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ACCA paper 1 3 2002 answers


Part 1 Examination – Paper 1.3
Managing People

December 2002 Answers

Organisations and businesses are made up of many individuals all working together. These individuals have different attitudes,
perceptions and learning experiences, which together with gender and personality differences can be either a good source for
developing creativity within an organisation or the root of an organisation’s problems.
Managers need to be aware of the many factors that affect individual differences and their own attitudes and assumptions. They
should recognise individual potential and harness talent to achieve the organisational goals.

Equal Opportunities is a generic term which describes the belief that there should be an equal chance for all workers in an
organisation to apply and be selected for jobs, to be trained and promoted in employment and to have that employment
terminated fairly. Employers should only discriminate according to ability, experience and potential. All employment decisions

should be based solely on a person’s ability to do the job in question; no consideration should be taken of a person’s sex,
age, racial origin, disability or marital status.

A Sex Discrimination Policy would look at equality in all areas of employment. Such areas would include the selection
process, opportunities for training, promotion, the provision of benefits and facilities and dismissal.
This policy would deem it wrong to make any form of discrimination within employment matters because of marital
status or sex.
The policy should cover the three main categories of sex discrimination: direct discrimination, indirect discrimination and
Direct discrimination incorporates the treating of a person on sexual or marital grounds less favourably than others would
be treated. One act of discrimination is sufficient and must be directed against an individual. Such as a clause in the
employment contract which states that it would be terminated on marriage.
Indirect discrimination consists in applying a term or condition applicable to both sexes but which one sex has
considerably smaller ability to comply with it than the other. Such as all applicants for a post must be six feet tall.
Victimisation is the discrimination against an individual who has brought proceedings or given evidence in another case.
Such persons should not be treated less favourably than any other individual in the same circumstances.


A race relations policy would adopt the same approach as the sex discrimination policy. However this policy would look
at ‘racial grounds’ and ‘racial groups’. These phrases refer to colour, race, nationality or other ethnic or national origins.
The same three categories of direct and indirect discrimination and victimisation can be used.


An equal pay policy means that a woman is entitled to identical pay with men and vice versa in respect of ‘like work’ or ‘work
that is rated as equivalent’ or ‘equal value’ to that of a man in the same employment.
‘Like work’ means work of a broadly similar nature where differences are not of a practical nature. Work rated as equivalent
requires equal pay. This is when work has been evaluated and graded to be equivalent as other work in relation to effort, skill
and decision-making. Work of equal value is that of a woman’s to that of a man’s in the same organisation.
This should apply equally to men and women.
In addition to any statutory equal pay policy and indeed social responsibility toward its workforce, ‘Food is Us’ would benefit
from an equal pay policy in other ways. It would avoid the costs and poor publicity that might arise from legal action brought
to enforce the law would be important for a business of this size and profile. In addtion it would project a caring image to it’s
diverse customer base and in terms of good people management, attract the best employees from a wider range of sources
and with more diverse characteristics, and help build it’s customer base to include a wider constituency.


A disability discrimination policy should contain the following key points:

a disabled person is defined as a person who has a physical or mental impairment that has a substantial and long-term,
more than 12 months, adverse effect on his/her ability to carry out normal day to day activities. Severe disfigurement is
included, as are progressive conditions such as HIV even though the current effect may not be substantial.

the effect includes mobility, manual dexterity, physical co-ordination, and lack of ability to lift or speak, hear, see,
remember, concentrate, learn or understand or to perceive the risk of physical danger.

the policy should also make it clear that it is wrong to discriminate against disabled people in the interviewing and
selection process, for promotion, transfer or training and by dismissal.

the employer has the duty to make reasonable adjustments to the physical features of the workplace where they
constitute a hazard to the disabled person.



Equal Opportunities and Managing Diversity
There is a new generation of managers within organisations who regard the quality of their people as the distinguishing feature
of a successful organisation.
People are the single sustainable source of competitive advantage. Nurturing high performance through the development of
people is essential if organisations are to remain viable and competitive.
The promotion of equal opportunities has made good business sense. Equal opportunities has been promoted as a key
component of good management as well as being legally required, socially desirable and morally right.
Managing diversity expands the horizons beyond equality issues and builds on recognised approaches to equal opportunities.
It adds new impetus to the development of equal opportunities and the creation of an environment in which enhanced
contributions from all employees will work to the advantage of business, people themselves and society more generally.
It offers an opportunity for organisations to develop a workforce to meet their business goals and to improve approaches to
customer care.
Managing diversity is about having the right person for the job regardless of sex, colour or religion. Essentially the management
of diversity is a quality assurance approach. It helps identify hidden organisational barriers which make it more difficult for
people who are perceived as being different from the majority of their colleagues to succeed and develop careers.
It also helps to effect cultural change and to create an environment in which people from all backgrounds can work together
harmoniously. The management of diversity combats prejudice, stereotyping, harassment and undignified behaviour.


In the search for organisational success, many business organisations have sought to adopt what appear to be successful Japanese
management methods. The leading theorist in this field is William Ouchi, who, drawing on earlier work, has described the Japanese
approach to management as ‘Theory Z.’


William Ouchi, a Japanese American, has concerned himself with comparing Japanese management techniques with
American. Ouchi uses the term ‘Theory Z’ for firms which use Japanese methods adapted to the Western system. Such
organisations display certain characteristics:

workers and managers trust their superiors

a much longer time horizon is the norm; the idea of short-term profit is rejected in favour of long-term growth

there is a team approach. Departments see their position within the organisation as a whole

a caring, paternal management unhampered by unions, demarcation or professional prejudices

generalised training. Managers learn the business, not just parts of it

a flexible organisation structure

collective values and company wide rewards

slow, but known promotion

lifelong employment.

Theory Z requires an emphasis on interpersonal skills and group and team working; decisions are based on consensus, but,
unlike in Japan from where the idea originates, responsibility remains with the individual.
Trust and informal relationships are the keystone of Theory Z organisations, even though the formal hierarchy and
organisational traditional structure remain.
It is often compared to Macgregor’s Theory Y approach in that it is seen as a more caring, sensitive and effective way of
achieving organisational success.
The theory is dependent upon the demands of the organisational situation. Some organisations, as a consequence of their
product or service do not provide a suitable environment for the use of motivational techniques associated with Theory Z.
Its strength lies in the fact that because of improved standards of education and changed social and political values, many
employees have wider expectations from the workplace and expect to be consulted and to participate.
The application of Theory Z will therefore depend upon:

the organisational culture, structure and objectives

the procedures and practices involved in the organisation

the technology, environment and product or service

the organisation’s history and attitude

the level of satisfaction that already exists in an individual’s task or role.



Recruitment of staff, especially if large numbers are involved, may be time consuming and a drain on resources. Additionally, the
expertise may not exist within the organisation, requiring the organisation to seek suitable candidates outside.

Internal promotion describes the situation where an organisation has an explicit policy to promote from within and where
there is a clear and transparent career structure. This is typical of many management and administrative staff and of certain
sectors of the economy such as the public services.
The advantages of internal promotion:


it acts as a source of motivation and provides good general morale amongst employees

staff seeking promotion are known to the employer

inexpensive in terms of time and money

training and induction costs are minimised

further training can be product and organisational specific

the culture of the organisation is understood by the individual

illustrates the organisation’s commitment to encouraging the staff

the individual will already be familiar with the other members of the organisation.

External recruitment describes the situation where the organisation decides to recruit someone from outside the organisation
to fill a staff vacancy.
The advantages of external recruitment:


may be essential if particular skills or expertise are not available within the organisation

is necessary to restore staffing levels or where an organisation urgently needs new employees

can bring new ideas and novel approaches to the organisation and to the specific task

provide experience and work methods from other employers.

Any organisation which is considering the use of external recruitment consultants would make its decision upon the following:

the availability, level and appropriateness of expertise available within the organisation and its likely effectiveness

the cost of using consultants against the cost involved in using the organisation’s own staff, recognising the level of the
vacancy or vacancies against the consultant’s fee

the particular expertise of the consultants and the appropriate experience with any particular specialised aspect of the
recruitment process

the level of expertise required of potential employees and therefore the appropriate knowledge required of the consultants

the need for impartiality; this may be of particular importance with public sector appointments, organisations with
particular needs of security or impartiality or where it is felt that an external, objective assessment is required

the time involved in the consultants needing to learn about the organisation, its requirements and the vacancy or

if there is a ready supply of labour then consultants may be less useful, standard vacancies may be readily filled by
advertising or similar inexpensive means

the views of internal staff as to the likely effect of using outside consultants

what effect the use of consultants might have on the need to develop expertise within the organisation, the use of
consultants will not assist with developing internal organisational expertise

the likelihood of existing staff to have misgivings about the presence of, or recommendations of, outside consultants
which can lead to mistrust and rejection of any candidates recruited by the consultants.


Individuals are often reluctant to undertake further learning, especially in the workplace. It is important therefore that managers
understand the way in which individuals actually learn, if any training programme is to be succesful.

David Kolb suggests that learning is a series of steps based on learning from experience. He suggested that classroom learning
is false and that actual learning comes from real life experiences. Learning is experiential and comes from ‘doing’, this ensures
that learners actually solve problems.
Kolb’s experiential learning cycle
⇒⇒⇒⇒⇒⇒⇒⇒concrete experiences⇒⇒⇒⇒⇒⇒⇒⇒

testing the
implications of
concepts in new situation

⇐⇐⇐⇐⇐⇐⇐⇐formation of abstract⇐⇐⇐⇐⇐⇐⇐⇐
concepts and generalisations


The first stage (concrete experiences) is the situation where the person is learning something new.
The second stage (observation and and reflection) is so called because the experience is being reviewed.
The third stage (concepts and generalisations) is when the experience has been accepted or rejected.
The fourth stage (concepts in new situations) is when the person calculates how and when to apply that which has been learned.

HONEY AND MUMFORD have identified four learning styles.
Theorists are concerned with forming principles or ‘how does this relate to that?’ They think problems through in a vertical,
step by step logical way and tend to be perfectionists who do not rest easy until things are tidy and fit into a rational scheme.
Theorists are usually detached, analytical and dedicated to rational objectivity rather than anything subjective or ambiguous.
Often known as CONCLUDING.
For them training must be:

programmed and structured

designed to allow time for analysis

provided by others who share the same preference for ideas and analysis.

Reflectors are concerned with observation and reflection or ‘I would like time to think about this.’ They like to stand back and
ponder experiences and observe them from many different perspectives. They collect data, both first hand and from others,
and prefer to think about it thoroughly before coming to any conclusion. Thoughtful people, they prefer to take back seats in
meetings and discussions. Often known as REVIEWING.
Reflectors need an observational approach to training

need to work at their own pace

do not find learning easy, especially if rushed

conclusions are carefully thought out

slow, cautious and non-participative.

Activists are concerned with actual experience ‘What’s new? I’m game for anything.’ They involve themselves fully and
without bias in new experiences, are open minded, not sceptical and this tends to make them enthusiastic about anything
new. They are gregarious people constantly involving themselves with others but, in so doing, they seek to centre all activities
around themselves. Often known as DOING.
Activists have a practical approach to training

prefer practical problems, a dislike of theory

insist on having hands on training

enjoy participation and challenge

flexible, optimistic

tend not to prepare

are easily bored.


Pragmatists are concerned with deliberate testing or ‘How can I apply this in practice?’ They are keen on trying out ideas,
theories and techniques to see if they work in practice, positively search out new ideas and take the first opportunity to
experiment with applications. They are essentially practical, down to earth people who like making practical decisions and
solving problems. Often known as PLANNING.
Pragmatists need to see a direct value and link between training and real problems.


enjoy learning new techniques and tasks

good at finding improved ways of doing things

aim to do things better

impatient if new ideas are not reflected in practical applications.

Motivation is fundamental to the task of management. Many different theories have been presented on how management might
motivate employees; Adams’ equity theory is an attempt to bring a more modern approach to the topic, based on the idea of
distributive justice.

The process theory of motivation asks the question ‘How can people be motivated?’
The process theory of motivation does not emphasise the need for fulfilment through work (as in the content theory), but
concentrates upon the processes through which individuals are motivated. They attempt to explain how individuals start,
sustain and direct behaviour and assume that individuals are able to select their own goals and means of achieving those
goals through a process of calculation. Process theory emphasises the importance of rewards, often financial.



Equity theory focuses on the feelings of the individual and how fairly they feel they have been treated in comparison with
treatment received by others. It is sometimes referred to as exchange theory; individuals expect certain outcomes in exchange
for certain efforts and contribution to the organisation. When an individual perceives that his or her efforts are equal to others
and the rewards are the same, then equity exists. If the perception is that the efforts and rewards of one person are unequal
to others, then there is inequity.


When an individual has feelings of negative inequity, he or she can

change the amount of effort put into the task

change the nature or amount of reward required

change the basis of comparison

distort the comparisons psychologically

leave the work situation or employer.

The need for clear and concise communication and the consequences of poor communication must be understood by a profession
which exists to provide information to others. Poor communication leads to ineffective control, poor co-ordination and management

Good communication is important because:

individuals know what is expected of them

better co-ordination within the organisation

improves control of the organisation’s plans, procedures and staff

the instructions of management are understood

encourages group and team cohesiveness

can lead to the reduction of stress

bias, distortion or omission can be removed

secrecy and misunderstanding is reduced or removed

information is received by appropriate person

conflict in the workplace is reduced




Barriers to communication include:

the personal background of the persons communicating

language differences

use of jargon

different education levels

‘noise’; that is the message confused by extraneous matters

the perception of individuals

conflict within the organisation

overload; that is too much information being communicated at once

problems of distance

basic misunderstanding

accidental or deliberate distortion of information.

Barriers to communication may be overcome by:

consideration of the needs and understanding of recipients

careful and clear reporting at all levels

express information clearly and concisely

not using jargon or abbreviations

using more than one communications system

encouraging dialogue rather than monologue

ensuring as few links as possible in the communication chain

ensuring feedback.


Part 1 Examination – Paper 1.3
Managing People


December 2002 Marking Scheme


Description of the main features of a sex discrimination policy


Description of the main characteristics of a race relations policy

Up to 10 marks
Up to 6 marks
(Maximum for Part (a) 16 marks)


Reasons for an equal pay policy

Up to 6 marks
(Maximum for Part (b) 6 marks)


Description of key points of policy and means of discrimination

Up to 8 marks
(Maximum for Part (c) 8 marks)


Discussion and recognition of the differences

Up to 10 marks
(Maximum for Part (d) 10 marks)
(Total for Question 40 marks)



Description of Theory Z
(One mark per characteristic)


Discussion on Theory Z

Up to 10 marks
(Maximum for Part (a) 10 marks)
Up to 5 marks
(Maximum for Part (b) 5 marks)
(Total for Question 15 marks)



Description of the advantages of internal recruitment

Up to 5 marks
(Maximum for Part (a) 5 marks)


Description of the advantages of external recruitment

Up to 5 marks
(Maximum for Part (b) 5 marks)


Description of three factors

Up to 5 marks
(Maximum for Part (c) 5 marks)
(Total for Question 15 marks)



Brief description of the four stages in the experiential learning cycle


Description of the learning styles and their implications for training programmes

Up to 4 marks
(Maximum for Part (a) 4 marks)
Up to 11 marks
(Maximum for Part (b) 11 marks)
(Total for Question 15 marks)



Description of process theory

Up to 5 marks
(Maximum for Part (a) 5 marks)


Description of equity theory

Up to 5 marks
(Maximum for Part (b) 5 marks)


Description of negative inequity

Up to 5 marks
(Maximum for Part (c) 5 marks)
(Total for Question 15 marks)






Explanation of the importance of good communication
(One mark per factor)

Up to 5 marks
(Maximum for Part (a) 5 marks)

List five barriers to communication
(One mark per barrier)

Up to 5 marks
(Maximum for Part (b) 5 marks)

Description of overcoming barriers
(One mark per factor)

Up to 5 marks
(Maximum for Part (c) 5 marks)
(Total for Question 15 marks)


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