BUSINESS STUDYNOES

P2 Term 2

Grade 11 Business Studies Study Notes – SACAI Exam

📘 TOPIC 1: Forms of Ownership

✅ Definition
A form of ownership refers to the legal structure of a business. It determines how the
business is established, who makes decisions, how profits are shared, how tax is paid,
and who is liable for debts and obligations. The choice of ownership affects the
business’s ability to raise capital, management structure, and overall success.

✅ Types of Ownership
1. Sole Proprietorship

A business owned and operated by a single individual.

Easiest and least expensive form to establish.
Owner keeps all profits and is in full control.
Unlimited liability – the owner's personal assets can be used to settle business
debts.
Not a separate legal entity; business and owner are considered the same in law.
Difficult to raise capital due to limited financial resources.
Common in informal sector or small businesses like tuck shops.

2. Partnership

Formed by 2–20 people who contribute capital and share profits.

Governed by a Partnership Agreement detailing roles, contributions,
responsibilities, and profit distribution.
Unlimited liability unless it’s a limited partnership.
Easier to raise capital than sole proprietorships.
 Shared decision-making can be beneficial, but may also lead to conflicts if not
managed properly.
Not a legal entity – the partnership ends when a partner leaves or dies.

3. Close Corporation (CC) (Phased out for new registration)

Allowed between 1 and 10 members.

Legal entity – members have limited liability.
Members can be directly involved in management.
Profits distributed according to ownership percentages.
Simpler structure and fewer legal formalities than companies.
Replaced by private companies under the Companies Act.

4. Private Company (Pty) Ltd

Owned by 1–50 shareholders, not listed on the stock exchange.

A separate legal entity; shareholders have limited liability.
Perpetual succession – business continues regardless of changes in ownership.
More complex to establish; must register with the CIPC and follow the Companies
Act.
Must appoint directors and keep financial records.

5. Public Company (Ltd)

Shares are traded on the Johannesburg Stock Exchange (JSE).

Can have an unlimited number of shareholders.
Must publish annual financial statements and be audited.
Has high capital-raising potential.
Subject to strict regulations and disclosure requirements.
Costly to manage and register.

6. State-Owned Enterprises (SOEs)

Owned and managed by the government.

Provide public services (e.g., Eskom, SAA, Transnet).
Often not profit-driven but focus on service delivery.
Funded through tax revenue and government investment.
May face issues like mismanagement, inefficiency, and political interference.

✅ Choosing a Form of Ownership

Key considerations:

Capital requirements.
Degree of control required by owners.
Legal liability.
 Tax implications.
Continuity of business.
Ease of formation and compliance costs.

🏢 TOPIC 2: Avenues for Acquiring a Business

1. Starting a New Business

Build from the ground up with full autonomy.

Design branding, layout, structure, and values from scratch.
High levels of risk – no customer base or market reputation.
High start-up costs and longer time to break even.
Great for entrepreneurs with innovative ideas.

2. Buying an Existing Business

Acquire assets, employees, customer base, and goodwill.

Immediate cash flow if business is profitable.
Less risky; systems and reputation already in place.
Potential issues include hidden debt, bad staff culture, or legal issues.
Due diligence is critical before purchasing.

3. Franchising

Purchase the right to operate under an established brand.

Benefit from existing customer base, advertising, and training.
Franchisor offers ongoing support, but control is limited.
Ongoing fees and royalties must be paid.
Good for entrepreneurs with limited experience.

🧠 TOPIC 3: Creative Thinking and Problem Solving

✅ Creative Thinking
The ability to think in new, imaginative, and innovative ways.
Important for solving problems, launching new products, and staying competitive.
Enhances adaptability and growth in uncertain environments.

Encouraging Creative Thinking:

Brainstorming sessions to generate diverse ideas.

Reward innovation and risk-taking.
Promote a safe and non-judgmental workplace.
Allow flexible work schedules and creativity breaks.
Encourage collaboration across departments.

✅ Problem-Solving Techniques
1. Six Thinking Hats (Edward de Bono)

White Hat: Focus on facts and data.

Red Hat: Focus on emotions and gut feelings.
Black Hat: Identify potential problems or risks.
Yellow Hat: Focus on benefits and positivity.
Green Hat: Focus on creativity and alternatives.
Blue Hat: Controls and manages the thinking process.
Allows for holistic, well-rounded decisions.

2. SCAMPER

Structured creativity model to modify or improve ideas:

Substitute: What elements can be replaced?
Combine: What ideas can be merged?
Adapt: What ideas can be adjusted or modified?
Modify: Can we change shape, size, colour?
Put to another use: Any new applications?
Eliminate: What can be removed?
Reverse: Can components be reordered or reversed?

3. Force Field Analysis

Identify driving and restraining forces for a proposed change.

Strengthen driving forces and reduce resisting forces.
Useful in change management decisions.

4. Delphi Technique

Collects opinions from a panel of experts over multiple rounds.

Responses are anonymous to prevent bias.
A facilitator summarises feedback between rounds.
Reaches consensus through expert insight.

5. Mind Mapping

Visual representation of ideas radiating from a central concept.

Encourages free thinking and associations.
Great for planning, revising, or brainstorming.

⚡ TOPIC 4: Stress, Crisis, and Change Management

✅ Stress Management
Stress can result in poor performance, absenteeism, and health issues.
Sources of stress: Heavy workloads, poor communication, lack of control.
Strategies to manage stress:

Provide employee support (e.g., counselling, mentorship).

Encourage regular breaks and physical activity.
Time management and prioritisation workshops.
Promote open communication and clear expectations.

✅ Crisis Management
A crisis is an unexpected disruption that can harm business operations or
reputation.
Types of crises: Natural disasters, cyberattacks, PR scandals, pandemics.

Three phases of crisis management:

1. Pre-crisis: Identify potential risks and prepare contingency plans.

2. Crisis response: Communicate quickly and clearly; implement plans.
3. Post-crisis: Evaluate the response; update crisis management plans.

Key components of a crisis plan:

Clear responsibilities and contact lists.

Communication strategies.
Evacuation procedures and IT backups.

✅ Change Management
Businesses must regularly adapt to changes such as tech upgrades, market trends,
or new laws.

Steps in managing change:

1. Explain the need for change.

2. Involve employees in decision-making.
3. Provide training and resources.
4. Address resistance with empathy and information.
5. Evaluate the effectiveness of change.

Reasons for resistance to change:

Fear of failure, job loss, or increased workload.

Lack of understanding or trust in leadership.
Solution: transparency, employee engagement, and clear communication.

✍️ TOPIC 5: Professionalism and Ethics

✅ Professionalism
 Demonstrating skilled, respectful, and responsible behaviour in the workplace.

Characteristics of Professionalism:

Dependability and punctuality.

Competency and continuous learning.
Accountability for actions.
Respect for co-workers and clients.
Dress and communicate appropriately.

Benefits of Professionalism:

Builds positive brand image.

Increases customer satisfaction.
Encourages employee morale and teamwork.

✅ Ethics
Moral guidelines that influence decisions and behaviour.

Examples of Ethical Behaviour:

Honesty in advertising.
Fair labour practices and wages.
Respecting the environment.
Avoiding corruption and bribery.

Consequences of unethical behaviour:

Legal penalties and fines.

Loss of customers and employees.
Reputational damage.
Decreased investor confidence.

Benefits of Ethical Behaviour:

Increased customer trust and loyalty.

Positive public image.
Compliance with laws and regulations.
Stronger business sustainability.

🧠 Creative Thinking in the Workplace

Business Studies Academic Essay (±800 words)
🔹 Introduction
In the context of the modern business world, where organisations are constantly challenged
by rapid technological developments, intense global competition, and shifting consumer
expectations, creative thinking has emerged as a critical skill. Creative thinking refers to the
process of generating original, innovative, and practical ideas to address complex challenges
or identify new opportunities. It is not limited to artistic expression but extends into strategic
business decisions, product development, marketing strategies, and problem-solving
techniques. Businesses that encourage creativity among their employees are often more
agile, adaptable, and competitive in volatile markets. This essay explores the meaning and
significance of creative thinking in the workplace, the qualities of creative thinkers, the
application of creativity in business decision-making and problem-solving, and the conditions
under which creativity can flourish in the corporate environment.

🔹 Body (Fully Developed Bullet Points)

🔸 Definition and Importance of Creative Thinking
Creative thinking can be defined as the ability to look at problems or situations from a
fresh, innovative perspective that is not limited by conventional rules or patterns.
It enables individuals and organisations to move beyond routine thinking and traditional
methods to find solutions that are both effective and original.
In a competitive business environment, creative thinking is vital for innovation, which is
often the key to survival and growth.
For example, companies like Apple have used creative thinking not only in product design
but also in how they approach user experience and marketing, giving them a unique
competitive advantage.

🔸 Qualities of Creative Thinkers

Creative thinkers often demonstrate intellectual curiosity, which means they are eager
to explore new ideas and ask “what if?” questions.
They are flexible in their thinking, meaning they can adapt to new circumstances and
consider multiple perspectives on a problem.
These individuals are also risk-tolerant, allowing them to propose unconventional
solutions without fear of criticism or failure.
Persistence is another key trait; creative thinkers do not abandon ideas at the first sign of
difficulty but are willing to refine and revise their thinking until a workable solution is
found.
A strong example of a creative thinker in business is Elon Musk, who has revolutionised
multiple industries by challenging norms and pushing boundaries in transportation and
space technology.

🔸 Benefits of Creative Thinking in the Workplace

Creative thinking can increase innovation, enabling companies to develop unique
products, services, and business models.
 It contributes to problem-solving by encouraging diverse approaches and the evaluation
of multiple alternatives before choosing a solution.
It also enhances employee engagement, as workers feel empowered when they can
contribute ideas and be part of strategic discussions.
Furthermore, creative thinking helps organisations become more adaptable, especially
during periods of crisis or change, by allowing for flexibility in planning and execution.
For instance, when Airbnb saw a drastic decline in travel during the COVID-19 pandemic,
the company used creative thinking to pivot toward offering virtual experiences, thereby
creating a new revenue stream.

🔸 Difference Between Creative Thinking and Routine Thinking

Routine thinking relies on established procedures and known solutions; it is predictable
and usually follows a specific path.
While routine thinking is useful for repetitive tasks, it lacks the ability to respond
effectively to new or unforeseen challenges.
In contrast, creative thinking involves exploring unfamiliar paths, combining ideas in new
ways, and imagining possibilities that routine thinking might dismiss.
An example is how traditional taxi companies relied on fixed fare structures, while Uber
used creative thinking to introduce dynamic pricing and app-based ride-hailing,
completely transforming the transport industry.

🔸 Strategies to Promote Creative Thinking in the Workplace

Organisations can host structured brainstorming sessions, where employees are
encouraged to contribute ideas freely without fear of judgment.
Mind mapping tools can be used to visually explore connections between ideas, which
can spark innovative solutions.
Encouraging interdisciplinary collaboration helps bring diverse viewpoints to the table,
increasing the chances of unique insights.
Leaders should create a safe environment for failure, where experimentation is seen as
part of the innovation process rather than a risk to be avoided.
An excellent example is Google’s "20% time" policy, where employees can spend a
portion of their time working on personal creative projects—many of which have led to
successful products like Gmail and AdSense.

🔸 Application of Creative Thinking to Business Problem Solving

The creative problem-solving process typically starts with clearly defining the problem,
ensuring a deep understanding of the issue.
Then, employees or teams generate multiple possible solutions, using brainstorming and
critical thinking to consider a wide range of options.
Next, the best ideas are evaluated and refined, weighing the advantages, risks, and
feasibility of each solution.
Finally, the solution is implemented, and its outcomes are monitored and adjusted if
needed.
For example, when Lego faced financial losses, they creatively diversified their product
line through collaborations with film franchises and digital gaming, revitalising the brand.
🔸 Barriers to Creative Thinking and How to Overcome Them
Common barriers include a fear of failure, rigid organisational structures, short-term
thinking, and a lack of resources or time.
Employees may be discouraged from suggesting ideas if they feel their input is not valued
or if they fear negative consequences for proposing unconventional solutions.
To overcome these barriers, companies must foster a supportive organisational culture,
train managers to be open to new ideas, and allocate time and resources specifically for
creative development.
For instance, some companies implement "innovation labs" or "idea incubators" where
employees can experiment with new projects without bureaucratic constraints.

🔹 Conclusion
Creative thinking plays an indispensable role in modern business strategy and operations. As
the business landscape becomes increasingly complex and unpredictable, the ability to think
innovatively allows organisations to remain agile, resilient, and forward-thinking. It not only
helps solve problems effectively but also promotes a culture of continuous improvement and
innovation. By fostering creative thinking among employees and leadership alike, businesses
can ensure they are not only keeping up with change but leading it. It is therefore imperative
that organisations actively nurture environments where creative thinking is not just
welcomed but expected.

🧾 Summary: Key Points to Remember for the Exam ✅

1. Creative thinking is generating fresh, original, and effective ideas.
2. Key traits of creative thinkers: curiosity, flexibility, risk-taking, persistence.
3. Benefits include innovation, engagement, adaptability, and better problem-solving.
4. Creative thinking is the opposite of routine thinking, which is limited to traditional
methods.
5. Encourage creativity through brainstorming, mind maps, collaboration, and failure
tolerance.
6. The creative problem-solving process involves defining, ideating, evaluating, and
implementing.
7. Barriers include fear, rigid rules, and lack of resources—overcome them with cultural
support and leadership.
8. Real-world examples: Google, Airbnb, Apple, Lego, and Uber.