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Business Studies Grade 12 IEB Summary of all chapters
Chapter 1 - Team Dynamics and Conflict Management ................................................................2
Chapter 2 - Professionalism and Ethics............................................................................................6
Chapter 3 - Corporate Social Responsibility .................................................................................. 13
Chapter 4 - Creative thinking and Problem solving .................................................................... 22
Chapter 5 - Business Environments................................................................................................ 27
Chapter 6 - Entrepreneurship and Management ......................................................................... 45
Chapter 7 - Marketing and Branding...............................................................................................53
Chapter 9 - Industrial Relations and Legislation ......................................................................... 66
Chapter 10 - Investment Opportunities and Insurance ............................................................. 84
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, Chapter 1 - Team Dynamics and Conflict Management
Conflict in teams often emerges from the distribution of work responsibilities.
Role overload: occurs when a team member takes on more tasks than they can handle.
Role ambiguity: arises from a lack of clear understanding of each member's
responsibilities.
Role conflict: happens when multiple members vie for the same role.
Synergy refers to the combined effect of two or more elements working together,
which produces a result greater than the sum of their individual effects.
Conflict
A clash or lack of harmony between objects, ideas, or individuals.
Functional Conflict vs Dysfunctional Conflict
- Constructive - Destructive
- Non-hostile - Hostile
- Encourages creativity - Hinders creativity and productivity
- Enhances productivity - Decreases morale
Advantages of conflict
- Highlights problems needing attention
- Promotes creative thinking
- Facilitates learning from others
- Encourages collaboration
- Motivates contributions from participants
Disadvantages of conflict
- Reduces productivity
- Lowers morale
- Can lead to inappropriate behavior
- Fosters a climate of distrust
Reasons for conflict
1. Change
2. Inclusivity and cultural diversity
3. Poor communication or lack thereof
4. Allocation of resources
5. Personality clashes and emotional issues
6. Conflicting values and ethics
7. Internal conflict
Skills a manager needs in order to manage conflict
- Adaptability to change
- Tolerance for diversity and inclusivity
- Effective communication skills
- Strategic thinking and action
- Emotional intelligence
- Strong values and ethics
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,Recommendations for conflict management
1. Stimulating functional conflict (devils advocate): Challenge ideas, welcome differing
opinions, foster debate, and avoid 'group think.'
2. Negotiation: Directly address issues between two parties without involving a third
party.
3. Smoothing: Temporarily set aside differences and focus on commonalities for short-
term resolution.
4. Forcing: Imposing a solution by authority on subordinates.
5. Avoidance: Deliberately ignoring or postponing an issue until a more opportune
moment.
6. Compromise: All parties involved make concessions to reach a mutually acceptable
solution.
Conflict resolution steps
Negotiation Conciliation Mediation Arbitration
Parties attempt to A third party The third party A third party makes
reach a compromise facilitates the becomes more a binding decision on
independently. discussion but does involved, offering how to resolve the
not offer solutions. advice while the dispute.
final decision
remains with the
original parties.
Con-arb Process
A combined process of conciliation and arbitration for resolving unfair labor practices
affecting individuals.
- Conducted within a single day
- Saves time and costs
- Mandatory during probation periods
CCMA: Commission for Conciliation, Mediation and Arbitration
- Prevents labor disputes from escalating
- Serves as a dispute resolution body, encouraging cooperation between employees and
employers
- Aims to enhance economic productivity
Process:
1. Conciliation Listen to both sides and facilitate discussion; mediation follows if no
agreement is reached.
2. During mediation, CCMA representative provides recommendations if a strike is
anticipated.
3. Arbitration Arbitrator issues a binding resolution for disputes or strikes.
4. 'Conarb' Conciliation and arbitration occur on the same day.
5. If a party believes the CCMA has not fully considered the case.
Conciliation - An informal method where a conciliator helps both parties express their
concerns and reach an agreement.
Mediation - An informal process where a mediator listens to both sides, may hold
separate discussions, and offers suggestions, but proposals are non-binding unless
accepted by the parties.
Arbitration - A formal process where evidence is presented in a structured setting,
following civil procedure rules. The decision can be binding or non-binding, with non-
binding decisions subject to court appeal.
3
,WPF Work Place Forums
- A platform for employees and employers to collaborate on decisions
- Ensures worker input on conditions
- Provides direct management communication
- Trade unions can apply to the CCMA to establish a WPF
Functions:
- Promote the interest of all employees in the workplace
- Promote efficiency in the workplace through collaboration
- Consulted by an employer and to reach a consensus on working conditions
- Participate in decision-making regarding working conditions
Issues to be dealt with by the employer and the WPF
- Health and safety measures
- New working methods can lead to restructuring and therefore workers who are laid
off
- Job rating
- Criteria for fringe benefits and bonuses
- Education and training
Trade Union vs Workplace Forum
- Trade unions are legal entities; workplace forums are not.
- Only representative unions can initiate workplace forums.
- Trade unions negotiate wages; workplace forums do not.
- Trade unions can initiate strikes; workplace forums cannot.
- Non-union members can participate in workplace forums.
Trade Unions
Trade unions represent and negotiate on behalf of their members and are controlled by
them.
Roles of trade unions
- Provide personal protection for individual workers
- Engage in collective bargaining for better conditions
- Assist members with grievances related to disciplinary actions or victimization
The general view that the role of trade unions extends beyond the everyday problems
of ordinary people and includes the following:
- Engage in industrial actions such as protests and strikes
- Influence government policies and strategies
- Advocate for minimum economic and legal standards
- Serve as moral institutions to uplift and support the marginalized
General functions of a trade union
- Represent members in disciplinary hearings
- Offer education and training
- Enhance worker productivity
- Improve working conditions
- Engage in collective bargaining
- Resolve disputes between workers and employers
- Provide professional and legal advice
- Manage legislation affecting employees
4
,Functions of trade unions
- Public administration function: Represent general societal interests and minority
groups via media and negotiations.
- Government Function: Influence government decisions.
- Negotiation function: Advocate for improved working conditions, salaries, and
benefits.
- Representation function: Represent employees both collectively and individually.
- Service Delivery Function: Enhance members' material benefits.
Role of trade unions in the economics
Secure a competitive workforce to attract foreign investment, though excessive
interference can deter investors.
COFESA
- One of South Africa's largest employer confederations, founded in 1989
- Represents about 6,500 employers
- Assists with navigating complex legislation, including the Labour Relations Act, Basic
Conditions of Employment Act, Skills Development Act, Employment Equity Act, UIF,
Tax Legislation, OHS, and Companies Act
Employers' organizations functions and issues to be negotiated
- Implement and maintain labor legislation
- Employment contracts
- Training and development
- Dispute resolution and CCMA negotiations
- Trade union interactions and disciplinary procedures
5
, Chapter 2 - Professionalism and Ethics
Professionalism
- Refers to how business managers and employees behave when dealing with
stakeholders
- Compliance with accepted ways of doing business; ethical behaviour, appearance,
communication, etiquette and loyalty
Ethics
- Refers to the moral values that are mostly set by society and by the enterprise as a
standard for correct behavior
- It is the morals, principles and values a company upholds
Professionalism Ethics
Setting standards for expected behavior Adheres to a set of values that are
morally acceptable
Forms part of the employees code of Form part of a code of conduct to guide
conduct to train workers to act employees to act ethically
professionally
Includes guidelines for workers Focus on developing a moral compass to
appearance / communication / attitude / use in decision making
responsibility
Focus on maintaining the reputation of the Involves following principles for right /
business wrong in business activities
Used for the benefit of the employees Acceptable to society / group / community
Knowledge and skills of a profession Set of standards for expected behavior
Adheres to a specific standard of quality Strive to prevent harm while benefitting
and skill while also being legal and ethical others
Differences between professionalism and ethics
- Professionalism is a broader concept that includes ethics
- Ethics focuses on right and wrong behaviour, judged by acceptable moral
standards
- Professionalism includes ethics, as well as behaviour related to a
particular profession
- Professionalism is related to a particular work environment and the
status of the position
- What is acceptable in one work environment may not be acceptable in another case
Professional codes
- Purpose is to regulate the behavior of people who practice a specific profession
- Professional occupation: A job that requires tertiary education before it can be
practised
Good business practice
- How professional, responsible, ethical and effective business practice must be applied
- If an employee does not belong to a Professional organization, it is sometimes unclear
what should be considered unethical behaviour, because ethics is related to the
individual's values and morality
Ethical Theories
Ethics theories that conduct behaviour
1. Utility Theory relates to the consequence-based theory that focuses on the
consequences of an action, something "useful" arises from an ethical action; with the
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, utility theory we decide whether something is ethical or not based on what is best for
the largest group of people
2. Consequence-based Theory determines the ethical nature of the behaviour based on
the outcome of the action/behaviour
3. Deontological Theory, an act is morally right if it does not deviate from the rule
Ethics theories that direct transparency
1. Transparency-based Theory focuses on a person's character rather than on his or
her actions (balance between 2 extremes) also known as the principle-based theory
where the person's principles are determined whether an action is considered
ethical or unethical
2. Caring Theory is more modern and implies that ethics must be related to the
situation
Principles of ethics
- Be reliable: customers want to do business with an organization they can trust in
exchange for their loyalty
- Fulfil obligations: fulfil all promises and obligations
- Community involvement: remains socially responsible towards the community within
which the business does business. It requires businesses to use financial and other
resources, but it leads to positive publicity respect and loyalty from the public
- Accounting control: managers must have control over record-keeping to prevent acts
of fraud and corruption. Tax avoidance (legal to reduce taxes) should be investigated,
and tax evasion (illegal) should be avoided
- Focus: the focus should be on the work done rather than on the lives of the people
involved in the work
- Relationships: professionalism sets boundaries for appropriate relationships in the
workplace
- Respect: people who practice professionalism, practice respect
- Order of command: to be professional, the order of command must be followed for
the correct handling of problems. Resolve conflict professionally with grievance and
disciplinary procedures, helps to keep conflict under control
- Presentation: the presentation of a professional image to customers increases the
customer base. Good language use, polite responses under pressure, neat and
appropriate appearance, and friendly attitude towards customers
- Knowledge and skills: it is important to have the appropriate qualifications and skills
for the relevant job or profession
Principles and skills of professional, responsible, ethical and effective business practices
- Employees must work professionally and responsibly keeping in mind the codes of
ethics and codes of conduct applicable to their work environment
- It is important to develop the skill to assess a situation and to come up with a
responsible, ethical solution that will be effective for the business
- Businesses should treat all employees equally
- Plan carefully and put preventive measures in place
- Pay fair compensation and compensate for overtime
- Get involved in environmental awareness programs/avoid pollution
- Avoid starting a business with another business's ideas protected by law
- Business decisions and actions must be clear and transparent to all stakeholders
- Businesses must be responsible for their actions and own patent rights
- Employ honest/trusted financial officers with good credentials
- Pay taxes regularly
- Draw up a code of ethics
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,- Continuous development and training of employees
- Personal evaluations in place
- Comply with internal controls/monitor
Ethical Enterprises
- There are ethical issues related to the internal stakeholders of the workplace, namely
the employers and the employees
- Some ethical issues related to external stakeholders in the corporate world include
advertising, personal sales, suppliers, contracts, and pricing
- An ethical enterprise must pay attention to the actions of all enterprises involved in
the supply chain
Unethical behaviour in practices
Conflict of A conflict of interest is a situation in which an individual competes
interest with competing interests or loyalties/is in a position of power to take
personal advantage of a business situation rather than where the
business benefits
- with a civil servant whose personal interests conflict with his/her
professional position
- with a person who has a position of authority in one organization
that is in conflict with his or her interests in another organization
- with a person who has conflicting responsibilities
Bribery Bribery is the act of giving money, goods, or other forms of
compensation to a recipient in exchange for a change in their conduct
(for the benefit or interest of the giver) that the recipient would not
otherwise have done. ; compensation offered to give a third party an
unfair advantage to which he/she/the business is not entitled
Corruption Corruption is a form of dishonesty or criminal activity undertaken by
a person or organization that holds a position of authority, often to
obtain an illegal advantage; abuse position of power for own gain
Unauthorized - Unauthorized use of business funds = theft
use of - Staff who download music and movies with the resources of the
funds business
- And the employee who uses business means for his/her profit
- This form of fraud is the misuse of money without the prior
approval of a senior manager
- Fraud increases the cost of doing business/affects
competition/discourages investors when prices are raised to absorb
the losses
- Use of company assets for private use/personal gain
Inappropriate
gifts All donations received must be declared; reason = it can be considered
bribery
Sexual Unwanted behaviour of a sexual nature violates the rights of the
harassment employee and is an antidote to equality in the workplace. This
behaviour includes any physical, verbal, or nonverbal sexual conduct
that makes the victim feel uncomfortable
- Manager promises an increase in salary/a promotion/Quid pro quo
harassment in exchange for sexual favours
- A violation of basic human rights that normally happens when
someone in power has his/her power
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, - Position abuse, e.g., gesture/remarks/action/suggestive behaviour
that makes the worker victim
- The affected party is usually reluctant to report the incident due
to fear of victimization
- Sexual harassment causes discomfort/humiliation and saves the job
Unfair/unfair - To give goods fraudulent names/False labelling
advertising - Sell second-hand goods as new goods
- Exaggerate the merit/ability of the product/False promises
- Use fine print to hide important information
- Criticize competitors' goods
- The exploitation of children's lack of understanding
- Abuse of people with disabilities in advertising
- Advertising that encourages violence
- Advertising goods at a very low price to attract customers, but
when the customer reaches the store, the item is no longer
there/Bait Marketing
- Advertising a product that contains additional items but does not
clearly state that these items are excluded
- The use of false or misleading statements in advertisements leads
to misrepresentation of the product in question, which may
adversely affect consumers
- Advertising influences the buyer's decision to buy a product
- Businesses can make unwise advertising choices when they are
under pressure to increase their profits
- Unfair advertising can be harmful to consumers
- Some advertisements can be considered discriminatory because
they exclude/target certain sections of the population
Labour issues - Make personal calls during working hours
- Extended lunch break
- Do personal business during working hours
- Abuse of sick leave
- Abuse of the Internet/Email
- Stationery took for own use
- Offensive language towards employees
Discriminatory - Inflation of prices
pricing - Higher prices demand goods of inferior quality in rural areas
Pricing = occurs when competitors agree to ask buyers for a
predetermined price
It is illegal to ask for more products in a rural area than in an urban
area without giving good reasons.
- Some businesses in the rural areas abuse their customers by adding
much more than necessary to their prices
- Some consumers in rural areas have little economic power and are
vulnerable to exploitation
- Businesses can form monopolies in rural areas and increase their
prices unilaterally
- It can be common practice to pay higher prices for goods of
inferior quality in rural areas
Insider Insider trading refers to transactions in securities of a company, such
Trading as shares or options, by corporate insiders or their associates based
on information from within the firm that will once be made public,
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, affecting the prices of such securities. Corporate insiders are
individuals whose service to the firm (as executives, directors, or
sometimes rank-and-file employees) or whose privileged access to the
firm's internal affairs (such as major shareholders, consultants,
accountants, attorneys, etc.) ) gives them valuable information
- The situation where someone trades shares on the JSE based on
confidential information = criminal offence
Piracy The illegal reproduction or distribution of copyrighted material
Counterfeiting Deceptive way of imitating someone else's work and pretending to
be original
Bootlegging Illegal manufacture and/or distribution of a product
Taxation - Corporate tax and personal income tax are the main sources of
income for the government
- Paying taxes reduces a business' profit margin/margin that forces
some businesses to evade taxes
- Many businesses and individuals do not declare all their income to
SARS
- Some businesses may falsify their financial records
- Businesses that evade taxes can be prosecuted and fined if they
are found guilty
Tax avoidance: legal and ethical way to reduce taxes
Tax evasion: illegal and unethical because the business does not
declare all its income to pay less tax
Firing an A whistle-blower is a person, usually, an employee, who exposes
employee for information or activity in a private, public, or governmental
whistle organization that is considered illegal, illegal, unsafe, fraudulent or
blowing misappropriation of taxpayer funds. Those who become whistle-
blowers can choose to bring forward information or allegations
internally or externally
- Someone who discloses unethical behavior, fraud, and other
offences
Solutions to the above unethical behaviour
Sexual Harassment
- Implement internal complaints and disciplinary procedures
- Educate employers about sexual harassment cases
- Formulate a policy regarding sexual harassment
- Create a good working environment where all employees' rights and dignity are
respected
- An internal investigation must be done to determine the severity of the harassment
- Serious cases/cases regarding sexual harassment must be reported to the relevant
institutions such as the South African Police Service (SAPS)
- Ensure compliance with the law/business code
Unauthorized use of funds and resources in the workplace
- Perform regular audits
- Identify risk areas/vulnerable areas
- Limit the number of employees who have access to business funds/assets
- Implement/Put in place fraud prevention strategies
- Educate employees about the impact of fraud
- Fraud prevention must be a collective responsibility of businesses and workers
- Clear policies must be in place so that employees are aware of what fraud is
considered
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