interpersonal trust exists – especially between subordinates and superiors.This is achieved in a variety of ways and will depend very much on the management style of the manager, on theattitudes and personality of the individuals involved and on other environmental variables.

5 (a) There are many reasons why health and safety at work should be important to all organisations.

(i) Employees – as human beings – should be protected from needless pain and suffering.

(ii) Employees and employers often both have legal obligations to take reasonable measures to promote health and safeworking.

(iii) Accidents, illness and other causes of employee absence and/or impaired performance cost the employer money.

(iv) A business’s corporate image may suffer if its health and safety record is poor.

(v) A business’s employer brand, i.e. its reputation as an employer may suffer if its health and safety record is not good.This may make it difficult to attract and keep qualified staff.

(b) In very general terms, everyone in the organisation is responsible for health and safety. As an individual, in order to contributeto a healthy, safe and secure environment there are a number of things that you may need to do:

(i) Be alert to potential hazards as you go about your work

(ii) Take responsibility for your own behaviour in the workplace, in order to protect yourself and others.

(iii) Co-operate with your employers’ health and safety measures: read instructions, follow procedures, perform fire drills,etc.

(iv) Keep yourself informed about health and safety issues relevant to your workplace.

(v) Undertake regular training as necessary.

(vi) Warn people who may be at immediate risk as a result of hazardous conditions or behaviours.

(vii) Take steps to minimise hazards, for example by clearing your own work area of obstructions.

(viii) Take steps to mobilise appropriate response procedures for example by sounding alarms or calling a first aid officer inthe event of an accident.

(ix) Inform appropriate people of identified hazards and the need for corrective action which might be beyond the scope ofyour own authority.

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(c) Your organisation may have dedicated departments, managers or staff in charge of health and safety. These may includespecialists such as, a first aid officer or a medical officer, an employee counsellor and/or health promotion officer, a fireprevention officer, security guards or a building manager with responsibly for a many different aspects of the workenvironment. The role of all of these people is to make and implement relevant polices and procedures, to listen to employeeconcerns and to respond to problems and emergencies.

In addition, a number of employee health and safety representatives may be appointed by the trade unions or staffassociations in your workplace, by agreement with your employer. Their role is to listen to employees’ concerns and to consultwith the employer on their behalf.

Legislation can also impose general duties upon employers to make sure that all systems and work practices are safe, thatthe work environment is safe and healthy – i.e. well lit, warm, ventilated and hygienic and that all plant and equipment iskept up to the necessary standard. Organisations may be required to provide protective clothing, safety guards on machineryand appropriate training to enable employees to use machinery and equipment in a safe manner.

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ACCA Certified Accounting Technician Examination – Paper T5 June 2006 Marking SchemeManaging People and Systems

1 (a) 2 marks for each influence identified up to a maximum of 8 marks. 8 marks

(b) 3 marks for each influence explained, up to a maximum of 6 marks, and a further 3 marks for appropriate use of examplesin each explanation. 12 marks

Total 20 marks

2 (a) 4 marks for each explanation up to a maximum of 12 marks. 12 marks

(b) 2 marks for each source identified up to a maximum of 8 marks. 8 marks

Total 20 marks

3 (a) 2 marks for each dimension identified. 4 marks

(b) 5 marks for each style identified and explained. 10 marks

(c) 3 marks for each practical application identified. 6 marks

Total 20 marks

4 (a) 6 marks for a full explanation to include reference to encoding, decoding and feedback and 2 marks for a clearly labelleddiagram. 8 marks

(b) 1 mark for each barrier identified up to a maximum of 4 marks. 4 marks

(c) 2 marks for each improvement suggested up to a maximum of 8 marks. 8 marks

Total 20 marks

5 (a) 1 mark for each reason identified up to a maximum of 4 marks. 4 marks

(b) 2 marks for each responsibility up to a maximum of 8 marks. 8 marks

(c) 2 marks for each responsibility up to a maximum of 8 marks. 8 marks

Total 20 marks

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ADVANCED LEVEL


QUESTION PAPER






Pape

r T5




1 Many accounting systems are now computerised. Computerised accounting systems have a number of advantagesover manual systems, but there are also a number of disadvantages.

Required:

(a) Identify four advantages of computerised accounting systems. (10 marks)

(b) Identify four disadvantages of computerised accounting systems. (10 marks)

(20 marks)

2 Every organisation is likely to be exposed to the risk of fraud.

Required:

(a) Identify four common types of fraud. (8 marks)

(b) Explain the consequences of the types of fraud identified in part (a) above. (12 marks)

(20 marks)

3 Motivation is a very important element in the management of individuals and can be a useful tool for improvingproductivity.

Required:

(a) Explain Abraham Maslow’s theory of motivation. (10 marks)

(b) Give five major practical limitations of Maslow’s theory. (10 marks)

(20 marks)

4 Training is the systematic development of the attitude, knowledge, skill and behaviour pattern required by anindividual in order to perform a given task or job effectively.

Required:

(a) Explain five benefits of training for an organisation. (10 marks)

(b) Explain five benefits of training for individual employees. (10 marks)

(20 marks)

2

6D–E

NG

PA

Pap

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56D

–EN

GA

AP

aper

T5

6D–E

NG

AB

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56D

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GA

CP

aper

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6D–E

NG

AD

Pap

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5



5 An effective health and safety policy is an important part of maintaining the health and safety standards promoted bythe International Labour Organisation.

Required:

(a) Identify the five key elements that you would expect to see in a health and safety policy. (10 marks)

(b) Identify five steps an organisation can take to ensure that its health and safety policy is effective.(10 marks)

(20 marks)


3

6D–E

NG

AE

Pap

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5



Answers




1 (a) The advantages of computerised accounting systems compared with manual systems are:

(i) Systems and packages can be used by non-specialists.(ii) Computerised systems are more accurate than manual systems.(iii) A computer is capable of handling and processing large volumes of data.(iv) Once the data has been inputted, computerised systems can analyse data very quickly to present useful control

information for managers such as a trial balance or debtors’ schedule.

(b) The disadvantages of computerised accounting systems over manual systems are:

(i) The initial time and costs involved in installing the system, including the need for staff training.(ii) The need for security checks to make sure that unauthorised personnel do not gain access to data files.(iii) Computers require information to be expressed in the form of codes and it is necessary to develop systems of coding

and checking. (iv) The potential for a lack of audit trail – as it is not always easy to see where a mistake has been made.

2 (a) Fraud falls into one of two main categories: the removal of funds or assets from a business; and the intentionalmisrepresentation of the financial position of the business. Types of fraud associated with the removal of funds or assetsinclude:

(i) Theft of cash or stock.(ii) Payroll fraud through falsifying timesheets, deliberate miscalculation of payslips, fictitious staff added to payroll lists.(iii) Fictitious customers.(iv) Collusion with customers.(v) Manipulation of bank reconciliations and cash books.(vi) Misuse of pension funds or other assets.(vii) Disposal of assets to employees.

Types of fraud associated with the intentional misrepresentation of the financial position of the business include:

(i) Over or under valuation of stock. There is a range of ways in which stock may be incorrectly valued for accountspurposes: the records can be manipulated by deliberate miscounting, deliveries to customers may be omitted from thebooks, returns to suppliers may not be recorded and obsolete stock may not be written off but held at cost on the balancesheet.

(ii) Fictitious sales channelled through the accounts.(iii) Manipulation of year-end events to enhance turnover during the year just ended.(iv) Understating expenses. Failure to record all expenses accurately will inflate the reported profit figure.(v) Manipulation of depreciation figures. Applying incorrect rates or inconsistent policies in order to understate depreciation

will result in a higher profit and a higher net book value, giving a more favourable impression of financial health.

(b) The precise ways in which an organisation is affected by fraud depends upon the type of fraud being carried out. If the fraudis in the category of the removal of funds or assets from the business then there will be both immediate financialconsequences and also longer-term effects on company performance. The immediate consequence is that profits will be lowerthan they should be. The business has less cash and fewer assets and therefore the net asset position is weakened. Returnsto shareholders (if applicable) are likely to fall as a result. In the longer term, the reduction in working capital makes it moredifficult for the company to operate effectively. In the most serious cases, fraud can ultimately result in the collapse of thebusiness.

If the fraud is in the category of intentional misrepresentation of the financial position of the business then the financialstatements will not give a true and fair view of the financial situation of the business. Results may be either artificiallyenhanced or under-reported. It is also possible that managers in charge of a particular division can artificially enhance theirdivisions’ results, thereby deceiving senior management.

3 (a) Maslow described five needs and put forward a theory about the motivating power of each of those needs. The five needsare:

(i) Physiological needs – food and shelter.(ii) Safety needs – the need for security and order and the need to be free from threat.(iii) Social needs – the need for belonging, for relationships.(iv) Esteem needs – the need for respect, recognition and status.(v) Self actualisation – the need for personal fulfilment

In addition to identifying these needs, Maslow argued that these needs could be seen as hierarchical in nature, fromphysiological needs at the bottom up to self-actualisation needs at the top. Each level of need is dominant until it is satisfiedand only then does the next level of need become a motivating factor. Once a particular need has been satisfied it ceases tobe a motivator.

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(b) There are a number of major limitations to Maslow’s theory:

(i) An individual’s behaviour may be in response to several needs simultaneously.(ii) The same need may cause different behaviour in different individuals.(iii) The theory ignores the concept of deferred gratification, whereby individuals are prepared to ignore current suffering or

dis-satisfactions for the promise of future benefits.(iv) Verification of the hierarchy is difficult. The role of pay is ambiguous and self-actualisation is very subjective.(v) The hierarchy reflects UK and US cultural values which may not transfer to other contexts.

4 (a) There are many benefits of training to organisations, including:

(i) Increased motivation. Training programmes can increase commitment to the organisation’s goals, by satisfyingemployee’s self-actualisation needs.

(ii) Managing change. Training can help organisations manage change by letting people know why the change is happeningand give them skills to cope with it.

(iii) Developing corporate culture. Training programmes can be used to build the corporate culture or to direct it in certainways.

(iv) Staff retention. Training can lead to internal transfers and promotions.(v) Recruitment and succession planning. (vi) Increased organisational flexibility. Training ensures that people have a variety of skills.(vii) Fewer accidents and better health and safety.(viii) Less need for supervision – properly trained people can get on with the job.(ix) Better job performance resulting from improved skills.

(b) There are many benefits of training to individuals, including:

(i) Psychological benefits. The employee feels reassured that he or she is of value to the organisation. Increased skill,knowledge and competence also enhances self-esteem and confidence.

(ii) Enhanced portfolio of skills. Even if not specifically related to the current job, training can be useful to the employee indifferent contexts and can make a valuable contribution to the enhancement of their CV.

(iii) Training can also provide the necessary skills and competence that an employee needs for future promotion.(iv) Social benefit. People’s social needs can be met through training and they can also develop a network of contacts.(v) The job itself. Training can help people to do their job better, thereby increasing job satisfaction, promotion and earning

prospects.(vi) An increased understanding of the business as a whole if staff train with other departments.

5 (a) Regardless of the specific needs and hazards of a particular workplace, there will be several key elements to a health andsafety policy which will be common to all. The key elements are:

(i) Risk assessment.(ii) Hazard minimisation.(iii) Systems and procedures (e.g. accident reporting and safety procedures for using specific equipment).(iv) Equipment (provision of protective clothing, ergonomics, safety equipment, maintenance).(v) Information (warnings, instructions).(vi) Training (use of equipment and safety procedures).(vii) Responsibilities.(viii) On-going monitoring.

(b) There a number of steps an organisation can take to ensure that its health and safety policy is effective, including:

(i) Making sure that the policy is known and understood by everyone in the organisation.(ii) Involving people in the development of the policy.(iii) Regularly reviewing the policy.(iv) Clear identification of roles and responsibilities. Everyone in the organisation has a role to play in ensuring their own

health and safety as well as that of their colleagues. It is important that employers and employees are aware of theirown specific responsibilities. Employers are required to make sure that all systems and work practices are safe, that thework environment is safe and that all plant and equipment is maintained to the necessary standard. Employees arerequired to take reasonable care and to cooperate with employers to help them comply with their legal obligations.

(v) Nominating individuals throughout the organisation with specific responsibility for health and safety. This will includenominated safety representatives and trained first aiders within each department. Many organisations appoint a safetycommittee to keep safety measures and policies under review.

(vi) On-going risk management rather than a one-off risk assessment. This includes the following: introducing controls toreduce risk, sharing of risk and hazard information, revising safety policies as appropriate, identifying any particularcategories of employee who are especially at risk and identifying any training needs.

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(vii) On-going health and safety training. The amount and types of training required should be assessed according toindividual needs. All employees should receive induction training when joining the organisation or when transferring toa different department or location. In addition there may be training requirements associated with the use of specificequipment or machinery. Training may also be required on a regular basis to update people regarding any changes tothe law or for technical updates

(viii) Information sharing, awareness and consultation are important in ensuring a health and safety policy is effective.Employees must be clearly advised of any risks and how they can be minimised.

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1 (a) 2·5 marks for each advantage identified up to a maximum of 10 marks 10 marks

(b) 2·5 marks for each disadvantage identified up to a maximum of 10 marks 10 marksTotal 20 marks

2 (a) 2 marks for each type of fraud identified up to a maximum of 8 marks. 8 marks

(b) 3 marks for each implication explained up to a maximum of 12 marks. 12 marksTotal 20 marks

3 (a) 1 mark for each of the five levels of need identified. 5 marks for a clear explanation of the theory. 10 marks

(b) 2 marks for each limitation given up to a maximum of 10 marks. 10 marksTotal 20 marks

4 (a) 2 marks for each benefit identified up to a maximum of 10 marks. 10 marks

(b) 2 marks for each benefit identified up to a maximum of 10 marks. 10 marksTotal 20 marks

5 (a) 2 marks for each of the five elements identified up to a maximum of 10 marks. 10 marks

(b) 2 marks for each step identified up to a maximum of 10 marks. 10 marksTotal 20 marks

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ADVANCED LEVEL

FRIDAY 8 JUNE 2007

QUESTION PAPER






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1 Many different types of activity are carried out in a typical organisation. Many of these activities can be grouped intobroad functional areas within the organisation structure.

Required:

(a) Identify and fully explain any two broad functional areas within an organisation. (10 marks)

(b) Briefly explain any five factors which might influence the way in which an organisation is structured.(10 marks)

(20 marks)

2 An integrated system links together the different elements of an accounting package such as sales, purchases andstock.

Required:

(a) Explain four potential benefits of an integrated system. (10 marks)

(b) Identify and briefly explain five key outputs from a computerised sales ledger system. (10 marks)

(20 marks)

3 There are different levels of management in most organisations. The supervisor is the first level of management.

Required:

(a) Explain four key features of supervision. (8 marks)

(b) With reference to appropriate theories, identify and fully explain three key differences between managementand leadership. (12 marks)

(20 marks)

4 Interpersonal skills are skills used in the interactions and relationships between two or more people.

Required:

(a) State and briefly explain five examples of interpersonal skills. (10 marks)

(b) State and briefly explain five examples of where interpersonal skills are important in an organisation.(10 marks)

(20 marks)

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5 A safe and healthy working environment is an important part of maintaining the health and safety standards promotedby the International Labour Organisation.

Required:

(a) Give five examples of costs that might be incurred by an organisation as a consequence of accidents or illnesswithin the workplace. (10 marks)

(b) Identify and briefly explain five key factors which can contribute to a safe and healthy working environment.(10 marks)

(20 marks)


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Answers




1 (a) Within a typical organisation, there are many different types of activity being carried out for example (two only required):

– Purchasing materials and components– Carrying out operations on purchased materials and components– Research on and development of new products and technologies– Communicating with customers and potential customers– Taking and processing sales orders– Accounting and record keeping– Employing and managing people– Planning and controlling all of the above activities to ensure that the organisation reaches its goals

Many of these activities can be grouped under the following broad functions (two only required):

(i) Production or direct service provision. This is the reason the organisation is in business. It covers the output of factoriesand farms and also the provision of services. For manufacturing industry, purchasing of components and raw materialsare important functions, and research and development expenditure is necessary in order to stay ahead technologically.Over the past few decades, manufacturing has been relocating to parts of the world where labour is cheaper, so a largerproportion of the workforce in a number of countries is now engaged in service industries.

(ii) Sales and marketing. The sales function covers both retail operations and the activities of the sales force who deal inlarge orders and contracts. This is a vital function. The outputs of the business are of no value if they cannot be sold.Marketing seeks out prospective customers for the product and looks for the best way to present it to them. Marketinghas become increasingly sophisticated over the past decade with customer profiling and use of web-based technologies.

(iii) Accounting and finance. Sales and purchases give rise to transactions (which must be recorded) and movements offunds (which must be monitored). The accounting and finance functions are there to safeguard the assets of thebusiness, comply with the statutory requirements and provide the information needed by management in order to runthe business profitably.

(iv) Human resource planning and management. For most businesses, personnel are the biggest cost and most valuableasset. This becomes more and more the case as service-based industries replace traditional manufacturing. Recruiting,keeping and training the right people is now a major function in large organisations. Planning and budgeting will alsoinvolve calculating future human resource needs.

(b) There are many influences on organisation structure (five only required).

(i) There are certain internal principles of organisation, which determine some aspects of structure. The scalar chain ofauthority, span of control and centralisation and decentralisation are all significant influences.

(ii) The objectives of the organisation and how these are broken down to define the goals of sub-units. Diversifiedorganisations, for example, may require more decentralised structures with autonomous specialist units. Organisationsthat want to support innovation may need more flexible structures.

(iii) The task or activity of the organisation, which determine which line and support functions are required, and the relativeimportance of each.

(iv) The technology of the task (how it is organised, as well as the tools and techniques used). Technologies require certainforms of organisation to maximise their efficiency and the needs of the people involved.

(v) The size of the organisation. As structures get larger they tend to get more complex. Formalisation, specialisation andsub-division are required in order to control and coordinate performance more closely. Geographical spread, on the otherhand, may require more decentralised structures to take local factors into account.

(vi) The human resources of the organisation. Their skills and expectations influence how far authority is decentralised(giving them more responsibility) and how work is organised (facilitating team working or utilising multi-skilled workers,for example).

(vii) The environment of the organisation. Many factors and changes within the business environment represent opportunitiesand threats to which the organisation structure must be able to adapt. For example, information and communicationtechnology has enabled organisations to adopt looser, more network-style units and to outsource areas of their activitiesto other organisations.

(viii) The culture of the organisation. Managerial willingness to delegate authority will support decentralisation and valuesabout ‘responsiveness’ will lead to a more flexible culture.

(ix) Geographical location.

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2 (a) An integrated system automatically links together the different elements of an accounting package, such as sales, purchasesand stock. In this way, data entered into one module can automatically update a database shared by all modules. Forexample, a sales invoice generated by the system could then update:

– The sales ledger– The stock module, recording the movement out of the goods– The sales account in the nominal ledger.

There are a number of potential benefits to this (four only required):

(i) One entry updates all of the others so there are fewer data inputs and fewer errors.

(ii) Fewer people need to be involved in the input. This makes it possible to have more restricted access to the computersystem, which enhances overall control. (However, this may have some implications for segregation of duties.)

(iii) Errors in one module are unlikely to go unnoticed because they will impinge upon other areas.

(iv) Frauds involving just one accounting area are difficult to maintain because queries will tend to arise in other areas.

(v) All of the above lead to the amalgamation of better information as the basis of improvements via the integrated systemand easier generation of reports across a number of module areas.

(b) Typical outputs of a computerised sales ledger are as follows (five only required):

(i) Day book listing. A list of all transactions posted each day. This provides an audit trail, information which the auditorsof the business can use when carrying out their work. Batch and control totals will be included in the listing.

(ii) Invoices and statements, produced for customers at point of despatch and at the end of the month or a given period.

(iii) Aged debtors list, typically produced monthly.

(iv) Sales analysis reports. This will analyse sales according to the sales analysis codes on the sales ledger file.

(v) Debtors’ reminder letters. Letters can be produced automatically to chase up late payments when the due date forpayment goes by without payment having been received.

(vi) Customer lists. This list might be printed onto adhesive labels, for sending out customer letters or marketing material.

(vii) Responses to enquiries, perhaps output onto a VDU screen rather than as printed copy, for fast response to customerenquiries.

(viii) Output onto disk file for other modules, e.g. to the stock control module and the nominal ledger module, if these arealso used by the organisation, and the package is not an integrated one.

3 (a) The key features of supervision are as follows (four only required):

(i) A supervisor is usually a front-line manager, dealing with the levels of the organisation where the day-to-day work isdone. The supervisor will deal with matters such as staffing and health and safety at the day-to-day operational level,whereas a manager might deal with them at a policy making level.

(ii) A supervisor does not spend all of his or her time on the managerial aspects of the job. Much of the time will be spentdoing technical/operational work.

(iii) A supervisor is a gatekeeper or filter for communication between managerial and non-managerial staff, both upward(conveying reports and suggestions) and downward (conveying policies, instructions and feedback).

(iv) The supervisor monitors and controls work by means of day-to-day, frequent and detailed information: higher levels ofmanagement plan and control using longer-term, less frequent and less detailed information, which must be ‘edited’ orselected and reported by the supervisor.

(v) Supervisors often carry out Fayol’s five functions of management (planning, organising, commanding, coordinating andcontrolling) at a lower, more operational level.

(b) The terms ‘management’ and ‘leadership’ are often used interchangeably. However, there have been many attempts todistinguish meaningfully between them (three only required).

(i) Kotter (2001) argues that leadership and management involve two distinct sets of action. Management is about copingwith complexity: its functions are to do with logical structure, analysis and control, and are aimed at producing order,consistency and predictability. Leadership, by contrast, is about coping with change: its activities include creating asense of direction, communicating strategy, and energising, inspiring and motivating others to translate the vision intoaction.

(ii) Yukl (1998) suggests that while management is defined by a prescribed role and position in the structure of theorganisation, leaders are given their roles by the perception of others, through election, choice or influence. Leadershipis an interpersonal process. Managers have subordinates; leaders have followers.

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(iii) Zaleznik (1992) suggests that managers are mainly concerned with order and maintaining the status quo, exercisingtheir skills in diplomacy and focusing on decision-making processes within the organisation. Leaders, in contrast, directtheir energies towards introducing new approaches and ideas. They create excitement and vision in order to arousemotivation and focus with empathy on the meanings of events and actions for people. Leaders search out opportunitiesfor change.

(iv) Katz and Kahn (1974) point out that while management aims to secure compliance with stated organisationalobjectives, leadership aims to secure willingness, enthusiasm and commitment. Leadership is the influential incrementover and above mechanical compliance with the routine directives of the organisation.

(v) Management can be exercised over resources, activities, projects and other essential non-personal things. Leadershipcan only be exercised over people.

4 (a) Interpersonal skills are particular types of communication skills and include (five only required):

(i) Building a rapport or a sense of ‘being in tune with’ another person, which draws them into a relationship.

(ii) Building trust and respect, so that the relationship is maintained and co-operation facilitated.

(iii) Managing conflict in such a way that the relationship is preserved.

(iv) Persuading or influencing another person to do what you want them to do or to share your beliefs.

(v) Negotiating or bargaining in order to reach mutually acceptable or compromise solutions to problems.

(vi) Communicating assertively, so that you uphold your rights and get your needs met – without violating the rights orignoring the needs of others.

(vii) Communicating informally, so that you give (and receive) relevant and timely information.

(viii) Communicating supportively, so that you encourage the other person and gain their commitment.

(b) Interpersonal skills are particularly important for processes such as (five only required):

(i) Motivation: persuading and inspiring employees to committed performance.

(ii) Teamworking and team building: building trust, encouraging communication, forming co-operative relationships andmanaging conflict.

(iii) Customer care (including internal customers): winning trust, managing conflict, exchanging information and persuading.

(iv) Human resource management: negotiating, interviewing, conducting appraisals, managing formal disciplinary andgrievance procedures.

(v) Negotiation: maintaining relationships despite conflicting interests, working towards mutually acceptable solutions.

(vi) Workload management: being able to delegate effectively, negotiating assistance, saying ‘no’ assertively.

(vii) Career development: demonstrating networking, communication and leadership skills – increasingly essential formanagerial roles.

5 (a) Costs to the employer may include the following (five only required):

(i) Productive time lost by the absent employee, and by other employees who stop work at the time of, or following, theaccident.

(ii) A proportion of the cost of employing first aid and medical staff.

(iii) The cost of disruption to operations at work.

(iv) The cost of any damage to equipment, including subsequent modifications to make it safer.

(v) The cost of any compensation payments or fines resulting from legal action following an accident or illness.

(vi) The costs of increased insurance premiums.

(vii) Possible reduced output from the employee on return to work.

(viii) Possible reduced output, increased absenteeism or increased labour turnover as a result of low morale among workersin an environment which has been shown to be unsafe or unhealthy.

(ix) The cost of recruiting and training a replacement for the absent employee.

(b) Some of the key requirements of a safe and healthy working environment are as follows (five only required):

(i) Cleanliness. Floors and steps to be cleaned regularly. Clean furniture and fittings. No accumulation of rubbish.

(ii) Avoid overcrowding. Make sure that each person has an adequate amount of space in which to work comfortably.

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(iii) Ventilation. There must be an adequate supply of fresh or purified air in circulation.

(iv) Temperature. A reasonable temperature must be maintained.

(v) Lighting and windows. There must be adequate natural or artificial light. Windows must be kept clean inside andoutside.

(vi) Toilets. There must be enough suitable toilets for all employees. They must be properly ventilated and lit, kept clean andproperly maintained.

(vii) Washing facilities. There should be access to clean hot and cold water, soap and towels, or equivalent.

(viii) Drinking water. Adequate drinking water must be provided together with cups or a fountain.

(ix) Seating. Where work must be done sitting down, seats must be suitable in design, construction and size.

(x) Lifts. Lifts must be safe and maintained regularly.

(xi) Machinery and equipment. All equipment must be maintained. Dangerous parts of machinery should have appropriateguards. Appropriate training should be given in the use of all machinery.

(xii) No heavy lifting. People should not be required to lift, carry or move a load likely to cause injury. Appropriate trainingshould be provided for all those required to undertake any lifting.

(xiii) Fire precautions. Appropriate fire fighting equipment should be provided. Valid fire certificates should be in evidence.Escape routes clearly marked etc.

(xiv) First aid. A first aid box/room, a trained first aider, and first aid training should all be made available.

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1 (a) 1 mark for each functional area identified up to a maximum of 2 marks; 4 further marks for each explanation of the two areas previously identified. 10 marks

(b) 1 mark for each factor given up to a maximum of 5 marks; a further 1 mark for the explanation ofeach factor given up to a maximum of 5 marks. 10 marks

Total 20 marks

2 (a) 2·5 marks for each benefit explained up to a maximum of 10 marks (1 mark only if no explanationoffered). 10 marks

(b) 1 mark for each output identified up to a maximum of 5 marks and 1 further mark for eachaccompanying explanation. 10 marks

Total 20 marks

3 (a) 2 marks for each feature explained (1 mark only to be awarded if a feature is identified but noexplanation is offered), up to a maximum of 8 marks. 8 marks

(b) 1 mark for each difference identified up to a maximum of 3 marks. 1 mark for each theoristreferenced, up to a maximum of 3 marks. 2 marks for each explanation of the difference up toa maximum of 6 marks. 12 marks

Total 20 marks

4 (a) 2 marks for each example stated and explained up to a maximum of 10 marks (1 mark only if noexplanation offered). 10 marks

(b) 2 marks for each example stated and explained up to a maximum of 10 marks (1 mark only if noexplanation offered). 10 marks

Total 20 marks

5 (a) 2 marks for each example of cost identified up to a maximum of 10 marks. 10 marks

(b) 1 mark for each factor identified up to a maximum of 5 marks. 1 further mark for theaccompanying explanation. 10 marks

Total 20 marks

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Certified Accounting Technician ExaminationAdvanced Level

Time allowed: 2 hours

ALL FIVE 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.

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Systems

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1 The accounting function is part of the broader business system and does not operate in isolation. Accounting systemsmust be adequate to fulfil a range of objectives.

Required:

(a) Identify FOUR key purposes of an accounting system. (8 marks)

(b) Identify and explain, with the use of examples, any TWO organisational factors that might influence theaccounting systems of a business. (12 marks)

(20 marks)

2 Control systems make sure that the organisation drives its plans forward and achieves its objectives. An effectivecontrol system will promote corrective actions where necessary and also help to detect and deter fraud or preventinefficiency.

Required:

(a) List EIGHT types of internal controls that can be used by an organisation. (8 marks)

(b) Fully explain any THREE of the types of controls identified in part (a) above. (12 marks)

(20 marks)

3 Team working allows tasks to be shared amongst a number of individuals so that they get done faster and moreeffectively and with a greater range of skills and knowledge than by individuals working alone.

Required:

(a) Fully explain any TWO different approaches to the organisation of teamwork. (8 marks)

(b) Describe any FOUR of the team roles identified by Belbin and explain their contribution to the team.(12 marks)

(20 marks)

4 There are several different schools of learning theory which help to describe and understand how people learn.

Required:

(a) Using the work of either Honey and Mumford or Kolb, explain the FOUR key elements of the experientiallearning cycle. Your explanation should include a fully labelled diagram. (10 marks)

(b) Identify and fully explain any TWO of the learning styles classified by Honey and Mumford. (10 marks)

(20 marks)

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5 Security aims to prevent others from taking away or doing damage to things that belong to your organisation and/orthe people who work within it.

Required:

(a) Identify and explain any FOUR vulnerable points found on business premises and within systems.(8 marks)

(b) Give FOUR examples of security procedures that should be in place in an organisation and explain how thecontents of each might protect the organisation from potential security risks. (12 marks)

(20 marks)


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Answers




1 (a) The accounting function handles the financial operations of the organisation and also provides information externally andadvice to other departments. The exact nature of the accounting system will depend on a number of factors, but it shouldprovide for the orderly collection, recording and processing of accounting information and appropriate analysis to enablefinancial statements to be prepared. The main purposes of any accounting system are (four only required):

(a) to control the organisation(b) to provide information for decision making(c) to provide planning and monitoring information(d) to safeguard the assets(e) to prepare the financial statements(f) to comply with the relevant legislation

(b) Accounting systems within an organisation are affected by the nature of its business transactions and the sort of business itis in, including the following (two only required):

(a) The size of the organisation can affect the accounting systems. For example a small business like a greengrocer is likelyto have a simple accounting system where the main accounting records will be the till roll and invoices from suppliers.A large retail business, such as a chain of supermarkets will have more elaborate accounting systems covering a largenumber of product ranges and sites.

(b) The type of organisation can affect the accounting system. For example, a service business might need to record thetime employees take on particular jobs or activities. For example calculating charge out rates say in accounting, on ajob or client basis, might also be a feature of service businesses. A public sector organisation, such as a governmentdepartment, may be more concerned with the monitoring of expenditure against performance targets than recordingrevenue. A manufacturing company will account for both unit sales and revenue, but also needs to keep a detailed trackof material and other costs for decision-making purposes and so forth.

(c) The structure of the organisation will affect the accounting system. In a business managed divisionally, accounts will beprepared on a devolved basis. In a functional organisation where the accounts staff are in a separate department,accounting may be wholly centralised. Some organisations are spread over many countries and are organised regionally.In such organisations the accounting function will be organised geographically and accounts will need to be preparedand reported segmentally.

2 (a) There are eight types of internal controls. These are often remembered using the mnemonic SPAMSOAP.

(a) Segregation of duties.(b) Physical controls.(c) Authorisation and approval.(d) Management controls.(e) Supervisory controls.(f) Organisation as a control.(g) Arithmetical and accounting controls.(h) Personnel.

(b) The controls listed in part (a) can be described as follows (three only required):

(a) Segregation of duties. Executive tasks should be separated from control tasks. One of the prime means of control is theseparation of those responsibilities or duties which would, if combined, enable one individual to record and process acomplete transaction. Segregation of duties reduces the risk of intentional manipulation or error and increases theelement of checking. Some functions should be separated whenever possible. For example, authorisation, execution andcustody. An example of segregation of duties concerns the receipt, recording and banking of cash. It is not a good ideafor the person who opens the post to be the person responsible for recording that the cash has arrived. It would be evenpoorer practice for that person to be responsible for taking that cash to the bank. If these duties are not segregated, thereis always the chance that the person will misappropriate or steal the cash and no-one would know.

(b) Physical controls. These are concerned with the custody of assets and records and are also concerned with ensuringthat access to assets and records is only permitted to authorised personnel. Procedures and security measures areneeded to ensure that access to assets is limited to authorised personnel. Such controls include locks, safes and entrycodes.

(c) Authorisation and approval. All transactions should be authorised or approved by an appropriate responsible person. Thelimits for these authorisations should be specified. In a purchasing system there should be authority limits, wherepurchases of amounts exceeding those limits require higher authority.

(d) Management controls. Management controls are exercised by management outside the day-to-day routine of the system.These include the following: overall supervisory controls, review of management accounts and comparison with budgets,internal audit function and special review procedures.

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(e) Supervisory controls. Any system of internal control should include the supervision by responsible officials of day-to-daytransactions and the recording of them.

(f) Organisation as a control. Enterprises should have a plan of their organisation, defining and allocating responsibilitiesand identifying lines of reporting for all aspects of the enterprise’s operations, including the controls. There must be awell-defined organisational structure showing how responsibility and authority are delegated. An effective plan wouldrequire:

(i) separation of a company’s operations into appropriate divisions and sub-divisions,(ii) appointment of persons to assume responsibility,(iii) establishment of clear lines of responsibility between each division and sub-division and the board of directors,(iv) overall co-ordination of the company’s activities.

This will help to prevent friction so that staff work together well. It also means that no duties go unperformed orunchecked.

(g) Arithmetical and accounting controls. These controls are within the recording function and check that the transactionsto be recorded and processed have been authorised, that they are included and that they are correctly recorded andaccurately processed. This includes: checking the arithmetical accuracy of the records, the maintenance and checkingof totals, reconciliations, control accounts, trial balances, accounting for documents.

(h) Personnel controls. These are procedures to ensure that personnel have capabilities appropriate to their responsibilities,since the proper functioning of any system depends on the competence and integrity of those operating it. Thequalifications, selection and training of the personnel involved are important features to be considered in setting up anycontrol system. For example, a company accountant should be suitably qualified.

3 (a) There are a number of approaches to the organisation of teamwork: including multi-disciplinary teams, multi-skilled teams,self-managed teams and virtual teams. (Two only required).

(a) Multi-disciplinary teams bring together individuals with different skills and specialisms so that their skills, experienceand knowledge can be pooled or exchanged. Such teams are typically project; customer or product focused and are afeature of matrix type structures. Multi-disciplinary teams increase workers’ awareness of their overall objectives andtargets. They aid coordination and communication across functional boundaries. They help to generate new ideas andsolutions to problems, since the team has access to more perspectives.

(b) Multi-skilled teams bring together a number of individuals who can perform any of the group’s tasks. These tasks canthen be shared out in more flexible ways between group members, according to who is available and best placed to doa given job at the time it is required. Multi-skilling is the cornerstone of team empowerment, since it cuts across thebarriers of job descriptions and demarcations, to enable teams to respond flexibly to changing demands.

(c) Self-managed teams are the most highly developed form of team working. They are permanent structures in which teammembers collaboratively decide all the major issues affecting their work: work processes and schedules, task allocation,the selection and development of team members, the distribution of rewards and the management of group processes(e.g. problem solving, conflict management, internal discipline etc). Self-managed team working has a number ofadvantages including, saving managerial costs, improvements in quality and productivity, encouraging individualinitiative and responsibility and gains in efficiency through multi-skilling.

(d) Virtual teams – the development of ICT has enabled communication and collaboration among people in remote locations,via teleconferencing and video conferencing, locally networked PCs and the Internet. This has created the concept of the‘virtual team’: an interconnected group of people who may never be present in the same place at the same time – butwho share information and tasks, make joint decisions and fulfil the collaborative functions of a team with ‘physical’proximity.

(b) Belbin researched business game teams at the Henley Management College and drew up a widely used framework forunderstanding roles within teams. He identified nine team roles:

(i) The plant. The plant is creative, imaginative and unorthodox, contributing to the team by solving difficult problems. Theplant tends to ignore details and is often too pre-occupied to communicate effectively.

(ii) The resource investigator. The resource investigator is extrovert, enthusiastic and communicative; contributing to theteam by exploring opportunities and developing contacts. The resource investigator can be over-optimistic and losesinterest once the initial enthusiasm has passed.

(iii) The coordinator. The coordinator is mature, confident and a good chairperson; contributing to the team by clarifyinggoals, promoting decision making and delegating well. The coordinator can be seen as manipulative.

(iv) The shaper. The shaper is challenging, dynamic and thrives on pressure; contributing to the team by having the driveand courage to overcome obstacles. The shaper can be provocative and sometimes hurts other people’s feelings.

(v) The monitor evaluator. The monitor evaluator is strategic and discerning; contributing to the team by seeing all optionsand making accurate judgements. The monitor evaluator can lack drive and the ability to inspire others and tends to beover critical.

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(vi) The teamworker. The teamworker is co-operative, mild, perceptive and diplomatic; contributing to the team by listening,building relationships and calming tensions. The teamworker can be indecisive in difficult situations and can be easilyinfluenced.

(vii) The implementer. The implementer is disciplined, reliable, conservative and efficient; contributing to the team by turningideas into practical actions. The implementer can be somewhat inflexible and slow to respond to new possibilities.

(viii) The completer. The completer is painstaking, conscientious and anxious; contributing to the team by searching out errorsand omissions and delivers on time. The completer can be inclined to worry unduly and is often reluctant to delegate.

(ix) The specialist. The specialist is single-minded, self-starting and dedicated; contributing to the team by providingspecialist knowledge and skills. The specialist contributes on a very narrow front, tends to dwell on technicalities andoverlooks the bigger picture.

The nine roles are complementary and Belbin suggested that an ‘ideal’ team should represent a mix or balance of all of them.

4 (a) Honey and Mumford (building on the work of Kolb) have produced a simple model called the learning cycle, which showshow individuals can turn everyday work into learning opportunities. This is known as experiential learning or ‘learning bydoing’.

The diagram shows the four stages in the learning cycle. Having a concrete experience – this is about being fully involved inan action or interaction, utilising your current knowledge and skills. This is followed by reflection and reviewing theexperience – this is about looking back after the event, describing it and reflecting on how effective you were and what youcould do differently or better. People often use personal development journals to write about events and interactions to helpreflect on these issues. Concluding from the experience (Kolb referred to this phase of the cycle as abstractconceptualisation) – this is about forming general principles or theories that suggest how you might do something differentnext time in order to achieve different results. Planning the next steps (active experimentation in Kolb’s terms) – this is aboutplanning specific opportunities to apply and test your conclusions in action. This provides a new experience with which tostart the cycle again.

(b) The way in which people learn most effectively differs according to individual psychological preferences, which have beencategorised as distinct learning styles. Peter Honey and Alan Mumford have drawn up a popular classification of four learningstyles (two only required):

(a) Theorists(i) Prefer to understand principles.(ii) Take an intellectual ‘hands-off’ approach.(iii) Learn best from programmed and structured training which allows time for analysis.(iv) Learn best from teachers who share their preference for concepts and analysis.

(b) Reflectors(i) Prefer to think things through first.(ii) Observe phenomena, think about them and then choose how to act.(iii) Need to work at their own pace.(iv) Find learning difficult if forced into hurried programmes.(v) Produce carefully thought out conclusions after research and reflection.(vi) Tend to be fairly slow, (non-participative unless to ask questions) and cautious.

(c) Activists(i) Prefer to try things ‘hands-on’ and require training based on ‘hands-on’ experience.(ii) Deal with practical, active problems and do not have patience with theory.(iii) Are excited by participation and pressure, such as new projects.(iv) Are flexible and optimistic but tend to rush at some things without undue preparation.

(d) Pragmatists(i) Prefer to work with real tasks and problems.(ii) Only like to study if they can see its direct link to practical problems.

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Having an experience

Concluding fromthe experience

Reviewing theexperience

Planning thenext steps



(iii) Good at learning new techniques in on-the-job training.(iv) Aim is to implement action plans and/or do the task better.(v) May discard good ideas which may only require some development.

5 (a) There are a number of vulnerable points on business premises and within systems. These include (four only required):

(i) Public and open areas, such as entrances, hallways, parking areas, toilets, stairways and lifts – particularly if these areunattended or inadequately attended for the volume of traffic.

(ii) Points of entry and exit, e.g. doors, windows, gates and lifts. These are points where intruders may attempt to gainaccess. Attention should be paid to open, unsecured or broken windows or doors – especially in unattended areas.

(iii) Unattended areas, e.g. store rooms or back stairs, where there are not always people about.(iv) Ill-lit areas like car parks and stairwells.(v) Reception areas, if an unauthorised person can talk, trick or slip their way past reception they may be much harder to

identify as a stranger (and subsequently to locate within the premises) later.(vi) Areas where at-risk items and data are concentrated e.g. store rooms, computer rooms, offices etc., especially if they

are located near points of entry or exit and busy public areas.(vii) Points of transit or storage outside the organisation’s premises. Valuable items taken out of the office (for banking,

delivery, work at home) may be particularly vulnerable.(viii) Risks to computerised systems relating to the environment in and around the location of hardware – this could lead to

disruption of service.(ix) Risk of fraudulent manipulation of data.(x) Manipulating input data.(xi) Incorrect processing of data.(xii) Unauthorised access to personal or confidential data.(xiii) Risks to data output.(xiv) Risks to data at point of storage.

(b) The following are examples of security procedures. (Four only required).

(i) Procedures for identifying regular staff. This includes instructions about the wearing of identity badges at all times,regardless of how well people might be known. Clear instructions about showing the pass whenever buildings andpremises are entered. It also includes being clear about the requirement to sign in and out of buildings and premises.

(ii) Procedures for vetting non staff members. If someone is coming to visit you on business then you may be required togo down to a reception area and accompany him or her back to the place where you work. If you have not met thembefore you may need to ask them to produce some further means of identification, for example a letter inviting them toattend a meeting or an event.

(iii) Procedures for non-business visitors. If you are meeting a friend or relative for lunch, your visitor may not be allowed onthe premises or beyond the reception area. It is important that your visitor does not unwittingly break, or try to break,the rules.

(iv) Procedures for protecting the building. A particular door may have to be kept locked at all times or at specified times. Itmay be a nominated person’s responsibility to ensure that this is adhered to. It may be part of an individual’sresponsibility to ensure that all windows in his or her working area are closed and locked at the end of the day or at theend of a shift.

(v) Procedures for protecting the organisation’s assets. Individuals usually have responsibility to lock away items in a deskdrawer, e.g. calculators etc.

(vi) Procedures for protecting documents and information. Locking away files and ledgers, or not leaving a computer terminalsuch that it can be used by someone without the password, are typical of measures of this sort. Other aspects of workmay be sensitive and some individuals may have a confidentiality clause in their contract of employment.

(vii) Procedures for protecting procedures. Computer passwords should not be revealed to others. Safe and lock combinationsshould not be made generally available, they should be restricted to nominated individuals. There should also beprocedures to control keys – such as a list of authorised key holders and instructions about where keys should be keptand who should hold master keys if they are used. The organisation’s security should not be discussed with anyoneoutside of the organisation.

(viii) Procedures for explaining what to do in the event of a breach of security. The names and numbers should be availableof people to contact and also of the information that they will need to be told: location of the intruders, for example, timeof entry, how many there are, items missing or damaged, and so on.

(ix) Fall back procedures. If service is disrupted by non-availability of computerised services there should be fall backprocedures in place to enable (limited) business services to continue. Also tested stand by and recovery proceduresshould be available to enable normal business to be quickly resumed.

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1 (a) 2 marks for each purpose given, up to a maximum of 8 marks. 8 marks

(b) 4 marks for each factor explained up to a maximum of 8 marks. 2 marks for each example given within each factor, up to a maximum of 4 marks. 12 marks

Total 20 marks

2 (a) 1 mark for each correct type of internal control identified, up to a maximum of 8 marks. 8 marks

(b) 4 marks for each type of internal control fully explained, up to a maximum of 12 marks. 12 marks

Total 20 marks

3 (a) 4 marks for each full explanation offered up to a maximum of 8 marks. 8 marks

(b) 1 mark for each team role identified up to a maximum of 4 marks and 2 further marks for each explanation of the four roles identified. 12 marks

Total 20 marks

4 (a) 2 marks for each stage clearly explained and 2 marks for a clearly labelled diagram. 10 marks

(b) 1 mark for each style correctly identified. 4 further marks for each full explanation of each style identified. 10 marks

Total 20 marks

5 (a) 1 mark for each vulnerable point identified up to a maximum of 4 marks. 1 further mark for each one explained. 8 marks

(b) 1 mark for each example given, up to a maximum of 4 marks and 2 further marks for a full explanation of how the content of each one identified might protect the organisation. 12 marks

Total 20 marks

11








Pape


Systems

Friday 6 June 2008





1 Organisations operate within a regulatory framework set by government which is very broad in scope and deals witha range of specific issues.

Required:

(a) Explain four principal aims of the government regulation of business. (8 marks)

(b) Identify and explain, with the use of examples, any four key areas in which an organisation is affected bygovernment legislation and regulation. (12 marks)

(20 marks)

2 Cash is a significant asset for many businesses and the control of cash is of prime importance.

Required:

(a) Outline three key objectives for the control of cash in any cash system. (6 marks)

(b) Identify any two types of cash system and in each case recommend three forms of control that should beincluded in a detailed control procedure. (14 marks)

(20 marks)

3 A leader is someone who exercises influence over other people. There are many different leadership models andtheories which try to explain the process of leadership.

Required:

(a) Outline three classifications of the theories, or ‘schools’ of leadership. (9 marks)

(b) Explain the Hersey and Blanchard situational leadership model. Your explanation should include a descriptionof the four leadership styles identified within the model. (11 marks)

(20 marks)

4 The effective employee needs to know exactly what their job entails and needs to be very familiar with the workmethods and practices of their organisation.

Required:

(a) Explain the purpose of a job description and outline any four sections that might be included within it.(10 marks)

(b) Identify and briefly explain five factors that affect the work methods and practices employed in anorganisation. (10 marks)

(20 marks)

2



5 Required:

(a) Explain why emergency procedures are important and outline four key areas that you would expect to seeincluded in an organisation’s emergency procedures. (10 marks)

(b) Explain why accident reporting procedures are important and outline three important steps that you wouldexpect to see included in an organisation’s accident reporting procedures. (10 marks)

(20 marks)


3



Answers






1 (a) The principal aims of government legislation are: (4 only required):

(i) To protect business entities, e.g. by enacting laws putting limits on market dominance by acting against monopolies andrestrictive practices and by providing financial assistance to selected ailing industries and companies.

(ii) To protect consumers through consumer protection regulations covering packaging, labelling, food hygiene andadvertising.

(iii) To protect employees with laws governing the recruitment of staff and health and safety legislation that regulatesconditions of work.

(iv) To protect third parties such as shareholders, suppliers and creditors through Companies Act regulation on capitalmaintenance and insolvency.

(v) To protect the interests of society at large against excessive business behaviour, e.g. by acting to protect the environment.

(b) Organisations are affected by legislation and regulation in the following areas (four only required).

(a) Health and safety at work(b) Intellectual property and copyright(c) Data protection(d) Discrimination and equal opportunities(e) Preparation of accounts

Health and safety at work. As an example of such legislation, the Health and Safety at Work Act 1974 is a major piece oflegislation in the UK. It provides the legal framework to promote, stimulate and encourage high standards. The Act sets outthe general duties that employers have towards employees and members of the public. It also sets out the general duties thatemployees have to themselves and others. Organisations are affected in a number of areas including (but not limited to) thefollowing areas, which are included here as examples. Organisations are required to have health and safety proceduresincluding emergency procedures, evacuation procedures and accident reporting procedures. Employers are required to lookafter the health and safety of their employees by ensuring that plant and equipment are safe and that articles and substancesare handled and stored safely. There is also a requirement to provide appropriate information, instruction, training andsupervision. A safe working environment and adequate welfare facilities must be provided.

Intellectual property and copyright. This refers to the reproduction and use of other people’s work, including photocopyingand recording. Copyright law covers books of all kinds, sound recordings, film and broadcasts, computer programs, dramaticand musical works. Modern technology enables the copying and distribution of software packages or DVDs to be donerelatively easily and cheaply compared with the cost of developing and producing the original. Manufacturers are increasinglybringing prosecutions to try and reduce the number of pirate copies of their material.

Data protection. The underlying principles behind the legislation in this area are openness, good practice in obtaining, usingand securing data and an opportunity for redress when an individual has cause for complaint. The legislation (for example inthe UK, the 1984 and 1998 Data Protection Acts) places obligations on those who use personal data – they must be openabout the use of data and must follow a code of good practice. The requirements will cover obtaining, storing, disclosing andusing any personal data about individuals. The need for privacy is recognised by the requirement that all data should be heldfor clearly designated purposes. Accuracy and integrity must be maintained and data must be open to inspection. Onlylegitimate parties can access data, and information must be secured against alteration, accidental loss or deliberate damage.Data must be obtained fairly, to precise specifications and must not be kept for longer than is required. There may also becodes of practice around how organisations respond to requests by individuals to access data held about them.

Discrimination and equal opportunities. Equal opportunities is a term describing the belief that there should be an equalchance for all workers to apply to be selected for jobs, to be trained and promoted in employment and have that employmentterminated fairly. Organisations are affected in a number of areas including (but not limited to) the following areas, which areincluded here as examples. The legislation covers specific issues like discrimination on the grounds of race, ethnic origin,gender or marital status. There is also specific legislation around equal pay for work of equal value and also disability. Thelegislation includes the administration of recruitment, selection, promotion, training and pay policies. It also includesinterpersonal behaviours that imply racial or sexual harassment.

Preparation of accounts. This includes keeping appropriate accounting records. It also includes preparing and circulatingannual reports and accounts and the preparation of auditing and financial statements. Accounts of companies prepared underthe Companies Acts are affected in a number of areas including the following which are included here as examples. Limitedcompanies are required to publish accounts annually for distribution to shareholders. Financial statements of companies mustshow a ‘true and fair view’. Prescribed formats for income statements and the balance sheet must be used. Detaileddisclosures of information are required. A company is limited in the amount of profit it can distribute to shareholders. Variousprovisions have to be satisfied if a company wishes to increase or decrease its share capital. Company law also requires thatthe accounts of a limited company must be audited. This means engaging a chartered or certified accountant to conduct anexamination of the financial records of the company to ascertain that they present a ‘true and fair view’ and comply with therelevant Companies Acts.

7



2 (a) The control of cash is of prime importance in any business. Key objectives for the control of cash are to ensure that:

(i) All sums are received and subsequently accounted for.(ii) No payments are made which should not be made.(iii) All receipts and payments are promptly and accurately recorded.(iv) As part of working capital management an organisation does not run out of money.

(b) There is not one ‘cash system’ in the same way as there is a sales cycle for example; there are a number of different typesof cash system which each have their own considerations as to the controls necessary. Cash systems also refer to chequereceipts and payments. Controls over cheque transactions are easier to establish and maintain and most organisations try toconduct all of their cash transactions by means of cheques or other forms of bank transfers. The following are types of cashsystems (two only required):

(a) Cash (both cheques and paper money) receipts by post(b) Cash (cheques and paper money) collected by sales people.(c) Cash sales(d) Controls over banking(e) Cheque payments(f) Petty cash

The forms of control, which should be included in a detailed control procedure, are listed below (three only required for eachcash system identified):

(a) Cash received by post(i) There should be safeguards against possible interceptions between receiving and opening the post, e.g. a locked

mailbox and restricted access to keys.(ii) The opening of post should be supervised.(iii) All cheques and postal orders should be restrictively crossed ‘Account payee only, not negotiable’ as soon as the

post is opened.(iv) Records should be made of cheques, postal orders and cash received at the time of opening the post. This can be

in the form of a cashbook, adding machine list, or copies of remittance advices. It provides control over the eventualsums banked and entered into the cashbook.

(v) The cashier and sales ledger personnel should not have access to the receipts until the record has been made.(vi) Post should be date stamped. It provides evidence of when remittances are received and can be checked against

the date of banking. This helps to prevent cash received one day from being banked as representing differentreceipts on a later day (teeming and lading).

(vii) All monies should be banked promptly.(viii) The loss of receipts through theft or accident must be prevented.

(b) Cash collected by sales staff(i) Authority to collect cash should be clearly defined.(ii) Sales staff should be required to remit cash and report sales at regular intervals.(iii) There should be clearly specified follow up actions if sales staff do not submit returns as required.(iv) Collections should be recorded when received e.g. in a cashbook or by copies of receipts, which should be given

to the sales staff.(v) The collector’s cash received should be reconciled to the eventual banking.(vi) The sales person’s own receipt books should be checked against the cashbook entries.(vii) If sales staff hold stocks of goods, an independent reconciliation of stock with sales and cash received should be

made.

(c) Cash sales(i) Cash sales should be recorded when the sale is made, normally by means of a cash till or the use of cash sale

invoices.(ii) If cash sale invoices are used they should be pre-numbered, a register should be maintained of cash sale invoice

books and copies should be retained.(iii) Cash received should be reconciled daily with either the till roll or the invoice totals.(iv) Someone independent of those receiving the cash and recording the sale should carry out this reconciliation.(v) Daily banking should be checked against the till roll or invoice total and differences investigated.(vi) A responsible official should sign cancelled cash sale invoices at the time of cancellation. All such invoices should

be checked periodically for the sequential numbering.

(d) Controls over banking(i) Monies received should be banked daily.(ii) Each day’s receipts should be recorded promptly in the cashbook.(iii) Sales ledger personnel should have no access to the cash or the preparation of the paying-in slip.(iv) Periodic comparisons should be made between the split of cash and cheques:

(i) received (and recorded in the cashbook)(ii) banked (and recorded on paying-in slip)

8



(e) Cheque payments(i) Unused cheques should be kept securely and access to them restricted.(ii) The person who prepares cheques should have no responsibility over purchase ledger or sales ledger.(iii) Cheques should be signed only when evidence of a properly approved transaction is available. Such evidence may

take the form of invoices, payroll, petty cash book etc.(iv) Two signatories at least should be required.(v) The signing of blank cheques should be prohibited.(vi) Cheques should be crossed before they are signed.(vii) Supporting documents should be cancelled as paid to prevent their use to support further cheque payments.(viii) Returned cheques may be obtained from the bank and a sample checked against cashbook entries and supporting

documentation.

(f) Petty cash(i) The level and location of cash floats should be formally laid down.(ii) There should be restricted access to the petty cash float.(iii) Cash should be held securely in a locked drawer or cupboard and access to keys should be restricted.(iv) All expenditure should require a voucher signed by a responsible officer, not the petty cashier.(v) Vouchers should be produced before a cheque is signed for reimbursement.(vi) Vouchers should be cancelled once reimbursement has taken place.(vii) A maximum amount should be placed on a petty cash payment to discourage normal purchasing procedures being

by-passed.(viii) The petty cash should be reconciled by an independent person periodically.(ix) Rules should exist preventing the issue of IOUs for the cashing of cheques.

3 (a) There are several classifications of the theories or ‘schools’ of leadership, including:

(a) Trait theories – these are based on analysing the personality characteristics or preferences of successful leaders andassume that leaders are born, not made. Lists of traits included physical traits, personality traits and social traits.

(b) Style theories – these are based on the view that leadership is an interpersonal process whereby different leadershipbehaviours influence people in different ways. More or less effective patterns of behaviour (or styles) can therefore beadopted.

(c) Contingency theories – these are based on the belief that there is no ‘one best way’ of leading, but that effective leadersadapt their behaviour to the specific and changing variables in the leadership context: the nature of the task, thepersonalities of team members, the organisation culture etc.

(b) Hersey and Blanchard’s model of situational leadership is based on the amount of direction (task behaviour) and the amountof support (relationship behaviour) a leader must provide given the situation and the ‘level of maturity’ of the followers. Taskbehaviour is the extent to which the leader provides directions for the actions of followers, sets goals for them, and definestheir roles and how to undertake them. Relationship behaviour is the extent to which the leader engages in two waycommunication with followers, listens to them and provides support and encouragement. The Hersey and Blanchard modelalso considers the ‘readiness’ level of people the leader is seeking to influence. Readiness is the extent to which followershave the ability and willingness to accomplish a specific task. This notion of ‘readiness’ is divided into a continuum of fourstages from low to high. The four stages are described as R1 (low), R2 and R3 (moderate) and R4 (high). The ‘level ofmaturity’ is the extent to which the people are willing and able to take responsibility for directing their own behaviour. Peopletend to have varying degrees of maturity depending on the specific task, function or objective that a leader is attempting toaccomplish. To determine the appropriate leadership style to use in a given situation, leaders must first determine the maturitylevel of their followers in relation to the specific task that they want to accomplish through the effort of the followers. As thelevel of maturity increases leaders should begin to reduce their task behaviour and increase their relationship behaviour. Asthe followers begin to move into an above average level of maturity, leaders should decrease not only task behaviour but alsorelationship behaviour. From the combination of task behaviour and relationship behaviour, four leadership styles (S) emerge:telling (S1), selling (S2), participating (S3) and delegating (S4).

S1 – telling – emphasises high amounts of guidance (task behaviour) but limited supportive (relationship) behaviour. Thisleader provides clear instructions and specific direction. This style is most appropriate for low follower readiness (R1).

S2 – selling – emphasises high amounts of both directive (task) and relationship behaviours. The leader encourages two-waycommunication and helps build confidence and motivation in followers. The leader retains responsibility and controlsdecision-making. This style is most appropriate for low to moderate follower readiness (R2).

S3 – participating – emphasises a high amount of two-way communication and supportive (relationship) behaviour but lowamounts of guidance (task behaviour). The leader and the followers share decision making and no longer need or expect therelationship to be directive. This style is most appropriate for moderate to high follower readiness (R3).

S4 – delegating – emphasises little direction or support with low levels of both task and relationship behaviours. This styleis appropriate for leaders whose followers are ready to accomplish a particular task and are both competent and motivated totake full responsibility. This style is most appropriate for high follower readiness.

Hersey and Blanchard suggest that the key to using situational leadership is that any leader behaviour may be more or lesseffective according to the readiness of the person the leader is attempting to influence. The model draws attention to the

9



importance of developing the ability, confidence and commitment of subordinates. The leader should help followers to developin readiness to the extent that they are able and willing to successfully accomplish the task. This development should takeplace by adjusting leadership behaviour through the four styles of telling, selling, participating and delegating.

This can be summed up as follows:

4 (a) A job description specifies and describes the role and responsibilities of a particular job. It is a statement of the tasks,responsibilities and relationships involved in a given job. All employees should have a job description that specifies tasks,details responsibilities, sets authority limits, distinguishes accountability and outlines the organisational relationships that thejob entails. The following sections should be included in a job description (four only required):

(i) The identification of the job, including the job title, the department structure and the number of people doing the job.(ii) The purpose of the job – identifying its objectives in relationship to the overall objectives, e.g. to manage the purchasing

section responsible for buying raw materials.(iii) The position in the organisation – indicating the relationships with other jobs and the lines of responsibility. Often an

organisation chart is included here.(iv) The principal duties to be performed, with emphasis on key tasks and limits to the jobholder’s authority. A more detailed

breakdown might be included which identifies specific tasks in terms of precisely what is to be done, with someexplanation, both in terms of quantity and quality.

(v) Responsibilities – a statement outlining any responsibilities for the resources e.g. staff and budgets.(vi) Job requirements and physical conditions – including details of noisy, dirty, dangerous conditions or pleasant office

conditions and also hours of work, overtime, unsocial hours.(vii) Grade and salary range – details of the rate for the grade, incremental scales, piecework, bonuses and commissions.

Additional benefits such as pension schemes and the provision of a company car would also be included in this section.(viii) Reporting structure – to whom the job holder reports and at what level, with possible indications about future

succession, prospects of promotion or transfer.

(b) The work methods and practices of your department and organisation arise from a number of factors (five only required):

(i) The nature of the specific task: i.e. what needs to be done, in what order and in what manner, in order for the purposeof the task to be fulfilled.

(ii) The requirements of the relevant laws (e.g. Data Protection Acts, Companies Acts), regulations and Codes of Practiceestablished to ensure that tasks are completed safely, fairly and in accordance with the rights of individuals and society.

(iii) The requirements of organisational policy, formulated to reflect the organisation’s values, culture and intentions.(iv) The requirements of the organisation’s systems, procedures and rules developed so that standard, safe, predictable and

dependable methods are used to encourage everyone to work together towards achieving the objectives of theorganisation.

(v) Formal instructions from people in positions of authority. Where there is no set policy, procedure or legal constraint, amanager can largely determine how things are done.

(vi) Informal ground rules or customs, developed over time by the work group or the organisational culture.(vii) Methods of communication and coordination in place within the structure of the organisation – designed to ensure that

all sections of the organisation are pursuing common objectives and that duplication of effort is avoided.

10

Share ideasand facilitatein decision-

making

Explain decisionsand provideopportunity

for clarification

Turn overresponsibilityfor decisions

andimplementation

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instructionsand closelysupervise

performance

S3 S2

S1S4

TASK BEHAVIOUR(Directive behaviour)

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5 (a) Emergency procedures are particularly important to ensure that people are aware of the scope and limits of their responsibility.Health emergencies may include any form of workplace injury (e.g. fractures, burns, eye injuries etc), electric shock, faintingor collapse, allergic reactions to toxic substances or manifestations of illness such as heart attacks or epileptic fits. Proceduresneed to be in place so that these can be dealt with as quickly and effectively as possible. Employers also need to plan foremergency situations such as fire and bomb alerts, chemical spillage etc. The plan should be written down andcommunicated to all employees and others who may be affected by it. Specific employees with allocated duties within theplan should be given appropriate, regular training in the correct procedures to follow. The purpose of emergency proceduresis to ensure that everyone is clear about what to do and where to go in the event of an emergency. The following areas shouldbe included in an organisation’s emergency procedures (four only required):

(i) How to raise the alarm – this includes ensuring that employees are aware of the location of fire alarms and that thealarms are regularly tested so that employees are able to recognise the sound.

(ii) What to do – i.e. how to call the emergency services and how to respond to a fire or evacuation alarm. This is achievedby carrying out fire and evacuation drills throughout the year.

(iii) Where to go to reach safety – this includes ensuring that employees are aware of fire and emergency exits, that they areclearly marked and lead as quickly as possible to a designated safe area and are kept clear at all times. This may alsoinclude evacuation procedures.

(iv) Names of nominated first aiders in each department or area – with full contact details.(v) Essential actions such as emergency factory shutdown – locations of adequate protective equipment (such as sprinklers

and fire extinguishers) should be in hand and regularly maintained.

(b) Accident reporting procedures are important to ensure that the circumstances and facts are recorded accurately as soon aspossible after an accident. It may be necessary to refer to accident reports at a later date if complications emerge some timelater. An accident reporting procedure would require the person reporting the accident to do the following:

(i) Report the accident to someone in authority as soon as possible. This can be done informally, but in addition it is usualpractice to complete an accident report form.

(ii) Record the details of the accident in an accident book. (iii) Get signed statements from any witnesses to the accident, including names and addresses.

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1 (a) 2 marks for each aim explained up to a maximum of 8 marks. 8 marks

(b) 1 mark for each area identified up to a maximum of 4 marks. 1 further mark for each area explained up to a maximum of 4 marks and 1 further mark for each example used up to a maximum of 4 marks. 12 marks

Total 20 marks

2 (a) 2 marks for each objective outlined up to a maximum of 6 marks. Marks could also be awarded for other relevant points. 6 marks

(b) 1 mark for each type of cash system identified up to a maximum of 2 marks. Up to 2 marks for each form of control recommended within each system up to a maximum of 6 marks in each area. 14 marks

Total 20 marks

3 (a) 3 marks for each classification or ‘school’ outlined, up to a maximum of 9 marks. 9 marks

(b) 3 marks for a general overview of the model. 1 mark for each style identified up to a maximum of 4 marks and 1 further mark for each style explained up to a maximum of 4 marks. 11 marks

Total 20 marks

4 (a) 2 marks for an explanation of the purpose. 2 marks for each section outlined up to a maximum of 8 marks. 10 marks

(b) 1 mark for each factor identified up to a maximum of 5 marks, 1 further mark for each factor explained up to a maximum of 5 marks. 10 marks

Total 20 marks

5 (a) 2 marks for an explanation of the importance. 2 marks for each area outlined up to a maximum of 8 marks. 10 marks

(b) 4 marks for an explanation of the importance. 2 marks for each step outlined up to a maximum of 6 marks. 10 marks

Total 20 marks

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Pape


Systems

Friday 5 December 2008





1 (a) Explain the role of coordination in an organisation’s strategic planning process. (12 marks)

(b) Identify and briefly explain four key stages in human resource planning. (8 marks)

(20 marks)

2 (a) Explain three different types of comparison that managers might make when reviewing reports on businessor functional performance. (12 marks)

(b) Outline the information you would expect to be included in EITHER a production and material control reportOR a marketing and distribution report. (8 marks)

(20 marks)

3 (a) Explain McGregor’s concept of Theory X and Theory Y regarding human nature and behaviour at work. (12 marks)

(b) Briefly explain William Ouchi’s concept of the Theory Z organisation and give three of its key characteristics.(8 marks)

(20 marks)

4 Work planning is an important part of a manager’s day-to-day work, as well as making an important contribution tohow individuals can organise themselves effectively.

Required:

(a) Describe the steps a manager should take when planning the work of a department. (8 marks)

(b) Explain how you would use any four planning aids to help you to organise your personal workload effectively.(12 marks)

(20 marks)

5 (a) Explain five key components of an effective health and safety policy. (10 marks)

(b) List the steps a health and safety manager should take in order to design and implement an effective riskmanagement programme. (10 marks)

(20 marks)


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Answers




1 (a) Within any organisation, the departments, sections and individuals must all be organised in such a way so as to ensure thatthe overall strategic objectives of the organisation are attained and that each department, section and individual makes acontribution. It is essential that the efforts of each contributor are coordinated to ensure that objectives are met. The functionof an organisation i.e. attaining a strategic objective, is operated via the attainment of contributory objectives by departments,sections and individuals. This is why efforts at all levels must be coordinated. As the business plan will cover all departmentsof the organisation, so all of the departmental plans and budgets must be coordinated, so that they are all working togetherto achieve the business plan. For example, sales should be planning to sell the number of units which the productiondepartments agreed to produce otherwise there will be either unsold stock or unfulfilled orders. Functional plans cannotproceed without regard for those of other functions. There must be coordination between them and an integration of alltowards successful performance. At the production level for example, coordination will ensure that:

(i) departments know what it is they need to achieve and when;(ii) work flows from one department to another without hold-ups or clashes and without idle time or overwork for staff or

machinery;(iii) the resources required for a task are available where and when they are required;(iv) there is no duplication of effort.

Each department will have its own set of priorities but effective coordination may cause some of these to change in theinterests of pursuing an overall set of priorities.

(b) Human resource planning can be described as a strategy for the acquisition, utilisation, improvement and retention of anorganisation’s human resources. The four main stages are auditing, forecasting, planning and controlling resources. Theauditing stage involves the analysis of the strategic environment (trends in population growth, education, pensions etc) in thelight of the organisation’s strategic objectives. The strategy chosen will have implications for the numbers of employees andthe mix of skills required. The forecasting stage analyses the demand for, and supply of, labour in terms of number, type andquality of people that the organisation should employ to meet planned requirements and cover expected turnover. Theplanning stage involves policies to recruit, train and develop the labour force indicated in the forecast. The controlling stageinvolves measuring the effective use of the human resources and their contribution towards the achievement of theorganisation’s objectives.

In addition to auditing, forecasting, planning and controlling resources – the following aspects of human resource planningcan also be important: recruiting, training and development, promotion planning and also retention and succession planning.

2 (a) Managers can assess the significance of information by monitoring and measuring against some baseline and mostmanagement reports are made more meaningful by the use of comparison. (Three only required)

(i) Comparisons with previous periods. The most common comparison of a previous period is of one year’s final figuresagainst the previous year’s. A business’s statutory financial accounts contain comparative figures for the previous yearas well as the figures for the actual year. Some companies’ financial accounts contain figures for the last five years.Comparing the figures for five years may be more valuable than comparing the figures for two years, as long term trendsbecome more apparent over five years. If the comparison is only over two years, one or other year might be unusual forvarious reasons and this will distort the comparison. For management accounting purposes year-on-year comparisonsare insufficient by themselves; management will wish to pick up problems a lot sooner than the end of the financial year.Hence comparisons are often made for management accounting purposes month-by-month or quarter-by-quarter.

(ii) Comparisons with corresponding periods. Making comparisons month-by-month or quarter-by-quarter is most usefulwhen you expect figures to be reasonably even over time. However, demand for many products fluctuates season-by-season. In this case, the most useful comparison would be to compare with the same season last year. This is thecorresponding period.

(iii) Comparison with forecasts. Businesses make forecasts for a number of purposes. A very common type of forecasting isa cash flow forecast. The purpose of making this forecast is for the business to be able to see how likely it is to haveproblems maintaining a positive cash balance. If the cash balance becomes negative, the business will have to obtaina loan or overdraft which will involve interest costs. At the end of the period, management will compare the actual figureswith the forecast figures and try to assess why they differ. Differences are likely to be a sign that some of the assumptionsmade when drawing up the original forecast were incorrect and so when making forecasts for future periodsmanagement may wish to change the assumptions that are made.

(iv) Comparisons with budgets. A budget is an organisation’s plan for a forthcoming period, expressed in monetary terms.Budgets can be used to check that the plan is working by comparing the planned results for the day, week, month oryear to date with the actual results.

(v) Comparisons within organisations. Organisations may also wish to compare the performance of different departments,sales regions or product type.

(vi) Comparisons with other organisations. An obvious way of assessing how a business is performing in its chosen marketis to compare its results and financial position with those of its main competitors. The main information that will begenerally available will be the competitor’s annual statutory financial accounts. Comparisons are generally made on anannual basis.

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(b) You might expect the following to be included in a production and material control report:

(i) Forward loading plans for production cycles, both forecast and actual.(ii) Machine capacity forecast and actual.(iii) Departmental operating statements.(iv) Stock and work-in-progress reports.(v) Wastage reports.(vi) Labour utilisation report, both forecast and actual.

You might expect to see the following in a marketing and distribution report:

(i) Market surveys.(ii) Order reports by product and geographical area, both forecast and actual.(iii) Discount trends.(iv) Transport and warehouse cost statements, both budgeted and actual.(v) Sales personnel performance, both forecast and actual.(vi) Product service and support costs, both forecast and actual.

3 (a) Douglas McGregor put forward two suppositions that US managers appeared to subscribe to about human nature andbehaviour at work. He argued that the style of management adopted is a function of the manager’s attitudes towards peopleand assumptions about human nature and behaviour. The two suppositions are called Theory X and Theory Y and are basedon opposing assumptions about people and work. Theory X represents the ‘carrot and stick’ assumptions believing that theaverage human being has an inherent dislike of work and will avoid it if possible. He or she also prefers to be directed, wishesto avoid responsibility, has relatively little ambition and wants security above all. Because of the human characteristic ofdisliking work, most people must be coerced, controlled, directed and/or threatened with punishment to get them to put inadequate effort towards the achievement of organisational objectives. Managers who operate according to these assumptionswill tend to supervise closely, apply detailed rules and controls and use ‘carrot and stick’ motivations. At the other end of theextreme to Theory X is Theory Y. The central principle of Theory Y is the integration of individual and organisational goals.Theory Y suggests that physical and mental effort in work is as natural as play or rest. The average human being does notinherently dislike work, which can be a source of satisfaction. External control and the threat of punishment are not the onlymeans of bringing about effort towards organisational objectives. People can exercise self-direction and self-control to achieveobjectives to which they are committed. Theory Y also assumes that the average human being learns, under properconditions, not only to accept, but also to seek responsibility. Avoidance of responsibility, emphasis on security and lowambition are the results of experience and are not inherent in human nature. Under conditions of modern industrial life, theintellectual potential of the average human being is only partially utilised. McGregor was of the view that Theory Yassumptions provided a better explanation of human nature and indicated the need for a different managerial strategy indealing with people if they were to be correctly motivated. Managers who hold Theory Y assumptions about people are likelyto be more democratic and consultative. Both Theory X and Theory Y are intended to be extreme sets of assumptions – notdescriptions of actual types of people. However, they also tend to be self-fulfilling prophecies since people tend to behave inthe way expected of them.

(b) William Ouchi provided a comparison of management style and practice in different cultural settings. Profiling Americanmanagement culture as Theory A and typical Japanese management as Theory J, he sought to synthesise the two to proposea form of Japanese-style management that could be applied successfully in a Western context. Ouchi called these methodsTheory Z. The characteristics of a Theory Z organisation are as follows (three only required):

(i) Long-term employment – not necessarily lifetime, but longer than the average in American and European companies.(ii) Slow-progressing managerial career paths (as in the Japanese system, but with a more Western specialisation of skills).(iii) Moderately specialised careers – which may not change.(iv) Collective consensus decision-making processes (Japanese), but with individual retention of ultimate responsibility for

defined areas of accountability (Western).(v) Industrial relations characterised by trust, co-operation and mutual adjustment. (vi) Concern for the employee – close to the paternalistic attitudes of the old Quaker companies in the UK, such as

Cadbury’s.(vii) Implicit informal controls (such as guiding values) alongside explicit, formal controls.

4 (a) All levels of management are involved in work planning. At the top level, decisions are made on what to do, and as you comedown the hierarchy the plan is developed to incorporate how it is to be done, when and by whom. The basic steps in workplanning for a department include the following:

(i) The establishment of departmental priorities, for example making decisions around which tasks and activities areimportant and/or urgent.

(ii) Scheduling or timetabling tasks and allocating them to different individuals within appropriate timescales (e.g.continuous routine work and arrangements for priority work with short-term deadlines), to achieve work deadlines andattain departmental goals.

(iii) Coordinating individual tasks within the duties of single employees or within the activities of groups or individuals sothat both individuals and teams can work as effectively as possible within a department.

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(iv) Establishing checks and controls to ensure that priority deadlines are being met and that work is not falling behind, andthat routine tasks are achieving their objectives.

(v) Agreeing the mechanism and means to reschedule ordinary work within the department to facilitate and accommodatenew, additional or emergency work by drawing up contingency plans for unscheduled events.

(b) Personal work planning aids include lists and checklists, bar charts, precedence networks, action plans, timetables, diaries,and personal organisers. (Four only required)

(i) Lists. Lists are a useful way of identifying and remembering what needs to be done and of monitoring how you have goton. Lists can be used to plan a coming week and can also be generated on a daily basis. You can prioritise items on alist in order of priority or in an order in which you intend to deal with the items on the list. Lists can help to keep youfocused if you stick to what is on the list and don’t do anything that is not on your list for the day/week. At the end ofeach day/week it can be useful to take all of the items on the list and transfer them to the list for the following day/week.The physical act of writing tasks down on paper is an important part of the process and helps fix them in your mind.

(ii) A checklist is a particular type of list that allows ticking or checking off each task as it is completed. Checklists can behelpful if you need to indicate when you start and finish an activity, or even for the stages of an activity (for examplewhere a particular document is at a given date) – or elements of all of these.

(iii) Bar charts. A bar chart has two main purposes: firstly to show the time needed for a personal work activity, and secondlyto display the time relationship between one activity and another. Bar charts can be especially useful for checking thetime schedules for a number of individual activities that are interdependent. A bar chart can show the overall progressof a project or a piece of work to date, thus assisting in monitoring the progress attained at an individual stage of a multi-stage process.

(iv) Precedence networks or time schedules. These are helpful if you are having difficulty converting your list or checklistinto a workable sequence of personal actions. A simple precedence network shows which activities need to be completedbefore others. A major advantage of this approach is that it allows you to show when a number of activities need to bedone at roughly the same time.

(v) Timetables and diaries. These are useful to remind you of key times and dates, to remind you to undertake advancepreparations or follow up actions and to help you to allocate and coordinate your time effectively.

(vi) Personal organisers (including electronic ones) are often a combination of timetables and diaries with additional featuressuch as the ability to store contact details, notepad and file management facilities.

(vii) Software packages such as Microsoft Project and Outlook, which ease the task of planning by enabling changes, updatesand projections to be produced quickly. Once data has been entered, bar charts, networks and reports can be produced.

5 (a) There will be several elements to a health and safety policy, whatever the specific needs and hazards of a particularworkplace. Some of the key components are as follows (five only required):

(i) Risk assessment. This is part of continuing risk management and includes:

(a) Identifying risks, (b) Controlling risks, (c) Sharing information, (d) Providing training as appropriate.

(ii) Having appropriate systems and procedures. This will include having safety procedures, procedures for the reporting ofincidents, the removal of hazards and appropriate checking procedures. Emergency and evacuation procedures may alsobe included.

(iii) Minimising hazards associated with equipment. This will include the provision of any protective clothing, ergonomicdesign of work areas, soundproofing, safety equipment and appropriate maintenance of machinery and equipment.

(iv) The provision of information. This includes any warning signs, instructions about location and use of fire extinguishers,updating safety manuals and ensuring that everyone is aware of their location.

(v) Training provision. This includes training in safety procedures and the use of equipment. It includes induction training,training when moving to a different department and regular updates on any new policies or information.

(vi) Responsibilities. This includes employee duties and the appointment of health and safety officers and representatives.

(vii) On-going monitoring to ensure policies and procedures are being adhered to. Making changes to systems and proceduresas appropriate.

(b) The typical steps that a health and safety manager might take in order to ensure on-going risk management are as follows:

(i) Carry out a risk assessment, generally in writing, of all work hazards on a continuous basis.(ii) Introduce controls to avoid/reduce risks and plan contingency measures to minimise impact.(iii) Assess the risks to anyone else affected by their work activities (such as suppliers, customers or visitors).(iv) Share hazard and risk information with other employers, including those on adjoining premises, other site occupiers and

all subcontractors coming on to the premises.

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(v) Revise safety policies in the light of the above – or initiate safety policies if none were in place previously.(vi) Identify employees who are especially at risk (such as pregnant women or night shift workers).(vii) Provide up-to-date and appropriate training in safety matters.(viii) Provide information to employees (including part-time and temporary workers) about health and safety.(ix) Employ/appoint competent health and safety advisors in all key areas.

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1 (a) 12 marks for a full explanation to include reference to meeting overall strategic objectives and departmental objectives,resource issues, workflows and avoidance of duplication of effort. 12 marks

(b) 2 marks for each of the stages (or aspects) identified and explained – in the context of planning – up to a maximum of 8 marks. 1 mark only to be awarded for a stage (or aspect) which is identified, but not explained in the context of planning.

8 marks

Total 20 marks

2 (a) 4 marks for each type of comparison (maximum of three types) explained, up to a maximum of 12 marks. 1 mark only pertype to be awarded if there is no explanation. 12 marks

(b) 2 marks for each item outlined, up to a maximum of 8 marks. 8 marks

Total 20 marks

3 (a) 5 marks for a full discussion of Theory X. 5 marks for a full discussion of Theory Y. 2 further marks for reference tomanagement style, self-fulfilling prophecy, implications etc. 12 marks

(b) 2 marks for a brief explanation which includes reference to the different cultural settings. 2 marks for each characteristic given,up to a maximum of 6 marks. 8 marks

Total 20 marks

4 (a) 2 marks for each step described up to a maximum of 8 marks. Only 1 mark to be awarded if no description is offered.OR 1 mark for each step identified up to a maximum of 8 marks. 8 marks

(b) 3 marks for each planning aid explained, up to a maximum of 12 marks. Only 1 mark to be awarded per aid if the planningaid is just identified or listed with no explanation. 12 marks

Total 20 marks

5 (a) 2 marks for each component explained, up to a maximum of 10 marks. 1 mark only to be awarded if a component is listedbut not explained. 10 marks

(b) 1 mark for each step listed up to a maximum of 9 and 1 further mark for listing them in a sensible order. 10 marks

Total 20 marks

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ACCA - CAT | Paper T5 Managing People and Systems Solved Past Papers

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