HOMEWORK 1: 2014 BUSINESS & MANAGEMENT: PAPER 1: THE IB CASE STUDY: THE IMPERIAL What is the IB Case Study - The Imperial?The case study you need to read for this homework task is the same case study you will use in the May 2014 IB exams. (SL & HL) This is a very important homework task because you are preparing for IB paper 1. The more you review this case study and know all the associated terms and concepts, the better you will be prepared for IB Paper 1.

Date Set: Week Beginning 6th January 2014.Date Due:Friday 14th February 2014. (4:00pm)

Mastery of Key Facts & Concepts (Weight 10)(Questions in bold)765432

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Critical Thinking and Reasoning (Weight 10)765432

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Dedication to the Learning 76543 - 2

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Teacher CommentsQuestions1. Define the term primary sector (line 2) (2 marks)

2. Clearly explain the difference between the primary sector, secondary sector, tertiary sector and quaternary sector. (4 marks)

3. Explain the meaning of the expression diversify investments (line 3) (2 marks)

4. What is the purpose of a cash flow statement? (1 mark)

5. Explain the concept of liquidity management. (line 5) (2 marks) 6 The hotel was originally operated by Roger who was a sole trader. 6a. Define the term sole trader. (line 5) (2 marks) 6b. What is the main disadvantage of being a sole trader? (1 mark) 6c. List two advantages of being a sole trader. (2 marks) 7. What is the major legal difference between a sole trader and a company? (2 marks) 8. Why did the ownership of the hotel change frequently between 1950 and the 1980s? (1 mark) 9. In 1989, GP purchased the hotel. They set up a subsidiary private limited company. 9a. What is a subsidiary? (2 marks) 9b. Identify two characteristics associated with a private limited company. (2 marks) 10. GP is a described as symbol of the new globalized world. 10a. Why do you think they say this? (2 marks) 10b. Define the term globalization. (2 marks) 11. GPs relationship with the hotel was hands off What does this mean? (2 marks) 12. What was the primary responsibility for the hotel manager? (1 mark) Break Even Analysis 13a. Define the following terms: (2 marks) Break Even Quantity Margin of Safety 13b. (Practical Exercise break Even: hotel context)Create your own hypothetical example to demonstrate your understanding of break even analysis. Ensure the example has a hotel context. Identify fixed and variable costs that would be associated with a hotel.(5 marks) 14. In 2009 a new manager was appointed: Martin Kimathi. Outline his journey/experience in becoming manager of the hotel. (2 marks) 15.Why did GP like Martins background? (2 marks) 16.What did employees of the Imperial think of Martin? (2 marks) Do you think this was a fair assessment? 17.Martins job was based on performance related pay. (line 45) (2 marks)Define the term performance related pay in the context of the hotel manager position. (2 marks) 18. In an extended response of at least 200 words, explain 5 other remuneration strategies. Outline one advantage and one disadvantage associated with each. (5 marks) 19.What long term problem did the Imperial face? (2 marks) 20.The market share of the Imperial was shrinking. Define the term market share (1 mark) 21.What financial constraints did Martin face that made it difficult to stay competitive? (1 mark)

22.Martin consulted a range of data from the Kenyan bureau of statistics and other secondary sources. What are secondary sources? (1 mark) 23. Define the term primary sources. (1 mark) 24.If the hotel were to conduct primary research, what type of research would be appropriate? (1 mark) 25Martin constructed a market audit and a position map. Define the term market audit (1 mark) 26.Construct a position map for the hotel industry in Caracas. (5 marks)(Identify 10 different hotels in different star/ group categories) 27.What did Martin identify from the market audit and position map? (1 mark) 28. Martin had found that managing the working capital sometimes proved difficult because of the seasonality of hotel operations. Define the term working capital (2 marks) 29. Explain how seasonality of the hotel industry can impact on operations. (1 mark) 30.Cite evidence from the case study that suggests the hotel did experience some cash flow problems. (1 mark) 31.Martins accountant recommended that the hotel use separate profit centres for the hotel itself. Explain the concept of profit centres and give an example. (2 marks) 32.Give two examples of non-revenue producing departments. (The case study has one) (2 mark) 33.What are the final accounts? (1 mark) 34a. List all the headings (in the correct order) for the profit and loss statement. 34b. List all the headings (in the correct order) for the balance sheet. Try to do this activity without referring to notes. Its good practice!(10 marks)35.Martin is accountable to GP for the financial performance of the Imperial.What does it mean to be accountable? (1 marks)36.What stock problems does the catering department face? (1 mark)37.Draw a traditional stock control diagram for the restaurant. Create your own hypothetical numbers. (5 marks)38.Why do you think it would be difficult to make the appropriate calculations of closing stock value? (2 marks) 39.If the hotel wanted to maximize profits, would you recommended LIFO or FIFO for stock control purposes? (2 marks) 40.Explain why there is conflict between Martin and Susan Chapman the Head of Housekeeping. (2 marks) 41.In extended response (200 words) compare and contrast the leadership styles of Martin and Susan. (3 marks) 42.What leadership style is most appropriate for this type of hotel? Justify your opinion? (100 words 3 marks) 43.Define the following terms in a leadership context: (2 marks x 8 = 16 marks)Task Oriented LeaderBureaucracy Formal Accountability Chain of CommandScientific approach to decision makingLaissez-Faire Leadership Style. Empowerment Delegation

44.Describe Susans relationship with employees she supervised. How did this intensify when she was not appointed manager? (2 marks)45.The employees perceived Susan as being a_______________. (1 mark)46.The employees used networks of informal communication when talking about Susan.Explain the concept of networks of informal communication (2 marks)Give two examples of what could be considered the opposite to networks of informal communication (2 marks)47.What change in leadership did Martin recommend for Susan? Why was she reluctant to listen? (2 marks)48.What was the hotels reputation for house-keeping? (2 marks)49.Susan dismissed one employee (Guthoni) for repeated absenteeism In your opinion what is an accepted level of absenteeism for employees?(2 marks)50. How did the other employees respond to the sacking of Guthoni? (1 mark)51. Why was Martin worried about potential strike action? (1 mark)52. Define the meaning of the words highlighted in this sentence: He realized that the collective action was giving the employees a sense of solidarity that had never been displayed before. (4 marks)53.Explain why the strike action would be empowering for the employees? (2 marks)54.What does Martin mean when he says: (2 marks)He wanted to channel their frustrations towards constructive ends55.If you were the manager of the Imperial, how would you resolve/prevent the industrial action? An extended response of 120 words is required. (5 marks) Refer also to Appendix 2, in your response. 56.Martin had to address the long term external issues facing the Imperial because of changes in the external environment.List three forces / factors from the external environment forcing the Imperial to change. (3 marks)Changes for the ImperialOption 1:57.Martin believed that hotel has reached its decline phase of the product life cycle. What are the different stages associated with the product life cycle? (2 marks)Option 258.With option 2, explain why the fixed costs and variable costs would be lower?(1 marks)59.What impact would this option have on housekeeping requirements? (1 mark)

Option 360.Option 3, involves a strategic alliance. What are strategic alliances and why are they important? (2 marks)61.Explain the meaning of the words in bold in this sentence:The owner and manager of KenSafar was Kamu Onyango a spontaneous, dynamic and charismatic Kenyan who had many networks and contacts and intuitively knew market trends, even without market research. (6 marks x 2 = Total of 12 marks)

Evaluation of the 3 Options62.In an extended response of about 400 words, outline the advantages and disadvantages of each option from the perspective of various stakeholders, including, (but not limited to): Employees Global Properties. Clients Future Business PartnershipsReach a decision on which option you would recommend and fully justify your decision. You should also refer to Appendix 1 & 3, in your response if possible. (15 marks)