University of the South Pacific, MG305 Exam 2011-2015 Answers-verified A+

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2011 paper SECTION B (60 marks) Section B has 8 questions. Answer any 6 questions. Each question is worth 10 marks. Question 1 (week 9-Chapter 13-legal and regulatory aspects of business formation)... Using appropriate examples, discuss the advantages and disadvantages of partnerships, corporations and sole proprietorships. Partnership is a Group of people that contribute time, talents and money share the responsibilities and profits. Potentially difficult interpersonal dynamics and written agreement is preferable to oral agreement Advantages of partnerships Disadvantages of partnerships  Ease of formation  Direct rewards  Flexibility over sole tradership  Responsiveness over sole tradership  Relative freedom from governmental control  Confidentiality regarding profits  Few tax concessions  Unlimited liability of at least one partner  Lack of continuity  Relative difficulty obtaining large sums of capital  Bound by the acts of just one partner, which obligate all partners Sole traderships (sole proprietorship) A business owned and operated by one person (also known as ‘sole proprietor’). No legal existence independent of its owner. Individual has a right to all of the profits and liability for all the debts. Liability is unlimited. Business and personal assets stand behind the operation. Advantages of sole traderships Disadvantages of sole traderships  Ease of formation  Inexpensive business structure  Least government reporting  Losses reduce personal taxes  Sole ownership of profits  Not required to share profits  Few tax concessions  Personal tax rate may be high  Unlimited liability  Personal responsibility for debts  Lack of continuity  Lack of personal freedom Decision making in one owner  Relative freedom from governmental control  Freedom from corporate taxes  Proprietors taxed as individuals  Easy to wind up  Few holidays/no one to run business  Less available capital  Relative difficulty obtaining long-term financing  Depends on one person’s ability Question 2- (Week 11- Chapter 11-Strategic entrepreneurial growth (a) Using appropriate examples, discuss the five major stages of growth of a venture’s typical cycle. Venture development stages Stages Development 1. New-venture development Accumulate resources; creativity, assessment and networking; philosophy, mission, scope and direction 2. Start-up activities Business plan, search for capital, marketing activities and developing a team 3. Growth stage Competition and market forces; administrative challenges; transition from entrepreneurial leadership to managerial leadership 4. Business stabilization Increased competition; consumer indifference; saturation of the market 5. Innovation or decline Innovate or terminate – acquisition; new product/service developmentProfit, productivity, revenues s Stages (number of years) (b) What is an adaptive firm? What would you do to make an organization more adaptive? An adaptive firm is a firm that remains flexible and adapts to the changing environment beyond the startup stage. The adaptive firms increases opportunity for its employees, initiates changes and instill a desire to be innovative. The following five methods are not inflexible rules, but they do enhances a venture’s chance of remaining adaptive and innovative both through and beyond the growth stage. Building the adaptive business Stages Description 1. Share the entrepreneur’s vision Vision permeates the organization 2. Increase the perception of opportunity Defined responsibilities 3. Continuous ‘morphing’ Comprehensive ongoing transformations 4. Institutionalize change as the venture’s goal Innovation and change rather than status quo 5. Instill the desire to be innovative Words alone will not create the innovative climate [Show More]

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