NSSCAS Business Studies (8245) cheat sheet

Business activity transforms inputs (land, labour, capital, enterprise) into outputs; added value = selling price of output minus cost of bought-in inputs.

Sectors: primary (extraction, e.g. Namibian mining and fishing), secondary (manufacturing), tertiary (services such as tourism and retail), quaternary (knowledge-based).

Objectives hierarchy: mission and vision → corporate aims → SMART objectives (Specific, Measurable, Achievable, Relevant, Time-bound) → departmental targets.

Common private-sector objectives: profit maximisation, profit satisficing, sales revenue growth, market share, survival, growth, image and social responsibility; public-sector bodies target service delivery and cost efficiency.

Stakeholder vs shareholder conflict: shareholders prioritise dividend and share value; employees prioritise pay, security and conditions; a decision rule is to test each option against the objective it most threatens.

Organisational structures: tall (many layers, narrow span of control) vs flat (few layers, wide span); delayering removes management levels to cut cost and speed communication.

Span of control widens when subordinates are skilled, tasks are similar and standardised, and supervision is remote; it narrows when work is complex or risky.

Centralisation concentrates decision-making at head office; decentralisation delegates authority to branches or regions, increasing local responsiveness but risking inconsistency.

Business size measures: employees, capital employed, turnover, market capitalisation; turnover is preferred for cross-industry comparison because capital intensity varies.

PESTLE analysis: Political, Economic, Social, Technological, Legal, Environmental factors; each factor is assessed for likelihood, impact and timescale.

Economic environment variables: inflation, interest rates, exchange rate (NAD linked to ZAR via the Common Monetary Area), unemployment, GDP growth, commodity prices (uranium, diamonds, gold, fish).

SWOT combines internal Strengths and Weaknesses with external Opportunities and Threats; PESTLE feeds the O and T of SWOT.

Stakeholder mapping by power and interest: high power/high interest = manage closely; high power/low interest = keep satisfied; low power/high interest = keep informed; low/low = monitor.

Stakeholder groups: owners/shareholders, employees and unions, customers, suppliers, lenders, government and regulators, local community, pressure groups.

CSR is voluntary action beyond legal minimum; it can be evaluated through Carroll's four levels: economic, legal, ethical, philanthropic.

CSR benefits: reputation, customer loyalty, staff retention, regulatory goodwill, access to finance; costs: direct spend, reduced short-term profit, possible accusations of greenwashing.

Environmental regulation in Namibia includes environmental impact assessment requirements and mining and fishing quota rules; non-compliance risks fines, licence loss and reputational damage.

Market segmentation bases: demographic, geographic, psychographic, behavioural; a segment must be measurable, accessible, substantial and differentiable to be viable.

Market size = total units sold × average price; market share (%) = firm's sales ÷ total market sales × 100; market growth (%) = (current size − previous size) ÷ previous size × 100.

Primary research (surveys, interviews, observation, focus groups, test marketing) is collected first-hand; secondary research uses existing internal records or published data.

Sampling: random, systematic, stratified, quota, cluster; a larger sample reduces sampling error but raises cost; bias arises from unrepresentative samples or leading questions.

Marketing mix 4Ps: Product (features, branding, packaging), Price (cost-plus, penetration, skimming, competitive, psychological), Place (channels, distribution intensity), Promotion (advertising, sales promotion, PR, personal selling, digital).

Services extend to 7Ps: People, Process, Physical evidence; intangibility, inseparability, variability and perishability shape service marketing decisions.

Product life cycle: development, introduction, growth, maturity, decline; extension strategies include new markets, repackaging, new uses and relaunch.

Price elasticity of demand = % change in quantity demanded ÷ % change in price; |PED| > 1 elastic (cut price to raise revenue), |PED| < 1 inelastic (raise price to raise revenue).

Distribution channel choice depends on product perishability, unit value, market size and geography; Namibia's low population density and long distances raise logistics costs.

Production methods: job (one-off, high skill, high unit cost), batch (groups, moderate flexibility), mass/flow (high volume, low unit cost, capital intensive), cell (grouped teams), lean production.

Productivity = output ÷ input (units per worker-hour); unit cost = total cost ÷ units produced; automation raises fixed cost and lowers variable cost per unit.

Break-even output (units) = fixed costs ÷ (selling price per unit − variable cost per unit); margin of safety = actual output − break-even output.

Contribution per unit = selling price − variable cost per unit; total contribution = contribution per unit × units sold; contribution covers fixed costs then profit.

Capacity utilisation (%) = actual output ÷ maximum possible output × 100; under-utilisation raises unit fixed cost, over-utilisation risks quality and staff strain.

Stock control: maximum level, minimum (buffer) stock, reorder level = maximum usage × maximum lead time; lead time and usage variability drive buffer size.

Just-in-time holds minimal stock, cutting holding cost and waste but raising vulnerability to supply disruption and demanding reliable suppliers.

Quality: quality control (inspection after production) vs quality assurance (built into process) vs TQM (continuous improvement, zero defects, employee responsibility); Kaizen is continuous incremental improvement.

Economies of scale: purchasing, technical, financial, managerial, marketing; diseconomies arise from communication, coordination and motivation problems as firms grow.

HRM functions: workforce planning, recruitment and selection, training and development, appraisal, reward, discipline and grievance, redundancy and retention.

Recruitment: internal (cheaper, motivating, known record, limited new ideas) vs external (wider pool, fresh skills, higher cost and risk); selection tools include CVs, interviews, tests, assessment centres, references.

Workforce planning: forecast labour demand from output targets, compare with supply (existing staff, turnover, retirement), then plan recruit, train, redeploy or make redundant.

Taylor (scientific management): task specialisation, close supervision, pay linked to output; Mayo (human relations): social needs and group norms affect output.

Maslow's hierarchy: physiological, safety, social, esteem, self-actualisation; lower needs are satisfied before higher ones motivate.

Herzberg two-factor theory: hygiene factors (pay, conditions, policy) prevent dissatisfaction but do not motivate; motivators (achievement, recognition, responsibility, advancement) create satisfaction.

Financial motivators: piece rate, commission, bonus, profit-sharing, time rate, fringe benefits; non-financial: job rotation, job enlargement, job enrichment, teamworking, autonomy, praise.

Labour turnover (%) = (number of leavers ÷ average number employed) × 100; absenteeism (%) = days lost ÷ possible working days × 100.

Employment law sets minimum standards on contracts, hours, leave, dismissal and health and safety; non-compliance risks tribunal claims, fines and reputational damage.

Cash flow forecast: inflows (sales receipts, loans, asset sales) minus outflows (payments to suppliers, wages, rent, interest, tax); closing balance = opening balance + net cash flow.

Profit vs cash: profit = revenue − expenses over a period; cash is the bank balance; a profitable firm can fail if cash timing is poor (overtrading).

Profit = revenue − total costs; gross profit = revenue − cost of sales; gross profit margin = gross profit ÷ revenue × 100; net profit margin = net profit ÷ revenue × 100.

Break-even output = fixed costs ÷ contribution per unit; target profit output = (fixed costs + target profit) ÷ contribution per unit.

Sources of finance: internal (retained profit, sale of assets, working capital reduction) vs external (bank loan, overdraft, trade credit, leasing, share issue, debenture, venture capital).

Short-term needs suit overdraft, trade credit or factoring; long-term asset purchase suits loan, mortgage, lease or equity; matching finance term to asset life reduces risk.

Cash flow problems: overtrading, too much credit given, poor credit control, unexpected costs, seasonal demand; remedies include tighter credit control, supplier negotiation, overdraft, asset sale, delaying expansion.

Accounting ratios: current ratio = current assets ÷ current liabilities (target around 1.5–2:1); acid test = (current assets − stock) ÷ current liabilities (target around 1:1); gearing = non-current liabilities ÷ (non-current liabilities + equity) × 100.

Investment appraisal: payback (years to recover outlay), ARR = average annual profit ÷ initial investment × 100, NPV discounts future cash flows at a chosen rate; a positive NPV means the project adds value.

Ansoff matrix: market penetration (existing product, existing market), product development, market development, diversification; risk generally rises from penetration to diversification.

Porter's generic strategies: cost leadership, differentiation, focus (cost or differentiation); being 'stuck in the middle' risks low price without low cost or premium image.

Porter's five forces: threat of new entrants, bargaining power of buyers, bargaining power of suppliers, threat of substitutes, competitive rivalry.

Growth: organic (internal, slower, lower risk) vs external (merger, acquisition, joint venture, strategic alliance - faster but integration and culture risk).

Boston Consulting Group matrix: stars (high growth, high share), cash cows (low growth, high share), question marks (high growth, low share), dogs (low growth, low share).

Decision trees: expected value = probability × outcome value, summed across outcomes; net gain = expected value − cost of decision; limitations are probability estimation and ignored non-financial factors.

Strategic choice criteria: feasibility (resources, finance, skills), acceptability (risk, return, stakeholder reaction), suitability (fit with objectives and environment).

Corporate strategy concerns overall scope and portfolio; functional strategy covers marketing, operations, HR and finance; the two must align for implementation to succeed.

Contingency planning and risk management: identify risks, assess likelihood and impact, then mitigate by diversification, insurance, buffer stock, flexible contracts and scenario planning.

An entrepreneur identifies an opportunity, takes financial risk, assembles resources and innovates; characteristics include initiative, resilience, self-confidence, opportunity spotting and willingness to accept risk.

Business plan contents: business description, market analysis, marketing plan, operations plan, management and organisation, financial forecasts (cash flow, profit, break-even), risk assessment.

Business plan purposes: secure finance, test feasibility, clarify objectives, attract partners; lenders and investors expect realistic cash flow and evidence of demand.

Legal forms in Namibia: sole trader (unlimited liability, simple, full control), partnership (shared capital and liability), close corporation, private company (Pty Ltd, limited liability), public company; registration is with BIPA.

Small business support in Namibia includes the Ministry of Industrialisation and Trade SME programmes, the Development Bank of Namibia, SME Bank, Namibia Chamber of Commerce and Industry, and sector bodies such as the Namibia Tourism Board.

Common causes of small business failure: insufficient working capital, poor cash flow management, weak market research, underestimating costs, competition, lack of skills, over-reliance on one customer.

Growth barriers for Namibian SMEs: limited access to finance and collateral, small domestic market, long distances and logistics cost, skills shortages, regulatory compliance, concentration of purchasing power.

Small firms compete by flexibility, personal service, niche focus and low overheads; larger rivals benefit from economies of scale, brand recognition and bargaining power.

Risk management for a start-up: start small and test the market, keep fixed costs low, hold cash buffer, diversify customer base, insure key assets, maintain accurate records.