Partial 3

Question 1

Backward vertical integration

Answer 1

It occurs when a business amalgamates with a firm operating in an earlier stage of production.

Question 2

Conglomerates

Answer 2

They are businesses that provide a diversified range of products and operate in an array of different industries.

Question 3

Diseconomies of scale

Answer 3

They are the cost disadvantages of growth. Unit costs are likely to eventually rise as a firm grow due to a lack of control, coordination and communication.

Question 4

Diversification

Answer 4

It is a high risk growth strategy that involves a business selling new products in new markets.

Question 5

Economies of scale

Answer 5

It refers to lower average costs of production as a firm operates on a larger scale due to gains in productive efficiency.

Question 6

External growth

Answer 6

It occurs when a business grows by collaborating with, buying up or merging with another firm.

Question 7

Forward vertical integration

Answer 7

It is a growth strategy that occurs with the amalgamation of a firm operating at a later stage in the production process.

Question 8

Franchise

Answer 8

It refers to an agreement between a franchisor selling its rights to franchisees to allow them to sell products under its name in return for a fee and regular royalty payments.

Question 9

Globalization

Answer 9

It is the growing integration and interdependence of the world’s economies, causing consumers around the globe to have increasingly similar habits and tastes.

Question 10

Horizontal integration

Answer 10

It is an external growth strategy that occurs when a business amalgamates with a firm operating in the same stage of production.

Question 11

Internal growth

Answer 11

It occurs when a business grows using its own capabilities and resources to increase the scale of its operations and sales revenue.

Question 12

Joint venture

Answer 12

It is a growth strategy that combines the contributions and responsibilities of two different organizations in a shared project by forming a separate legal enterprise.

Question 13

Lateral integration

Answer 13

Refers to M&A between firms that have similar operations but do not directly compete with each other.

Question 14

Merger

Answer 14

It is a form of external growth whereby two or more firms agree to form a new organization, thereby losing their original identities.

Question 15

Multinational company

Answer 15

It is an organization that operates in two or more countries, with its head office usually based in the home country.

Question 16

Optimal level of output

Answer 16

It is the most efficient scale of operation for a business which occurs at the level of output where average costs of production are minimized.

Question 17

Decision trees

Answer 17

They are a quantitative organization planning tool that calculate the probable values of different options, helping managers to minimize the risks in dexision-making.

Question 18

Force field analysis

Answer 18

It deals with the forces for and against change.

Question 19

Fishbone diagram

Answer 19

It is an organization planning tool based on identifying and dealing with the root causes of a problem or issue facing a business.

Question 20

Gantt charts

Answer 20

They are a visual representation of all the tasks in a particular project plotted against the timescale. As a planning and scheduling too, it allows project managers to monitor progress.

Question 21

Organization planning tools

Answer 21

They are the various methods that business use to aid their decision-making.