These notes were compiled using previous examination papers: DBE/November 2022, SACAI NOV 2021 & DBE/November 2022.
(For the best results also purchase BS Paper 2 Prelim Notes.
Section A: Short questions
Section B: Business Opportunities/ Ventures
1. Management and leadership
2. Investment: ...
PAPER 2
These notes were compiled by previous papers of DBE/November 2022, SACAI NOV 2021 &
DBE/November 2022. NOTE: These are only suggested answers. Some information is repeated, I want to
show you the different ways the same information is asked for.
I encourage you to answer the computation/illustration questions without even looking at the answers.
Good luck .Juffrou Ansie
Section A: Short questions
Section B: Business Opportunities/ Ventures
1. Management and leadership
2. Investment: Securities/Opportunities & insurance
3. Forms of ownership: Criteria for success and/or failure
4. Presentation and data responses
Section C: Business Roles
1. Ethics and professionalism
2. Creative thinking and Problem-solving
3. Social Responsibility and Corporate Citizenship Corporate Social Responsibility (CSR) & Corporate
Social Investment (CSI)
4. Human rights, inclusivity and environmental issues
,Limited liability Losses are limited to the amount that the owner invested in the
business. The owner’s personal assets are protected against the debts
of the business. Applicable to companies that have a separate
entity/personality.
Unlimited liability The liability of the owner to pay debts/claims is not limited to the
business only. The owner’s personal assets may be seized to pay for the
debts of the business. Applicable to a sole proprietorship and
partnership as they do not have a separate legal entity/personality.
Democratic leadership style Employees are invited to be part of the decision-making process
Autocratic leadership style Employees are not involved in the decision-making process.
Laissez-faire/Free-rein The leader allows experienced and trustworthy employees to make
leadership style decisions in pursuit of the organization's goals.
Charismatic leadership style The leader uses charisma and charm to influence employees.
Transactional leadership Use rewards and punishments as incentives to influence employee
style behaviour.
Leadership theories Guide leaders on the different leadership styles that can be applied or
used.
Situational leadership In these leadership theories, the leader applies different leadership
theories styles depending on different situations
Transformational/Transition Best applies during a period of drastic change in an organization
Management Leadership
Theories
Johannesburg Stock The market that deals with the buying and selling of shares in listed
exchange (JSE) companies.
Investors The persons who save money with the expectation of making a profit.
Dividend An amount of money that a company pays to its shareholders from its
profits.
Stock market The financial market in which long-term debt securities are bought and
sold
Short-term investment Investment for less than one year
Long-term investment The duration / period of investment is more than three years.
,Liquidation Selling the assets of a company to pay creditors.
Interest The amount of money earned by investors as return on/remuneration
for investments in bank deposits and loans
Fixed rate The interest rate remains the same for the duration of the investment
period
Ethical behaviour Acting according to with a set of values that is morally acceptable in
society
Business ethics The set of values of a business, displayed by its managers, executives
and employees. These values must be morally acceptable by society,
and within set business codes
Professionalism Describes the internationally accepted standards and expectations that
businesses and society have of people’s conduct and levels of
competence in the workplace. It is a broader concept than ethics and
includes aspects such as appearance, attitude, loyalty, etc
Corporate governance The exercise of ethical and effective leadership by the individuals who
are responsible for managing the business. They are required to
achieve good performance, effective control, sustainability, and
Profitability.
Annual General Meeting A meeting of a company attended by all the shareholders that takes
(AGM) place once a year.
Unprofessional practices When people/the business do not act within the accepted standards
and expectation, it is unprofessional behaviour.
Unethical practices When the business acts with a different set of values of what is morally
acceptable.
, Section B: Business Opportunities/ Ventures
1. Management and leadership
Autocratic leadership style SACAI NOV 2021
Positives/Advantages Negatives/Disadvantages
❖ Quick decisions can be taken without ❖ Leaders and followers may become
consulting/considering followers/ divided and may not agree on ways to
employees. solve problems.
❖ Work gets done in time/on schedule as ❖ Workers can become demotivated if their
targets are clearly specified. opinions/ideas are not considered.
❖ Line of command/communication is clear ❖ Demotivated workers impact negatively
as it is top-down/followers know exactly on productivity.
what to do. ❖ New/Creative/Cost reducing ideas may
❖ Direct supervision/strict control ensure not be used/considered/implemented.
high quality products/service. ❖ Followers may feel that they are not
❖ Provides strong leadership which makes valued resulting in high absenteeism/
new employees feel confident/safe. employee turnover
❖ Works well in large companies where
consultation with every employee is
impractical.
_____________________________________
Role of personal attitude in successful leadership SACAI NOV 2021/ DBE/November 2020(2)
▪ Positive attitude releases leadership potential for personal growth.
▪ A leader's good attitude can influence the success of the business.
▪ Leaders must know their strengths and weaknesses to apply their leadership styles effectively.
▪ Great leaders understand that the right attitude will set the right atmosphere.
▪ Leaders' attitude may influence employees'/teams' thoughts/behaviour.
, ▪ Leaders should model the behaviour that they want to see in team members.
▪ Successful leaders consider the abilities/skills of team members to allocate tasks/roles
effectively.
▪ Enthusiasm produces confidence in a leader and inspires them to work even harder.
_________________________________
Leadership theories DBE/November 2020(2)
Situational leadership ❖ Leaders are required to manage employees under different
theory conditions and different character traits are required to deal with
each situation within the workplace.
❖ A different leadership style would be adopted by the leader, based
on the prevailing circumstances at a particular time.
❖ Effective leaders may adopt the leadership style that will ensure that
the goals of the organisation are achieved.
❖ The relationship between the leader and the employees are based
on values of trust/integrity/respect.
Transformational ❖ This leadership theory would be adopted by the leader during a
theory/Transitional period in which the organisation is experiencing radical changes.
leadership theory ❖ The leader may use his communication skills/passion/interaction
with employees to convince employees to accept the changes that
are planned in the organisation.
❖ Employees in turn respect/admire the leader and trust the leader’s
judgement regarding the planned changes within the organisation.
, ❖ Strategic thinking leaders use this leadership theory to convince
employees to accept the long-term vision of the organisation.
❖ Leaders have strong and charismatic personalities, that they use to
increase the motivation/productivity levels of workers
Leaders and Followers ❖ The relationship between the leader and employees has a major
impact on the goals that the organisation has set out to achieve.
❖ Employees, as followers of the leader, follow the instructions of the
leader and collectively work towards the organisation’s goals.
❖ Leaders allow followers to be creative/innovative and encourage
them to explore alternative methods to increase productivity.
❖ Leaders lead by example and provide incentives for positive
behaviours.
❖ Followers take responsibility for goals/targets not achieved.
, The insurance clause that is applicable to YT in the scenario above = Average clause
Calculate the amount that Yabo Traders should receive as compensation from the insurer. Show ALL
workings.
Examples of long-term insurance DBE/November 2022
↘ Endowment policy
↘ Life cover policy/Life insurance
↘ Retirement annuity/Pension fund/Provident fund
↘ Disability policy
↘ Trauma insurance
↘ Funeral insurance
↘ Health insurance/Medical aid
The meaning of excess as an insurance concept. DBE/November 2022
Excess is the amount that the insured agrees to pay upfront when he/she takes out an insurance
policy
The amount the insured agrees to pay upfront as stipulated in the insurance policy.
A portion of the insurance claim that the insured will have to pay towards the cost of
replacing/repairing goods/property concerned.
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