NABTEB GCE 2025 ADVANCED BUSINESS CONSTRUCTION MANAGEMENT ANSWERS (ESSAY – TYPE B)

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ADVANCED BUSINESS CONSTRUCTION MANAGEMENT (TYPE B)

SECTION A
INSTRUCTIONS: ANSWER ALL QUESTIONS.

(1)
Line and staff organizational structure is a system in which the line managers have direct authority over achieving the organization’s main objectives, while staff personnel provide expert advice, support, and specialized services to assist the line managers in making effective decisions. It combines the clear chain of command found in line structure with the professional guidance supplied by staff specialists.
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(2)
The reinforcement theory of motivation explains that an individual’s behavior is shaped by the consequences that follow it. It states that people are more likely to repeat actions that bring positive outcomes and avoid actions that lead to negative outcomes. The theory emphasizes the use of rewards to strengthen desired behaviors and the use of punishments or withdrawal of rewards to reduce undesirable behaviors. It also highlights that consistent reinforcement increases motivation, while a lack of reinforcement weakens or stops a behavior over time.
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(3)
(i) Verbal Warning: This is the first corrective step where the employee is verbally informed of misconduct or poor performance. The manager explains the unacceptable behaviour, states the expected improvement, and warns of further action if the issue continues.
(ii) Written Warning: This involves issuing a formal documented notice to the employee. It states the nature of the offence, previous warnings given, the expected behavioural change, and the consequences of failing to improve, such as suspension or termination.
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(4)
(i) Damages: This is a monetary compensation awarded to the injured party. It is intended to place the affected person in the same financial position they would have been if the contract had been properly performed. It is the most common remedy for breach of contract.
(ii) Specific Performance: This is a court order compelling the defaulting party to fulfil their contractual obligations. It is usually applied where monetary compensation is inadequate, such as in contracts involving unique goods, land, or special services.
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(5)
(i) Clear goal-setting
(ii) Regular performance review
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(6)
(i) Fixed Cost: These are costs that remain constant regardless of the level of production or sales. They do not change with output and must be paid even when no goods are produced, such as rent and salaries.
(ii) Variable Cost: These are costs that change directly with the level of production. The higher the output, the higher the cost incurred, such as raw materials and direct labour.
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(7)
An annuity is a financial arrangement in which equal payments are made or received at regular intervals over a specific period of time. It involves a series of consistent cash flows, monthly, quarterly, or yearly, often used for investments, loan repayments, insurance benefits, or retirement income.
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(8)
(Draw the diagram)

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(9)
(i) Language Barrier: This occurs when the sender and receiver do not share a common language or when complex, technical, or ambiguous words are used. Misinterpretation arises because the message is not clearly understood, leading to confusion and incorrect responses.
(ii) Physical Barrier: These are obstacles in the communication environment such as noise, long distance, poor network, or faulty communication equipment. Such conditions disrupt the smooth flow of messages, causing distortion or incomplete information.
(iii) Psychological Barrier: Personal attitudes, emotions, and mental conditions such as stress, fear, or lack of interest can hinder communication. When a receiver is emotionally disturbed or biased, they may misinterpret the message or fail to pay attention.
(iv) Cultural Barrier: Differences in cultural backgrounds, beliefs, customs, and values can lead to misunderstanding. A gesture, expression, or idea acceptable in one culture may be offensive or meaningless in another, thus affecting message clarity.
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(10)
(i) Identify production requirements
(ii) Conduct site evaluation
(iii) Analyse cost and accessibility
(iv) Compare alternatives and make a final selection.
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SECTION B
INSTRUCTIONS: ANSWER TWO QUESTIONS ONLY FROM THIS SECTION.

(11)
(i) Time-rate method: This method involves paying operatives based on the amount of time they spend working, such as per hour, per day, or per week. The worker’s salary is calculated by multiplying the time worked by the agreed rate. It allows for easy calculation and ensures regular income, but it does not directly reward effort or speed.
(ii) Piece-rate method: This method pays operatives according to the quantity of work completed. Each task, unit, or output has a fixed rate, and the worker’s salary increases with the amount of work produced. It encourages higher productivity, but quality may be reduced if workers rush to produce more units.
(iii) Measured-work method: This method determines salaries based on predetermined standards of work output and time for specific tasks. Payment is calculated by assessing the expected quantity and time required for each activity using work study or job analysis. It ensures fairness and efficiency, as wages reflect both performance and the difficulty of the task.
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(12i)
Breakeven analysis: This is a financial tool used to determine the point at which total cost equals total revenue. At the breakeven point, a project or business makes no profit and no loss. It helps managers understand the minimum output or sales needed to cover all fixed and variable costs. It also assists in decision-making on pricing, cost control, and profitability forecasting.

(12ii)
Stream of cash flow: This refers to a sequence of money inflows and outflows that occur over a specific period of time. It shows how cash enters and leaves a business through activities such as sales, expenses, investments, and loan repayments. Analysing cash flow streams helps businesses determine liquidity, evaluate financial stability, and assess the ability to meet future obligations.

(12iii)
Capital budgeting: This is the process of evaluating and selecting long-term investment projects that require substantial capital. It involves analysing potential projects based on expected costs, cash inflows, risks, and returns. Common techniques used include Net Present Value (NPV), Internal Rate of Return (IRR), and Payback Period. Capital budgeting ensures that resources are allocated to projects that will generate the highest value and support long-term growth.
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(13a)
(i) First-In First-Out (FIFO)
(ii) Last-In First-Out (LIFO)

(13b)
(i) First-In First-Out (FIFO): This method assumes that the first items purchased or produced are the first to be issued or sold. The closing stock is therefore valued using the price of the most recent purchases, while the cost of goods sold is based on older prices. It gives a stock value that reflects current market prices and is useful during periods of rising prices.
(ii) Last-In First-Out (LIFO): This method assumes that the most recently purchased or produced items are the first to be issued or sold. The closing stock is valued using the cost of the earliest purchases, while recent prices are used to calculate the cost of goods sold. It helps match current costs with current revenues but may undervalue closing stock during inflation.
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SECTION C
INSTRUCTIONS: ANSWER TWO QUESTIONS ONLY.

(14a)
Sales Day Book: This is a primary book of original entry used to record all credit sales of goods made by a business. Each entry shows the date, the customer’s name, the invoice number, and the amount. It helps in keeping accurate records of credit transactions and makes posting to the sales ledger easier.

(14b)
Trial Balance: This is a statement prepared at the end of an accounting period that lists all ledger account balances. It is used to check the arithmetic accuracy of the ledger by ensuring that total debit balances equal total credit balances. A balanced trial balance suggests that entries have been correctly posted, although it does not guarantee error-free accounts.

(14c)
Ledger: This is the main book of accounts where transactions recorded in books of original entry are posted into individual accounts. It contains personal, real, and nominal accounts. The ledger helps in summarising financial information and is the basis for preparing final accounts such as the income statement and balance sheet.

(14d)
Return Inward Book: It is also known as the sales returns book. This book records goods previously sold on credit that customers return due to reasons like defects, wrong specifications, or damage. It includes details such as the customer’s name, date, and amount. It helps in adjusting the total sales and updating customers’ account balances.

(14e)
Purchase Book: This is a book of original entries used to record all credit purchases of goods meant for resale. Each entry includes the date, supplier’s name, invoice details, and amount. The total from this book is posted periodically to the purchases account, helping to maintain accurate records of credit purchases.
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(15a)
(i) Negotiation
(ii) Mediation
(iii) Arbitration
(iv) Collaboration
(v) Compromise

(15b)
(i) Negotiation: This process involves the conflicting parties discussing their differences directly to reach a mutually acceptable agreement. Each party presents its interests, listens to the other, and works toward a solution without third-party involvement.
(ii) Mediation: In this process, a neutral third party called a mediator helps the conflicting parties communicate better and understand each other’s positions. The mediator does not impose a decision but guides the parties toward a voluntary and peaceful agreement.
(iii) Arbitration: Here a neutral third party, known as an arbitrator, listens to both sides of the conflict and then makes a binding or non-binding decision depending on the agreement of the parties. It is more formal than mediation and is often used when negotiation fails.
(iv) Collaboration: This involves both parties working together cooperatively to identify the underlying causes of the conflict and find a solution that satisfies everyone. It focuses on open communication, shared problem-solving, and building long-term positive relationships.
(v) Compromise: This process requires each party to give up part of their demands to reach a middle-ground solution. It helps reduce tension quickly and provides a fair settlement where neither party gets everything they want, but both gain acceptable outcomes.
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(16a)
(i) Autocratic leadership
(ii) Democratic leadership
(iii) Laissez-faire leadership

(16b)
(i) Autocratic leadership: This style involves the leader making decisions alone without seeking input from subordinates. The leader sets rules, gives instructions, and expects strict compliance. It allows for quick decision-making but may reduce employee morale due to limited participation.
(ii) Democratic leadership: This style encourages participation, communication, and shared decision-making between the leader and subordinates. The leader values team opinions and promotes discussion before choosing a course of action. It improves teamwork, motivation, and creativity, though decisions may take longer.
(iii) Laissez-faire leadership: In this style, the leader allows subordinates a high degree of freedom to make decisions and manage their work. The leader provides resources and guidance only when needed. It works well with experienced and self-motivated workers, but may lead to a lack of direction if employees require supervision.
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SECTION D
INSTRUCTIONS: ANSWER TWO QUESTIONS ONLY.

(17a)
(i) Product Design Stage: This is the stage where the idea of the item is conceived and translated into a workable design. At this point, the purpose of the product, its features, size, materials, shape, and mode of operation are clearly defined. Detailed drawings, specifications, and models are prepared to ensure that the item can be produced effectively and will meet the required standards.
(ii) Production Planning Stage: This stage involves arranging all the necessary resources required for manufacturing the item. Decisions are made on the production methods to use, the machines needed, the quantity of materials, the labour requirements, and the time schedule for operations. It also includes planning the workflow, determining the sequence of operations, and ensuring that every activity is coordinated to achieve smooth and cost-effective production.
(iii) Manufacturing Stage: At this stage, the actual production of the item takes place. The raw materials are processed using the planned methods, machines, and labour. Each operation is carried out according to specifications to ensure accuracy, quality, and consistency. The product passes through various processes such as cutting, shaping, assembling, and finishing until a complete item is obtained and made ready for distribution or use.

(17b)
Method study focuses on analyzing and improving the way a job is carried out, while work measurement determines the time required for a worker to complete that improved method. The two are related because method study ensures that the best possible method is used, and work measurement then assigns a standard time to that method to promote efficiency, fair wages, and proper planning.
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(18a)
(i) To Determine Standard Time for Tasks: Work measurement aims at establishing the amount of time a qualified worker should reasonably take to complete a specific job under defined working conditions. This standard time becomes a benchmark for planning, scheduling, and evaluating performance. It ensures that time allowances are fair, realistic, and achievable for all workers involved.
(ii) To Improve Production Planning and Control: By knowing how long each operation should take, managers can effectively plan the flow of work through different departments. It allows accurate forecasting of delivery dates, allocation of labour, estimation of machine loading, and prevention of bottlenecks. This ensures smooth, balanced, and uninterrupted production activities throughout the system.
(iii) To Set Fair and Equitable Wage Systems: Work measurement helps in establishing fair incentive schemes, piece-rates, and wage structures based on the actual effort required for each job. It eliminates guesswork in wage fixing and prevents both overpayment and underpayment. Workers are rewarded according to the quantity and quality of work they perform using standard times as a guiding factor.
(iv) To Identify and Reduce Inefficiencies: By measuring the time taken to perform different tasks, management can identify delays, unnecessary motions, wasted effort, and poor work methods. These inefficiencies can then be corrected through method improvements, better training, or improved workplace layout. This leads to increased productivity and reduced operating costs.
(v) To Facilitate Costing and Budgeting: Standard times obtained from work measurement help determine labour costs accurately for each product or service. This information is essential for preparing realistic budgets, setting selling prices, and making decisions on production methods. It ensures that organisational resources are used effectively and costs are kept within manageable limits.

(18b)
(i) Select the Job to Be Measured: The first step is to choose the specific task or operation that needs to be timed. The job selected must be clearly defined, stable, and representative of the work done so that the results will be meaningful and applicable.
(ii) Break the Job into Elements: The chosen task is divided into small, logical, and measurable work elements. Each element should have a clear start and finish point. This breakdown makes the timing more accurate and helps identify parts of the job that may need improvement.
(iii) Observe and Record the Time Taken: Using a stopwatch or timing device, the analyst observes a qualified worker performing each element and records the time taken. Several observations are made to obtain consistent results, avoiding errors caused by unusual delays or exceptionally fast work.
(iv) Determine the Basic (Normal) Time: The recorded times are adjusted based on the worker’s performance rating. If the worker was slower or faster than the standard pace, the timing is corrected to reflect what an average skilled worker would take. This adjusted value is called the basic or normal time.
(v) Add Allowances and Compute the Standard Time: Allowances for personal needs, fatigue, and unavoidable delays are added to the basic time to determine the standard time. This final standard time represents the total amount of time a worker should reasonably take to complete the task under normal working conditions.
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(19i)
Bill of Quantities: A Bill of Quantities is a detailed document prepared by a quantity surveyor that lists all materials, labour, equipment, and work items required for a construction project. It describes each item of work with its quantity, unit of measurement, and description. The Bill of Quantities is used for tendering, cost estimation, and project control. It allows contractors to price each item accurately and competitively. During construction, it serves as a basis for the valuation of executed work, interim payments, and final accounts. It also helps in cost control, variation measurement, and comparison of bids from different contractors.

(19ii)
Drafting: Drafting is the technical process of producing accurate drawings that represent objects, structures, or components according to scale and standard conventions. It involves the use of drawing instruments or computer-aided design software to create plans, elevations, sections, and details. Drafting is used in engineering, architecture, and construction to communicate design ideas clearly and precisely. It shows dimensions, materials, shapes, and construction methods required for production or building. Proper drafting ensures accuracy, reduces errors during construction, and serves as a permanent record for reference.

(19iii)
Taking Off: Taking off is the process of measuring quantities of materials and work directly from construction drawings for the purpose of preparing cost estimates and Bills of Quantities. It involves calculating lengths, areas, volumes, and numbers of different building components such as walls, floors, concrete, steel, and finishes. The measurements are recorded systematically in a take-off sheet. Taking off ensures that all items of work are included in the estimate and that materials are neither overestimated nor underestimated. It is a critical step in cost planning, tender preparation, and project budgeting.
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