The key function of the corporate/entity level is to formulate decisions, whilst the key function or activity of the functional level is to implement the decisions formulated by the corporate/entity level.

The risks associated with the decisions at the corporate/entity level is very high and any error can collapse the whole organization. On the other hand, the risks associated with the decisions at the functional level are quite low and their effect is only on the concerned department.

The nature of decisions made at the corporate level affect the whole organization whilst the nature of decision at the functional level affects only the assigned department.

The duration of the decisions taken at the corporate or entity level is mostly long term whilst the duration of the decisions taken at the functional level is mostly short term.

Decision support system (DSS) is an information designed to provide managers with alternative solutions to a problem they face.   (2 marks)

Executive Information System (EIS). This is an interactive system that provides managers or executives with a flexible access to information for monitoring the performance of the organization as well as general business conditions.     (2 marks)

Difference:

Whilst decision support systems are specifically used for unstructured decisions, executive information system may provide information (mostly in graphical format) that can inform top management on trends in the organization.    (1 mark)

• Function of the organization. The function of the organization will determine the adoption and implementation of management information system.
• The company must also take into account the total cost involved in buying the necessary infrastructure for the management information system to be implemented.
• Management must also consider how the system can be expanded to take care of additional operations in the future.
• Management must also consider the necessary measures to secure the system
• Training of staff. Management must also allocate resources for the training of employees to equip with them with the skills to be able to work with the system.
• Management support. The top hierarchy of the company must be able to offer the necessary financial and non-financial support to facilitate the successful implementation of the system.
• Control structures. Management must also consider measures to control the successful implementation of the management information system.                                                                                                                                                       (Any 5)

SWOT is an acronym for strengths, weaknesses, opportunities and threats and it is an analytical tool used to create an overview of a company’s strategic situation.

i) Strengths: These are the resource capabilities of the organization and which it can use to gain competitive advantage over its rivals (2 marks) Examples: adequate financial resources, acknowledged market leader.

ii) Weaknesses: These are resource constraints that can put the organization in a competitive disadvantage position. (2 marks) Examples: Obsolete technological infrastructure, poor customer service.

iii) Opportunities: These are favourable openings or conditions in the external environment of the company and that the company can use its strengths to take advantage of. (2 marks) Examples: Change in government policy, growing domestic economy.

iv) Threats: These are unfavourable factors in the external environment of the company that can erode all the gains made by the company. (2 marks) Examples: decline in consumer demand, environmental hazards.

(1 mark for each example)

• Political environment refers to the policies, procedures and practices of both national and international political institutions.
• Economic environment refers to the changes in the country’s inflationary levels, interest rates, buying patterns as well as the income levels of the people in a country.
• Socio-cultural environment refers to the lifestyle and the way things are done by a particular group of people.Technological environment refers to the changes and improvement in the processes and technologies used to undertake the activities of the company.
• Ecological/or the environment refers to the weather conditions, pollution, noise, natural disasters and its impact on the living conditions of human beings.
• Legal environment refers to the rules and regulations fabricated by a national and international political institutions.   (Any 6)

• Legal obligations. The finance department should allocate money for health and safety of employees because the company is legally obligated to cater for the health and safety needs of employees.
• To reduce labour turnover. The finance department must allocate money for health and safety needs to prevent employees from leaving the company.
• Social responsibility. The finance department should allocate money to cater for the health and safety needs as a way of fulfilling its social responsibility to employees.
• Continued production. When employees are not in good health it will affect the company’s productivity and for this reason the finance department must allocate money to the human resource department for them to ensure that employees are always in good health.
• Accident prevention. Investing resources in the health and safety of employees will help prevent accidents because employees will be protected from any hazardous situations.
• Talent attraction. When prospective employees are looking for jobs, they will ensure that the company they intend to work with, cares for its staff and that will motivate them to join the company.                                                                     (Any 4)

• Divestiture programmes are undertaken to raise funds for the company or the government.
• Divestiture programmes are undertaken to enable the company to concentrate on its core activities.
• Divestiture programmes are undertaken as part of a company’s bankruptcy process.
• Companies undertake divestiture programmes if there is no synergy between the divested assets and the company’s core activities.
• Companies undertake divestiture programmes to be able to take advantage of better opportunities elsewhere.

                                                                                                                                                                                              (Any 4)

REASONS FOR CONTINUOUS INVESTMENT IN STRATEGIC PLANINING PROCESS

• Risk reduction: The continuous investment in the strategic planning process will help the company to reduce the risks associated with its operations by taking many factors into consideration.
• Reduction of uncertainty: The company will be able to reduce uncertainty because the personnel will be able to know the results expected of them.
• Realistic targets: The company will be able to set targets that can be achieved because it will consider its strengths and weaknesses before such targets are set.
• Guide: Investing in the strategic planning process will serve as a guide in the operations of the company.
• Commitment: The continuous investment in the strategic planning process will help the company to gain loyalty and commitment of employees because they will be involved in the planning process.
• Better decisions. The company will be able to make better decisions because managers will have a basis of measuring their performance.
• It will enhance the degree to which employees will accept change.
• The financial performance of the company will also increase.                                                                                       (Any 5)

• Waste of time. The company may consider the investment as waste of time due to the time involved in the planning process.
• Fear of failure. The company may not invest in the strategic planning process because they may fear that it will fail.
• Lack of expertise. The company may not invest in the strategic planning process just because they don’t have the personnel with the expertise to undertake such activity.
• The company may be satisfied with its current performance and may not see the need to plan.
• The company’s executives may refuse to plan strategically due to mere laziness.
• The company may not invest in any strategic planning process because the future changes so fast that it will not be necessary to plan.                                                                                                                                                                               (Any 5)

ADVANTAGES OF VIRTUAL ORGANIZATIONS 

• There will be lower administrative costs.
• The amount of salaries paid to employees will also reduce.
• Virtual organizations have the advantage of attracting specialists from all over the world.
• Virtual organizations have the advantage of instant communication.
• Employees will have job satisfaction because they can work from home.
• There is time savings.
• There is increased productivity for the organisation.                                                                                                      (Any 4)

DISADVANTAGES OF VIRTUAL ORGANIZATIONS

• It is difficult to control employees’ working hours.
• There can be problems of service quality delivery.
• The electronic communication systems can break down, hence affecting the company’s operations.
• Virtual organizational systems cannot be applied in every part of the world as a result of poor telecommunications infrastructure.
• There is increased operational complexity for the organization as a result of different cultural backgrounds of employees.
• Lack of cohesiveness among the employees can affect the morale of employees.

                                                                                                                                                                                              (Any 3)

• Lack of consistency of purpose for the implementation of the total quality management concept.
• If there is too much emphasis on short term benefits for implementing the total quality management concept.
• If management fails to prepare the employees through training before the implementation takes place.
• Lack of commitment on the part of top management.
• Poor allocation of resources to the implementation of the total quality management concept.
• Incurring of excessive costs may lead to resistance to the implementation of total quality management concept.                                                                                                                                                                                                                (Any 3)

• Geographic segmentation. Bisclothing can segment the market based on the location, that is, the country or region where the consumers live, because the type of clothing used in Europe will differ from the type of clothing used in Africa.
• Demographic segmentation. Biscloting can segment the market based on age range, sex, family life cycle and income of consumers.
• Psychographic Segmentation. Bisclothing can segment the clothing market based on such factors as lifestyle, attitudes and beliefs.
• Behavioural segmentation. Bisclothing can segment the market based on the loyalty status, usage rate,usage situation or payment methods of consumers.                                                                                                                                     (Any 3)

• Identifiable: The clothing market must be capable of being identified as a separate market.
• Substantial: The segment must be large enough to guarantee the success of Bisclothings’ activities.
• Profitable: The segment must be able to yield enough profits for Bisclothing.
• Accessible: The segment must be reachable by Bisclothing through the various communication platforms.
• Sustainable. The segment must be able to exist in the long term.
• Measurable:The segment must have the capabilities of being measured or assessed, so that the company will know whether it is achieving success or not.                                                                                                                                           (Any 4)