Business Environment · November 2025

a) A matrix organisation is a structure in which there is more than one line of reporting. Effectively, it means that each employee of the organisation has more than one boss. The matrix organisation structure is complex but helps in achieving the ultimate goal that is, reaching higher productivity. It has various benefits. This type of structure is used in organisations which have diverse product lines and services. It breaks the monotony and gives more flexibility to the organisation. Employees work with colleagues of different departments who have expertise in different functions. When different people from diverse departments work together, it helps solve problems in a more efficient way. It does lead to overall development of employees, as each one is exposed to different functions apart from his or her core job.

b) Advantages of matrix organisational structure

i. Enhanced flexibility and adaptability: Cross-functional teams quickly respond to changes in market conditions and evolving project requirements. It makes organisations responsive and agile, giving them a competitive edge in fast-paced industries.

ii. Improved resource utilisation: Matrix structure also enables optimal utilisation of human resources. Employees work on different projects simultaneously, which enhances their skills and expertise. Better resource allocation reduces overloading or underutilisation of employees.

iii. Cross-functional collaboration: Employees from different functional areas work together on projects, breaking silos. They gain a more holistic understanding of organisational goals and objectives. It leads to improved problem-solving and better decision-making.

iv. Specialised expertise utilisation: Matrix structures allow project managers to build well-rounded teams with experts from different functional units. They can utilise their diverse skills and knowledge to achieve better problem- solving and high-quality project outcomes.

v. Faster decision-making: Decision-making is streamlined by involving relevant stakeholders. It leads to fewer bureaucratic delays in the decision- making process and faster implementation. 72

vi. Employee development opportunities: The matrix structure offers employees a significant advantage of continuous learning and development opportunities. They gain exposure by working on various projects and collaborating with managers from multiple departments. It enhances their versatility, adaptability and skill set.

vii. Global and local integration: Matrix structure also facilitates the integration of global and regional perspectives. Employees from various regions and cultures collaborate to comprehend local market needs and develop customised strategies. It enables better market penetration and customer satisfaction.

c) Disadvantages of matrix organisational structure

i. Communication challenges: Effective communication becomes challenging when employees report to multiple managers. Miscommunication and misunderstandings may lead to delays in decision-making.

ii. Conflicting information: Diverse instructions from functional and project managers can cause confusion and hinder productivity.

iii. Role ambiguity: Employee performance is impaired if they are unclear about their roles and responsibilities. They may feel overwhelmed with conflicting tasks and expectations from different managers.

iv. Decision-making complexities: With multiple managers involved, reaching a consensus may be challenging, leading to delays in important decisions. It can cause frustration among employees and affect their morale.

v. Dissatisfaction and burnout: Employees struggle to prioritise tasks and find it challenging to manage their time effectively. It results in lower productivity levels and increased stress.

vi. Power conflicts: Each manager has their own objectives and goals, which can lead to disputes in a competitive environment. It delays decision-making and hinders teamwork.

Examiner’s report The question is presented in three parts. The first part of the question requires a description of matrix type of organizational structure. The second part demands explanation of five advantages of a matrix organization,while third part requests for stating and explaining of five disadvantages of matrix organization. About 62% of the candidates attempted this question, and 54% of the number scored above average For better performance in future examinations, candidates should cover the contents of the syllabus using ICAN study text as guide. 73

Marking guide Marks Marks

a. Correct description of matrix type of organisational structure 5

b. (i) Listing of any five advantages of matrix organisational structure 2½

(ii) Explanations of the advantages of matrix organisational structure 5 7½

c. (i) Stating of any five disadvantages of matrix organisational structure 2½

(ii) Explanations of the disadvantages of matrix organisational structure 5 7½ Total 20

a. Technological changes that have played a role in globalisation

i. Internet and internet communication: The internet has significantly increased the global sharing and flow of information, knowledge and ideas. It has enabled cultural exchange across countries and helped reduce the digital divide between more technologically advanced and less advanced nations.

ii. Communication technology: Advancements such as 4G and 5G networks have dramatically improved the speed, capacity, and responsiveness of mobile and wireless communication. This has enhanced real-time connectivity and supported global business operations, remote work and international collaboration.

iii. Internet of things (IoT) and Artificial Intelligence (AI): IoT and AI technologies are enabling the tracking of assets in transit and as they move across borders, making cross-border product management more efficient.

iv. Blockchain: Blockchain provides a transparent, tamper-resistant ledger for recording and verifying transactions. It enhances data security in sectors such as healthcare, finance and international trade. Blockchain has also enabled decentralised databases and systems that improve the tracking of materials across global supply chains. 74

b. Three types of globalisation

i. Economic globalisation: This refers to the increasing integration of international financial markets and the coordination of economic activities across borders. It includes the expansion of free trade agreements such as the North American Free Trade Agreement (NAFTA) and the Trans-Pacific Partnership (TPP) which reduce barriers to trade and investment. Multinational corporations, operating in two or more countries, play a significant role in driving economic globalisation.

ii. Political globalisation: Political globalisation involves the development of policies and frameworks that bring countries together politically, economically and culturally. It includes the cooperation fostered through international organisations such as the United Nations (UN), the North Atlantic Treaty Organisation (NATO) and other bodies that encourage global governance, diplomacy and collective decision-making.

iii. Cultural globalisation: Cultural globalisation focuses on the ways in which cultures become more interconnected and similar, largely due to technological and societal changes. Factors such as easier global communication, widespread use of social media and improved transportation systems enable the rapid exchange of cultural ideas, values, lifestyles and practices across borders.

c. Significant aspects of globalisation

i. Solving economic problems: Globalisation moves jobs and capital to places that need these resources. It gives more developed countries access to lower cost resources and labour and less developed countries access to jobs and the investment funds they need for development.

ii. Promoting free trade: Globalisation puts pressure on nations to reduce tariffs, subsidies and other barriers to free trade. This promotes economic growth, creates jobs, makes companies more competitive and lowers prices for consumers.

iii. Spurring economic development: Globalisation can give developing countries access to foreign capital and technology they would not otherwise have, thus bridging the digital divide. Foreign investment can result in an improved standard of living for the citizens of those nations.

iv. Promoting shared cultural understanding: Advocates view the increased ability to travel and experience new cultures as a positive part of globalisation that can contribute to international cooperation and peace. 75

v. Encouraging positive trends in human rights and the environment: Advocates of globalisation point to improved attention to human rights on a global scale and a shared understanding of the impact of people and production on the environment.

Examiner’s report The question is presented in three parts. The first part requires the listing and explaining four recent technological changes that have contributed to globalization. The second part requires three types of globalization to be listed and explained. The last part requires four significant aspect of globalization to be stated and explained. About 72% of the candidates attempted this question and about 64% of the number scored above average For better performance in future examinations, candidates are strongly advised to be familiar with every topic in the syllabus. A deep understanding of each topic using the ICAN study text guarantees brilliant success.

Marking guide Marks Marks

a. (i) Listing of any four recent technological changes 2

(ii) Explanations of the four recent technological changes 4 6

b. (i) Listing three types of globalisation 1½

(ii) Explanations of the three types of globalisation 4½ 6

c. (i) Listing of four significant aspects of globalisation 2

(ii) Explanations of the four significant aspects of globalisation 6 8 Total 20

a. Internal controls are established to further strengthen:

i. the reliability and integrity of information; ii. compliance with policies, plans, procedures, laws and regulations; iii. safeguarding the assets; iv. the economical and efficient use of resources; and v. the accomplishment of established objectives and goals for operations or programmes. 76

b. Fundamental concepts that internet control reflects

i. Internal control is a process: It is an ongoing series of activities designed to help the organisation achieve its objectives — a means to an end, not an end in itself.

ii. Internal control is carried out by people: It depends on the actions, attitudes, competence and integrity of individuals at all levels, not just on written policies and procedures.

iii. Internal control provides reasonable, not absolute, assurance: No system can eliminate all risks; internal control aims to offer a high but realistic level of assurance to management and the board.

iv. Internal control is designed to help achieve organisational objectives: It supports the achievement of key goals, including effective operations, reliable financial reporting and compliance with applicable laws and regulations.

c. Examples of access controls are:

i. Physical controls: Examples include the locks on office building’s doors, a card security terminal for gaining entry into the IT room and surveillance cameras that capture unauthorized access to areas where financial data may be stored.

ii. Administrative access controls: These include the policies around who can access what information at what times. Examples are, background checks for employees handling sensitive financial data and guidelines on how to determine who should be granted access to important data.

iii. Technical controls: These include implementing user accounts with unique usernames and passwords or incorporating multi-factor authentication requirements when signing into financial systems (e.g. requiring a one-time code be sent to a mobile device).

d. Objectives of internal control

i. Efficient conduct of business: Controls should be in place to ensure that processes flow smoothly and operations are free from disruptions. This mitigates against the risk of inefficiencies and threats to the creation of value in the organisation.

ii. Safeguarding assets: Controls should be in place to ensure that assets are deployed for their proper purposes and are not vulnerable to misuse or theft. A comprehensive approach to this objective should consider all assets, including both tangible and intangible assets. 77

iii. Preventing and detecting fraud and other unlawful acts: Even small businesses with simple organisational structures may fall victim to these violations, but as organisations increase in size and complexity, the nature of fraudulent practices becomes more diverse and controls must be capable of addressing them.

iv. Completeness and accuracy of financial records: An organisation cannot produce accurate financial statements, if its financial records are unreliable. Financial systems should be capable of recording transactions, so that the nature of business transacted is properly reflected in the financial accounts.

v. Timely preparation of financial statements: Organisations should be able to fulfil their legal obligations to submit their accounts, accurately and on time. They also have a duty to their shareholders to produce meaningful statements. Internal controls may also be applied to management accounting processes, which are necessary for effective strategic planning, decision taking and monitoring of organisational performance.

Examiner’s report The question is in four parts. All parts of the question examine candidates’ knowledge on internal control. It was observed that about 92% of the candidates attempted this question and about 62% of the number scored above average The ICAN study text and Pathfinder provide the necessary guidance. Therefore, for future examinations in this subject, all prospective candidates are encouraged to cover all aspects of the syllabus using the study text in conjunction with any other recommended texts.

Marking guide Marks Marks a. Explaining five correct areas where internal controls are applied to strengthen the accounting and auditing processes 5 b. Listing four correct fundamental concepts that the definition of internal Control reflects 4 c. (i) Listing three correct examples of access control in internal control. 1½ (ii) Explaining the three correct explanations of examples of access control in internal controls 4½ 6 d. Explaining five correct objectives of internal control 5 Total 20 78

a. Leadership is defined as the potential to influence and drive group efforts towards the accomplishment of goals. This influence may originate from formal sources, such as that provided by acquisition of managerial position in an organisation.

b. Management in all business and organisational activities is the act of getting people together to accomplish desired goals and objectives, using available resources efficiently and effectively. Management comprises planning, organizing, staffing, leading or directing and controlling an organisation (a group of people or entities) or effort for the purpose of accomplishing a goal. Resourcing encompasses the deployment of human, financial, technological and natural resources.

c. Key distinctions between a leader and a manager. Aspect Leader Manager Focus Vision, inspiration and direction Planning, organizing and controlling Goal Motivating people toward a shared vision Achieving organisational objectives efficiently Approach People-oriented Task-oriented Decision-making Often intuitive and based on values Analytical and based on data and procedures Power Source Influence and charisma Formal authority and position Style Transformational and participative Transactional and directive Risk Orientation Willing to take risks Risk-averse and focused on stability Change Management Drives change and innovation Maintains order and consistency Communication Inspires and engages Informs and instructs Primary Role Leading people Managing work and processes

d. Key similarities between leadership and management Aspect Similarities Leadership and Management 79 Goal achievement Both aim to achieve organisational goals and improve performance. Influence Both involve influencing others to accomplish tasks and objectives. Decision-making Both require making decisions that affect the team or organisation. Communication Effective communication is essential in both roles to convey vision, goals and expectations. Problem-solving Both involve identifying problems and finding solutions to ensure smooth operations. Team building Both focus on building and maintaining effective teams. Motivation Both seek to motivate employees to perform at their best. Strategic thinking Both require strategic thinking to align actions with organisational objectives. Responsibility Both carry responsibility for the success or failure of their teams or departments. Adaptability Both must adapt to changing environments, challenges and organisational needs.

Examiner’s report The question is in four parts. All parts of the question examine candidates’ knowledge on leadership and management. It was observed that about 88% of the candidates attempted this question and about 46% of the number scored above average. For better performance in future examinations, candidates should cover the contents of the syllabus using ICAN study text as guide.

Marking guide Marks Marks a. Correct definition of the concept of leadership 2½

b. Direct explanation of management 2½

c. Five key distinctions between a leader and a manager 7½

d. Five correct similarities between leadership and management 7½ Total 20 80

a. Concept of a maximum price Maximum prices (price ceilings): Maximum prices are restrictions set by the government on the cost of a commodity or service. To shield customers from exorbitant costs, they are usually set below the equilibrium price. Example: Rent control policies in cities like Lagos, New York and San Francisco, impose maximum rents to make housing more affordable for low-income residents.

b. Illustration of leftward shift in the supply curve Figure 5.1: Leftward shift of the supply curve From figure 5.1, the equilibrium market price is OPe, while the maximum price is fixed at OP1, below the equilibrium price. Because this price ceiling is not a market clearing price, the quantity demanded will increase from OQe to OQ2, while the quantity supplied will decrease from OQe to OQ1. The resulting shortage is OQ2-OQ1 or AB. This reaffirms the assertion that whenever a price ceiling is set for a good, it results in a persistent shortage of the good.

c. Five key problems that may arise from the persistent shortage caused by a price ceiling i. Rationing: It might be necessary for the government to divide the amount of OQ1 among consumers who wish to consume more OQ2. This could be accomplished by issuing coupons that need to be turned in with cash in order to receive the item.

ii. Queuing: Whenever the good is available; people will form long queues for it. The queues may be physical lines of people outside suppliers’ shops, typically in the case of essential commodities like drugs, bread, milk, etc., or long waiting lists in the case of consumer durables, such as cars, television sets, government flats or houses, etc. 81

iii. Black or parallel markets: There will be the emergence of black or parallel markets where the product would be sold illegally. The price at which a good is sold in an illegal market is typically higher than the equilibrium price

iv. Selling at sellers’ preferences: First-come, first-served, selling to friends and family first and other strategies are some of the options available to sellers.

v. Random allocation: This is a chance or luck sale. The goal of fixing the maximum price is to guarantee that both the rich and the poor receive the good may be defeated by this.

Examiner’s report The question is in three parts. All parts of the question examine candidates’ knowledge on maximum price and its implication on demand and supply. About 42% of the candidates attempted this question and about 36% of the number scored above average. The ICAN study text and Pathfinder provide the necessary guidance. Therefore, for future examinations in this subject, all prospective candidates are encouraged to cover all aspects of the syllabus using the study text in conjunction with any other recommended texts.

Marking guide Marks Marks a. Correct definition of the concept of a maximum price 2½

b. Illustrative diagram on how a price ceiling can cause a leftward shift in the supply curve. 4 3½ 7½

c. (i) Identify key problems that may arise from the persistent shortage caused by a price ceiling 2½

(ii) Explaining the five key problems that may arise from the persistent shortage caused by a price ceiling 7½ 10 Total 20 82

a. Key sectors that integrate Internet of Things (IoT) Internet of Things (IoT) applications spans nearly every industry, such as: i. Smart homes and buildings: Energy-saving thermostats, remote lighting control and security systems.

ii. Healthcare: Remote patient monitoring, wearable fitness trackers and real time diagnostics.

iii. Manufacturing: Intelligent robotics, predictive maintenance and supply chain automation.

iv. Retail: Smart shelves, inventory tracking via Radio Frequency Identification (RFID) and personalized in-store experiences.

v. Transportation: Global Positioning System (GPS) enabled fleet tracking, smart traffic lights and connected vehicles.

b. Benefits of IoT technology in transforming how businesses operate and interact with customers. i. Operational efficiency: Enhanced tracking, predictive maintenance and resource optimisation.

ii. Data-driven insights: Continuous data collection enables better forecasting and decision-making.

iii. Personalised services: Devices can adapt to user behaviour and preferences.

iv. Innovation opportunities: Supports new business models such as smart homes, smart cities and connected healthcare.

c. Challenges, barriers and the future of the Internet of Things (IoT) The Internet of Things (IoT) presents a revolutionary paradigm in the digital age, connecting billions of smart devices to enhance real-time data exchange and informed decision-making. However, its widespread adoption and seamless functionality face numerous challenges and barriers, some of which include:

i. Reliability: Unreliable communication or device failure can lead to data loss, delayed responses and compromised safety. To ensure reliability, both hardware and software across all IoT layers must be designed to support consistent data availability and resilience against failures.

ii. Performance: Evaluating IoT performance is complex due to its dependency on diverse technologies and components. Metrics such as processing speed, data transmission rate, energy efficiency and device scalability determine performance, yet, a unified standard for assessing end-to-end performance across heterogeneous environments remains underdeveloped. 83

iii. Interoperability: The diversity of devices, platforms and communication protocols poses significant interoperability challenges. Ensuring that devices from different manufacturers work seamlessly together requires standardisation, adherence to standard protocols (e.g., WiFi, NFC, GSM) and interoperability testing environments like ETSI Plugtests.

iv. Security and privacy: The absence of a universal security architecture makes data exchange vulnerable to unauthorised access, cyberattacks and breaches of user privacy. Key management, access control and secure data handling must be integrated at both the network and application layers to address these issues effectively.

v. Management complexity: Managing billions of devices entails challenges in configuration, monitoring, fault detection and performance optimisation. Protocols such as Lightweight M2M (LWM2M) and NETCONF Light are emerging to support remote management of resource-constrained devices. Real-time IoT platforms, such as MASH, also provide scalable tools for asset management and connectivity monitoring.

vi. Manufacturing and environmental impact: Scalable IoT adoption requires cost- effective manufacturing, such as producing passive RFID tags for under one cent and environmentally sustainable production methods. Circular design strategies that emphasise reuse and recycling across the device lifecycle are increasingly vital.

vii. Lack of governance: A fragmented global governance structure impedes standardisation and coordination. The coexistence of non-compatible identification schemes (e.g., EPC global vs. Ubiquitous Networking Lab) risks market fragmentation. A unified and neutral governance model is necessary to promote interoperability, scalability and cross-border trust.

Examiner’s report The question is in three parts. All parts of the question examine candidates’ knowledge on Internet of Things (IoT) and its impact on ecosystem. It was observed that about 67% of the candidates attempted this question and about 18% of the number scored above average Candidates are encouraged to thoroughly cover the subject's syllabus and utilise the provided ICAN study text for future examinations. 84

Marking guide Marks Marks a. Five correct key sectors that integrate Internet of Things (IOT) technologies 5 b. (i) Four correct explanation significant benefits of deploying IOT solution in modern enterprises 2

(ii) Four correct explanations of significant benefits of deploying IOT solution in modern enterprises 4 6

c. Explanations of significant challenges associated with the implementation and management of IOT systems 9 Total 20 85