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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:2010
TIME : 3 HOURS
INSTRUCTIONS Answer Question ONE (Compulsory) and any other THREE questions.
KEEPING THINGS GOING
The Marketing Dynamic Insight Company has grown 115 percent in the last year and 600 plus percent in the last three years. A large portion of this growth is attributed to Joseph Nyakundi’s philosophy of hiring the best possible computer systems people and giving them the freedom they need to do their jobs. Most of Joseph’s personnel operate out of work teams that analyze, design, and implement computer system 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. Joseph will send over one of his people to talk to the client and analyze the situation. If it turns out that the marketing dynamics company has the expertise and personnel to handle the job, the client will be quoted a price. If this price is acceptable, the Marketing Dynamics 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 company wanted these machines hooked up to the main computer. Additionally, the firm wanted its computer-aided design software to be modified so that the engineers could see their computer-generated drawings in a variety of colours, not just in monochrome. The staff personnel designed the entire system and modified the software in ten working days. Joseph realized that the growth of his enterprise will be determined by two factors. One is the creativity and ingenuity of her work force. The other is the ability to attract talented personnel. “This business is heavily labour intensive”, she 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, Joseph 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, she gives quarterly salary increases, with the greatest percentages going to those employees who are most active in developing new programs 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 working on developing a spirit de corps among the personnel.
Question 1
a) Carry out a SWOT analysis for Marketing Dynamics Insight (7marks)
b) In what phase of venture life cycle is Joseph’s firm currently operating? Defend your answer. (8marks)
c) How are Joseph’s actions helping to build an adaptive firm? Give three specific examples. (5marks)
d) If Joseph’s continues to grow, what recommendations would you make for future actions? What else should Joseph’s be thinking about in order to keep things along smoothly? Be specific in your answer (5marks)
Question 2
Research has shown that over 90% of small enterprises do not survive past eight years after inception. In Kenya, the media has reported that about 75% of them do not celebrate their third and fourth birthday and only 5% get into the growth stage. As an MBA student concentrating in entrepreneurship, discuss this phenomenon and in your discussion explain what normally happen to the 20% between introduction and growth stage. You can include illustrations and graphs where applicable (25marks)
Question 3
The MSE sector in Kenya plays an important role in the socio – economic development of the country. Such as employment creation, economic growth among others. Despite the critical role played by the sector, it is faced with couple of challenges and constraints. Discuss in details some of these challenges and propose a remedy for each (25marks)
Question 4
Business plan is a very important document to any serious entrepreneurs. This is because it can set as an operational tool in the day to day operations of the business. Discuss in details the components of the business plan (25marks)
Question 5
a) Discuss the difference ways of financing small businessmen that are available in the Kenya Market. In your discussion, point out the advantages and disadvantages of each one of them (10marks)
b) Differentiate between entrepreneurship and small business giving local examples (5marks) c) What is the role of small business in entrepreneurship development (10marks)
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