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Small Business Management(Entr 543) Question Paper
Small Business Management(Entr 543)
Course:Business Administration
Institution: Kenya Methodist University question papers
Exam Year:2012
TIME : 3 HOURS
INSTRUCTIONS Answer Question ONE(Compulsory) and any other THREE Questions
Question 1
Case Study
The Kenya Methodist Company (KEMU) has grown 115% in the last years and 600% in the last three years. A large portion of this growth is attributed to George Otieno’s philosophy of hiring the best possible computer systems; people giving them the freedom they need to do their jobs. Most of George’s personnel operate out of work teams that analyze, design, and implement computer systems for clients. The way in which the process works is this: First the company will get a call from a potential client indicating that it needs to have a computer system installed or special software written for its operations. George will send over one of his people to talk to the client and analyze the situation. If it turns out that the company has the expertise and personnel to handle the job, the client will be quoted a fee. If the fee is acceptable, the KEMU group will be assigned the project. An example of a typical project is the client who called three weeks ago and wanted to purchase five personal computers for use by the firm’s engineering staff. The client wanted these machines hooked up to the main computer. Additionally, the client firm wanted its computer-aided design software to be modified so that engineers could see their computer-generated drawings in a variety of colours, not just in monochrome. Th KEMU staff personnel designed the entire system and modified the software in ten working days. George realized that the growth of his enterprise will be determined by two factors. One is the creativity and ingenuity of his workforce. The other is the ability to attract talented personnel. ‘This business is heavily labour-intensive,’ he explained. ‘If someone wants a computer system installation, that may take 100 man hours. If I don’t have the people to handle the project, I have to turn it down. My expansion is heavily dependent on hiring and training talented people. Additionally, I need more than just hard workers. I need creative people who can figure out new approaches to handling complex problems. If I can do these two things, I can stay a jump ahead of the competition. Otherwise, I won’t be able to survive’ In dealing with the above-mentioned key factors for success, George has done three things. First, he has instituted a bonus system that is tied to sales; these bonuses are shared by all of the personnel. Second, he gives quarterly salary increases, with the greatest percentages going to those employees who are most active in the developing new programmes and procedures for handling client problems. Third, she has ‘retreats’ every six months in which the entire staff goes away for a long weekend to a mountain area where they spend three days discussing current work-related problems and ways of dealing with them. Time is also devoted to social events and to working on developing an esprit de corps among the personnel.
Required:
a) In what phase of the venture life cycle is George’s firm currently operating? Defend your answer by highlighting the characteristics of the phase (6 marks)
b) How are George’s actions helping to build an adaptive firm? Give three specific examples(6marks)
c) If George’s venture continues to grow, what recommendations would you make for future actions? What else should George be thinking about doing in order to keep things going along smoothly? Be specific in your answer (4 marks)
d) Advise George on the purpose for which he may require some financing for his venture at this phase of the cycle (4marks)
e) What advice can you offer to George to handle the various problems he may encounter during this phase in order to bring the necessary transition (5marks)
Question 2
a) Kenya may drastically fail to achieve its dreams spelt out in Vision 2030 without a well developed and growth oriented small businesses. Argue for or against the views expressed by such experts.(14 marks)
b) As an expert in the field of small enterprise, discuss six different parameters you can recommend to be used in describing a small business (11marks)
Question 3
a) Despite of their significance in a country’s development, small businesses face alot of challenges that impact on their growth and survival. Discuss giving examples any six constraints that small businesses face in Kenya (14marks)
b) Explain at least eight measures the Kenyan Government has instituted to support the development of the small businesses (11marks)
Question 4
Among the major functions of small business management are planning, Marketing and production management. To the extent of this:
a) Why would you encourage small businesses to prepare strategic plans (8marks)
b) How can you convince a small business owner that marketing is different from selling and advertising? (8marks)
c) Advise an entrepreneur on the most suitable place to locate his/her business for it to flourish (9marks)
Question 5
A young person would like to venture into a small business but lack the know-how. The young person has approached for some advice on how to start his business. In view of this: a) Explain to the young person the process he can follow to initiate a viable small business (9marks)
b) Advise the young person why he should operate a Sole Proprietorship form business and not others (9marks)
c) Advise the young person SIX different sources of business finances (7marks)
Question 6
Despite the significant role consultants can play in assisting small businesses, many small businesses fear using consultancy services. To this extent:
a) How can you as a consultant build a good relationship with your client (11 marks)
b) Discuss the characteristics clients expect from a consultant (10 marks)
c) Explain FOUR probable barriers between a consultant and a client (4marks)
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