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Second edition

Riana Balliram; Peter Budd; Edith Emmanuel; Marsha Guiness; James McCloskey;

Rachael Raghoo Bitu

Contributors: Paul Anderson, Wayne Dass, Kamla Mungal, Margaret Latchman-Nicholson,

Carlisle Pemberton, Nadia Salamat-Ali, Kailashnath Maharaj

for CSEC® Examinations

Principles of

9781380034229.indb 1 21/08/2019 11:51 am

Macmillan Education 4 Crinan StreetLondon N1 9XW A division of Springer Nature Limited

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ISBN 978-1-380-03933-0

Text © R. Balliram (units 4 & 10); E. Emmanuel (units 1, 2 & SBA); M. Guiness (unit 3); R. Raghoo Bitu (units 5, 6 & 7); Springer Nature Limited (units 8, 9 & Alternative SBA) 2019

Additional material by Paul Anderson; Wayne Dass; Kamla Mungal; Margaret Latchman-Nicholson; Carlisle Pemberton; Nadia Salamat-Ali; Kailashnath Maharaj

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First published 2016 This edition published 2019

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The publishers would like to thank Mr Kevin James (Jamaica), Alana Gajadhar (Trinidad), Roxanne Williams (St Vincent) and Seline Sundar (Trinidad) for their invaluable help in reviewing this manuscript.

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The authors and publishers would like to thank the following for permission to reproduce their text extracts:

P76 Extract from ‘LIAT pilots on strike –Guyana bound flights cancelled’. Originally published in Guyana Chronicle, 7th June 2017]. © 2016 Guyana Chronicle. Reprinted with permission of Guyana Chronicle P264 Extract from YouTube. ©2019 Google. Reprinted with permission of Google. P264 Extract from YouTube. ©2019 Google. Reprinted with permission of Google. P267 Extract from YouTube. ©2019 Google. Reprinted with permission of Google. P364 Data from ‘Access to Basic Drinking Water in Selected Countries (based on 2015 estimates)’ in the Global Health Observatory data repository by World Health Organization. © Licence: CC BY-NC-SA 3.0 IGO. P369 Data from ‘Table 1. Human Development Index and its components - 2017’ in Human Development Reports by United Nations Development Programme. ©Creative Commons Attribution 3.0 IGO licence. Used under Creative Commons Licence https://creativecommons.org/licenses/by/3.0/igo/legalcode

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James McCloskey, Lead Consultant, Imperial College Business SchoolDr James McCloskey is an experienced teacher and materials writer, and has managed various educational programmes for the British Council in Asia and Europe (between 1995 and 2005). He has an MSc in Management and a PhD in Applied Linguistics from the University of London. He is based in London and currently works at Imperial College Business School, where he delivers a range of academic support courses.

Riana Balliram, Acting Head of Business, Lakshmi Girls’ Hindu CollegeRiana Balliram is the Acting Head of Department for Business at Lakshmi Girls’ Hindu College, Trinidad and Tobago. She has 10 years’ teaching experience at CSEC and CAPE level and also served as a part-time Lecturer for eight years at the University of the West Indies (UWI). She holds an MBA General Management (Heriot-Watt University), a Postgraduate Diploma in Education (UWI) and a BSc Management Studies Special (UWI). She has also served as CXC Item Writer, creating questions for CXC examinations.

Peter Budd, Senior Tutor, University of NottinghamPeter Budd is a language specialist with interests spanning documentary linguistics, English for business, curriculum design, exam writing and online materials development. He has over 10 years’ experience teaching in higher education, and has recently taught English for Academic Purposes (EAP) at Imperial College Business School and the University of East London. He is currently working for the University of Nottingham, Ningbo, China as Senior Tutor in EAP.

Rachael Raghoo Bitu, Acting Dean, Bishop Anstey High SchoolRachael Raghoo Bitu is the Acting Dean at Bishop Anstey High School, Trinidad and Tobago. She has taught Principles of Business (CSEC), Business Studies (GCE) and Management of Business (CAPE) for 18 years. She also served as a part-time Lecturer at the School of Business and Computer Studies and Assistant Examiner for Management of Business. She holds an MSc in Strategic Leadership and Management, a Post Graduate Diploma in Education and a BSc in Management from UWI. She previously worked in the private sector at Lexicon Trinidad Ltd, Mary King and Associates and Caribbean Chemicals International Ltd.

Marsha Guiness, Head of Business Education, Kingston Technical High SchoolMarsha Guiness is the Head of Department for Business Education at Kingston Technical High School (KTHS), Jamaica, where she has been teaching for 25 years. She currently teaches Entrepreneurship Education, Electronic Document Preparation and Management, Word Processing and Customer Service to upper school students. She holds a First Degree in Education from the UTECH Jamaica and is a Training Specialist for Entrepreneurship and Customer Service. She is the author of five textbooks on entrepreneurship, an E-Diary for teachers, and a students’ Homework/Things to Do Organizer and Executive Organizer.

Edith Emmanuel, Project Officer (Education), Education Quality Improvement ProjectEdith Emmanuel served as a qualified educator in Principles of Business and Principles of Accounts for a number of years, and as an Assistant Examiner for CSEC Principles of Business. She holds a BSc in Management Studies and Accounting from the University of the West Indies, a MSc in Accounting from Walden University, and a MA in International Education. She is currently Project Officer (Education) for the Education Quality Improvement Project (EQuIP) within St Lucia’s Ministry of Education, Innovation, Gender Relations and Sustainable Development.

iii

AUTHOR TEAM

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iv

Dr Kamla Mungal, Director of the Leadership Institute, Arthur Lok Jack Graduate School of BusinessDr Kamla Mungal is the Director of the Leadership Institute at the Arthur Lok Jack Graduate School of Business, UWI, in Trinidad and Tobago. She also lectures in the areas of Leadership and Organisational Behaviour and Development. She has

participated in several global leadership development programmes. Her specialisations include curriculum design, development and implementation, and leadership of

educational organisations. She won the Teacher of the Year award in 2004 for her leadership of an at-risk school, and she has worked with principals across the country to develop and implement their School Improvement Plans. She continues to lead her staff to attain accreditation and recognition of the business school.

Paul Anderson, CEO, Trinidad and Tobago at Global Medical ResponsePaul Anderson is an American expatriate healthcare executive and has practised in the Caribbean for 10 of his 25-year management career. His portfolio includes foreign-market business development in the healthcare industry, including involvement in emergency medicine enterprise. At the time of publication, he is a Doctorate in

Business Administration candidate at the University of Liverpool (UK). He is an adjunct faculty member at the Arthur Lok Jack Graduate School of Business at the University of

the West Indies, where he primarily lectures in business strategy.

Wayne Dass, CEO, CariCRISWayne Dass is the Chief Executive Officer of Caribbean Information and Credit Rating Services Limited (CariCRIS). CariCRIS is the Caribbean’s first credit rating agency. He holds BSc and MSc degrees in Engineering and is a Chartered Financial Analyst (CFA) charter-holder. He has garnered over 20 years of credit market experience,

technical expertise in credit risk assessment, financial risk management, investment management, and a wide knowledge of the Caribbean region. Prior to joining CariCRIS,

he held senior leadership positions in prominent regional financial institutions. He is also a member of the board of the Trinidad & Tobago International Financial Centre and lectures part-time on Caribbean Capital Markets and Financial Institutions at the Arthur Lok Jack Graduate School of Business.

EXPERT CONTRIBUTORS

These industry experts share their knowledge throughout the book on Caribbean and global business topics. Look out for them at the start of each unit, where they answer questions related to key concepts and share their insights.

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v

Nadia Salamat-Ali, Programme Director, Arthur Lok Jack Graduate School of BusinessNadia Salamat-Ali is a Lecturer and Programme Director for the International Master of Strategic Marketing Programme at the Arthur Lok Jack Graduate School of Business. She is also its Subject Group Leader for Marketing. She has been

trained in writing and teaching using real-life cases from the Richard Ivey School of Business, and has undergone specialised training in Business Etiquette and Protocol.

She is also certified in teaching with the authentic business education model.

Prof. Carlisle Pemberton, President of the Caribbean Agro-Economic Society (CAES)Prof. Carlisle Pemberton recently retired as Professor of Agricultural Economics at the University of the West Indies. His teaching and research have spanned Production and Marketing, particularly with respect to the cocoa industry and

also non-market valuation of wetlands. He is the President of the Caribbean Agro-Economic Society (CAES) and served for many years as the Chairman of the Cocoa

and Coffee Industry Board of Trinidad and Tobago. He has received a number of awards, including the Lifetime Achievement Award of the Caribbean Agro-Economic Society, a Senior Fulbright Fellowship, and a World Bank Institute Award and Scholarship (Development Marketplace).

Dr Margaret Latchman-Nicholson, Programme Manager, Arthur Lok Jack School of BusinessDr Margaret Latchman-Nicholson worked in the UK for a number of years as a Business Studies and Economics Teacher, and as a Teacher Training Mentor (Secondary Schools) for the University of Hull (UK). She completed her MBA and

PhD at the University of Lincoln, where she became a member of the Corporate and Professional Programmes Unit. Here she has facilitated organisational change

and development for a variety of public and private sector organisations. She is also experienced in managing academic and professional programmes in the Caribbean and in the UK.

Kailashnath Maharaj, CEO, Massy Gas Products Kailashnath Maharaj is the CEO of Massy Gas Products (Trinidad) Ltd and a director of Massy Gas Products (Jamaica) Ltd where he served as CEO for 3 years.

Kailashnath holds BSc and MSc degrees in Agricultural Science as well as an MBA from the Arthur Lok Jack Graduate School of Business. He has been actively

involved in the distribution business for over 20 years and has served as a director on the Massy Distribution and Massy Trading boards both in Trinidad and Jamaica. His

distribution experience covers many lines of business including agricultural chemicals, explosives, industrial chemicals, fast moving consumer goods and pharmaceuticals.

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vi CONTENTS

CONTENTS

ORGANISATIONAL PRINCIPLES (UNITS 1–4)

PROMOTION AND LOGISTICS (UNITS 5–7)

Author Team iii

Expert Contributors iv

How to Use This Book viii

Introduction to the Exam x

The Nature of Business Overview 2

1.1 Forms of Exchange and Economic Systems 41.2 Types of Business Organisations and Economic Systems 171.3 Business Functions and Stakeholders 351.4 Ethical and Legal Issues in Business 401.5 Careers in Business 43

Unit 1 Revision & Exam Practice 46

The Internal Organisational Environment Overview 50

2.1 Management 522.2 Organisational Structure 582.3 Leadership 642.4 Resolving Conflict at Work 692.5 Motivating Employees 762.6 Internal Communication 81


Establishing a Business Overview 92

3.1 Starting a Business 943.2 The Role of an Entrepreneur 1003.3 Preparing a Business Plan 1073.4 Choosing a Business Location 113


Legal Aspects of Business Overview 122

4.1 Legal Principles and Contracts 1244.2 Business Documents 1374.3 Insurance 150


ProductionOverview 164

5.1 Factors of Production 1665.2 Production and Productivity 1725.3 Small Businesses 1845.4 Business Growth 189


UNIT 2

3UNIT

UNIT 4

1UNIT

5UNIT

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viiCONTENTS

FINANCE, GOVERNMENT AND TECHNOLOGY (UNITS 8–10)

Marketing Overview 202

6.1 The Role of Marketing 2046.2 Understanding Consumer Behaviour 2136.3 Product Packaging and Presentation 2186.4 Sales and Customer Services 2236.5 The Protection of Consumers and Intellectual Property Rights 232


Logistics and Supply Chain Overview 242

7.1 Managing Supply Chains 2447.2 Transportation 2547.3 Overcoming Problems in Distribution 2627.4 The Impact of Information Technology 264


UNIT 6

UNIT 7

Business Finance Overview 276

8.1 Financial Institutions and Regulation 2788.2 Managing Personal Finances 2918.3 Choosing a Source and Method of Finance 2968.4 Keeping Financial Records 302


The Role of Government in an Economy Overview 312

9.1 Government Responsibilities and Policies 3149.2 Taxation 3269.3 Government Assistance for Business 3329.4 The Provision of Social Services 335


Technology and the Global Business Environment Overview 344

10.1 Business Technology 34610.2 Living Standards and Economic Development 36010.3 The Impact of Regional and Global Economic Institutions and Systems 37410.4 Economic Problems in the Caribbean 378


School Based Assessment (SBA) 392The Alternative to School Based Assessment (SBA) 402Glossary 406Index 412

UNIT 9

UNIT10

UNIT 8

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viii HOw TO USE THIS BOOk

HOW TO USE THIS BOOKMacmillan’s second edition of Principles of Business

for CSEC® Examinations brings students thought-

provoking and relevant learning materials that fully

engage them at every step. The material is written in

accessible language for all learning levels, and uses

a task-based approach to learning where scenarios,

critical thinking tasks, comprehension questions and

mini-research projects are continuously interwoven

into the core syllabus content. Visually stimulating

and embracing a 21st century approach, this book

helps students feel engaged in class, secure exam

success, and maximise future employability. In each

unit, targeted activities develop critical thinking,

problem-solving, research, and communication skills,

applying knowledge to real life experiences. Inspiring

entrepreneurship and showcasing career possibilities,

students will build knowledge of modern business

trends, concerns and practices in the Caribbean and

the global economic environment.

How is the course organised?Written in an accessible language suitable for all

learning levels and designed for students to actively

participate in their own learning, the course is

structured to provide complete coverage of the

CXC syllabus – including full curriculum, coursework,

and exam guidance and practice, as well as an

extensive SBA section at the back of the book. The

key business concepts and terms covered in the

syllabus are highlighted within each unit and are listed

alphabetically in the Glossary at the back. Each of the

10 main units is divided into sub-topics which group

together related Specific Objectives from the syllabus,

encouraging students to link topics and ideas. Students

undertake a thorough revision of the material at the

end of every unit in a four-page Exam Practice &

Revision section.

What is included in each unit?Each unit includes a wealth of pedagogical features to

support teaching - these are outlined below. Designed

to target different learning styles, these features focus

on building retention, understanding and application of

knowledge. The variety of activities helps keep students

engaged and interested, while also developing different

skills that encourage both individual participation and

collaboration with classmates and communities.

Unit summariesEach unit opens with an overview that

orientates student to the topic. The

academic content is framed in a way that is relevant to

the students’ own lives – they are encouraged to think

about, discuss and apply some of the big wider issues

to their own local context. Additionally, the most vital

issues and themes covered are condensed into quick

reference bulleted lists at the end of each Unit.

Specific ObjectivesThe structure mirrors the CXC syllabus with

comprehensive coverage of all the Specific

Objectives. Each of the 10 main units is divided into

sub-topics which group together related Specific

Objectives, encouraging students to link topics

and ideas.

Key conceptsThe key business concepts and terms

covered in the CXC syllabus are

highlighted within each unit and listed alphabetically in

the Glossary at the back.

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ixHOw TO USE THIS BOOk

What is included in each unit?Each unit includes a wealth of pedagogical features to

support teaching - these are outlined below. Designed

to target different learning styles, these features focus

on building retention, understanding and application of

knowledge. The variety of activities helps keep students

engaged and interested, while also developing different

skills that encourage both individual participation and

collaboration with classmates and communities.

Unit summariesEach unit opens with an overview that

orientates student to the topic. The

academic content is framed in a way that is relevant to

the students’ own lives – they are encouraged to think

about, discuss and apply some of the big wider issues

to their own local context. Additionally, the most vital

issues and themes covered are condensed into quick

reference bulleted lists at the end of each Unit.

Specific ObjectivesThe structure mirrors the CXC syllabus with

comprehensive coverage of all the Specific

Objectives. Each of the 10 main units is divided into

sub-topics which group together related Specific

Objectives, encouraging students to link topics

and ideas.

Key conceptsThe key business concepts and terms

covered in the CXC syllabus are

highlighted within each unit and listed alphabetically in

the Glossary at the back.

Expert viewWritten in conjunction with subject

specialists, Caribbean teachers, and

globally successful business people, students will

see how the business theory relates to the modern

Caribbean context. Each unit opens with an expert

giving their view on modern business trends, concerns

and practices that relate to the topics covered. See the

Expert Contributors page for more information on each

business person.

CheckThere are pause points for students to

consider and digest what they have read,

to confirm comprehension. Questions are varied in

format to keep students interested and designed not to

ask students to simply repeat the text but to cognitively

process the information.

Critical thinkingDesigned to provoke discussion and

allow students to question and challenge,

students are encouraged to think more deeply about

the issues raised. The activities regularly prompt

students to take concepts they have learnt and apply

them to their own experiences, as well as to move

beyond their own opinion to consider someone else’s

perspective and view topics in new contexts.

Student research projects

Research projects help students relate

topics to the real world and develop

interpretation and analysis skills through their own

student-led learning. These involve exploring topics

online to practise using technology for research or

speaking to friends, family and local businesses to

ground the issues in their own experiences. These

potential homework tasks include both individual

and group collaboration projects, which encourage

presenting back to class to build communication skills.

ScenariosThese are written in a narrative style

designed to tell personal stories that

capture the wider business issues and bring them to

life so students are able to understand how business

theory, principles and models work in practice. The

scenarios cover a range of industry sectors from

Caribbean and non-Caribbean areas, with a focus on

the service sector: in particular, small micro-enterprises

that are more accessible to students in this age group.

Each scenario comes with associated questions that

ask students to analyse the information and apply their

learning from the book to the situation.

Brain teasers Each unit finishes with a quick puzzle

or activity that targets key terms and

concepts. These will especially benefit visual and active

learners and can be used as extension tasks.

Digital resources

Throughout the book you’ll see Scan-

Me codes like this one. If you have a

smartphone, open the camera and hover over the

Scan-Me code to view case study videos. Additional

content such as lesson plans, worksheets for use

at home or in the classroom, as well as answers are

available online. Don’t have a smartphone? Don’t worry.

We’ve also provided direct links whenever there’s a

Scan-Me code.

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x INTRODUCTION TO THE ExAM

INTRODUCTION TO THE EXAM

ORGANISATIONAL PRINCIPLES

The CSEC® Principles of Business exam tests your

knowledge and understanding of the theories,

concepts, models and practices of business as applied

to the Caribbean context. The syllabus aims to equip

you with knowledge to pass your examination and to

foster a ‘sense of commitment to the development of

the community’ – you should learn to evaluate ideas

and opinions and to apply them to the community and

country around you.

You will need to demonstrate an ability to learn and

communicate business concepts and principles,

interpret data and draw conclusions, identify and

analyse problems and devise solutions, develop

research skills and critical thinking skills.

The exam consists of two papers plus a School-Based

Assessment (SBA) task as follows:

Paper 1Paper 1 consists of 60 multiple choice questions.

The exam lasts 1 hour 15 minutes and provides 30%

of total marks.

Paper 2Paper 2 requires you to write extensive answers to 5

compulsory questions. The Paper 2 exam lasts 2 hours

and provides 50% of total marks.

Paper 3Paper 3/1: SBA project. Designed for school

candidates and guided by your teacher. You are

required to investigate and write a report on a topic,

issue or problem in a business related area of study.

Your chosen project should involve the manipulation

of research data including data collection, analysis

and interpretation and your final written report should

not exceed 1000 words (see page 392 for more

information). Paper 3 provides 20% of total marks.

OR

Paper 3/2: Alternative SBA project is a written exam

paper designed for private candidates. The paper

consists of a set of questions based on a business case

study. You are required to use the information provided

and your answers to the questions to complete a

business plan. See page 402 for more information. The

Paper 3 exam lasts 1 hour and 15 minutes and provides

20% of total marks.

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