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Management (MGT)

MGTA03 - INTRODUCTION TO MANAGEMENT I 2011 Winter – Mid-Term Test – March 12th, 2011 Model Answers to SAQs Question 1 Identify the degree of competition of the cell phone industry in Canada1 mark Answer 1 The Canadian cell phone industry is an Oligopoly 1 mark Explain and justify your answer by identify at least three features of this degree of competition, and relate these features to the cell phone industry in3 marks We can say that is an oligopoly because the industry has the following attributes: 1) A small number of suppliers (3 main providers Rogers, Bell, Telus = 95% of all subscribers) dominates the industry 2) Each of the few cell phone companies is "large", i.e. large in terms of volume of sales, number of employees, number of customers, etc. 3) There are only a few suppliers because there are barriers to entry: large capital needs 4) There are economies of scale, i.e. the huge costs of installing a network can be lowered on a per-customer basis if you have very many subscribers. 5) The competitors watch each others' pricing policies closely, and tend to match each others' price changes and marketing initiatives, quickly.. Page 1 of 4 Question 2 When measuring an economy's economic performance, the officially reported rate of "unemployment" is usually thought to under-report an economy's ability to fully and effectively utilise its labour resources. This was attributed to both "underemployment" and the "discouraged worker" effect. Explain what is meant by "underemployment" 2 marks Underemployment: means that workers are not working at their full potential. Either they are working at part time (rather than full time) jobs, or they are working at jobs that are not fully exploiting their expertise and education. e.g. a nuclear engineer driving a taxi, a Ph. D. chemist working as a greeter at Wal-Mart. Unemployment statistics will show these people as having jobs, but they are earning less than they would like, and contributing to society less than they might. Explain what is meant by the "discouraged worker" effect. 2 marks Discouraged Worker: means people who might normally be looking for a job (and therefore be counted as part of the workforce) have judged the chances of their finding employment are too remote to even bother trying. Therefore, talented people who might be working choose instead to retire, to go back to school, to travel, or to be full time home makers, rather than to be unemployed or underemployed. Because they have withdrawn themselves from the work force (i.e. they are not actively looking for work) they are not considered to be unemployed. Page 2 of 4 Question 3 The American Psychologist David McLelland developed the "needs motivation" theory. McLelland's theory suggests that every person poss
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