Individual Written Assignment

Section 7
Question 1
1.1
Environmental factors can either affect an organisation in a positive or negative way; an
organisation that doesnt adapt to changes and make relevant adjustments based on those
changes. External environment factors are developments that take place outside the
organisation and are taken into consideration in the decision-making process, they are
usually more difficult to control due to their unpredictability which leads to the organisation
being left baffled (McKinney, 2003). The external environment usually consists of:

Social factors
Economic factors
Environmental factors
Legal factors
Political factors

(IIRC (2013a:29))
These factors include certain examples such as: threats posed by competition, the changing
environment, government regulations and the industry in which the organisation operates.
The political environment is based on the legal framework and consists of laws and
regulations that govern the operations of the organisation; this in return provides stable,
efficient and effective operations. Economic environment factors usually provide
opportunities for the organisation and are vital to its existence.
Knowledge of the organisations external environment is important to business decision
makers as it helps determine organisational performance. Controlling these factors can be
done through consistent monitoring and a clear understanding of the trend of the external
environment. This helps the organisation choose certain strategies in making decisions.
Using planning tools such as the SWOT analysis, the organisation can determine the
disadvantages and advantages in the market. Analysing the opportunities and threats within
the market will be helping the organisation in decision making. Knowing how progressive the
changing the environment is will help the organisation maintain their performance. (Adeoye,
et al., 2012).
Question 2

2.1
The most concerning external environment risks and opportunities would be:
Risks
Competitors selling at cheaper prices
Suppliers selling directly to customers
Strikes
Opportunities

Targeting customers other than students

Expanding business across continent
Increase community interaction
Becoming environmentally friendly

These risks are of concern to investors as if competitors start selling at cheaper prices Van
Schaik would lose start losing their customer base and would have to start finding ways to
keep their customers. If suppliers start selling directly to customers there would be no reason
for a bookstore like Van Schaik and they would eventually fail as a business. Strikes cause
the business to suffer financial loss, this would lead to less efficient business and if it is an
occurring event Van Schaik might develop a bad reputation. All of this will lead to the
investor not gain on their investment.
These opportunities would be of interest as it all leads to the business growing and
expanding to unfamiliar territory. If community interaction is increased, this will promote the
company and advertise their quality. By becoming environmentally friendly Van Schaik will
be able to attract a new customer base and therefore increase profits. If the business
expands profits will increase and therefore the return on investment will be greater

Section 8
Question 1

1.1
Management by objectives also referred to as MBO helps improve the organisations current
performance by describing the objectives that the employees and management agreed
upon. Managers and employees work hand in hand to create and monitor relevant goals for
a certain period (Management By Objectives MBO, 2015).
A vital concept of MBO is planning, this will assure that management and its employees are
proactively prepared for any situation and they are not just reacting to it as they come. The
organisational goal should be the main objective when employees set their personal goals.
Therefore their measurable personal goals should align with the organisational goal.
Monitoring of each individuals goals should be assessed and monitored on a regular basis
to make sure that it is in conjunction with the organisational goal (Grimsley, 2012).
Some of the benefits of MBO include an increase in the level of commitment and motivation
by the employees. It improves efficiency as if an employee knows what their goals are they
will be able to achieve success more easily. Communication between employees and
management is improved which leads to employees being more satisfied in their jobs and in
turn increase general morale. This will also help management and employees be prepared
for any problems that occur.
A disadvantage of MBO is that it focuses more on the setting of goals to attain an objective
rather than a practical plan of actually following out the goals. When setting the goals the
effects of environmental factors on the organisation are usually not taken into consideration,
for example, a shortage of resources. People usually dont see through the actual goals and
changes that will lead to necessary modification of goals are usually not monitored
effectively, this could lead to inappropriate.

Question 2
2.1

In my opinion the bargaining power of suppliers will be the greatest threat to future
profitability for Van Schaik, because since there are only a few suppliers that supply
academic books in this industry, suppliers determine the price and have a higher hand in the
movement and distribution of goods. This means that suppliers have the power to increase
or decrease profitability exponentially. There are many buyers and the demand for academic
books is high, but as the use of online e-books increase, supplying these books will cost
more and therefore an increase in the prices of the academic books will increase, therefore
making it more expensive for Van Schaik to acquire physical academic books.

Section 9
Question 1
1.1

Governance is a framework of rules and practices that helps direct and control a company in
order to determine the organisations direction and performance (What is Corporate
Governance?, 2015). Governance deals with the relationship and the adjustment of
interests of the organisations stakeholders. It includes procedures, policies, processes and
controls that the management implement in order to minimise conflict between relevant
stakeholders such as management, board of directors, employees and other stakeholders
(Correia, Flynn, Uliana, Wormald & Dillon (2015:1-36)).
The board of directors are usually central to governance and they need to maintain a strong
relationship with stakeholders such as management and shareholders. Some of the other
stakeholders include:

Employees
Customers
Financers
Suppliers
Government
Community

Corporate governance system combines certain mechanisms in order ensure that the
organisation is being managed for the benefit of several stakeholders. Governance consists
of:

Contracts that state the responsibilities, rights and rewards of the relevant stakeholders
Procedures that must be followed in order to reconcile clashing interests between

stakeholders
Procedures that are put in place in order to avoid mistakes and inadmissible behaviour

(Corporate governance, 2015)

Effective governing is essential to the economic success and sustainable growth of an
organisation.

1.2
Governance of information technology (IT) is important as the maintenance of operation
dealing with the capital markets is reliant on information technology (Correia et al. (2015:129)). IT governance clearly defines and distinguishes the gap between business goals and
IT projects (Shuptar, 2012).

There are many reasons why IT governance is important to an organisation, some include:

The interaction between the improvement of information technology governance

practices and the effects of information technology is a clear one.

In todays time there is an increased dependence on information and IT.
It brings management and different stakeholders within the organisation together in order
to provide management with surveillance of the organisation, open communications and
set coherent expectations.

When the value of a company is evaluated the ability of the organisation to manage
information technology risks and its ability to create value using information technology is
taken into account. Governance of information technology is essential in the organisations
strategy.

Section 10
Question 1
1.1

Disruptive technology is a new technology that transforms the way businesses operate. This
technology forces organisations to alter traditional business approach and practices. It
usually is designed to replace similar technology that originally was being used. It has to
effects: It can either shock the entire industry or it can lead to an entirely new industry being
created. (Janssen, 2010)
If a company doesnt account for the consequences of disruptive technology they may find
themselves losing out to companies who have combined the technology with its business
processes.
Disruptive technology has to be able to provide the same features (for cheaper price) or
better features than the traditional technology. Some examples of disruptive technology
include: the cell phone, the internet and e-commerce. They enter the industry and leave the
original technology obsolete; however it could take years for the technology to have an
impact in the industry.
1.2
Big data is a term that describes the expanding growth and availability of data (Big Data:
What it is & why it matters, 2013). It is data sets that are too large and complex for longestablished processing applications. It is large volume of structured and unstructured data.
Big data improves the companys operations and make swift, more accurate decisions.
(Beal, 2015) Big data prevents threats and fraud and improves customer engagement. Data
is becoming a fast-growing resource of competitive advantage.
Some of the challenges include:

Analysis
Capture
Sharing
Storage
Information privacy

1.3
XBRL stands for extensible business reporting language and was created in order to
improve the way financial information is disclosed, therefore making it much easier to
assemble and share the information.

XBRL provides identification tags for each individual item, this tag then gets read by a
computer which makes it easier to be used interactively and makes financial statements
machine readable. XBRL increases efficiency and effectively helps the company maintains
performance in this high-speed world.
1.4
When it comes to the organisation outlook in terms of integrated reporting care must be
taken that the organisations stated expectations, aspirations and intentions are grounded in
reality the potential conclusions include:

The external environment

The availability, quality and affordability of appropriate capitals used by the organisation
Competitive landscape market positioning
risks

Disclosures about an organisations outlook should take in account the legal or regulatory
requirements to which the organisation is subject (IIRC (2013a:31)).

Section 11
Question 1
1.1

UN Global Compact is a principle-based strategic policy for businesses; they align their
operations with the ten universally accepted principles in the following areas: Human rights,
labour standards, environment, and anti-corruption (Overview of the UN Global Compact,
2013).
1.2
Equator Principles is a risk management framework that acts as a benchmark for financial
institutions to evaluate, manage and determine social and environmental issues in project
financing. Intended as a standard for due diligences for responsible risk decision making.
1.3
Global Reporting Initiative is an international project whose mission is to develop a
comprehensive globally applicable Sustainability Reporting Framework. It is used for
reporting on economic, environmental, and social elements of their activities. It provides a
common framework (An overview of GRI, 2103).
1.4
JSE accommodates the listing of securities in order to provide JSE users with an appropriate
market place for trading in such securities. The JSE Listing Requirements are the rules and
procedures that a company has to comply to in order to be listed on the JSE (JSE Listings
Requirements, 2015).
1.5
ISO 14001 explains how to put an environmental management system in place and is
accepted worldwide. It helps businesses achieve success while paying sufficient attention to
their environmental impact of its growth (ISO 14001 Environmental Management, 2015).
1.6
JSE Socially Responsible Investment Index provides a reference point for Socially
Responsible Investors. It was launched to identify companies who incorporate triple bottom
line principles and good governance (SRI INDEX: Background and Criteria, 2014).
1.7

AA1000 Series is a set of standards based on principles that acts as the grounds for the
improvement of sustainability, accountability and responsibility performance of relevant
organisations(The AA1000 Standards, 2015).
1.8
Forestry Stewardship Council (FSC) promotes more sustainable forestry practices by using
the marketplace to protect forest for the future through setting standards for responsible
forest management (What We Do: Protect Forests For Future Generations, 2015).
1.9
Carbon Disclosure Project wants to change the face of business in order to prevent climate
change and protect our natural resources.
1.10
CRISA is the Code for Responsible Investment in South Africa it is a code that applies 5
principles that helps ensure guidance for institutional investors to execute investments
responsibly.