Practice question and answer bank f1

A …………………………………. company has a separate legal personality from its owners (shareholders).

Which word correctly completes this sentence?

Private Limited

Public (1 mark)

2	……………. comprise all those individuals or groups who have a legitimate interest in an organisation’s activities. Which word or phrase correctly completes this sentence? Key players Stakeholders Shareholders		(1 mark)
3	Complete the statement given below by using one of the words in the list below. ‘Shareholders are …………………… stakeholders.’ External Internal
	Community	Connected	(2 marks)

4 ABC is a business controlled on the basis of one share, one vote; while DEF is controlled on the basis of one member, one vote.

What sort of businesses are ABC and DEF?

	ABC	DEF
	Limited liability company	Partnership
	Co-operative society	Limited liability company
	Partnership	Limited liability company
	Limited liability company	Co-operative society

Azif is a customer of both ABC and DEF. What type of stakeholder is he?

Select the correct answers from the list below.

ABC

DEF

Picklist

Internal

Connected

External

Not a stakeholder (4 marks)

For which of the following reasons would dismissal automatically be considered unfair?

Redundancy Pregnancy

Non-capability Misconduct (2 marks)

Under which component of PEST analysis would an organisation analyse the media through which segments of the youth market access new digital music products?

Political Social

Economic Technological (2 marks)

The bargaining power of customers in an industry will be greater in which of the following circumstances?

There are one or two dominant suppliers in the industry

The product is highly important to the customer’s business

There are many customers in the industry

Switching costs are low (2 marks)

Health and safety regulations cover a range of workplace health and safety issues. Which of the following is not covered by regulation?

Handling and storage of chemicals

Lifting heavy objects

Computers

Professional disagreements (2 marks)

Workplace hazards cover a variety of situations including heavy lifting and VDU usage. What is the definition of a hazard?

Heavy machinery

Electrical equipment

Something likely to cause injury, or a point of exposure to risk of accident, injury or illness

Tippex (2 marks)

Data security is crucially important to an organisation. Certain types of data may be particularly at risk.

Select all of the following data types to which this applies?

Personal and private information

Information relating to the security of the organisation

Information integral to the outcome of dealings in the organisation

Information integral to the organisation’s standing and competitive advantage (2 marks)

11 All of the following except one are data protectio

Data maximisation

n principles. Which is the exception?

Purpose limitation

Storage limitation

Accuracy

(2 marks)

Constance is a sole trader operating in the UK. Her main business is in telecommunications:

providing telephone, broadband and cable television services to the public. Demand for Constance’s services is growing and she is considering outsourcing some of her operations. She is looking into using local contractors for a short period, until she can train her own operatives to cover the west of England and Wales.

How does the Government impact on Constance’s business?

	Yes	No
Company law
Employment law
Industry regulation
Consumer protection

What type of outsourcing is Constance considering?

Ad hoc Partial

Project management Total (4 marks)

Which type of government policy focuses on taxation, public borrowing and public spending?

Fiscal Social

Monetary Industry (2 marks)

Which of the following is not likely to result from a fall in the exchange rate?

A stimulus to exports

An increase in the costs of imports

Reducing demand for imports

A reduction in the rate of domestic inflation (2 marks)

……………. inflation arises from an excess of aggregate need over the productive capacity of the economy.

Which word or words correctly complete this sentence?

Demand pull Frictional

Cost push (1 mark)

XYZ Ltd operates an IT business. Recent developments in the IT industry mean that XYZ Ltd can use computers to replace some of its workers, who will be made redundant. At the same time, XYZ Ltd will be bringing in policies to limit environmental damage as a result of its actions.
- What category of unemployment is the redundancy?

Frictional

Seasonal

Technological Structural

Which of the following actions would be of benefit to the environment?

	Yes	No
Using renewable energy sources
Burying non-biodegradable waste on site
Minimising costs
Buying recycled paper
Encouraging staff not to print emails

(4 marks)

In the diagram below, point 5 represents equilibrium. If the government starts to pay a cash subsidy to producers of the commodity, what will the new equilibrium be?

Producer surplus (2 marks)

If the cost of milk rises, and milk is a major ingredient in yoghurt, then the:

Demand curve for yoghurt shifts to the left

Supply for yoghurt curve shifts to the left

Supply curve for yoghurt shifts to the right

Demand and supply curves for yoghurt both shift to the right (2 marks)

Which of the following is not one of the roles performed by prices in a market economy?

A signal to consumers

A signal to producers

A way of allocating resources between competing uses

A way of ensuring a fair distribution of incomes (2 marks)

21 If all other factors remain unchanged, which one of the following would lead to a fall i prices?

A reduction in the rate of tax which companies have to pay

Forecasts predicting a rise in company profits

A rise in interest rates

A reduction in the number of shares issued

n share

(2 marks)

22 Indicate whether the following will cause a shift in the demand curve for a normal good, a shift in its supply curve, or neither:

	Shift in demand	Shift in supply	Neither
An increase in household incomes
A rise in wage costs
A fall in the price of raw materials
A fall in the price of the good

(2 marks)

Which of the following statements is true?

The grapevine springs up where there is inadequate formal communication in an organisation

Cliques and other informal groups can be either helpful or dysfunctional in an organisation Not all organisations have an informal organisation

The informal organisation promotes employee health and safety (2 marks)

Henry Mintzberg’s model analysed organisation structure into five basic components.

Which of the following components include analysts and designers of control systems?

Strategic apex Middle line

Technostructure Support staff (2 marks)

25 Which of the following is not a component of Mi

Technostructure

ntzberg’s model of the organisation?

Middle line

Operating core

Administration staff

(2 marks)

Which feature of Mintzberg’s organisational model is most heavily influential in a machine bureaucracy?

The operating core

The technostructure

The strategic apex

The middle line (2 marks)

A business has the following features: narrow control spans, small groups with team members participating in decisions, and a large number of steps on the promotional ladder. It relies on the informal organisation to supply most of its internal communications.
- What type of organisation is this business?

Select the correct answer from the list below.

Picklist

Flat organisation Tall organisation

What are the advantages and disadvantages of an informal organisation?

	Advantage	Disadvantage
Knowledge sharing
Social groupings
Informal work practices
Responsiveness
Speed

(4 marks)

28 Which of the following is not one of the main objectives of Human Resource Management?

To obtain the right number and type of skilled employees for the organisation’s current and future requirements

To develop and deploy the organisation’s employees in such a way as to maximise flexibility and productivity

To ensure compliance with the organisation’s social and legal responsibilities in relation to employees

To minimise labour turnover and maximise employee retention within the organisation

(2 marks)

29 Which of the following is most likely to be an example of an ‘existential culture’ in Harr model of cultural types?

An entrepreneurial start-up business

A partnership of graphic designers

A construction project

A large telecommunications company

ison’s

(2 marks)

30 Committees are particularly effective for carrying out day–to-day work.

Is this statement true or false?

True False

(1 mark)

31 Ralph founded a toy business, Raleigh’s, many years ago. Although Ralph used to keep firm control in the early days, recently he has been happy to delegate authority to a vibrant new team of toy enthusiasts, although he remains Chairman of the Board. The team have brought out new toy ranges and are determined to make Raleigh’s the leading toy manufacturer.

Which of Handy’s cultures is closest to the current situation at Raleigh’s?

Zeus

Apollo

Athena

Dionysus

Which of the following roles are carried out by the Chair of a committee?

Select the correct answers from the list below.

Picklist

Fixing the date and time of a meeting

Giving immediate rulings on points of dispute

Being seen to be impartial

Acting on decisions made	(4 marks)
32 Which of the following is not a major theme of corporate governance? Ensuring the confidentiality of information Accountability Ethical treatment of stakeholders The management and reduction of risk	(2 marks)
33 Under good corporate governance, who should set directors’ remuneration? An audit committee Independent non-executive directors The board of directors The London Stock Exchange	(2 marks)
34 Corporate social responsibility (CSR) is incompatible with the interests of shareholders	in a
business organisation. According to the stakeholder view, is this statement true or false? True False		(1 mark)

35 The following paragraphs describe corporate governance and social responsibility respectively. Some words have been omitted.

Corporate governance is the ………… by which organisations are ………….. by senior officers. Most corporate governance ………….. are based around the principles of integrity, ……………, independence and good management but there is disagreement on how much these principles need to be …………… by detailed rules.

Businesses, particularly large ones, are subject to increasing ………… that they will exercise social responsibility. This is an ill-defined concept, but appears to focus on the …………… of specific benefits to society in general, such as charitable donations, the creation or preservation of …………, and spending on …………. improvement or maintenance.

Complete the sentences using the following list of words/terms. Each word or term can only be used once. Picklist accountability directed and controlled employment environmental expectations provision

reports supplemented

system (4 marks)

An organisation has to decide whether to buy or lease machinery for its new factory.

Which of the following members of the finance function would be responsible for this decision?

The financial manager The financial accountant

The management accountant (1 mark)

Goods inwards checks are an example of a control in which business financial system?

Payroll Sales

Purchasing Cash management (2 marks)

Which of the following is not an advantage of a computerised accounting package compared with a manual system?

A large amount of data can be processed very quickly

The need for security checks for authorising access

Accuracy of data

Non-specialists can use packages (2 marks)

Which of the following statements is true?

Financial accountants provide historical information for internal use.

Financial accountants provide historical information for external use.

Financial accountants provide forward-looking information for internal use.

Financial accountants provide forward-looking information for external use. (2 marks)

40 Most management reports are made meaningful by the use of following comparisons is/are likely to be made by Select all that apply.

With other organisations

comparison. Which of the

an organisation in reviewing financial

With forecast

data?

With budget

With prior periods

(2 marks)

Management reports are often used to make comparisons within the organisation. Where comparisons are made between products, what measure would be used?

Gross profit Contribution

Net profit Return on capital (2 marks)

GHI Ltd has a computerised accounting system. The system produces various reports and the draft financial statements.
- What output would you expect to get from the sales ledger accounting system?

Bank statement

Aged receivables listing

Aged payables listing List of bankings

What information is included in the statement of financial position?

	Yes	No
Income
Assets
Expenses
Liabilities
Sources of cash generated and spent

(4 marks)

An organisation has a policy of checking all invoices from suppliers against goods-received notes before paying the invoices.

This is an example of what type of control procedure?

Accounting controls Correct controls

Detect controls Prevent controls (2 marks)

Which form of cyber security involves physical as well as software protection?

Access control Boundary firewall Internet gateway.

Malware protection (2 marks)

The purpose of ………….. data is to ensure that the most recent usable copy of the data can be recovered and restored in the event of loss or corruption on the primary storage medium.

Which word correctly completes this sentence?

Password-protecting Validating

Backing up Verifying (2 marks)

The mnemonic SPAMSOAP is often used to remember the range of financial control procedures. What does the ‘O’ stand for in this mnemonic?

Operations Oversight

Organisation Openness (2 marks)

Which characteristic of big data refers to how trustworthy it is?

Variety

Veracity

Velocity

Volume (2 marks)

JKL Ltd is a limited liability company incorporated in the UK. The company is listed on the UK Stock Exchange and applies International Financial Reporting Standards (IFRSs) when preparing its financial statements.
- What are the features of internal and external audit?

	Internal	External
Evaluating the adequacy and effectiveness of internal controls
Carried out for the benefit of shareholders
Part of the business’s control system
Examines the published financial statements

Which body in the UK monitors the use of accounting standards in published financial statements?

Government

HM Revenue and Customs

International Accounting Standards Board

Financial Reporting Review Panel (4 marks)

A warehouse manager instructs staff not to record returns of goods to suppliers if the goods have already been entered into inventory records, as this will be ‘sorted out by the accounts department’.

Is this action potentially fraudulent?

Yes, as an example of removal of assets from a business

Yes, as an example of intentional misrepresentation of the financial position of a business

(1 mark)

Which of the following would be regarded as fraud prevention measures?

Requiring all quantities to be written in words rather than numbers

Requiring all staff to take full holiday entitlements

Defining standard procedures for normal business operations

All of the above (2 marks)

51 Only allowing purchasing staff to choose supplier sort of fraud prevention measure?

Segregation of duties

s from an approved list is an example of what

Limitation controls

Appropriate documentation

(1 mark)

52 Which of the following internal controls might be least effective in preventing fraud, if s collusion with customers?

Physical security

Requiring signatures to confirm receipt of goods or services

Sequential numbering of transaction documents

Authorisation policies

taff are in

(2 marks)

53 Match the feature of the payables and creditors system to the control aims given:

Ordering C Accounting
Receipt and invoices

(i) Cut-off is applied correctly to the purchase ledger

(ii) All goods and services received are accurately recorded

(iii) Orders are only made to authorised suppliers

(2 marks)

54 Match the feature of the receivables and sales system to the control aims given:

A Ordering and granting credit

B Despatch and ordering

C Recording, accounting and credit control

(i) Credit notes are only given for valid reasons

(ii) Orders are recorded correctly

(iii) All sales that have been invoiced are recorded on the nominal and sales ledgers

(2 marks)

Leticia runs a highly successful model agency. She relies on her bookkeeper to control the financial side of her business. However, the bookkeeper left recently and, due to business pressures, Leticia has employed a temp rather than spend time recruiting a permanent replacement. Leticia was looking at the business bank statements recently and became concerned by amounts of cash being paid into and out of the business account. She questioned the temp who said that one of the models had requested payment in cash and one of their new overseas customers was paying in cash ‘to avoid tax problems at home’. This has never happened before. Leticia is extremely concerned that the temp and model may be colluding to commit fraud and that her bank account may be being used for money laundering.
- Which of the following factors may indicate fraud?

	Yes	No
New bookkeeper
New overseas customer
Lack of supervision
Cash transactions

If Leticia’s bank account is being used for money laundering, what phase of the process may she be involved in?

Select the correct answer from the list below.

Picklist

Placement

Integration Layering

What action should Leticia take?

Select the correct answer from the list below.

Picklist

Do nothing as it is only a suspicion

Find more evidence of what is going on

Report her suspicions to the authorities immediately (4 marks)

Which type of power is associated with line authority?

Physical power Legitimate power

Resource power Expert power (2 marks)

Which school of management thinking focused o job satisfaction?

Scientific management

n a range of higher-order needs of workers for

Neo-human relations

Human relations

Contingency (2 marks)

What two factors in leadership style are plotted on Blake and Mouton’s managerial grid?

Managerial discretion and subordinate discretion

Concern for production and concern for people

Psychological distance and favourability of the situation

Exercise of leadership and exercise of authority

(2 marks)

Which of the following is not one of Fayol’s five functions of management?

Commanding Communicating

Controlling Co-ordinating

(2 marks)

Which of the following is not one of the interpersonal roles of managers identified by Henry Mintzberg?

Handling disturbances

Reconciling individual needs with the requirements of the organisation

Training staff

Liaising outside the scalar chain (2 marks)

61	Match the following Category	managerial roles to Mintzberg’s categories? Roles
	Interpersonal:	Entrepreneur; Disturbance handler; Resource allocator; Negotiator
	Informational:	Figurehead; Leader; Liaison
	Decisional:	Monitor; Spokesperson; Disseminator (2 marks)
62	Power arising from an individual’s formal position in the organisation is called: Referent power Expert power Legitimate power Resource power (2 marks)
63	What does a person specification describe? The main tasks, responsibilities and conditions involved in a job The attributes of the ideal person for a given job The performance rating of a given job holder The number of people required to fill job vacancies (2 marks)
64	An organisation urgently needs to recruit an experienced cost accountant, but does not large budget for recruitment advertising. Which of the following would be its most appropriate recruitment medium? Recruitment consultancy Advertisement in a national newspaper Advertisement on local radio Register with an online accountancy recruitment database		have a (2 marks)

Which selection method is the most reliable predictor of job performance?

Interviews Work sampling

References Personality tests (2 marks)

Lin is the manager in charge of the financial accounts department for a large company. He is a very effective manager: making decisions, motivating his department and getting results. He is focused on the organisation’s long-term goals and his department’s part in them.
- According to the Ashridge model, what is Lin’s style of management?

Tells Sells

Consults Joins

Where would Lin be in Blake and Mouton’s managerial grid?

According to Bennis, is Lin a manager or a leader?

(4 marks)

Justine has offered to give evidence at an Employment Tribunal on behalf of a colleague who is claiming that he has been passed over for promotion because he is not married. Over the following weeks, her department head repeatedly denies her requests for work breaks, because she is already having ‘time off in court’.

Justine may have a claim for what form of discrimination?

Direct discrimination Victimisation

Indirect discrimination Harassment

(2 marks)

Using age limits or phrases that imply restriction advertisements is age discrimination.

Is this statement true or false?

True

s (such as ‘recent graduate’) in job

False

(1 mark)

SPQR uses individual interviews for its staff recruitment. Janine has been recruited as a goods outwards clerk. After two months, she complains that the other clerks are discriminating against her, using foul and abusive language and threatening her.
- Which of the following are advantages and disadvantages of the interview method?

	Advantage	Disadvantage
Interviewer may have knowledge gaps
Direct face to face communication
Flexibility in questioning
Interviewer’s perception may be selective

Janine is the subject of what kind of behaviour?

Direct discrimination

Harassment

Indirect discrimination

Victimisation (4 marks)

Cohesive groups generally take more risky decisions than the same individuals working separately.

Is this statement true or false?

True False (1 mark)

In a project team, Jane is the person everyone turns to with their problems and interpersonal conflicts, knowing that she will listen and mediate.

Which of Belbin’s team roles does Jane fulfil?

Plant Co-ordinator

Shaper Teamworker (2 marks)

In which order does a team ordinarily progress through Tuckman’s stages of development?

Norming, storming, forming, performing

Storming, forming, norming, performing

Forming, storming, norming, performing

Norming, forming, storming, performing (2 marks)

The tendency of a group to follow what its members assume to be the group consens up following a course of action that no one in fact wants, is called:

The risky-shift phenomenon The Abilene paradox Social facilitation Group think

us, ending

(2 marks)

Which of the following would be an example of poor chairing of a meeting?

Discussion is not limited to the items on the agenda

Speakers are not allowed time to re-state their views

Discussion of an item is cut short in order to move onto the next item

People arrive and leave part-way through the meeting

(2 marks)

What type of motivation theory is expectancy theory?

Process theory Content theory

(1 mark)

Bill believes that his team are innately lazy and will shirk work and responsibility unless he directs and supervises them closely, and applies strict discipline.

Which writer’s motivational theory accounts for Bill’s motivational approach?

Herzberg Vroom

Maslow McGregor (2 marks)

Which of the following is not identified as a core dimension in job design for job satisfaction?

Skill variety Performance-related pay

Task identity Feedback (2 marks)

The management of Guenguiss Cans Ltd runs a ‘tight ship’, with clocking-on timekeeping systems, close supervision and rules for everything. ‘Well,’ says the general manager, ‘give people an inch and they’ll take a mile.’

Which of Douglas McGregor’s ‘theories’ does this management team subscribe to?

Theory X Theory Y (1 mark)

Meredith is a member of a team set up to complete a project. Meredith likes to review a project to see all the options and she is accurate in her judgements. However, she can be overly critical and lacks the ability to inspire others. The team leader feels that Meredith lacks drive and prefers to avoid responsibility.
- Which is Meredith’s team role according to the Belbin model?

Plant

Shaper

Monitor-evaluator

Completer-finisher

If the team leader bases his approach on McGregor’s theory, which one should he apply to Meredith?

Select the correct answer from the list below.

Picklist

Theory X

Theory Y (4 marks)

What learning style would have a natural preference for (and learn best from) on-the-job training using such methods as project work or job instruction?

Theorist Activist

Reflector Pragmatist (2 marks)

Which of the following is an advantage of on-the-job training?

Allows focus on learning

Supports transfer of learning

Allows standardisation of training

Minimises risk (2 marks)

What is the lowest level at which the effectiveness of training can be evaluated?

Trainee learning

Changes in trainees’ job behaviour

Trainee reaction

Changes in results (2 marks)

…………………………………. is ‘the planned and systematic modification of behaviour through learning events, programmes and instruction which enable individuals to achieve the level of knowledge, skills and competence to carry out their work effectively’.

Which word correctly completes this definition?

Conditioning Education

Training Development (2 marks)

The learning cycle developed by David Kolb is a process for …………………………………. learning. Which of the following words correctly completes this sentence?

Programmed Action

Experiential (1 mark)

What is a key objective of a performance appraisal system?

To ensure that employees are developing their potential for improvement

To underpin the reward system of the organisation

To support promotion planning

To give employees feedback on the previous year’s performance (2 marks)

An organisation uses an appraisal form which enables managers to measure employees’ behaviour in key situations against descriptions of key successful and unsuccessful job behaviour reported by managers.

What appraisal technique is being used by this organisation?

Overall assessment A behavioural incident method

Guided assessment A results-oriented scheme (2 marks)

Which approach to appraisal interviewing gives the interviewer the least critical and dominant role in the process?

Tell and sell Problem-solving

Tell and listen

(1 mark)

Appraisal is an example of what level of control?

Strategic Operational

Tactical Clan

(2 marks)

When a subordinate rates their superior’s leadership skills, this is an example of:

360⁰ feedback Upward appraisal

Performance management Results-oriented appraisal

(2 marks)

Fred is a team leader who keeps a detailed checklist of his daily tasks, and ranks them in order of importance and urgency. He only takes phone calls during particular times of day, to avoid interruptions. Even so, at the end of the day, he has to work late to complete a large number of urgent but low-level tasks for the following day.

Which of the following is Fred’s weakness in the area of time management?

Planning Focus

Delegation Prioritisation (2 marks)

Jihander, the payroll supervisor, has been asked to meet with Tom once a week for eig in order to help Tom to plan, implement and review a learning programme to improve knowledge of the company’s payroll system.

What term would be given to this type of relationship?

Coaching Counselling

Mentoring

ht weeks,

his

(1 mark)

Which of the following is not usually a barrier to effective communication?

Distortion Connection between individuals Noise Technical vocabulary

(2 marks)

It has been suggested that work organisation mig management.

What does ‘ABCD’ stand for?

Act, Bin, Create, Delegate

ht be improved by an ABCD method

Act, Blame, Create, Deliver

of in-tray

Apply, Bin, Collate, Delegate

Apply, Bin, Collate, Deliver

(2 marks)

Which TWO of the following makes a piece of work high priority?
Compromise is an example of a:

Win-win result Lose-win result

Win-lose result Lose-lose result (2 marks)

Under the ACAS disciplinary code, an instance of gross misconduct should be dealt with after:

An oral warning A final written warning

A disciplinary hearing A full investigation (2 marks)

A grievance occurs when an employee infringes organisational rules or expectations.

True

False (1 mark)

An employer’s treatment of an employee is so bad that eventually she resigns even though she liked her work. This would be an example of:

Wrongful dismissal Automatically unfair dismissal

Potentially unfair dismissal Constructive dismissal (2 marks)

Manesh is an accounts assistant who works from 9am to 5pm, with an hour for lunch. He has the following routine duties (duration of tasks are in brackets):
- Open the morning post (30 mins)
- Pass any cheques received to the cashier (30 mins)
- Enter sales invoices/credit notes daily in batches into the computer system by midday (2 hours)
- Match and check purchase invoices to goods received notes daily and pass them to the accountant for authorisation (6 mins per invoice)
- File sales invoices/credit notes (between 1 and 2 hours of filing)

Today is Friday 10am and Manesh has already opened the post and passed the cheques to the cashier, when he gets a telephone call from the accountant asking him to cover for a sick colleague. As a result, Manesh needs to enter the weekly purchase invoices into the computer today (which should only take an hour). Another colleague, who is back in the office this afternoon (2pm) needs to review a list of these invoices before the end of the day for forecasting purposes. The list is generated by the computer system.

Manesh has 20 purchase invoices that need to be matched to (and checked against) GRNs before the end of the day ready for authorisation first thing on Monday.

Decide on the order in which Manesh should carry out the tasks included in the picklist.

Order	Task
1st task
2nd task
3rd task
4th task

Picklist

Filing

Match purchase invoices to goods received notes and pass to the accountant for authorisation

Enter weekly purchase invoices into the computer

Enter sales invoices/credit notes into computer system (4 marks)

Rajesh works in the accounts department of a large business. He receives communications from his two assistants, Lisa and Freda. He passes the information to the accountant, who in turn passes it to the chief accountant.

Lisa has only recently joined the firm and Rajesh is responsible for overseeing her training. He has delegated teaching the day-to-day workings to Freda, who has been with the firm for some years and is very capable. However, Freda is now complaining that Lisa is constantly interrupting her with queries, so that Freda cannot get her own work done. Freda is now seriously behind schedule and she asks Rajesh to relieve her of the ‘burden’ of teaching Lisa. Lisa in turn complains that Freda does not explain things properly, which is why she has to keep asking questions.

On further investigation, Rajesh discovers that Lisa is not as experienced as he had thought and decides to send her on a week’s training course in the company’s systems. He will then supervise her more closely when she returns from the course. Although Freda will still help with some queries, she is to let Rajesh know immediately if this starts to affect her own workload.

What type of communication pattern is being used?

Chain

Circle

Wheel

In resolving the conflict between Lisa and Freda, which model has Rajesh used?

Select the correct answer from the list below.

Picklist

Win-lose

Lose-lose

Win-win (4 marks)

Which approach to ethics considers which actions are likely to result in ‘the greatest good for the greatest number of people’?

Legalism Categorical imperatives

Deontology Utilitarianism (2 marks)

What is the meaning of the ethical principal of ‘independence in appearance’?

Accountants must complete their work free from bias or prejudice

Accountants must complete their work without excessive supervision

Accountants must complete their work in such a way as to give a reasonable person no cause to question their objectivity

Accountants must complete their work in such a way as to give a reasonable person

confidence that they can work without supervision (2 marks)

The Board of TUV Ltd are considering their organisational values in order to promote ethical behaviour. The Chair recounts a recent problem where they found that a waste disposal contractor was dumping their waste instead of recycling it according to their contract. The Board debates whether they are ethically liable for sorting out the problem, particularly as the contractor has ceased to trade.

Later in the meeting, a director reveals that his wife has been elected to the Board of a minor supplier. He says the supplier will offer substantial discounts if more goods are ordered from her firm.

Which ethical concept(s) is/are at issue in the case of the waste disposal situation?

	Yes	No
Openness
Honesty
Accountability
Integrity
Objectivity

What conflict of interest may arise in the case of the supplier?

Self-review threat

Self-interest threat

Familiarity threat

Intimidation threat (4 marks)

Which of the following would NOT be included in a corporate code of ethics for a company that buys products and raw materials from overseas?

A statement detailing the behavioural standards expected of employees

A summary of the company’s quality promises to customers

Details of environmental standards expected of suppliers

A list of the laws and regulations that apply to the company (2 marks)

Limited
- limited company is incorporated specifically to create a separate legal entity, allowing for the concept of limited liability. A limited company may be either public or private – but this is a separate distinction, based mainly on different sources of share capital. (Chapter 1)
Stakeholders

Stakeholders are all individuals or groups with a ‘stake’ in the organisation’s activities or results. Shareholders are merely one (connected) stakeholder group, while key players are one ‘category’ of stakeholders in Mendelow’s power-interest matrix. (Chapter 1)

Connected

Shareholders are connected stakeholders. (Chapter 1)

	ABC	DEF
	Limited liability company	Partnership
	Co-operative society	Limited liability company
	Partnership	Limited liability company
P	Limited liability company	Co-operative society

One share, one vote implies a limited liability company; one member, one vote is the basis of a co-operative or mutual society.

(b) ABC Connected, DEF Connected. (Chapter 1)

As a customer, Azif is a connected stakeholder to both ABC and DEF. Note that any business has stakeholders, not just limited liability companies.

Pregnancy

Redundancy, non-capability and misconduct are potentially fair grounds for dismissal, provided that the employee was fairly handled. Dismissal on the grounds of pregnancy is automatically unfair, partly as a form of sexual discrimination. (Chapter 2)

Social

The developments in digital music products may be analysed under technological factors, but media consumption and buying patterns are sociocultural factors. (Chapter 2)

Switching costs are low

If the costs of switching to alternative suppliers is low, customers can demand more from their suppliers. The other circumstances tend to increase the power of suppliers, by reducing the customers’ ability to take their business elsewhere or by decreasing the importance of individual customers’ business. (Chapter 2)

Professional disagreements

The other choices are covered by regulations which also encompass issues as diverse as noise regulations and the control of working hours and rest breaks. (Chapter 2)

Something likely to cause injury, or a point of exposure to risk of accident, injury or illness

This is the definition given in the chapter. The other alternatives are examples of things that may be hazards if misused. (Chapter 2)

All of these types of data are at risk. Remember that any data is at risk if it has a monetary value, could give a competitive advantage to whoever has it or has nuisance value. (Chapter 2)
Data maximisation

It is data minimisation that is a data protection principle. (Chapter 2)

	Yes	No
Company law		P
Employment law	P
Industry regulation	P
Consumer protection	P

As Constance is a sole trader, she will not be affected by company law. However, she could be affected by employment law, by industry regulation and by consumer protection.

(b) Ad hoc

As Constance is considering using outsourcing for only a short period, this is ad-hoc outsourcing. (Chapter 2)

Fiscal

Monetary policy focuses on money supply, the monetary system, interest rates, exchange rates and the availability of credit. Social policy focuses on workplace regulation, labour supply, education and skills. Industry policy focuses on matters such as freedom of trade, entry barriers and capacity, and industry regulation. (Chapter 3)

A reduction in the rate of domestic inflation
- fall in the exchange rate makes a country’s exports cheaper to overseas buyers, and imports more expensive: it therefore has the first three effects. The increase in the cost of imports, however, is likely to add to the rate of domestic inflation. (Chapter 3)
Demand pull

Demand pull inflation occurs when the economy is buoyant and there is a high aggregate demand, in excess of the economy’s ability to supply. Cost push inflation occurs where the costs of factors of production rise. ‘Frictional’ is not a term applied to inflation, but to unemployment

(referring to the lead time required to match workers with jobs). (Chapter 3)

(a) Technological

Frictional and seasonal unemployment are short term, whereas XYZ’s employees are being permanently laid off. Structural unemployment results from long-term changes in an industry. In XYZ’s case, the workers are being made redundant because of new technology and so the correct answer is technological.

(b)

	Yes	No
Using renewable energy sources	P
Burying non-biodegradable waste on site		P
Minimising costs		P
Buying recycled paper	P
Encouraging staff not to print emails	P

Burying non-biodegradable waste on site is causing an environmental problem for the future and could well be illegal. Minimising costs will not produce an environmental benefit. (Chapters 2 and 3)

Point 8

The effect of a cash subsidy is to shift the supply curve to the right. Producers are willing to supply bigger quantities at the same market price, because they will get a cash subsidy from the government in addition to the market price. The new supply curve goes through points 7, 8 and 9, and so the new equilibrium, given no shift in the demand curve, is at point 8. (Chapter 4)

1 A The market clears at the equilibrium price – there is neither surplus nor shortage.
- B Some consumers would have paid a higher price.
- C The higher the price, the more attractive it is to suppliers.
- D The demand curve usually slopes downwards.
- E Some suppliers would have sold at lower price. (Chapter 4)
Supply for yoghurt curve shifts to the left

Demand conditions, and therefore the demand curve, are unchanged. However, less will be supplied at any given price and so the supply curve will move to the left. (Chapter 4)

A way of ensuring a fair distribution of incomes
- government may intervene, for example through progressive taxation, to make the distribution of income fairer. (Chapter 4)
A rise in interest rates
- reduction in corporation tax, and expectations of increased profits, will both increase the demand for shares. A reduction in the number of shares issued reduces the supply of shares. As the price of shares is determined by demand and supply (for shares) these options will cause the price of shares to rise.

However, a rise in interest rates will lead to other investments becoming relatively more attractive instead of shares, so demand (and therefore price) for shares will fall. (Chapter 4)

	Shift in demand	Shift in supply	Neither
An increase in household incomes	P
A rise in wage costs		P
A fall in the price of raw materials		P
A fall in the price of the good			P

An increase in household incomes will lead to an increase in the quantity demanded at all prices, and so will lead to an outward shift in the demand curve.

A rise in wage costs will lead to an inward shift (contraction) of the supply curve, while a fall in the price of raw materials will lead to an outward shift (expansion) of the supply curve.

A fall in the price of the good will lead to a movement along both the demand and supply curves, but will not lead to a shift in either of them. (Chapter 4)

Cliques and other informal groups can be either helpful or dysfunctional in an organisation

Cliques can be helpful in encouraging cross-functional communication, but they can also ‘freeze out’ individuals and focus on their own agendas. The other statements are untrue: a grapevine flourishes even where formal communication is good; all organisations also have informal social systems; and informal organisation can undermine health and safety (eg by creating informal ‘short-cuts’ or a culture of recklessness). (Chapter 5)

Technostructure

The technostructure is concerned with standardisation of work processes and outputs. The strategic apex and middle line are layers of management (controlling the operating core). Support staff fulfil ancillary functions.

Administration staff

Mintzberg uses the term ‘support staff’.

The technostructure

Machine bureaucracies are characterised by multiple layers of management, formal (often rigid) procedures and standardised production processes, so the technostructure is very important (Chapter 5)

(a) Tall organisation These are the perceived advantages of a tall organisation.

(b)

	Advantage	Disadvantage
Knowledge sharing	P
Social groupings		P
Informal work practices		P
Responsiveness	P
Speed	P

Knowledge sharing can give a wider perspective on an employee’s role. Speed and responsiveness are another two advantages of the informal organisation. Social groupings, however, may act collectively against the organisation and informal work practices may violate safety or quality assurance measures. (Chapter 5)

To minimise labour turnover and maximise employee retention within the organisation

An organisation may not wish to minimise labour turnover and maximise retention, if the HR plan requires downsizing by natural wastage. The other three options are key objectives of HRM. (Chapter 6)

A partnership of graphic designers

An existential culture is shaped by the interests of contributing members, such as a professional partnership. An entrepreneurial start-up is likely to be a power culture; a construction project a task culture; and a large telecom firm a bureaucracy or role culture. (Chapter 6)

False

Committees are useful for generating new ideas, but inefficient for ongoing work. (Chapter 6)

(a) Athena

Athena represents a task culture where management is seen as completing a series of projects.

(b) Giving immediate rulings on points of dispute; Being seen to be impartial

Fixing the date and time of a meeting, and acting on decisions made are the duties of the committee secretary. (Chapter 6)

Ensuring the confidentiality of information

Confidentiality may legitimately be breached in the public interest: corporate governance depends on the free flow of information to stakeholders. The other options are key themes in corporate governance. (Chapter 7)

Independent non-executive directors

Non-executive directors (sitting on a remuneration committee) have the independence required for this task – while the board of directors (including executive directors) does not. An audit committee has responsibilities for review of financial statements, internal controls and internal audits, and liaison with external auditors. (Chapter 7)

False

According to the stakeholder view, CSR is in the long-term interests of shareholders because it helps to secure stakeholder support, access to resources, sustainable business relationships, and so on. (Chapter 7)

Corporate governance is the system by which organisations are directed and controlled by senior officers. Most corporate governance reports are based around the principles of integrity, accountability, independence and good management but there is disagreement on how much these principles need to be supplemented by detailed rules.

Businesses, particularly large ones, are subject to increasing expectations that they will exercise social responsibility. This is an ill-defined concept, but appears to focus on the provision of specific benefits to society in general, such as charitable donations, the creation or preservation of employment, and spending on environmental improvement or maintenance. (Chapter 7)

The financial manager

The financial manager is responsible for raising finance and controlling financial resources. The management accountant presents accounting information to support the management of the business. The financial accountant reports the results and financial position of a business. (Chapter 8)

Purchasing

Purchasing system tests are based around buying and goods inwards. The equivalent for sales would be selling and goods outwards. Payroll concerns the payment of wages and salaries. Cash management focuses on the authorisation, verification and recording of payments and receipts. (Chapter 8)

The need for security checks for authorising access

The need for security checks to ensure unauthorised personnel do not gain access to data files is a disadvantage rather than an advantage. (Chapter 8)

Financial accountants provide historical information for external use.

This is a true statement concerning financial accounts. (Chapter 8)

All the options are valid comparisons that can be made. Note the difference between a budget which is an organisation’s plan or target for a forthcoming period and a forecast which is a prediction. (Chapter 8)
Contribution

Contribution refers to how much each product contributes to fixed costs and profit. (Chapter 8) 42 (a) Aged receivables listing

Supplier statements would be sent from the supplier, the aged payables listing is an output from the purchases ledger system, and the list of bankings is an output from the cash system.

(b)

	Yes	No
Income		P
Assets	P
Expenses		P
Liabilities	P
Sources of cash generated and spent		P

The statement of financial position gives details of assets owned and liabilities owed by the business. Details of income and expenditure would be included in the statement of profit or loss and the sources of cash generated and spent appear in the statement of cash flows. (Chapter 8)

Prevent controls

Prevent controls are designed to prevent errors (in this case, wrong payments) from happening. Detect controls are designed to detect errors once they have happened; correct controls to minimise or negate the effect of errors; and accounting controls to provide accurate accounting records. (Chapter 9)

Access control

Access controls involve physical and network procedures to restrict access to a system. The other options are purely software-based security methods.(Chapter 9)

Backing up

Backing up is making separately stored duplicate copies of data for this purpose. The other three options are other forms of integrity control: verification involves ensuring data entered matches source documents, while validation involves ensuring that it is not incomplete or unreasonable. (Chapter 9)

Organisation

Organisation in this context means identifying reporting lines, levels of authority and responsibility to ensure that everyone is aware of their control responsibilities. The full mnemonic stands for:

Segregation of duties; Physical; Authorisation and approval; Management; Supervision; Organisation; Arithmetical and accounting; and Personnel. (Chapter 9)

Veracity

Veracity concerns the trustworthiness or accuracy of big data. (Chapter 9)

	Internal	External
Evaluating the adequacy and effectiveness of internal controls	P
Carried out for the benefit of shareholders		P
Part of the business’s control system	P
Examines the published financial statements		P

Internal audit is part of the internal controls within an organisation, checking that the existing controls work and how to improve them. External audit is carried out by an external accounting firm on behalf of the shareholders to check that the published accounts give a true and fair view.

Financial Reporting Review Panel

In the UK, the Financial Reporting Review Panel is responsible for examining and questioning the departure from accounting standards by large companies. (Chapters 8 and 9)

Yes, as an example of intentional misrepresentation of the financial position of a business

There is potential for inventory to be fraudulently overvalued for accounts purposes. (Chapter 10)

All of the above

Trivial and unrelated as some of the options may seem, they are all fraud-prevention controls: making it difficult to alter quantities; creating time for frauds to come to light; and highlighting deviations from norms. (Chapter 10)

Limitation controls

Limit controls limit opportunity for fraud: another example is limiting access to the computer network by means of passwords. Segregation of duties means ensuring that functions which together facilitate fraud are performed by different individuals: eg separating the cheque signing function from the authorisation of payments. Appropriate documentation involves recording, authorising and tracking transactions through purchase requisitions, orders, invoices, and so on. (Chapter 10)

Requiring signatures to confirm receipt of goods or services

This should be clear from the context, because of the collusion with customers (if you remembered what collusion was). Physical security refers to keeping assets under lock and key: not to be dismissed as a fraud prevention measure! Sequential numbering works because it is easy to spot if documents are missing. Authorisation policies increase checks and accountabilities. (Chapter 10)

A(iii), B(ii), C(i) Refer back to the chapter if you didn’t get this right. (Chapter 10)
A(ii), B(i), C(iii) Make sure you know the features of the control system, as these relate to the main accounting systems in the organisation. (Chapter 10)
(a)

	Yes	No
New bookkeeper	P
New overseas customer	P
Lack of supervision	P
Cash transactions		P

Cash transactions of themselves do not indicate fraud, as it seems that amounts are being paid in as well as out. This seems more likely to indicate money laundering.

Layering Placement usually involves small sums of money. The business to business transactions with the overseas customer are more indicative of layering.
Report her suspicions to the authorities immediately

Once Leticia’s suspicions are aroused, she should report the transactions to the authorities. Otherwise she may be committing the offence of failure to report. If found guilty she could go to prison for five years and/or suffer a fine. (Chapter 10)

Legitimate power

Also known as ‘position’ power, as it derives from a given role in the chain of command. Physical power is based on superior force; resource power on control over valued resources or rewards; and expert power on possession of valued knowledge or expertise. (Chapter 11)

Neo-human relations

The neo-human relations school argued that a wide range of employee motivations impact on performance: the human relations school pioneered this insight, but focused on social or belonging needs. Scientific management focused instead on technical efficiency. The contingency school argued that a wide range of factors – human and non-human – impact on performance. (Chapter 11)

Concern for production and concern for people

The grid plots concern for production and concern for people. A balance between managerial and subordinate discretion can be seen in other style theories, such as ‘Tells-sells-consults-joins’. Psychological distance and situation are factors in Fiedler’s contingency theory. The distinction between leadership and authority is used by Heifetz to distinguish between leaders (potentially informal or emergent) and managers (in positions of formal authority). (Chapter 11)

Communicating

Communicating is not one of Fayol’s five functions of management. (Chapter 11)

Handling disturbances

This is a decisional role. The ‘disturbances’ referred to are unpredictable situations that require managerial input to resolve. (Chapter 11)

Category Roles

Interpersonal: Figurehead; Leader; Liaison

Informational: Monitor; Spokesperson; Disseminator

Decisional: Entrepreneur; Disturbance handler; Resource allocator; Negotiator

(Chapter 11)

Legitimate power

(Or ‘position’ power) is power arising from an individual’s formal position in the organisation.

(Chapter 11)

The attributes of the ideal person for a given job

The main tasks, responsibilities and conditions involved in a job describes a job description: often confused with a person specification. One describes the job, while the other describes the ideal candidate for the job. A performance rating would be contained in a performance appraisal, and the number of people required in a job requisition or recruitment plan. (Chapter 12)

This e-recruitment option is suitably targeted (compared with a national newspaper or local radio), and low cost and low lead time (compared with retaining a consultancy). (Chapter 12)

Work sampling

Work sampling allows candidates to demonstrate actual capability in job-relevant tasks. Various forms of testing are less accurate. Interviews are very low on predictive validity, due to their limited scope, artificiality and subjectivity. References are even less accurate, due to bias and caution. (Chapter 12)

(a) Sells Lin makes the decisions but motivates his subordinates to accept them.
- 9 team High work accomplishment through leading committed people who identify themselves with the organisational aims.
- Leader Lin focuses on people and inspires trust, holding a long-term view.

(Chapter 12)

Victimisation

Victimisation occurs when a person is penalised for giving information or taking action in pursuit of a claim of discrimination. Direct discrimination occurs when one interested group is treated less favourably than another, and indirect discrimination when a policy or practice appears fair but is discriminatory in practice. Harassment is the use of threatening, intimidatory, offensive or abusive language or behaviour. (Chapter 13)

True

Age regulations make this practice unlawful in some countries. (Chapter 13)

	Advantage	Disadvantage
Interviewer may have knowledge gaps		P
Direct face to face communication	P
Flexibility in questioning	P
Interviewer’s perception may be selective		P

The interviewer’s perception being selective may weaken the interviewer’s objectivity. An interviewer having knowledge gaps is a disadvantage if the candidate is able to disguise a lack of specialist knowledge required for the post.

Harassment

Janine is not being discriminated against; she is being subjected to harassment.

(Chapters 12 and 13)

True

This is known as the ‘risky-shift’ phenomena: it is also a symptom of ‘group think’. It is one of the ways in which people contribute differently in groups than they do individually – and not always in positive ways. (Chapter 14)

Teamworker

The Plant solves more conceptual, strategic problems for the team. The Shaper is a leader, but uses dynamism and challenge. The Co-ordinator pulls the team together, but more as organiser or chairperson. It is the Teamworker who fulfils the relationship-maintenance function. (Chapter 14)

Forming, storming, norming, performing

Forming is the ‘coming together’ stage, followed by conflict (storming) as roles and goals are tested, settling down (norming) as ways of working together are developed, and finally focus on the task (performing). (Chapter 14)

The Abilene paradox

You should be able to describe the other group processes as well. (Chapter 14)

Discussion is not limited to the items on the agenda

This is the best answer. A chairperson will be justified in cutting short a speaker who has nothing new to say and says it at great length. Brisk progress through the agenda is one mark of good meeting conduct. Some people may only need to be present for part of the meeting and it is a waste of their time to insist on their presence throughout. (Chapter 14)

Process theory

Expectancy theory is a process theory, because it explores the process or ‘calculation’ by which outcomes become desirable and are pursued by individuals. Content theory focuses on the ‘package’ of needs or desired outcomes that motivate people (eg Herzberg’s and Maslow’s models). (Chapter 15)

McGregor

McGregor’s Theory X/Y accounts for the motivational approach of managers, based on their assumptions about their subordinates. You should be able to identify the other theories as twofactor theory, hierarchy of needs and expectancy theory respectively. (Chapter 15)

Performance-related pay

PRP is not an element of job design: nor is it directly related to job satisfaction. The five core dimensions are skill variety, task identity, task significance, autonomy and feedback: any or all of these can be increased in a job to increase employee satisfaction and commitment. (Chapter 15)

Theory X

Theory X is the managerial assumption that most people dislike work and responsibility and avoid them if possible. Managers use coercion and control to manage staff. Theory Y is the managerial assumption that people can be motivated to accept challenge and responsibility and contribute willingly to the firm. This results in quite a different management style. (Chapter 15) 79 (a) Monitor-evaluator Meredith fulfils the criteria of a monitor-evaluator.

Theory X Theory X suggests that people dislike work and want to avoid responsibility. They need to be closely supervised and motivated by ‘carrot and stick’ techniques. (Chapters 14 and 15)

Pragmatist

Methods of learning by doing suit both Activists and Pragmatists, but Pragmatists have the additional preference for practical, job-related problem-solving. Theorists and Reflectors prefer to conceptualise or observe before applying learning. (Chapter 16)

Supports transfer of learning

On the job learning supports application of learning to the job (transfer of learning) far better than off the job learning. However, it is subject to the distractions and pressures of work, is not easy to standardise for large numbers of trainees, and creates the risk of poor initial performance and experimentation in real-work situations. (Chapter 16)

Trainee reaction

Trainee reaction or satisfaction is level 1; trainee learning is level 2; changes in job behaviour (ie application of learning) is level 3; and impact on goals/results is level 4. (Chapter 16)

Training

Conditioning may have sounded familiar if you only read as far as ‘modification of behaviour’, but it involves specific repetition and reward techniques. Education is the gradual acquisition of knowledge through learning and instruction, often leading to qualifications. Development is a wider experience of the growth or realisation of a person’s ability and potential through a wide range of learning experiences. (Chapter 16)

Experiential

The learning cycle is experiential learning or ‘learning by doing’. ‘Action learning’ sounds similar, but is actually a specific learning method by which managers are brought together as a problemsolving group to discuss real work issues. Programmed learning is highly structured learning, which doesn’t apply here. (Chapter 16)

To ensure that employees are developing their potential for improvement

The key objective of performance appraisal is performance improvement, through feedback, problem-solving and development planning. This is often not directly related to reward and/or promotion planning. While retrospective feedback is one tool of appraisal, it is not regarded as an end in itself. (Chapter 17)

A behavioural incident method

Overall assessment is an unguided narrative evaluation; guided assessment a comment on specified characteristics and performance elements; and a results-oriented scheme a review of performance against specific targets and standards agreed in advance by the assessor and assessee. (Chapter 17)

Problem-solving

The three options are listed in decreasing order of interviewer dominance and critical role, using Maier’s popular classification. (Chapter 17)

Tactical

Appraisal is an example of the tactical level of control. (Note that ‘clan control’ is a type of control strategy: not a level of control). (Chapter 17)

Upward appraisal

Upward appraisal is when a subordinate rates their superior’s leadership skills. (Chapter 17)

Delegation

Fred is not delegating tasks to his team: this is an important aspect of time management. The mini-scenario indicates that Fred plans, focuses and prioritises well. (Chapter 18)

Coaching

This can be identified as coaching because it is short term, job specific and carried out by the immediate supervisor: unlike mentoring, which is long term, broad in focus and often carried out by an offline mentor. Counselling is a specific intervention in the case of personal or disciplinary problems, rather than directly addressing skill improvement. (Chapter 18)

Connection between individuals

Rapport is the term for establishing a ‘connection’ between yourself and another person, which generally facilitates communication: it involves a range of verbal and non-verbal communication techniques. Distortion refers to a fault in the ‘coding’ or ‘decoding’ of a message; noise to interference in the transmission or receipt of a message; and jargon to the use of technical vocabulary which non-users cannot understand. (Chapter 18)

Act, Bin, Create, Delegate

Act, Bin, Create, Delegate. This is a useful shorthand for remembering good advice on managing what can be mountains of paper! (Chapter 18)

It has to be completed by a deadline, Other tasks depend on it

The Chairman’s involvement may make it high priority but not necessarily so. The other options make the work high priority for you, but not necessarily for the organisation. (Chapter 18)

Lose-lose result

Neither party gets what they want. (Chapter 18)

A full investigation

The point of this question is to emphasise that all disciplinary issues should be properly investigated. After proper investigation and a disciplinary hearing, any of the usual sanctions may be appropriate. (Chapter 18)

False

This is a disciplinary action. (Try and define ‘grievance’ yourself.) (Chapter 18)

Constructive dismissal

Little is certain in employment law but, on the face of it, this would seem to be a case of constructive dismissal. It may also turn out to be unfair dismissal. Wrongful dismissal is unlikely, as the employer may not have actually breached the contract of employment. It may emerge on investigation that the bad treatment of the employee was the result of one of the automatically unfair reasons for dismissal, such as membership of a trade union. However, on the facts we are given, constructive dismissal is the best answer. (Chapter 18) 99 The correct answer is:

Order	Task
1st task (10am to 12 noon)	Enter sales invoices/credit notes into computer system
2nd task (12 noon to 1pm)	Enter weekly purchase invoices into the computer
3rd task (2pm to 4pm) (20 × 6 mins = 120 mins)	Match purchase invoices to goods-received notes and pass to the accountant for authorisation
4th task (4pm to 5pm)	Filing

The sales invoices and credit notes need to be entered into the computer system by midday and so take priority.

Next enter the purchase invoices into the computer, so that the report is available for Manesh’s colleague by 2pm.

The third priority is to match the purchase invoices to the GRNs before the end of today, Friday, so that they are ready for the accountant first thing on Monday morning.

Any time left can then be spent on filing. (Chapter 18) 100 (a) Y This is the classic Y pattern.

(b) Win-win Freda has won because she will be able to limit the disruption to her work.

Lisa has also won because she will receive proper training. (Chapter 18)

Utilitarianism

Utilitarianism is based on the outcomes or consequences of actions. Deontology is based on duty: categorical imperatives are the ‘rules’ by which duty (or moral responsibility) can be judged. Legalism is based on the agreed rules or laws laid down by a group or society. (Chapter 19)

Accountants must complete their work in such a way as to give a reasonable person no cause to question their objectivity

Independence in appearance is being seen to be independent or objective: it is an additional requirement to being objective in fact (independence of mind) – and nothing to do with freedom from supervision (or autonomy). (Chapter 19)

	Yes	No
Openness		P
Honesty		P
Accountability	P
Integrity	P
Objectivity		P

Accountability refers to whether an organisation is responsible for the consequences of their actions and this is very much to the point in this case.

Openness means disclosing relevant information which may affect decisions to stakeholders. If TUV decide to incur the costs of a clean up, then this concept may come into play later.

Honesty means not only telling the truth but also not misleading stakeholders. Again this concept may come into play at a later stage.

Integrity means straightforward dealing and completeness, so this is an issue here.

Objectivity means that all choices are made purely on merit.

(b) Self-interest threat

The self-interest threat may arise because the director’s wife is on the Board of the supplier. This may lead to contracts being made with her firm regardless of which supplier would actually be better for the business. (Chapter 19)

A list of the laws and regulations that apply to the company

Although a corporate code of ethics may refer to applicable laws and regulations, it would not necessarily list all those that the company has to comply with. Corporate codes of ethics usually represent statements of standards relating to a range of stakeholders – customers, shareholders, employees, suppliers, local communities etc (Chapter 19)

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