Level 3 Certificate in Business Principles and Practice

Transcription

1 LCCI International Qualifications Level 3 Certificate in Business Principles and Practice Syllabus Effective from: 1 March 2012 First Examination: Series 3, 2012 For further information contact us: Tel. +44 (0) enquiries@ediplc.com

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3 INTRODUCTION Education Development International (EDI) is a leading international awarding body that was formed through the merger of the London Chamber of Commerce and Industry Examinations Board (LCCI) and a leading online assessment provider GOAL. EDI now delivers LCCI International qualifications (LCCI IQ) through a network of over 5000 registered centres in more than 120 countries worldwide. Our range of business-related qualifications is trusted and valued by employers worldwide and recognised by universities and professional bodies. Level 3 Certificate in Business Principles and Practice Aims The aims of the qualification are to develop candidates knowledge and understanding of: the nature of economic activity and the internal and external environment and constraints in which businesses operate national and multinational forms of businesses and their impact on the local economy how businesses are functionally organised and managed in relation to corporate culture, image and identity the different aspects of operational and financial management of a business strategic planning and the frameworks, models and strategies that may be used in strategic analysis and implementation business performance measurement and the frameworks and practices that may be used to improve performance. This qualification is accredited on the National Qualifications Framework (NQF) in the UK as EDI Level 3 Certificate in Business Principles and Practice (VRQ) 600/4350/7. Target Audience and Candidate Progression This qualification is suitable for people who want to develop their understanding of modern business management practices in order to improve their business career opportunities and/or academic progression. It is particularly suitable for people who currently hold middle management positions within any of the functional business areas or those aspiring to such positions. This qualification can be taken as a standalone qualification or as a part of a range of Diplomas. Please see the LCCI International Qualification Guide for the specific Diploma titles. Information is also available on the LCCI International Qualifications website. It is recommended that candidates achieve the Level 2 Certificate in Marketing qualification to supplement and extend their understanding of how businesses relate to, and interact with their customers. 1

4 Structure of the qualification The Level 3 Certificate in Business Principles and Practice is a single unit qualification that consists of the following five topic areas : 1 Business and its Environment 2 Business Organisation, Management and Culture 3 Operational and Financial Management in Business 4 Introduction to Business Strategy and Planning 5 Measuring and Improving Business Performance ASSESSMENT Assessment Objectives The examination will assess the candidate s ability to demonstrate knowledge and understanding of: the nature of economic activity and how the internal and external environment and constraints influence business activities the features of national and multinational forms of businesses and their disadvantages and benefits to the local economy the different types of formal organisational structures and the role of leadership and motivation as functions of management the concept and importance of corporate culture, image and identity and how businesses may influence and develop these the different methods of production and quality control and how technology and the scale of operations impact on business efficiency and effectiveness the need for different sources of finance and the types of financial records that will be kept by a business strategy, strategic planning and the use of techniques and frameworks such as PEST, SWOT, Porter s Five Forces Analysis, Boston Consulting Group Matrix and Ansoff Matrix in strategic analysis and decision-making the importance of measuring business performance and how KPIs and target-setting contribute to the process the use of financial and non-financial performance measures, and frameworks and systems such as the Balanced Scorecard, TQM and MIS in improving business performance. 2

5 Assessment Method The assessment method for this qualification has been designed to provide an appropriate and fit-for-purpose assessment of a candidate s ability to achieve the assessment objectives. It has been levelled to match Level 3 of the National Qualification Framework, the qualifications framework for England, Wales and Northern Ireland. This qualification is assessed by a written examination paper consisting of five questions of 20 marks each, covering all five topic areas within the syllabus. Candidates must answer all five questions. Questions will be presented in the form of a business situation, problem or issue with a number of tasks to be completed. The time allowance for the examination is 2.5 hours. The examination is available in all three Series sittings as well as on demand. All examinations must be carried out in accordance with the Examination Guide for LCCI Centres and the Examination Regulations, which is sent to centres with the examination papers. Coverage of Topic Areas in the Examination The written examination will cover the topic areas as follows: Topic Areas Approximate weighting of topic areas within examination 1 Business and its Environment 20 % 2 Business Organisation, Management and Culture 25% 3 Operational and Financial Management 20 % 4 Introduction to Business Strategy and Planning 15 % 5 Measuring and Improving Business Performance 20 % Answer Format Candidates are required to provide answers in the form of short notes, diagrams or charts, bullet points or short paragraphs. Some questions may ask for relevant examples to be provided. Appropriate business language should be used and any relevant charts or diagrams should be properly labelled. Mark Allocation A positive marking approach is used. Marks are not deducted for spelling or grammatical errors. Certification Successful candidates will be awarded the Level 3 Certificate in Business Principles and Practice based on the achievement of the marks and grades below: Pass 50% Merit 60% Distinction 75% Centres will receive certificates within a maximum of 6 weeks of the receipt of the scripts at EDI. 3

6 Topic 1 Level 3 Business and its Environment Learning outcomes The learner will: 1. Understand the nature of economic activity. 2. Understand how business objectives affect decisionmaking and business activities. 3. Understand how the interests of the major stakeholder groups influence business activity. 4. Understand the role of Government in promoting and controlling business activity. Assessment Criteria The learner can: 1.1 Describe the main features of a competitive market economy. 1.2 Define the term opportunity cost. 1.3 Explain how choice and opportunity cost affects economic activity. 2.1 Discuss the role of business objectives in the planning and decision-making process. 2.2 Explain how business objectives impact on organisational targets and budgets. 2.3 Explain how corporate social responsibility (CSR) as a business objective affects business activities. 3.1 Explain why businesses need to be accountable to stakeholders. 3.2 Compare and contrast the competing interests of the major stakeholder groups. 3.3 Identify appropriate business strategies to meet the needs and interests of the major stakeholder groups. 4.1 Explain why and how the government may seek to influence the level of business activity. 4.2 Discuss the possible consequences of Government economic policies on business organisations. 4 Indicative Content Features include: economic freedom; economic incentive; competition; demand and supply; private ownership; limited government intervention; profit motive Includes implicit and explicit costs SMART targets Impact on marketing, customer service, business processes, corporate culture, community relations and human resource management Stakeholder groups include: shareholders/owners; employees; customers; suppliers; local community; government; financial institutions, etc. How govt. influence: taxation; spending; laws and regulation; subsidies; interest rates; trade policy Consequences include: Impact on demand; supply; cost and business growth

7 5. Understand how changes in the business environment impact on businesses. 5.1 Describe the factors influencing the internal and external business environment. Factors affecting internal environment: business processes; technological capacity; organisational culture; management structure; financial management; human resources; mission and objectives Factors affecting external: sociocultural (values, attitudes and demographics); political and legal; economic; global influences 5.2 Explain how changes in economic conditions affect the business. 5.3 Discuss the external considerations and constraints on business activities in a range of different contexts. 5.4 Provide examples of corporate social responsibility and explain its importance in a competitive business environment. Economic conditions includes: Standard of living; inflation; economic growth; exchange rates Cultural and ethical considerations and constraints Examples of corporate responsibility: sponsoring community projects; ethical behaviour; environmental sustainability; charitable donations 5.5 Explain how current developments in information and communications technology (ICT) impact upon business activities. Access to wider market; increase in competition; opportunities for cost reductions; development of Management Information Systems (MIS) 6. Understand the influence of the global economy on the business. 6.1 Describe the characteristics of the global economy. Characteristics: multinational-trading; foreign exchange; international mobility of capital and labour 5

8 6.2 Discuss the influence of the global market on business operations and practices. 6.3 Explain how the global economy influences the size, location, management and structure of business organisations. Impact on: marketing activities; cultural considerations; competitive pressure to reduce cost, improve quality and business performance 6

9 Topic 2 Level 3 Business Organisation, Management and Culture Learning outcomes The learner will: 1. Understand the nature of national and multinational types of business ownership and their impact on the local economy. Assessment Criteria The learner can: 1.1 Discuss the reasons why business activity may be conducted by the government/state. 1.2 Describe the features of a : Indicative Content Social; economic; strategic and political reasons multinational corporation franchise. 1.3 Discuss the benefits and disadvantages a multinational corporation may bring to a country. Benefits: job opportunities; foreign exchange; tax revenue for govt.; training and skill development; economic growth Disadvantages: overdependence on foreign investment; influence on govt. policies; possible exploitation of local resources 2. Understand the nature of organisational structures and the factors to be considered when choosing a structure. 2.1 Discuss the advantages and disadvantages of the main types of organisational structures. 2.2 Explain each of the following features of formal organisational structures: Levels of hierarchy Chain of command Span of control Responsibility and authority Delegation and accountability 2.3 Evaluate the factors to be considered in selecting an appropriate organisational structure for a business. Main structures include: functional; hierarchical; matrix Includes producing appropriate organisational charts to depict different structures and features as required. Factors include: flexibility; the needs of the business; corporate culture; business strategy 7

10 3. Understand the role of leadership and motivation as functions of management. 3.1 Explain the difference between strategic, operational and administrative management. 3.2 Compare and contrast the three main leadership styles. 3.3 Explain the importance of motivation as a function of management. 3.4 Explain Maslow s theory of motivation and how it may be applied in motivating staff. 3.5 Assess the effectiveness of different types of financial and non-financial motivators in a specific context. Main styles: democratic; participative; laissez-faire; autocratic Including the diagram of the Hierarchy of Needs Financial motivators: wages and salaries; bonuses; performancerelated pay; share option; fringe benefits; profit sharing Non-financial motivators: training, induction; opportunities for promotion; job enrichment, job rotation; job security; teamworking; empowerment, etc. 4. Understand the concepts of corporate culture, corporate image and corporate identity. 4.1 Explain what is meant by corporate culture and the importance of corporate culture. 4.2 Describe how different factors influence the development of corporate culture. Factors include: mission statement; stakeholder influence; management style 4.3 Distinguish between corporate image and corporate identity. 4.4 Describe ways in which a business can create a corporate image and identity. 4.5 Explain the importance of a positive corporate image in a competitive business environment. 8

11 Topic 3 Level 3 Operational and Financial Management of Business Learning outcomes The learner will: 1. Understand the different methods of production and the importance of quality control in the production process. Assessment Criteria The learner can: 1.1 Describe the main methods of production and the situations where each is most appropriate. 1.2 Explain the importance of quality assurance and control in the production process. 1.3 Evaluate different methods of quality assurance and control. Indicative Content Advantages and disadvantages of each method of production: job; batch; flow; mass customization Methods include: TQM; inspection; testing; random sampling 2. Understand how technology and the scale of operations affect efficiency and effectiveness in business operations. 2.1 Explain the difference between effectiveness and efficiency. 2.2 Explain the importance of economies of scale to businesses. 2.3 Explain the difference between internal economies of scale and external economies of scale. 2.4 Describe the different types of internal and external economies of scale and provide examples. 2.5 Describe the diseconomies of scale that a large business may face. 2.6 Describe how improvements in technology affect the production process; e.g. CAD, CAM, automation. Internal economies of scale: purchasing; technical; financial; marketing; managerial External economies of scale: Improved transport and communication links; availability of training and education; growth in supporting industries Diseconomies include: poor communication; lack of motivation; loss of direction and control; slow response time; possible public and government opposition; complacency CAD: Computer-aided Design, CAM: Computer aided manufacture 9

12 3. Understand the relationship between the sources of finance and the nature and needs of the business. 3.1 Explain the meaning of working capital and its importance as a source of finance. 3.2 Explain why different sources of finance may be appropriate in different circumstances. Sources of finance: overdraft; trade credit; bank loans; invoice discounting; share capital; leasing; venture capital 4 Understand the nature of, and the need for accurate financial records in businesses. 4.1 Explain why businesses need to keep accurate financial records. 4.2 Explain the difference between financial accounting and management accounting. 4.3 Describe the information provided by the Income Statement (Trading, Profit & Loss Account) and how this information may be used. 4.4 Describe the information provided by the Balance Sheet and how this information may be used. 4.5 Describe the information provided by a Cash Flow Statement and how this information may be used. 4.6 Describe how each of the following ratios is used in assessing the financial position of a business: Current ratio/working capital ratio Acid test ratio Gross profit as a percentage of sales Net profit as a percentage of sales. 10

13 Topic 4 Level 3 Introduction to Business Strategy and Planning Learning outcomes The learner will: 1. Understand the concept of strategy and strategic planning. Assessment Criteria The learner can: 1.1 Explain the purpose of strategic planning. 1.2 Explain the difference between strategy and tactics. Indicative Content 2. Understand the various frameworks and models used in internal and external strategic analysis. 2.1 Explain the purpose of strategic analysis in the planning process. 2.2 Explain the difference between internal and external strategic analysis. 2.3 Describe how each of the following techniques is used in business environment analysis: STEEPLE/PEST SWOT Competitor analysis 2.4 Undertake and interpret STEEPLE/PEST and SWOT analyses in given situations. 2.5 Describe the elements in Porter s Five Force Analysis. 2.6 Explain the usefulness of Porter s Five Forces Analysis in the development of business strategies. 2.7 Describe the features of Boston Consulting Group (BCG) Matrix. 2.8 Explain the usefulness of the Boston Consulting Group Matrix (BCG) in the development of business strategies. 11 STEEPLE = Social; Technological; Environmental; Economical; Political; Legal; Ethical PEST = Political; Economical; Social; Technological SWOT= Strengths; Weaknesses; Opportunities; Threats Five forces: Threat of new industry entrants; threat of substitute products; bargaining power of buyers; bargaining power of suppliers; intensity of rivalry between competitors Diagram including: Cash cow; problem child/question mark; star; dog

14 3. Understand how the Ansoff Matrix is used in strategic choice and decision-making. 3.1 Describe the features of the Ansoff Matrix. 3.2 Explain how the Ansoff Matrix analyses the link between business strategy and risk. 3.3 Use the Ansoff Matrix to evaluate and select different business strategies in given situations. Diagram including: Market penetration; market development; product development; diversification 4. Understand the process of implementing strategy and the factors affecting the effectiveness of implementation. 4.1 Describe the main components of a business plan. 4.2 Explain the importance of mission statements and business objectives in the planning process. 4.3 Explain the factors that may affect the effectiveness of strategy implementation. 4.4 Explain the importance of leading and managing strategic change. 4.5 Describe management strategies that may be used to successfully implement and manage strategic change. Components are: Background information; business objectives; market research and marketing plan; resource implications; financial statements and targets Leadership; organisational structure and culture; motivation; resources Participative and consultative management; target-setting and monitoring; change agents; decentralisation 12

15 Topic 5 Level 3 Measuring and Improving Business Performance Learning outcomes The learner will: 1. Understand the nature of business performance measurement and its importance. Assessment criteria The learner can: 1.1 State reasons why it is important to measure business performance. 1.2 Explain how Key Performance Indicators (KPIs) help in performance measurement. 1.3 Explain the contribution of targetsetting to the performance measurement process. Indicative content Key characteristics of KPIs; examples of KPIs for different businesses /functional areas SMART targets 2. Understand the measures that may be used in a performance measurement system. 2.1 Explain the difference between financial and non-financial performance measures. 2.2 Describe a range of key financial performance measures/indicators. 2.3 Describe a range of non-financial performance measures/indicators. 2.4 Explain the difference between leading and lagging performance measures, giving examples. Financial performance indicators: profitability; liquidity and solvency; debt collection period; inventory turnover; bad debts Non-financial performance indicators: Human resource development; leadership effectiveness; customer satisfaction, retention and growth; product/service quality and innovation; brand image and reputation; labour turnover rate; absenteeism rate 13

16 3. Understand the models that may be used in performance measurement and improvement systems and their usefulness to a business. 3.1 Describe the Balanced Scorecard framework. 3.2 Explain why the Balance Scorecard framework is an important tool in measuring business performance. 3.3 Describe the principles of Total Quality Management (TQM). 3.4 Explain how an effective Total Quality Management system can impact on the performance of a business. Diagram including the four perspectives: Financial; Internal business process; learning and growth; customer Principles: customer focus and feedback (internal & external); leadership; involvement of all staff; process approach; continual improvement 4. Understand the different practices by which business performance can be improved. 4.1 Describe how a range of management and business practices can be used to improve business performance. 4.2 Explain the difference between monitoring and forecasting as applied to business performance. Staff development and training; multi-skilling; good customer service; teamwork; benchmarking 5. Understand the role and importance of management information in monitoring business performance. 5.1 Explain the functions of a management information system (MIS). 5.2 Analyse how management information can assist in decisionmaking and improving business performance. Difference between data and information 6. Understand the contribution of managers, teams and the individual to business performance. 6.1 Discuss the advantages of organising staff into work groups and teams. 6.2 Identify the ways in which an individual can contribute towards the achievement of business targets and objectives. 6.3 Discuss the advantages of staff appraisal for the individual and the manager. 14 Willingness to participate; personal development/ effectiveness; good customer service skills; empowerment 360 degree appraisals

17 ADDITIONAL INFORMATION Diversity, access and inclusion EDI qualifications address diversity, access and inclusion issues through a) guidance provided to authors of assessment material, b) assessment arrangements and c) guidance to centres. The assessments generated by EDI are designed to be inclusive and free from bias. This is built into the task-setting specifications on which the assessments are based. EDI administers external assessments in line with the latest recommended procedures for ensuring accessibility and fair treatment of all. EDI has procedures in place for making reasonable adjustments to assessments for those learners with particular assessment requirements, provided that this does not invalidate the assessment requirements of the qualification. For guidance on reasonable adjustments, please refer to the Access Arrangements, Reasonable Adjustments and Special Consideration document which can be downloaded by EDI approved centres from the Centre Administration area of the LCCI website, Entry requirements There are no formal entry requirements for this qualification. However, candidates should have a minimum level of English equivalent to the LCCI Level 2 English for Business or JETSET 4 - (Council of Europe B1/Threshold) to meet the communication requirements for this qualification. Guided Learning Hours EDI recommends that Guided Learning Hours (GLHs) provide a suitable course duration for an average candidate at this level. This figure includes direct contact hours as well as other time when candidates work is being supervised by teachers. Ultimately, however, it is the responsibility of training centres to determine the appropriate course duration based on their candidates ability and level of existing knowledge. EDI s experience indicates that the number of GLHs can vary significantly from one training centre to another. 15

18 Recommended Reading List and Support Materials Reading List Title Authors(s) Publisher ISBN Code Level 3 Business EDI EDI Website download Principles and Practice Student Revision Book AQA Business Studies Helen Coupland Nelson Thornes AS & A2 Smith et al (2009) Ltd Business Studies: A-Level Study Guide Barry Brindley Martin Buckley Pearson Education Business Studies D Hall, R Jones, Causeway Press (4 th Edition) C Raffo, A Anderton, I Chambers, & D Gray How to Pass Business Practice, Third Level Stephen Jakubowski EDI Support Material A sample paper and answers are available on the qualification page of the website. A Student Revision Book, as stated in the reading list, will also be available for download from the qualification page of the website centres will need to login before they can access this. How to offer this qualification To offer this qualification you must be an LCCI IQ registered examination centre. To gain centre approval please contact Customer Support on between the hours of 0830 and 1700 (GMT) Monday to Friday or by on centresupport@ediplc.com Alternatively you may contact your Regional LCCI Office or Co-ordinating Authority. 16

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