EXAMINATION 1998 FOR BUSINESS THIRD LEVEL
Instructions to Candidates
(a) The time allowed for this examination is 3 hours.
(b) Answer all 4 questions.
(c) All questions carry equal marks.
(d) All answers must be clearly and correctly numbered but need not be in numerical order.
(e) While formal accuracy is expected, adequate and appropriate communication is essential and candidates must judge the length of their answers in this light.
(f) When you finish, check your work carefully.
(g) The use of standard English dictionaries and cordless non-programmable calculators is permitted. Candidates whose first language is not English may use a bilingual dictionary.
Situation You are Geoff Arnold, Customer Services Manager for Euronorth Airlines. Your company has recently introduced special Silver Club privileges for its frequent Business Class travellers. Unfortunately some of your airport staff do not appear to be aware of these privileges as the following letter from one of your regular customers reveals.
Task: Write the required letter of apology.
SATCO ELECTRONICS plc
28 November 1998
Customer Services Manager
I wish to draw your attention to the following matter.
On 8 September, I booked 2 single Business Class seats for 29 September on your 2 flights EN312 (Newcastle to London Heathrow) and EN716 (London to Frankfurt). My booking reference was LB5RS. I had been invited by the Frankfurt City Authority to give lectures about, and a demonstration of, our firm's most recent products. When I booked your flights by phone, I informed your Ticket Salesperson that I would need to bring over 200 kilos of equipment. She told me that, although this was above the permitted maximum business Class weight, I would not need to pay any extra money as I was a Silver Club member.
However, when I checked in at Newcastle Airport on 29 September I was asked to pay ￡500 excess luggage fees. As I refused to pay this amount, I had to personally collect my luggage at Heathrow Terminal 1 and take it to Terminal 2.
I had a heated discussion there with your Senior Airline Representative. He reduced the fee to 100 but told me that if I did not pay there and then, my luggage would not be transported to Frankfurt.
You will, I am sure, appreciate the fact that I am extremely angry about the whole situation. I expect a thorough investigation on your part, a refund of the excess luggage fees and a written apology for the inconvenience I was caused. Please find enclosed the receipt for the ￡100 I was forced to pay you.
Situation: The Safety Committee of Brent Chemicals has asked you, its Health and Safety Officer, to investigate the causes of 10 accidents in the company's General Office over the year ended 31 December 1997 and to write a report with recommendations using the information below.
A) MY OWN SURVEY OF GENERAL OFFICE PREMISES AND EQUIPMENT
Size of Office: 6×5 metres
Number of Staff: 16
Number of power points: 10
Equipment requiring mains electricity:
4 VDUs on-line to main computer
2 word processors
1 high-speed printer
6 electronic typewriters
2 plain-paper copiers
3 mains calculators
Serious problems regarding insufficient power points, lack of space and trailing leads
B) ACCIDENT REPORT BY SAFETY COMMITTEE
2 accidents were caused by faulty copiers, which inexplicably burned (7 Jan, 13 March)
2, by staff with wet hands, attempting to plug in electrical machines (13 Feb, 16 May)
6, by staff tripping over trailing leads (5 Feb, 17 June, 3 Sept, 10 Sept, 21 Oct, 4 Nov)
C) NUMBER OF STAFF INVOLVED IN ACCIDENTS AT BRENT'S AND COMPARABLE FIRMS' GENERAL OFFICES IN THE YEAR ENDING 1997
Firm Men Women
Brent 11 20
Sinochem 5 2
Gloxichemi 3 1
D) CROSS-SECTION OF STAFF COMMENTS
1 It‘s been a hazardous place to work in for years.
2 I think the firm should institute an enquiry led by health and safety experts.
Parent of a clerical assistant
3 The staff are simply not safety-conscious enough. Too many are tired when they come to work and they eat and drink far too much at lunch-time.
Nurses at the firm
4 Surely health and safety should have been considered long ago?
5 We must urgently hold some courses about safety.
Write the report.
QUESTION 2 CONTINUED
E) PROMOTIONS NORMALLY HELD
January General Sale
February, third week Stocktaking bargains
March, third week Mother's Day week
April Cookery and cookware demonstrations by renowned
International and national chefs
June Wedding gifts and bridal wear, Father's Day display
August College and schoolwear promotion
October Hallowe'en displays
December Christmas items and gifts (local school bands,
My ideas about Cathy's promotions
Bargain sales have never been particularly successful. Occasionally lines, specially bought in for the sales, do very well. Customers often complain that end-of-line fashions are over-priced.
The April cookery demonstrations are popular but cookware sales are often disappointing. The June promotions would do better if our store sold perfumery. Christmas sales would also probably improve if toys, cards, gift-wrappings, chocolates were on sale.
F) EXTERNAL INFLUENCES
Two hypermarkets, Ringways and Lateco, have recently opened near the ring road. They both have large car parks and facilities for purchasing cheap petrol. Traffic to and from the town centre has now been significantly reduced following the introduction of a new “park and ride” scheme.
G) CROSS-SECTION OF STAFF COMMENTS
We haven't enough variety and our prices are far too high.
Salesperson in Furniture Department
Our styles are old-fashioned and we never seem to have the right sizes and colours of clothes.
Sales Manager in Ladies' Clothes Department
Here I'm paid only ￡260 a week. At Ringways I'd get 20 more and at Lateco they'd pay me 300 for my skills. Buyer
70% of our staff are female, 60% are middle-aged (ie between 40 and 60).
We questioned all of them recently about our current problems and,surprisingly, 73% said they wouldn't move. Researcher
Our products are good but Lateco impress purchasers with their more professional approach. Personal Assistant
Situation: John Gates, Training Officer at the South Western Bank of Bristol intends to circulate the adapted article below from the Financial Times at the next staff meeting. The text will be used as part of a training programme in which you will be involved.
Task: John Gates asks you to make sure that you understand the text by answering the questions which follow it.
It is far more difficult to precisely pinpoint the meaning of the term Global Custody than it is to describe its rapid expansion. The majority of those working in the industry believe that the 2-word description Global Custody can best be used to cover what happens after the client has decided to buy or sell securities.
At a rough estimate, about 40,000 billion assets are in Custody worldwide and the total is likely to rise to 50,000 billion within the next 5 yeas. Global Custodians who, in the past, have had to put up with jokes about the dullness of their jobs are currently in great demand and their industry is dominated by talk of takeovers, product-growth and cut-throat price wars.
Whereas formerly, the main objective of Global Custodians was to look after their clients' securities, nowadays they offer a range of other services, including investment-advice, performance-measurement and cash-management. As a direct result Custody has become an important business for many of the largest banks and financial institutions in Europe and the US, mainly because it offers a constant stream of income, in comparison with the sharp “ups and downs” of investment-banking earnings.
However, alongside the industry s growth, the related problems of high costs and difficult customers, who often demand and receive extra services for no additional fees, have also now come to the fore. Although the Global industry's gross revenues are estimated to be 6 billion, profit margins are extremely small and, as a direct result, many financial institutions have withdrawn from Custody work. It is esimated that, by the year 2001, there will be a maximum of 10 Global custodians world wide. By then, many expect there to be a greater number of regionally-based Custody businesses, known as Niche Custodians in search of smaller customers. They will only operate for a short time unless they are able to retain their clients‘ confidence by repeatedly offering them inexpensive, beneficial advice.
These difficulties aside, those remaining in the industry are confident about its development prospects. In particular the switch in Europe towards funded pensions and the continued interest in overseas investment of US fund managers add weight to forecasts of further large growth.
1 Write your own short definition of Global Custody.
2 By how much money, according to the author, are the assets in Global Custody likely to rise?
3 What, originally, was the principal aim of Global Custody?
4 Use your own words to describe why many of the largest financial organisations prefer earnings from Global Custody to those from investment-banking.
5 Which 2 reasons are given for Global Custody s small profit margins?
QUESTION 3 CONTINUED
6 Is the number of Global Custodians likely to (a) expand (b) contract (c) remain the same by the year 2001?
7 Name and describe any extra service which you think difficult customers may expect from Global Custodians.
8 Explain the following terms (a) pinpoint (b) cut-throat.
9 Will there be (a) less than 10 (b) more than 10 or (c) the same number of Custodians by the year 2001?
10 Explain why EIGHER Global Custody OR Niche Custody would benefit or not benefit your own real/imaginary business.
Situation: Dr Joanna Sergeant, occupational health physician for the South East Chartered Band in London, has become increasingly aware of, as well as concerned about, the dangers of frequent flying encountered by today s executives. Now several financial organisations have asked her to give a lecture on the topic. She invites you, her Personal assistant, to make a list of 8 short, positive self-help tips in credit card format which can be distributed to those attending the lecture.
(a) Devise your own short card title.
(b) Use the following abridged version of the lecture to assist you to make the list.
According to a recently published World Bank health report on the effects of flying, the emotional strain of frequent travel is beginning to take its toll on travelling executives and they are, unfortunately, proving to be up to 3 times more susceptible to psychological disorders than their office-bound counterparts. It is obvious that executives have not been given adequate advice as to how to retain their self control and composure in difficult airport and aircraft conditions.
The report draws particular attention to the fact that many business trips are planned at the last moment and that important meetings are all too often arranged without adequate consultation. The result is that executives' powers of decision-making are impaired as a direct result of travel stress and fatigue.
The Aviation Health Institute has also produced its own reports on the states of anxiety and panic which often surface well before executive travellers arrive at the check-in. Institute Director, Farrol Kahn, explains that confused chemical processes in our bodies trigger off a flight-or-flight reaction to the crowds milling around in the terminals. It can prove extremely dangerous for your mental condition if you arrive in an excited, nervous state at the airport with only a little time to spare before your flight. Another potential health hazard is alcohol. To stave off dehydration it is far better to take an abundant quantity of water.
Rich foods such as chocolate and cheese, should be avoided as they give our bodies excess energy which is often converted into anxiety.
QUESTION 4 CONTINUED
Generally speaking, flying executives, if abroad for 2 days or less, should not change their home time zone and their body clocks should be allowed to determine their behaviour. If they are away for 3 days or more, they should not delay changing to the new time zone. A golden rule is not to be awake in your temporary abode when it is dark and not to lie in bed when it is light. The sun boosts natural wake-up responses in the body which make the transition easier.
After returning to your own country, it is best to follow the body s own advice. Work is fine if fatigue is no problem, but if tiredness reigns, it is best to go home and have a good rest.