Bmit 111/Envs 211: Business Society And The Environment Question Paper
Bmit 111/Envs 211: Business Society And The Environment
Course:Bachelor Of Environmental Science
Institution: Kabarak University question papers
Exam Year:2010
INSTRUCTIONS:
Answer question ONE (compulsory) and any other THREE questions
QUESTION ONE
CASE STUDY
When Scott Shane taught at Dupree College of Management at Georgia Tech, an MBA
student went to his office one day asking for advice on financing his new company, which
had just developed a new inventory Management software program. The students had just
received a phone call from Atlanta area venture capital firm that wanted to finance his
venture, and he wanted to talk to Scott Shane about terms she had been offered.
The venture capital firm proposed providing the new venture with $1 million in financing in
return for 30% of the company. The plan would be to use their investors’ capital to refine the
prototype of the software, do better test, and launch the product. However, the student was
not sure he should take the financing offer. He had only asked for $500,000 in seed capital to
refine the prototype and then seek more capital when the production begins. Moreover, he
had a business angle willing to take those terms. Scott Shane urged the student to take the
venture capital financing, arguing that it is more important to raise enough capital than to get
the best valuation of the new company. But the student stuck on the terms, ‘why’ he asked,
“should I give up 30% of the company to get $500,000. if I do two financing rounds at
$500,000 I would still have 80% of the company left. And beside, the venture will be so
much further developed by the time of the next round that will get the next round of money
for even less quality.”
Scott Shane wanted explained that the venture might run into a rough spot along way and that
it might not be able to raise sufficient money he needed later. “Take the money when you can
get it”, said Scott Shane. “You never know when it will be offered to you again.” The student
decided to go with the business angle’s offer, and put the $500,000 he received towards
developing the software. Unfortunately it proved to be a lot harder to develop the software
than the student had originally thought, and he ran through his capital very quickly.
When the money started running out, the student went out looking for additional financing.
However, the project did not find anyone to give him the capital he needed. The entrepreneur in this case survived for six months by selling equipment and giving employees stock in
place of their pay checks but that was not enough. After spending $750,000, he still did not
have working capital. Although the students probably could have solved the software
problems in a few months, no one would give him the $250,000. He had to close up shop.
a) Discuss the financing lesson learned from this case. (10 marks)
b) What is the role of Scott Shane at this stage of entrepreneurship process? (3 marks)
c) Identify and explain the two modes of financing a business singled put in this case.
(10 marks)
d) What is actually the main problem that forced the entrepreneur to close down the
business and would you say it is a common problem in Kenya today? (5 marks)
e) A part from the two financing options identifiable from the case, what other options
based on your reading the entrepreneur may have painfully attempted to exploit
without success? (2 marks)
QUESTION 2
a) A memorandum of Association is a very important document when forming a
company. Explain the six clauses contain in them. (6 marks)
b) Discuss the advantages and challenges of self-employment. (9 marks)
c) In what ways can franchising form of business be beneficial to young upcoming
Entrepreneurs in Kenya. (5 marks)
QUESTION 3
a) Discuss the managerial functions and state how they are related to the functions of a
business firm. (10 marks)
b) Explain the arguments for and against business social responsibility. (10 marks)
QUESTION 4
(a) Discuss the following terms:
i. Millennium Development goals
ii. Economies of scale
iii. Renewable energy
iv. Sustainable development
v. Human wildlife conflict (10 marks)
(b) Explain the various stakeholders in the business environment. Give specific examples
in each case. (5 marks)
(c) Identify the goals of the world summit on the environment and state four (4) activities
that needs to be carried out at community level to achieve goals on the environment.
(5 marks)
QUESTION 5
(a) Discuss the “Rio Earth Summit” and identify the conventions adopted in June 1992
by more than 100 heads of National Governments. (5 marks)
(b) Business interacts with society in a variety of ways. Identify a company’s relations
with different primary stakeholders. (5 marks)
(c) Outline and explain the legal aspects required to start and operate a small business in
Kenya. (10 marks)
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