Economic and Management Sciences Grade 7

1.
Term 1
1. Self-employment
2. Demand and supply
3. Making a profit
2. Term 2
1. Leadership and management
2. Human resources management
3. The core principles of a successful business
4. The qualities of a successful entrepreneur
5. What is a market?
6. The price factor
7. Consumer rights between buyer and seller
3. Term 3
1. Overview of SA's economy (1910 -1948)
2. Overview of SA's economy (1948 - 1994)
3. Restoring socio-economic imbalances
4. Central issues of the Union of SA and the new SA
4. Term 4
1. Electronic banking services
2. Telkom services
3. Shopping via the internet
4. Information technology in business and administration
Self-employment
ECONOMIC AND MANAGEMENT SCIENCES
Grade 7
ECONOMIC PRINCIPLES
Module 1
SELF-EMPLOYMENT
How often have you wished that you were able to generate your own
income to be independent of your parents? You’ve imagined this to be
impossible? Consider it again!
A. Self-employment in South Africa
No lazing around for young Crossroads boy
By Sobantu Xayiya
An 11-year old boy from Crossroads who could not gain entrance to school
has started his own barber’s concern.
Xolisa Mgusholo, the young entrepreneur from the Transkei, says that he
started his enterprise because he did not want to just sit around for a year.
“When I came from the Transkei at the beginning of the year, I tried really
hard to gain entrance to a school, but all the schools were full and they said
I should try again next year,” he said this week.
“I did not want to be bored and unoccupied, so I started cutting hair.

Nobody showed me how to do it . . . I just trusted my instinct and taught
myself as I went along. At first I used a pair of scissors, and practised on
my family, for R2 a head.”
“When I had earned enough money, I bought an electric cutter for R113 and
then my enterprise took off,” he said.
“The number of customers grew and I needed to work faster.”
Customers came to his house, but when they could not do that, he went to
their houses.
His customers vary from toddlers to scholars, as well as “Oobhiti” – older

people – and he now charges R5 per person.
With the approaching festive season in sight, the young entrepreneur plans
to buy a second electrical cutter “because I do not want to disappoint my
customers”.
Xolisa says he is not afraid of competing with established town barbers.
“The people know me and they will come to me for as long as I satisfy
them.”
All his profit goes to his mother Alice, a domestic worker, to help the
family.
One of his customers, Xolili Khambi, 13, says that he decided to support
Xolisa when he saw how he had cut his brother’s hair.
“He did a good job,” he said.
Xolisa has about eight customers a day and makes up to R32 in profit over
weekends.
From: Sunday Times Cape Metro, 21 November 1993
A. Self-employment in other countries
The number of people working for themselves is increasing worldwide.

Activity 1:
To interpret statistics and make inferences
[LO 1.2]
Study the following table, interpret the statistics and draw conclusions
Self-employment in various countries
Country Self-employment
USA 1 in 12
JAPAN 1 in 7
BRITAIN 1 in 10
SOUTH KOREA 1 in 4
HONG KONG 1 in 8
SOUTH AFRICA 1 in 50
Which country has the lowest percentage of people in the labour

market working for themselves?
Which three Eastern countries have a strong focus on self-
employment?
Make a list of household articles produced in these countries. What
deductions can be made from your list?
Convert the above statistics to percentages and present the information
in a block graph.
The reason why so few South Africans create their own employment is to
be found in the very strict labour regulations that used to exist and which
made it very difficult for an individual person to obtain permission to start
his/her own business. Compared to other countries, much of South African
economic activity was centred in a small number of large businesses.
The situation has changed, however. Nowadays there are many

opportunities for anyone who wants to be his/her own boss.
Experience from right across the world, however, has taught us that seven
in every ten (70 %) of newly established business concerns fail within the
first year!
Some economic principles

Primitive communities
People have inhabited the earth for a very long time. For most of their
existence, they have survived together in small groups of 20 – 30 persons.
This is because few people survived the cold and dangerous circumstances
of early times. The groups were like extended families and they shared
almost everything they possessed. The leader of each group determined
what each of the other members of the group had to do. This largely stifled
all own initiative.
Right of ownership
In time, however, certain communities came to grow in numbers and

became wealthy.
Why did only some communities begin to develop after such an extended
period of primitive life?
Some historians ascribe this to the principle of right of ownership. In certain
communities, individuals were encouraged to own private property and
thereby became better off. As soon as such a person has his or her own
property, he or she is the owner of such property and is able to decide how
to dispose of it without needing permission from anyone else in the group.
It soon became evident that owning property affected the attitudes of the
owners.
Activity 2:
To choose the correct statement and motivate your choice
[LO 1.1]
Select the correct statement:
As soon as people are allowed to retain what they earn or produce, they
generally are willing to work harder.
As soon as people are allowed to retain what they earn or produce, they
generally become lazy and unwilling to work harder.
What is the reason for this situation?
How do you think the right of private ownership will affect the attitude of
most people towards a new opportunity or business?
Activity 3:
To find a solution for the typical problems of bartering
[LO 1.3]
The price system
The various communities quickly realised that knowledge and products

within their own communities did not comprise all the knowledge and
products that were available and that different communities needed one
another for a wider range of products. This introduced bartering. But it
often was impossible to exchange one article for another in the barter
system. A cow obviously could not be exchanged for a bar of soap, or a loaf
of bread, or fruit, even! And you could not divide up a cow!
Can you suggest a solution to this problem?
Initially, people considered the use of commodities such as salt, which

could be broken up into smaller pieces/quantities and used in bartering for
smaller quantities of other products. Soon the value of silver also became
apparent – especially as it was always in demand as far as everyone was
concerned.
These commodities used for barter became known as money. In this way,
a price system was developed. The price paid for an article gave the
producer an indication of the needs of the consumers. Those in the textile
trade, for instance, knew that there was a great demand for textile fabrics by
noting that the prices paid for textiles were increasing. The price obtained
for an article therefore indicated what producers needed to produce in
greater or smaller quantities.
Activity 4:
To choose the correct statement and motivate your choice

[LO 1.3]
Imagine that you, as the leader of a particular community, have decided that
the price of shoes is exorbitantly high. You promulgate a law enforcing a
drastic reduction of shoe prices on all producers of shoes.
What will shoe dealers (entrepreneurs) who do not know of the law think
when they see the reduced prices at the shoe factories?
≤ Consumers want more shoes.
≤ Consumers want fewer shoes.
Which of the statements that follow will be true once the law is established?
≤ More entrepreneurs will enter the shoe trade.
≤ Fewer entrepreneurs will enter the shoe trade.
≤ There won’t be any difference.
Reasons for your answer:
Profit
A trader cannot force a consumer to buy from him. The consumer has the
choice of buying many different articles from thousands of traders. Why
would he buy from any particular trader?
This is a problem that affects every businessman. How can any client be
persuaded to buy from his business and not from a competitor? He therefore
has to ensure that his prices are as attractive as possible, but this makes it
more difficult to make a profit.
Activity 5:
To plan ahead and create interest for your product
[LO 4.1]
At market day you run a cake stall selling homemade cakes. You discover
that there will be another similar stall. How can you attract clients to your
stall?
What will work better:
Selling whole cakes?

Selling slices of cake?
Why?
Do you think it is wise to have a cake stall at a school market day?
Why?
It is important to sell products in which consumers have some interest.
You have to offer your services at a price that consumers are willing to pay
for that service.
Assessment
Learning Outcomes(LOs)
LO 1
THE ECONOMIC CYCLEThe learner will be able to demonstrate

knowledge and understanding of the economic cycle within the
context of ‘the economic problem’.
We know this when the learner:
1.1 explains needs and wants and how the differences between them
impact on communities and the environment;
1.2 describes the different types of businesses and activities within the
primary, secondary and tertiary sectors;
1.3 explains the concepts ‘free’ and ‘economic’ (scarce) goods, and
the influence of demand and supply on market prices.
LO 4
ENTREPRENEURIAL KNOWLEDGE AND SKILLSThe learner

will be able to demonstrate entrepreneurial knowledge, skills and
attitudes.
4.1 compares essential characteristics and skills needed to be

entrepreneurial from two different simple case studies of practising
entrepreneurs in own community;
4.2 uses idea generation techniques to make recommendations on

using community resources to generate income in a responsible way.
Memorandum
Read and discuss the newspaper report about a young entrepreneur
who saw an opportunity to generate an income.
Study the information that has been given about self-employment in

six different countries, draw conclusions and present the information
graphically once the data have been converted to percentages.
Read and discuss the paragraph by way of an introduction to economic
principles.
Guide the learners to realise that private property ownership leads to
motivation and a pride in own “products”.
Here learners come to realise that (the development of) “money” as a

means of payment (commodity used for barter) is indispensable and
that the price of a product is determined by the demand that exists for
it.
Here learners are guided to understand the fine balance between an

attractive selling price and a good profit on products.
Demand and supply
Grade 7
ECONOMIC PRINCIPLES
Module 2
DEMAND AND SUPPLY
What is meant by demand and supply?
Before motor cars appeared on our roads, people used to travel on

horseback. Supposing everybody decides to start travelling by car, instead
of on horseback. What will happen in everyday life?
Does the government decide to build factories in Uitenhage and tell

workers to relocate and work in the factories?
Are horse-breeders told to scale down on horse-breeding?
Does government decide that it would be better to start growing cotton
for upholstering car-seats, and that less hay should be grown to feed
the horses?
Of course government did nothing of the kind. Consumers bought more

motor cars and fewer horses. What happens now?
Due to higher profits in the motor car industry, more car factories are
erected, and workers move to those areas to find jobs.
The price of horses drop, and horse-breeders find other ways of
making money.
As less hay is needed for feeding the horses, the price of hay comes
down and other crops have to be planted.
At the same time the demand for raw materials such as steel, cotton
and rubber increases, as it is needed for the manufacturing of cars. As
the prices of these commodities also escalate, more businesses turn to
manufacturing.
Eventually the demand for horses decreased by 90% in the previous

century, while millions of cars were manufactured.
What was the reason for this revolution? It was caused by changes in
buyers’ preferences and new technology resulting from the forces of
demand and supply.
Similar changes constantly occur in the economic field, as buyers’

preferences change and new production methods are developed.
“Free” and “Economic” goods
Free goods
When goods exist in such large quantities, like e.g. seawater or air, we can
use as much of it as we wish, without paying for it. In other words, it is
freely available to all.
Economic goods
When something is scarce and there is a big demand, we have to pay for it.
These goods are not always plentiful, and the less there is, the more we
have to pay for it.
If everything that we need is plentiful, and the prices are low, we will all
lead comfortable lives, and no-one will be worrying about the distribution
of income among people. Everybody will be able to have as much as they
want, of whatever they want. In such a society of prosperity, there will be
no economic goods.
Activity 1:
To distinguish between wants and needs
[LO 1.1]
What is the difference between wants and needs?
Write the following items in the appropriate column:
CD’s, bicycle, ski-vacation, swimming-pool, iPod, medical services,
cellphone, bread flour, clean air, purified water
Needs Wants
Far too many flat-screen television sets
All of a sudden there is a surplus of high technology flat-screen lcd

television sets. Or rather, there are far more of them in the shops than
consumers want to buy. World market-leaders Samsung and LG Philips
overestimated the demand for flat screens when they invested tens of
millions of rands in new factories over the past few years.
The over-supply of lcd-televisions led to a drop of about 40% in the prices

over the past year. It is expected that prices will still come down with a
further 20% in the course of this year. According to experts lcd-television
sets are a boon to the consumer, but a disaster for manufacturers. They had
to witness how fat profits changed into fat losses.
The over-supply of modern, flat televisions clearly illustrates the present

risk of making money from consumer electronics. Technology changes so
quickly that products soon become redundant and prices drop drastically.
The personal computers of two years ago are almost worthless today, as is
the case with digital cameras.
The reason for this is that electronics make use of chips, and every two
years the speed of chips is doubled.
Chinese manufacturers copy everything in an instant, enabling them to sell

quality imitations at rock-bottom prices.
Samsung and LG Philips nevertheless continue to invest large sums of

money in new factories. This year the latter has opened the biggest lcd-
factory in the world at a cost of 40 milliard rands. Nevertheless, these two
market-leaders expect a growing demand for lcd-television sets which will
cause new shortages. Should this happen, next year’s profits will be sky-
high again.
In the meantime these manufacturers must also take note of new companies
entering into the market. Also the more up-to-date and advanced
technologies need to be taken into account, such as plasma televisions that
have flat screens as well. Modern, energy-saving technology like oled-
televisions could probably replace lcd in the future. OLED is an acronym
for organic light emitting diodes.
Adapted from an article in Elsevier, 7 May 2005
Activity 2:
To determine why certain products are more expensive than others

[LO 1.3]
Your parents have decided that it is time to buy a new television set. You
visit some shops selling television-sets. There you discover that there is
quite a variety of sets available. The salesperson immediately points out the
television sets with a plasma screen. It appears that these sets are much
more expensive. But then again, the image is that much sharper and clearer.
Discuss the following questions :
Why are the sets with the plasma screens (LCD= Liquid Crystal
Display) more expensive?
s that new or old technology?
Are the sets manufactured locally or are they imported?
Is there a big demand for these television sets?
Activity 3:
To make inferences from a graph on new technology
[LO 1.3]
Discuss this graph by answering the following questions:
1. Have the sales of ordinary TV sets decreased at the same rate that the
sales of lcd sets increased?
2. How many fewer ordinary TV sets have been sold in 2004 and 2005?
a) How many lcd sets have been sold in 2005 and 2006?
Assessment
LO 1

1.1 explains needs and wants and how the differences between them
impact on communities and the environment;
1.2 describes the different types of businesses and activities within the
primary, secondary and tertiary sectors;
Memorandum
It is very rarely the case that a specific trader is the only one who sells
particular products. Therefore he / she must be properly equipped to
handle competition in the market-place.
By way of an analysis chart, the learners are guided to determine
exactly who the consumer is that they wish to target.
By answering simple questions the learners become aware of specific
characteristics that an entrepreneur must possess in order to ensure
success.
Making a profit
Grade 7
ECONOMIC PRINCIPLES
Module 3
MAKING A PROFIT
Activity 1:
To determine whether a dealer is making a profit on the product he sells
[LO 3.1]
A particular trader sells bananas on the pavement. He calculates his expenses carefully and ensures that the
following costs are covered:
transport costs;
helper’s salary;
cost of packaging.
All these costs are added together to calculate the price of a banana accordingly. Then he adds a reasonable profit
for himself and sells his bananas.
Can this trader be sure of making a profit? Provide reasons for your answer.
When you hope to run a profitable business over a period of time, it is very important to take care of particular
aspects.
Treat all your clients with respect. Without clients, you cannot run a business.
Find out which products and services are required and where they are required.
Do not hope to become wealthy overnight. Your clients must be able to afford your products/services.
Ensure that your products are displayed attractively. Clients need to feel comfortable in their buying
environment.
1. Competition
All sellers try to make money to take care of themselves and their families.
It therefore becomes important for any seller to compete with other sellers to persuade the consumer to buy from
him/her rather than from the competitor. The seller has to search for new and better methods of producing the
product offered to be able to sell it at a lower price / at a better profit. Any seller is sure to make many mistakes,
and many businesses do fail.
2. The consumer
The businessman continually has to ask himself:
“Who will buy my products?”

This refers to his MARKET. He has to make a decision about the market he is going to aim at in advance.
Remember:
Without consumers (the clients), the business cannot exist.

You must meet the needs of the consumers.
Listen to their complaints and to what they have to say.
Always be friendly.
Always provide good service.
Offer the best quality at the best price.
Always offer service of the same quality.
Be sensitive to the needs of the consumer and adjust the product accordingly.
Be creative and make adjustments to products to satisfy particular consumers.
Get to know customers and build up a personal relationship with them.
Activity 2:
To establish the demand for a product that you want to sell
[LO 4.1, 4.2]
Boys2 Girls2 Boys7 Girls7 Teenage Teenage

Babies Men W
–6 –6 – 12 – 12 boys girls
Soft toys
Dolls
Puzzles
Remote-
controlled
toys
Model
cars &
aeroplanes
Balls
Computer
games
Bicycles
Tricycles
If you now determine who the particular clients from your surroundings are that would buy from you, you will
have an idea of what kind of stock to offer.
3. Entrepreneurship
Definition
The word is derived from the French word “entreprendre”. “Entre” means “to enter in(to)”, while “prendre” means
“to take”. From this we can deduce that an entrepreneur is someone who undertakes a particular task.
An entrepreneur is someone who has the ability to see a business opportunity, has
the courage to make use of it and the skill to manage it in a profitable manner.
Characteristics of the entrepreneur.
Prefers to work for himself.

Thinks in a new and original way.
Creates work for other people.
Has courage.
Exhibits perseverance.
Can you add to this list?
Why do people start their own businesses?
Discuss this question in your groups and jot down some possible reasons:
Could you be an entrepreneur?
Complete the following form as honestly as possible:
Characteristics YES NO
I have ideas for making money.
I have already made money with my ideas.
I should like to have my own business.
I often make plans of my own.
I am courageous.
If you have mainly said YES, you could definitely consider becoming an entrepreneur.
REMEMBER THIS!
“A business is an opportunity to serve the consumer by satisfying some of his needs.”
“A successful business is an opportunity to serve the needs of the consumer and make money at the same time.”
********
SHELDON’S LAW
When you start a business, things take three times as long as you expect.
Assessment
LO 3
MANAGERIAL, CONSUMER AND FINANCIAL KNOWLEDGE AND SKILLSThe learner will be able
to demonstrate knowledge and the ability to apply responsibly a range of managerial, consumer and financial
skills.
3.1 explains the role of planning, organising, leading and controlling (e.g. financial and procedural controls)
in a business.
LO 4
ENTREPRENEURIAL KNOWLEDGE AND SKILLSThe learner will be able to demonstrate

entrepreneurial knowledge, skills and attitudes.
4.1 compares essential characteristics and skills needed to be entrepreneurial from two different simple case
studies of practising entrepreneurs in own community;
4.2 uses idea generation techniques to make recommendations on using community resources to generate
income in a responsible way.
Leadership and management
Grade 7
SUCCESSFUL MANAGEMENT SCIENCES
Module 4
LEADERSHIP AND MANAGEMENT

A leader is someone with a talent for leading others. He walks ahead;
he must point the way and move in the right direction.
A manager is the leader of a business. Apart from guiding his

colleagues, he makes important decisions to steer the company’s
future.
Basically a leader and a manager fulfil the same functions as the captain
ofa rugby or netball team. Those in leading positions want to lead a winning
team, and they realise that they are largely responsible for their team’s
success.
Activity 1:
To identify leaders of “teams”
[LO 3.1]
What do we call the following persons?
The manager of a school

The manager of a church
The manager of a hospital
The manager of a police station
The manager of a ship
The need for a manager
One of most important functions of a manager of any concern is to manage

people. Every year thousands of people from rural areas flock to the cities
to find jobs. Most of them are unschooled workers. In other words, they
have no training. The utilisation of the workforce should be free from
discrimination. All workers must be treated as human beings, enjoying the
necessary training and encouragement.
Managers in South Africa face enormous responsibilities. They have to

make the right decisions and act responsibly to ensure economic growth and
create work opportunities. One of a manager’s main tasks is to manage his
staff, and especially to motivate them to be more productive. The manager
must also motivate workers to achieve certain goals in the workplace.
A. Management styles
Every manager has a particular management style or approach to his work.

There are basically three management theories:
1. The traditional theory
A worker has tried to solve a certain problem on his own, but he was not
successful.
When the manager took him to task for this, the worker defended himself,
saying: “But I thought…”, upon which the manager barked at him: “You
mustn’t think – you must do as I say.”
This approach is typical of a manager who believes in the traditional theory.
1. The human relations theory
This theory is based on the idea the workers are motivated if they are
treated well.
Amenities such as tennis courts, a swimming-pool, a squash court, pool
tables, etc. are made available, for the manager believes that those who play
together, will also work together efficiently.
1. The theory of utilizing human potential
In this case the utilization of the workforce is a more important factor than
the way they are treated. The manager encourages workers to think for
themselves and solve their own work-related problems.
Question
Which theory will be the most effective to increase the workers’

productivity?
The most common theory applied by most South African companies is the
traditional theory on lower management level, and the utilization of human
potential on the top management level.
If workers are lazy, only interested in money, and unable to think for
themselves, the traditional theory would undoubtedly be the most effective
approach.
However, if workers enjoy their jobs, are keen to prove themselves and are
intelligent, the theory of utilizing human potential will reap the best results.
Activity 2:
To determine which management style should be applied
[LO 3.2]
Each management style is determined by the manager’s view of his
workers. Write down only the corresponding numbers in the column below
the appropriate heading.
1. Workers are lazy by nature, therefore they will avoid working if they
can.
2. Workers want to be treated as human beings.
3. Workers enjoy hard work if they see that they have achieved
something worthwhile.
4. Workers will do nothing without extra pay.
5. Workers’ social needs are just as important as their financial needs.
6. Workers prefer to be left to themselves so that they can show the boss
how good they are.
7. Workers will rather leave it to the manager to solve problems, so that
somebody else can be blamed if something goes wrong.
8. Workers are people who want to be noticed.
9. The manager may not think that the members of his staff are
important, but he will at least try to make them feel important.
10. Workers will plan the work themselves and check to see if it has been
done properly.
11. The manager will encourage workers to show initiative and trust them
to carry on with their work.
12. Workers cannot think for themselves, due to insufficient
education/training/experience.
Traditional Utilization of human

Human relations
management potential management
management style
style style
Assessment
LO 3
MANAGERIAL, CONSUMER AND FINANCIAL KNOWLEDGE

AND SKILLSThe learner will be able to demonstrate knowledge and
the ability to apply responsibly a range of managerial, consumer and
financial skills.
3.1 explains the role of planning, organising, leading and controlling

(e.g. financial and procedural controls) in a business;
3.2 discusses different approaches to leadership and management;
3.3 describes the importance of administration in managing a business

(record keeping, storing documentation);
3.5 draws up an elementary statement of net worth, using personal

records.
Memorandum
The purpose of these pages is to provide the learner with sufficient
knowledge to understand the key principles of successful businesses. You
will have noticed that there is no assignment with which to assess this
knowledge. As a result it is suggested that the teacher conduct a learning
discussion with the learners during which specific questions are set to them.
Human resources management
Grade 7
Module 5
HUMAN RESOURCES MANAGEMENT
Managing people
1. The duties of the manager
Over and above his other management tasks, the manager of any concern is
especially responsible for utilizing the people who work for him:
He must treat his employees in such a way that they have no reason to
complain.
He must motivate his employees to use their abilities to the full.
A manager must know what is happening on the lower levels of the

concern. He must make time to talk to his employees. This is also referred
to as roving management.
2. The expectations of the manager
The successful manager must also be familiar with the expectations of his
staff, and he must take active steps to fulfil in those expectations.
What are those expectations?

Good treatment
Every worker wants to work under ideal circumstances.

Every worker would like a pleasant relationship with his boss.
Every worker wants to be treated fairly.
Motivation
Every worker has five basic expectations that will motivate them to give
their best:
“Let’s come to an agreement about the results I’m supposed to

achieve.” (Setting of goals)
“Give me the opportunity to prove myself.” (Participation and
delegating)
“Inform me about my progress – good or bad”. (Management control)
“Assist me if I need help, or when I do not perform well.” (Managing
the underachiever)
“Acknowledge my contribution by rewarding me accordingly.”
(Rewards that motivate)
Ways in which the manager can motivate his staff
1. Setting of goals
When the manager sets certain goals for the employee to achieve, this
serves as an agreement between the manager and his employee.
The employee expects these goals to be realistic, in other words, they must
be attainable.
The manager regards these goals as a challenge to the employee.
1. Participation and delegating
A worker wants to prove himself. He welcomes help and support while he

is still learning, but he soon longs for opportunities to prove himself. This
can occur in two ways:
Participation in decision-making
One way of giving employees an opportunity to prove themselves, is to

involve them in decision-making processes, i.e. to consult them, to ask for
suggestions, and to include them in problem-solving discussions.
Delegating responsibilities
Another way of giving an employee an opportunity to prove himself, is to

delegate certain responsibilities to him. Delegating means that a member of
staff is entrusted with the power to use his own judgment.
1. Management control
The third expectation of an employee is that he will be kept informed about

his progress – whether it is good or bad. To be able to do that, the manager
must exercise effective management control.
The purpose of management control is to confirm that the work of the

particular employee meets the required standards. Records should also be
kept of individuals’ achievements.
1. Dealing with the under-achiever
It is the task of the manager to help the employee, not to judge him. Do not
point out his shortcomings or imply that poor achievement is his fault. Try
to find a solution, instead of a mistake; tackle the problem, not the person.
If the employee improves, the manager should re-enforce this improvement
by providing positive feedback, and set new goals.
1. Rewards to serve as motivation
The last expectation of the employee, but not the least, is to be rewarded for
his contribution.
Acknowledgement is what makes a reward worthwhile. It is not so much

the nature or the size of the reward that counts, but the fact that it is a token
of acknowledging an achievement.
Rewards play a very important role in motivating employees to higher

levels of achievement if it is used to acknowledge achievement. Managers
who neglect the rewards at their disposal, neglect powerful instruments – to
their own detriment.
This information is adapted from: Mol. A., Help! Ek is ‘n bestuurder, (Cape

Town: Tafelberg, 1990)
Assessment
LO 3

financial skills.



records.
The core principles of a successful business
Grade 7
Module 6
THE CORE PRINCIPLES OF A SUCCESSFUL BUSINESS
The core principles of a successful business
We have approached a successful businessman to share his experience and

expertise with grade 7 learners. In this module he will try to give you some
expert advice so that you may become acquainted with the secrets of
successful businessmen at an early age.
This module requires the following abilities:
to be able to analyse given statistics of a business;

to keep a cash-book with which to keep control of your income and
expenditures;
to compile a cash flow statement;
to write out invoices; and
to write out receipts.
The following principles (foundations) are always necessary to be able to

run a business with success:
1. Knowledge of the product you want to sell or the service you wish to
render
Once you have made the decision to start your own business, it is
advantageous to be familiar with the kind of product or service you wish to
offer. You will have to be able to convince people that your product or
service is of the best quality, and that they cannot do without it. Once the
business begins to expand, it will be necessary to appoint salespeople to sell
your product or service, but you will remain the person to inspire and
motivate them and inform them about the advantages of the product. Only
at a later stage the product or service will begin to sell itself. Also
remember to be well informed of similar products or services in the market
place, as it is necessary to continuously improve your product to remain
competitive. If you have to decide between two motor vehicles and both are
tempting propositions, it will probably be the salesman with the superior
knowledge of the product that will convince you.
2. Capital
No business can operate without capital (money). The question is always

where to find the capital to start one’s own business. Here knowledge of the
product plays an important role! Normally a bank will be prepared to make
the initial funds available to enable a person to start his or her own business.
However, you will have to convince the bank that there are enough people
who would be interested in your product to enable you to gradually show a
profit. On the other hand banks will only grant a loan if certain securities
can be presented. If things do not go according to your business plan, the
bank will want to retrieve its money.
If it is not possible to present any securities, it will be necessary to acquire a

partner to fulfil the function. Many successful businesses owe their success
to two partners: one with the knowledge of the product or service that will
sell successfully, and the other partner who has a certain financial capacity.
Never allow a shortage of capital to prevent you from starting a business!
3. Focus
A business needs time to show a profit, as well as being accepted or

acknowledged by the public. An enterprise may only show a profit after
several years. Many entrepreneurs who had started a business, surrendered
along the way because the business did not show a profit soon enough,
according to them. In many cases they should have remained involved for a
few more months. In other words, they desponded just before reaching the
proverbial winning post. The importance of a thorough business plan must
be stressed once again. The business plan indicates at what stage a business
should show a profit. Should it indicate that an attractive profit would only
be shown after three or four years, it would help to remain focussed on the
product or the service that is being rendered. Many entrepreneurs are misled
by the successes of other seemingly successful enterprises. Consequently
they move from one enterprise to another, only to find after a few years that
they could not make a success of either. Therefore, remain focussed on the
product or the service rendered. Allow your business time to establish itself.
Therefore, remain focussed sufficiently on the product of your choice!
1. Accept having to take risks!
Successful entrepreneurs are prepared to take risks. Sometimes a business

will prosper, and at times it will experience difficulties. Be honest with the
bank (or the person who funded the business). Explain why there is a
shortage of cash flow, and why there is being deviated form the business
plan. Initially you may find it difficult to sleep peacefully whilst knowing
that your business was experiencing difficulties. With time one learns that
difficult times are part and parcel of operating any business, large or small,
and that there are creative ways to overcome them. A golden rule is to fully
inform the bank of the reasons why the business is experiencing difficulties,
and how the problem is being addressed. Being able to involve the bank as
a partner during these difficult times will result in acquiring the trust of the
bank. Eventually the same bank will be prepared to finance a larger
enterprise in which you are involved, because a special relationship based
on trust developed between you and the bank when the difficult times were
experienced.
5. Each client is special
It is difficult to describe one’s excitement when the first client buys one’s
product. One should let the client feel special and build a relationship with
him/her to ensure satisfaction with the product and also to offer one’s
support. As the number of clients increases, it becomes difficult to offer
special treatment to all of them on a regular basis. However, well-written
letters offer positive inspiration to clients.
Always listen attentively to positive and negative criticism from your

clients. Often clients want to experience a willingness from your side to
care for their needs. In many cases unhappy clients can be comforted with
good and honest means of communication. Learn to handle negative
criticism from the beginning.
6. Managing cash flow
Although many enterprises show a potential profit over the medium term
(one year), they sometimes experience a shortage of cash during certain
months to meet their expenses. In this case two golden rules apply: apply
thorough debtor’s control, and pay the larger accounts only after enough
clients have paid their accounts. Perhaps you are unfamiliar with the word
debtor’s control. Debtors are the people who owe you money. They are
supposed to receive invoices (account statements) on a monthly basis.
Debtor’s control means that someone in the company must ensure that the
accounts are paid. In most cases a friendly telephone call or a letter to
remind people are met with success in collecting payments that are in
arrears.
7. Design systems that work
You will soon realise that successful business management will challenge
you to make sound decisions on a regular basis. One needs management
information to make sound decisions. Information that applies in this case,
is the following:
How many clients does the business have?

How are the clients distributed geographically; in other words, how
many of them are close to the establishment, and how many come
from afar?
What are the monthly expenses?
How much money is needed to pay all the expenses and still maintain
capital in reserve?
During which months must VAT be paid, and if all debtors pay their
accounts, and if all expenses are paid, what amount for VAT must be
paid to the Receiver of Revenue?
Is the business still expanding?
Are there any unhappy clients?
Assessment
LO 3

financial skills.



records.
The qualities of a successful entrepreneur
Grade 7
THE SUCCESSFUL ENTREPRENEUR
Module 7
THE QUALITIES OF AN ENTREPRENEUR

In module one we looked at a brief definition of an entrepreneur and listed
some characteristics of entrepreneurs.In this module, you are going to
discover your own
entrepreneurial skills, judge and develop them, and also master some
important concepts from the world of business.
Activity 1:
To determine if you have the qualities to be an entrepreneur
[LO 4.1]
Am I an entrepreneur?
1. Respond to the statements that follow, being as honest as possible:
YES NO
I am hardworking.
I work according to a definite system.
I like working with people.
People like working with me.
People trust me.
I communicate well with people.
I like to take risks.
I am creative and bursting with new ideas.
I am happy to learn from my mistakes.
I have plenty of self-confidence.
I like to function independently.
YES NO
I do not give up easily.
I am able to adjust to change.
I complete the things that I start.

I am enthusiastic about things that I plan to do.
I am able to cope with pressure.
I like solving problems.
I am productive.
Personal satisfaction with a task is as important as

making money.
I am able to work well with money.
I am able to motivate other people to do their best.
This is a set of qualities that an entrepreneur should have. In areas where

you have indicated YES, you have already acquired necessary
characteristics of an entrepreneur. Where you have indicated NO, you need
to apply yourself to ensure the success of the business.
2. Thorough research that was launched in selected countries right across

the world by management teams identified ten core characteristics that
distinguish successful entrepreneurs from less successful entrepreneurs.
They are the following:
a) Searching for opportunities:
A successful entrepreneur is continually on the lookout for new

business opportunities and he/she utilises them. He or she also
embraces opportunities to obtain financial support, equipment,
premises, workspace, etc.
b) Perseverance:
Tries out different strategies to overcome problems.

Will make personal sacrifices to complete a task.
c) Commitment:
Accepts full responsibility for any problem that may occur.

Is prepared to work alongside workers to complete a task on time.
d) Demanding quality and effectiveness:
Strives to do things in such a way that all previous standards are

surpassed.
a. Taking risks:
Is prepared to take calculated risks.

Shows a preference for situations that require a measure of daring.
Setting objectives:
Has clear and specific short-term objectives.

Sets clear long-term objectives.
Systematic planning and control:
Develops and utilises logical step-by-step plans to reach objectives.

Continuously examines and evaluates alternatives.
Controls progress and switches to alternative strategies to achieve the
objective.
Searching for information:
Searches out new information about clients, suppliers and/or

competitors.
Uses contacts or information networks to acquire important
information.
Conviction:
Makes use of purposeful strategies to convince other people.

Self-confidence:
Has a firm belief in personal capability.

Acknowledges personal abilities to complete particularly difficult tasks
successfully.
3. What follows is an extract from a certain Mr Chin’s story of success.
Study it and see if you can identify any of the afore-mentioned

characteristics as part of Mr Chin’s outlook on life.
Mr Chin – The Story of an Entrepreneur
When Mr Sophonpanich was born on Friday, June 24, 1910 at Wa Sai in

Thailand, it was difficult to imagine that he would become one of the
richest men in Asia, and be the symbol of the Thai banking industry for one
generation. The name, Mr Chin, came from the last four letters of
Sophonpanich.
Mr Chin was born poor, the son of a sawmill clerk. He left Thailand when
he was five and spent twelve years as a young boy in the poverty-stricken
Chua Toa District in China. There was never enough food for him and his
four sisters. He only had four or five years of formal education, and half of
this time was spent working in the fields. Whenever it rained, he was called
out of the classroom to till the softened soil.
From this humble beginning he grew up to earn the honour of “Titan of

Thai Finance”, after building Bangkok Bank to become a major financial
institution holding a 30 % market share in the overall banking system of
Thailand.
How did he do it?
Throughout his life Mr Chin was an achiever. In whatever he did, he did not
only do his best, but the best. He was always trying to figure out how to do
his work one step better than anyone else, resulting in his excellent
performance at any job. He showed his character even at a very young age.
At the age of 15 he worked as an apprentice for a village chemist in China.

He learned the names of all the medicines in the shop, which resulted in the
owner of the shop trying to persuade him to become a doctor! He chose
other things instead, like furthering his studies. On returning to Thailand at
the age of 17, Mr Chin worked as a cook in a wood shop at Yosse.
He then worked as an indentured labourer assigned to clean the shop, load
wood onto horse carriages for clients, and to help the shop owner. While
working at the shop, Mr Chin would write letters in Chinese to his family in
China. His employers saw his beautiful handwriting, and made him a clerk.
It was perhaps at this time that he developed his sharp memory, which was
later to become one of his greatest assets in banking. As he sold wood, he
had to be able to work out the measurements of all types of wood for each
customer and the calculation had to be done in his head!
He was a modest man who disliked too much consumption. He had a long-
term view of things. This is shown by his investing the amount he had won
from a savings pool. It allowed him to open his own bookstore in
Pattanakorn. Many young men at that time would have spent the same
amount on pleasurable goods. Mr Chin was ambitious and always looked
towards the future. His small business grew to become the leader of
Thailand’s department store businesses, as his four-storeyed shop offered a
wide variety of products (from stationery to construction materials), selling
different types of items on each floor.
The growth of Bangkok Bank is a monument to Mr Chin’s entrepreneurial

spirit. He was a naïve young man when World War II came to an end, and
he got involved in the establishment of the bank after a casual discussion
among a group of close friends. Initially, he had thought how much fun it
would be to be a banker with lots of money to spend. But the growth of
Bangkok Bank into the giant that it is can hardly be called fun by anyone.
The early years were difficult, and the accomplishments could not be
attributed to luck at all. Mr Chin’s great skill, energy and foresight made the
Bank’s story so remarkable.
As World War II was ending, Mr Chin sensed that good business

opportunities were at hand. He set up Thailand’s first finance company,
Asia Trust Company Limited, dealing mainly in foreign exchange. It soon
became Thailand’s most influential and reliable source of foreign exchange
activity. Mr Chin had to work very hard, getting up well before dawn to
check the world exchange rates so that he could display the day’s quotations
before businessmen arrived at work. In no time, Mr Chin became known as
the best foreign exchange dealer in town. Anyone just had to tell him the
rates for the pound, dollar or baht (Thai currency), and he would give the
quote on the spot without using a calculator.
Mr Chin’s Asia Trust Company initially served as an agent for Bangkok

Bank whose original business involved currency exchange mainly with
Hong Kong and Singapore. Later, the bank experienced serious cash flow
problems as a result of over investment in property. Mr Chin, who was a
shareholder at the bank, was asked to take over the management. He
immediately sent a team of experts from his Asia Trust Company to launch
a big rescue mission. He used his wide range of business contacts and
connections to conduct major banking activities in international affairs,
currency and loans. Meanwhile, he appointed a trusted aide, Mr
Rojanasthien, to deal with the bank’s internal system. Mr Rojanasthien
applied proper management and accounting principles to solve the bank’s
liquidity problems.
Under Mr Chin’s competent management, the bank developed rapidly to

become the number one local bank by 1970. It has continued to maintain a
leading international position to this day.
Mr Chin loved his country. He viewed growth for Bangkok Bank in terms
of its concrete contribution to the Thai economy.
Mr Chin used all the information that promised to be useful to the bank. He
loved to read books that helped him in his daily work. He routinely started
each morning in the office by reading daily reports and calling for
documents he wanted. Though an old time banker, he was receptive to new
ideas, determined as he was to keep Bangkok Bank growing. He supported
the introduction of new technology and electronic banking in 1978 – 79, the
introduction of new management concepts, like management by objectives,
and allowing employees to own shares in the Bank.
Mr Chin was an effective administrator. He could easily put an issue to one

side after several hours of serious debate and immediately take up a new
issue without getting mixed up or losing sight of the matter at hand.
When problems or obstacles came Mr Chin’s way, he turned them into

advantages and opportunities. This was particularly dramatised sometime in
1958 when, after a political upheaval in Thailand, Mr Chin had to flee to
Hong Kong as an exile. He was labelled an economic criminal. He tried to
continue steering the bank from abroad, but found it useless. He quickly
started a new life and succeeded in setting up a flourishing rice trading
business, which continues to grow to this day. He also expanded Bangkok
Bank’s network overseas. The bank had already opened two overseas
branches in 1954 – one in Hong Kong and the other in Tokyo. During his
exile in Hong Kong he opened four more branches – three in Vietnam and
one in Taipei.
One of Mr Chin’s chief ingredients for success was his ability to develop
and cultivate business contacts over the years. Many times his contacts with
businessmen and high-ranking government officials made the achievement
of business goals easier.
In Mr Chin’s time it was difficult to be a good banker and a good trader at

the same time but he managed to be very good at both because he was very
close to leading businessmen and officials of the Thai government at the
same time. He had grown up with them and they all understood each other
well.
He worked himself and his people hard. To him, the task of growing was
most important and he was determined to win over those who wanted to get
rid of him in the banking industry. At the start there were no holidays for
him and his people for many months. They worked long office hours,
including Saturdays and Sundays in order to cope with the customers’
needs.
Unlike many successful self-made men, Mr Chin had almost no enemies at

all. No one really disliked him. He did not take advantage of people. When
others took advantage of him, he would just quit by selling out or taking
over the business. He believed that if someone was his enemy, he had to
win not by defeating, nor hurting that person, but by believing the other
person was his friend.
Thus did Mr Chin approach life, business and people.
Source: The Nation, Bangkok, January 1988

Activity 2:
To establish if someone is well-suited to become an entrepreneur
[LO 4.1]
Does Mr Chin display any of the characteristics mentioned at (b)?
YES NO
1. Searching for opportunities
2. Perseverance
3. Commitment
4. Requiring quality and effectiveness
5. Taking risks
6. Setting objectives
7. Systematic planning and control
8. Searching for information
9. Conviction
10. Self-confidence
4. Which characteristics can make a person into an unsuccessful
entrepreneur?
The most important driving force for any successful entrepreneur is related
to attitudes and motivation – inner qualities that can hardly ever be
acquired through any kind of training. Remember that all entrepreneurs do
not have all the necessary qualities, and good qualities that are driven too
hard can have a very negative effect on the business. It is never good, for
instance, to have too much self-confidence. This can lead to megalomania,
and make it difficult for the entrepreneur to see warning signals in the
business.
The following are some of the deficiencies or flaws for which an

entrepreneur should be on the lookout:
a. Setting unrealistic demands
Entrepreneurs are often in a hurry to be successful or to make money. They

want to achieve their objectives very quickly and therefore misjudge the
time and input that is really needed to make a success of their business.
a. Keeping ideas and recipes for success to themselves
They frequently want to do everything themselves and neglect to call for

help from other people. Through this they often make serious mistakes or
commit cardinal errors.
a. Allowing too many interruptions
Because entrepreneurs are eager to be involved in everything, they often

allow too many interruptions, of which many interfere with the success of
the business. For example: he or she wants to take all the telephone calls
and to talk to all visitors to the business, whether they have arranged an
appointment or not.
a. Working without a definite plan

Many entrepreneurs prepare a very thorough plan when they start off their
new business, but never look at it again once they get going. They feel that
they are clever enough to manage the business on instinct.
a. Neglecting to do “homework”
Entrepreneurs frequently are in too much of a hurry to start a business, or to

expand it, and therefore neglect to do proper market research and to
determine the strength of their competitors. They do not try to find out
whether there is anybody who might want to buy their specific services
and/or products.
a. Unwilling to give everything
Hard work and dedication is a prerequisite for a long-term successful

business. Personal sacrifices are vital.
5. A successful entrepreneur has to be willing to roll up his sleeves and get

to work:
Yes, if you want to be successful, you must be totally committed – prepared

to “eat and sleep” your business.
Assessment
LO 4
ENTREPRENEURIAL KNOWLEDGE AND SKILLSThe learner

will be able to demonstrate entrepreneurial knowledge, skills and
attitudes.

4.1 compares essential characteristics and skills needed to be
entrepreneurial from two different simple case studies of practising
entrepreneurs in own community;
What is a market?
Grade 7
Module 8
WHAT IS A MARKET?
“An employee questions that which is already part of the business.”
“An entrepreneur questions the reasons for things not being part of the
business.”
What is a market?
Products and services are bought and offered for sale on the “market”. Most
people think of the market as an informal shopping centre where you can
buy fruit, vegetables and handmade articles. But a “market” does not have
to be a fixed place. Wherever there is contact between buyers and sellers,
we have a market. This contact does not necessarily have to take place
physically between persons. It could happen by telephone, computer or
even through an advertisement in a newspaper.
The word “market” is also used to refer to a group of buyers. The market
for school clothes, for instance, comprises the learners at school and their
parents.
1. Different types of markets
Consumers buy goods and services from manufacturers at the goods and
services market.
Manufacturers, again, buy the four factors of production (land, capital,
labour and entrepreneurial skills) from the factors market. These four
factors are required for producing goods and services.
Activity 1:
To make inferences from the interaction between buyer and

seller
[LO 1.4.1]
2. Study the following representation and:

a. try to find six examples of contact between buyer and seller;
b. see if you are able to identify products/services that are sold on the
factors market.
c. In your groups, discuss the different types of market where
manufacturers will be buying the four factors of production.
Assessment
LO 1

Assessment Standards(ASs)
1.4 describes and debates the power relationships, economic rights

and responsibilities between:
1.4.1 consumer and producer;
1.4.2 employer and employee;
1.4.3 government and business.

The price factor
Grade 7
Module 9
The price factor
The price of goods/services is determined by the manufacturers (sellers)

and consumers (buyers). The price is influenced by the supply (the
availability of a product/service) and demand (the number of people who
want a product or service and are able to pay for it).
1. Demand
When clients want a product and are willing to pay for it, we say that there
is a demand for the specific product. There has to be a demand for a product
before a manufacturer can sell it. Demand does not only have to do with the
need to have a product or a service, but also with the willingness and ability
to buy it at the price changed for it.
ANDREW’S GRAPE JAM
Andrew and his mother decided to earn extra money by selling grape jam at
the local craft market. Mrs Jeffries would buy the ingredients and make the
jam. Andrew would help his mother to seal it in jars and they planned to
sell it at the market on Saturday mornings.
Before starting to boil the jam, they decided to test the market to see
whether people would be interested in buying their product. Mrs Jeffries
therefore boiled a few jars of jam and asked their friends and family if they
were interested in buying it and how much they would be willing to pay for
it. Everyone was encouraged to taste some of the jam before making a
decision.
Andrew entered the sales on a table as follows:
Price per jar Number of jars requested (sold)
R6,00 5
R5,00 9
R4,00 16
R3,00 24
He also presented it in a graph to indicate the demand at different prices:

The line on the graph indicates the way in which the change in price
brought about a change in demand. It is referred to as the demand curve. It
specifies the amount of a product according to the demands for it at a
specific price.
Activity 1:
To establish if someone is well-suited to become an

entrepreneur
[LO 1.4]
Study Andrew’s graph carefully and answer the following questions:
What was the effect of the price of the jam on the demand for the jam?
Is this phenomenon true for all products?

Are you able to think of any product where price does not affect the
demand of the product?
NOBOBY WANTED TO BUY THE JAM AT MORE THAN R6,00 PER

JAR.
2. Supply
Sellers provide the market with goods and services. The supply of
something has to do with the quantity that is available for sale. The
manufacturers or sellers who offer goods want to sell as much of it as
possible at the best prices possible. They want to make as much profit as
possible.
ANDREW’S GRAPE JAM (continued)
Andrew and his mother calculated that they were not able to make and store
more than 100 jars of jam per week.
They would like to sell the jam at R6,00 per jar, but they know that
everybody would not be willing to pay R6,00 for it. If they have to make
the jam at R3,00 per jar, they are not willing to sell more than 25 jars at that
price. They could store the rest and sell it at a better price, later.
Andrew drew up another table to indicate how many jars they were willing
to sell at the specific prices:
Price per jar Number of jars that they would sell at the price
R6,00 100
R5,00 75
R4,00 50
R3,00 25
The supply curve would then look like this:

3. Market price
Before goods or services can be bought or sold, both seller and buyer must
agree on the price to be paid. Prices normally are determined by the
manufacturers or sellers. The consumer can decide whether he or she is
willing to buy it at that price, or not. At some markets buyers and sellers
negotiate with one another until they reach a point at which both are
satisfied with the price.
A combination of the supply and demand curves may illustrate this

phenomenon best.
Remember:
Sellers want to sell as much as possible at the highest prices.

Buyers want to buy as much as possible at the highest prices.
They have to come to an agreement somewhere!

Supply and demand meet at the price where the amount of the demand is
equal to the amount supplied.
Activity 2:
To make inferences about the interaction between buyer and

seller
[LO 1.3]
a. Group discussion: Who benefits most when the price is higher than
the market price and who benefits most when the price is lower than
the market price?
b. Are you able to think of reasons why a product may cost less/more
than the market price?
Assessment
LO 1



Consumer rights between buyer and seller
Grade 7
Module10
Consumer rights between buyer and seller
Whenever goods or services change hands (are sold) an agreement is

entered into between the seller and the buyer. The buyer undertakes to pay
the requested price and the seller undertakes to deliver the goods/services at
that price. According to this seller-buyer contract the buyer can claim the
following rights:
if the goods are dangerous in any way, there should be a warning;

the goods must be of reasonable quality and undamaged;
the goods may not be second-hand (unless advertised as such); and
the goods must be provided with the necessary, easily-understood
instructions.
We naturally expect people to be honest, fair and trustworthy in their

dealings with us. The principles that form the foundation of good business
are referred to as business ethics.
Both buyer and seller have the right to expect the other party to act in an
ethically correct manner. The seller has the right to expect that he/she will
be paid properly for his/her goods or services, while the buyer has the right
to expect that the seller will not try to mislead him/her.
The South African Consumer Council is a South African body that exists to
hear the complaints of dissatisfied parties.
ALLAN BUYS HIS FIRST MOTORBIKE
Allan Jones is 16 and he buys his own motorbike with money saved from
delivering newspapers. After five days he discovers that the motorbike’s
engine heats up too much. On the next day, the machine breaks down
completely. Very dissatisfied, he returns the motorbike to the dealer and
explains the situation.
After a short conversation, the dealer realises that Allan had used neat fuel
only, which caused extreme friction and over-heating of the two-stroke
engine. In a friendly manner, he pointed out the warning in large, clear
letters on the fuel tank of the motorbike. It stipulates that a tin of two-stroke
oil has to be added to the contents of the tank whenever it is refilled with
fuel, which Allan never did.
Activity 1:
To decide if people acted correctly
[LO 1.4.1]
Do you think the dealer should have explained the fuel mixture to
Allan when he sold the motorbike to him? Why?
Do you think that the dealer misled Allan?

What do you think Allan should do next?
How would you have handled the situation if you had been the dealer?
Friday it will be market day for the intermediate phase for the second term.
Mrs Watson runs the school’s tuck shop in her private capacity.
Activity 2:
To determine if the economic rights of a producer are respected
[LO 1.4.1]
Discuss the following in your groups:
May the learners ask Mrs Watson to close her tuck shop on the
particular day?
What can the sellers do on market day to persuade the buyers to come
to their stall rather than to the tuck shop?
Which ethical principles should be applied by the owner of the tuck
shop, as well as by the market day sellers?
Write a short report on how you think the parties that are involved
should deal with the situation so that everyone could benefit by it.
The state’s responsibility to the business world
The economic functions of the state are to promote efficiency, impartiality

and stability.
1. Efficiency
The state must ensure that some businesses do not hold the monopoly or
sole rights to deliver certain services, because a lack of competition would
allow these businesses to fix high prices.
Some businesses pollute the air and water and bury hazardous wastage
under the ground. Government can prevent pollution by issuing regulations
that force companies to do something about the matter.
2. Impartiality (fairness)
Government cannot accept that only some people earn big salaries and live
prosperously.
Government can provide poorer people (the lower income groups)

with specific subsidies in terms of housing, medical care, caring for the
aged, etc. so that they can also afford these services.
It is very difficult to bring an end to all poverty, but by taxing income
and wealth, poverty can be relieved to a large extent.
3. Stability
Government is mainly responsible for economic stability and economic

growth. The following problems can be addressed by government:
inflation
unemployment
a low growth rate
This can be done by:
fixing interest rates

raising taxes
controlling state expenditure
Assessment
LO 1



Overview of SA's economy (1910 -1948)
Grade 7
ECONOMIC POLICY DIRECTION (1910 – 1994)
Module 11
Overview of South Africa’s economy (1910 – 1948)

After the end of the Second Boer War there were four independent
provinces in South Africa: The Cape Colony, the two former Boer republics
(Transvaal and the Orange Free State), and Natal. Each had its own
parliament. In 1910 they were united to form the Union of South Africa.
We are going to study the development of South Africa’s economy

according to a time-line. Explanatory notes will be provided throughout, to
shed some light on the important moments in the development of the
economy.
a) The regime of the two generals – Botha and Smuts 1910 to 1924
When the Union of South Africa was founded in 1910, the three important
parties joined forces and established the South African National Party. Gen.
Louis Botha was the prime minister. The opposition parties formed the
Unionist Party. Both parties envisaged unity between white Afrikaans- and
English-speaking people, establishing one South African nation.
Botha’s aim was to unite English- and Afrikaans-speakers. He made it his

mission in life to bridge the gap between the two groups.
Hertzog fought for the interests of the Afrikaner.

The continuing friction between Botha and Herzog was the reason why
Hertzog founded his own party, the Nationalist Party.
Any male citizen who was a British subject could vote if he:
Could write his name, address and occupation.

Earned more than ₤50 in wages per year, or resided on a property to
the value of ₤75 or more.
These qualifications eliminated most black males, even if they inhabited

traditional (ethnic) land.
Activity 1:
To establish what percentage of each population group made up the

country’s total population
[LO 2.1]
In 1910 the population of the Union of South Africa comprised the

following:
whites – 1 278 000

Coloureds – 517 000
blacks – 3 956 000
Asians – 148 000
What percentage did each population group make up of the total

population? Write down the percentage next to each population group.
Activity 2:
To establish what percentage of men in each population group had the
vote
[LO 2.1]
What percentage of men in each of the population groups had the vote?
Write down the percentage next to each population group.
white males – 497 700

Coloured males – 46 200
black males – 76 000
c) Native Land Bill (Act on Possession of Land) 1913
The most important act passed during this time was the Naturellen Grond
Wet which became of force in June 1913. This act allocated land to blacks
in their own areas (reserves) and forbade the selling of white land to blacks,
and black land to whites.
This act was the result of people’s fears and concerns about blacks who
entered white areas. The large majority of these blacks were squatters who
settled on private and state land.
This was the first act in the Union of South Africa that resulted in separate
areas.
d) The founding of the ANC
The South African National Congress, later the African National Congress
(ANC) insisted on the abolishment of this act. In February 1914 they sent a
delegation to London, asking the British government to abolish this act, but
without success, for the British government was not prepared to get
involved in South African affairs.
This movement was founded in Bloemfontein in 1912 in an effort to unite

the majority of the black population, and defend their rights and freedom.
Farming on the halves
After the second Boer War, especially, many white Afrikaners had no jobs.
They lived on farms as peasants, where they cultivated some land for their
own benefit.
Large areas of white farms, particularly in the Free State, were uncultivated
because the farmers concentrated mainly on sheep and cattle farming. As
white farmers were reluctant to switch over to grain farming, they gave
some of the land to black farmers to cultivate, in exchange for part of the
crop (usually one-third). The black farmers provided the ploughs, oxen and
seed, enabling them to plough, sow and harvest. These black farmers were
called share-croppers. They formed a big threat to the white peasants. The
peasants were reluctant to obey orders and they were also unwilling to work
on the lands together with the black labourers. Another important factor
was labour. black labour was in high demand on the gold-mines.
e) Urban Areas Act
Squatter towns were fast spreading on the outskirts of the towns. These
squatter towns were poorly managed by municipalities. Inhabitants did not
receive much in exchange for the taxes and levies they were paying. There
was a shortage of sanitary amenities, and serious diseases such as
tuberculosis often broke out in the squatter communities.
General Smuts decided that it was the government’s duty to provide proper
housing for urban blacks and manage the shanty towns in a proper way,
otherwise it would put the white civilisation to shame.
Blacks, however, would not possess property in these shanty towns. The
government regarded their presence solely as a labour force for the benefit
of the whites. Once their labour became redundant, they were to return to
the reserves.
By introducing these two laws the government of the South African Party
lay the foundations of segregation.
f) Mines and Works Act 1911

From the beginning the labour force in the mining activities was divided
into small groups of schooled and semi-schooled white labourers and a
much bigger labour force consisting of unschooled black labourers. Many
white labourers came from outside the borders of the country, and their
remuneration was considerably higher than that of the white workers who
were citizens of the country. The blacks, on the other hand, received a very
low remuneration.
The goldmines followed the policy of replacing schooled and semi-

schooled white labour with cheaper, unschooled black labour.
De Wet op Mijnen en Bedrijfen (1911) laid down certain working conditions

and safety precautions. Unfortunately regulations regarding the issue of
certificates of competence for certain occupations in the mines, also
discriminated against blacks in the long run. The pact-government made no
secret of the fact the interests of the white mineworkers were to be served
above those of the black workers. When the act was amended in 1926
competence certificates were limited to certain occupations such as
machinists, surveyors and dynamite operators amongst whites and
Coloureds only.
Activity 3:
To determine the racial composition of mineworkers on the goldmines

in 1907
[LO 2.1]
In 1907 only 18% of the 18 600 white mineworkers were not immigrants.
How many foreign workers were there?

How many were South Africans?
Activity 4:
To determine the contribution of the three most important economic

sectors to the country’s gross interior product
[LO 2.1]
In 1925 the gross domestic product was R537 million (in terms of its value
in 1982). Calculate the financial value of each sector’s contribution and
write it next to the percentage.
Agriculture 21%
Mining 16,2%
Manufacturing industry 7,8%The government had decided that the
manufacturing industry were to expand to provide work for more
whites in that area, as the mines offered whites only a limited number
of job opportunities. In the early 1920s mining houses started to invest
a bigger portion of their profits in the local manufacturing industry.
g) Government enterprises
Hendrik van der Bijl
(1887 – 1948)
Hendrik van der Bijl is regarded as the father of the twentieth century’s
industrial revolution in South Africa.
In 1920 gen. Jan Smuts offered him the position as technical consultant,
hoping that this brilliant young man would contribute towards
industrialisation in South Africa.
From the outset Van der Bijl realised that South Africa would first need an
electricity network before industrialisation could be attempted. He wrote
the Electricity Act that led to the establishment of the Electricity Supply
Commission (ESCOM) in 1923, which would provide South Africa with a
power supply. The assets of the company grew dramatically during Van der
Bijl’s lifetime, and increased thirty-fold before his death. In 1948 there were
16 100 people in the company’s service.
Van der Bijl realised that no country could industrialise successfully

without having two basic commodities: cheap, accessible electricity and
cheap steel. At that stage South Africa depended wholly on imported steel
from Britain.
In 1928 the Act on the South African Steel Corporation was passed. Van der
Bijl was the first chairman of ISCOR. The first factory was erected outside
Pretoria, and a second plant was constructed at Vanderbijlpark in 1945. This
concern was founded just before the onset of the Big Depression, and his
determination to make the concern a success immediately bore fruit.
Adapted from: Hulle het ons gevorm. Kaapstad, Human & Rousseau
(pp.334-338).Article by Pieter Kapp.
h) The government under the Nationalist Party
The policy of “Civilised labour”

The Nationalist Party came into power in 1929. The government wanted to
create jobs for unschooled and semi-schooled workers, even at the cost of
other white workers.
The government made a difference between two kinds of labour:
There were those who rendered “civilised labour” and whose earnings
would enable them to maintain a decent standard of living.
As opposed to that, there was “uncivilised” labour, rendered almost

exclusively by black workers, and whose wages would only provide for the
needs of “barbaric and underdeveloped persons”.
In practice this meant that jobs for whites would be better paid than those of
blacks.
The government encouraged businesses to employ whites, and punished
them if they failed to do so. In the allocation of contracts the state gave
preference to concerns employing whites only. In the case of many business
concerns this meant that unschooled black labourers were replaced by poor
whites.
The government instructed the civil service to replace “uncivilised labour”

with “civilised labour”, especially in the railways, that became the biggest
employer of white labour.
Activity 5:
To express the express the share of the two population groups in the
manufacturing process in terms of percentages
[LO 2.1]
In 1930 the population figures were as follows:
White population 1 801 000
Black population 5 585 000
Whites in manufacturing 91 024
Blacks in manufacturing 90 517

a. What percentage of the white population was employed in the
manufacturing industry?
b. What percentage of the black population was employed in the
manufacturing industry?
c. What percentage of the population was white?
d. What percentage of the population was black?
e. What percentage of the total population was involved in
manufacturing?
i)Government under the United Party
In 1934 the Nationalist Party and the South African Party joined forces to
form the United Party.
The rapid urbanisation of blacks and the steep rise in numbers increased
existing pressure on the government to recall the black vote in the Cape
Province. The Act on Native Representation that was promulgated in 1936,
recalled the black vote.
At the same time the Native’s Trust and Land Act made provision for more
land to be bought for the reserves. The reserves now made up 13,5% of the
total land surface of the Union of South Africa.
In 1937 the Native Laws Amendment Act in fact forbade blacks from rural
areas to go and look for work in the cities.
j) The economic impact of the Second World War
The war was responsible for a turning point in the South African economy.
Enormous amounts of warfare material were needed to furnish the South
African troops. This was an incentive for the government to manufacture a
wide range of goods themselves. Large industrial government concerns
such as the Railways, the mines, the Mint and Iscor made a significant
switch to the production of material for warfare.
Eventually South Africa supplied not only its own forces, but also its allies
with weaponry, amongst others anti-tankguns, ammunition, (18 million
rounds of ammunition per month), mortar bombs, gun supplies, etc.
Various private firms were also encouraged to adapt their facilities for the
manufacturing of war supplies.
At the time South Africa switched its mining economy to a mainly

manufacturing economy. Besides, because of the war it had become
practically impossible to import goods such as mining equipment. The
country had no choice but to manufacture whatever their industries needed.
After the war the South African manufacturing industry was not only in a
position to manufacture consumer goods on a large scale, but also to build
its own machinery for this purpose.
This major industrial expansion during the war years took place while many
schooled white labourers were serving in the army. As a consequence black
and Coloured labourers replaced the whites. Women of all races were also
increasingly allowed to enter the labour market.
k) The general elections of 1948
The Nationalist Party came into power with a small minority of five seats.
Under the leadership of Dr. D.F. Malan, the prime minister, the South
African society was reorganised according to the ideals of Afrikaner
nationalism.
Assessment
LO 2
SUSTAINABLE GROWTH AND DEVELOPMENTThe learner will
be able to demonstrate an understanding of sustainable growth,
reconstruction and development, and to reflect critically on related
processes.
2.1 collects information on the influence of apartheid economic

policies on ownership, poverty, wealth and quality.
2.2 identifies steps required to redress socio-economic imbalances and

poverty.
Memorandum
Activity 1
Add the four population figures together = 5 899 000
Whites: 1 278 000 x 100% = 127 800 000 divided by 5 899 000 =
21,66%
Coloureds: 517 000 x 100% = 51 700 000 divided by 5 899 000 =
8,76%
Blacks: 3 956 000 x 100% = 395 600 000 divided by 5 899 000 =
67,06%
Asians: 148 000 x 100% = 14 800 000 divided by 5 899 000 = 2,51%
Activity 2
Total number of qualified voters = 619 900
White males: 497 000 x 100% = 49 700 000 divided by 619 900 =
80,17%
Coloured males: 46 200 x 100% = 4 620 000 divided by 619 900 =
7,45%
Black males: 76 000 x 100% = 7 600 000 divided by 619 000 =
12,26%
Activity 3
18% of the white mine-workers were South Africans

82% of the white mine-workers were immigrants
____
100% = 18 600 white mine-workers
1% = 18 600 divided by 100 = 186 white mine-workers
18% = 186 white mine-workers x 18% = 3 348 white South Africans
82% = 186 white immigrants x 82% = 15 252 white immigrants
Activity 4
21% + 16.2% + 7.8% = 45%
45% = R537 000 000,00
1% = R11 933 333,00
Agriculture: 21 x R11 933 333,00 = R250 600 000,00

Mining: 16,2 x R11 933 333,00 = R193 319 946,00
Manufacturing industry: 7,8 x R11 933 333,00 = R93 079 974,00
Gross domestic product: Total monetary worth of these sectors in one

year.
Activity 5
Total of white and black population:

Total of Whites and Blacks in the manufacturing industry:
a. 91 024 x 100% = 9 102 400 divided by 7 386 000 =1,23%

b. 90 517 x 100% =9 051 700 divided by 7 386 000 = 1,23%
c. 1 801 000 x 100% = 180 100 000 divided by 7 386 000 = 24,38%
d. 5 585 000 x 100% = 558 500 000 divided by 7 386 000 = 75,62%
e. 1,23% = 1,23% = 2,46%
A quarter of the population was white and they filled half the jobs in the
manufacturing industry. Ask the learners to discuss the following: “What
percentage of the employees was “civilised labour” and what percentage
was “uncivilised labour”? According to the government policy the white
employees would be considered to be “civilised” labour, and the black
employees as “uncivilised” labour.
Overview of SA's economy (1948 - 1994)
Grade 7
Module 12
Overview of South Africa’s economy (1948 – 1994)

Apartheid in society
a) Separate residential areas
In the early 80s many black people worked in cities and lived in black
residential areas (townships), but they were not allowed to own property
there. They were obliged to carry a “pass”. Government did not build
enough houses in the black residential areas and conditions were often very
unsatisfactory. Black residential areas were overcrowded and hostels were
built to try and address the problem. Hostels, however, could not
accommodate families. It was illegal for a black woman to live with her
husband if she did not have a job. This led to the breaking up of families
and there were many social problems. Many poor women and children
remained in the homelands, waiting for money to be sent home from the
cities.
b) Apartheid education
The standard of education in black schools deteriorated over the decades,

particularly since the missionary schools were closed down. Human
resources among all race groups were not developed by former
governments and many adults never realised their full potential. People
whose knowledge and skills remained undeveloped could not make a
contribution to the development of the country’s economy.
In 1952 only 3% of the black children went beyond primary school. In 1937
there were only four high schools for coloureds and only 182 learners
passed matric.
c) The economic deterioration of the “homelands”
The homelands were a very expensive venture of the South African

government and millions of rands were spent on this “apartheid” institution.
white entrepreneurs received financial encouragement to establish
industries on the borders of the homelands, thereby creating jobs for their
citizens. In this way the South African government tried to discourage
labourers to work in the cities. However, these efforts were unsuccessful.
Few entrepreneurs were prepared to risk building factories at such long
distances from the well-developed industries. The massive expenditure of
the South African government made no contribution to the prosperity of
inhabitants in the homelands.
d) Apartheid becomes economically obsolete
After many years of unfair legislation there was lots of financial pressure on
the present government to restore the balance. The following areas in
particular need to be focussed upon:
equal rights in education;

provision of basic services such as water and electricity for all;
building sufficient homes, a safe living environment for all and the
support of self-build projects;
building good roads to and from black residential areas.
Restoring socio-economic imbalances
Grade 7
Module 13
Restoring socio-economic imbalances

1. Economic growth
In a developed economy most of the citizens make a contribution of some

kind. In South Africa many citizens do not form part of the working
fraternity. People can only join the work force if they possess a certain
degree of knowledge and skills. Inhabitants who form part of a working
fraternity earn more money and the general standard of living in such
families is higher. A low family income is often the reason why a large
percentage of school leavers have to forgo suitable training and the
acquisition of the necessary skills.
It will require a lot of planning and dedication on the part of all role-players
to create opportunities for as many people as possible to contribute to South
Africa’s economic growth. Entrepreneurship should be encouraged, labour
must be focussed and productive, and labourers must be properly schooled.
Even if the government passes laws to provide the necessary structures,
only the inhabitants of the country themselves can really make the economy
grow.
2. Ubuntu
Everybody must become involved and greed must be replaced with feelings
of human fellowship. Growth is possible only where there is a spirit of
unselfishness. South Africa needs Ubuntu.
UBUNTUCase Study: Joseph’s Story
Joseph was born in Transkei 30 years ago, as the fifth child in a family of
eight. His father worked in a clothing factory and his mother stayed at home
to care for the children. At the age of 22 Joseph decided to join his father in
the big city and find a job. This would enable him to contribute to the
family’s income and raise their standard of living. Just outside Cape Town
Joseph and his wife moved into a wooden shack in another family’s back-
yard. It was small and there was no privacy. In winter-time it was flooded,
but Joseph would not give up and kept looking for a job.
One day, while walking along a main road, he came across a motorist who
was having trouble with his car. As a child Joseph acquired some
mechanical knowledge by watching while his uncle serviced other people’s
cars to earn a living. He offered his help and it was not long before the
motorist, Mr. Wall, could move on, but not before he had noted down
Joseph’s particulars.
At a time when Joseph was getting rather despondent and thought that he
would never find a job in the city, he received a call from Mr. Wall. His
steel firm in Somerset West was opening a branch in Durbanville and Mr.
Wall was looking for a handyman who could monitor and manage all the
maintenance in the factory. He was so impressed by Joseph’s helpfulness
and mechanical expertise that he invited him to come for an interview.
Before long Joseph was receiving in service-training. He was sent for a

driver’s licence so that he would also be able to do deliveries. The steel firm
benefited from Joseph’s excellent and reliable services, and Joseph enjoyed
some very good perks.
Early one morning, after only three months in his first job, Joseph was
struck down in a taxi cross-fire. He was severely injured and had to spend
four months in hospital until the reconstructive surgery was completed. Mr.
Wall’s steel firm, knowing all about Josephs qualities, in the meantime
employed Joseph’s wife to help the family survive. Since then Joseph has
been back at work on a full-time basis, although Mr. Wall had to make
certain amendments to his job description, for due to his injury he was no
longer allowed to lift heavy objects. Mr. Wall also started training Thandi,
his wife, to help with administrative tasks.
Joseph could soon afford his own home an even bought a light vehicle to
commute safely to and from his work.
Today Joseph is the factory manager. He earns a good salary, while Thandi
stays home caring for their three children.
What at first seemed to be a hopeless situation for Joseph, turned into a

bright future with the help of somebody who believed in him. Through
Joseph’s honesty, perseverance, his willingness to learn and his hard work,
he managed to secure a good future for himself and his family, while
making a significant contribution to the country’s economy. Joseph’s sons
will also be able to enter the job market more confidently one day.
In Joseph’s story, who displayed UBUNTU?

Do you know more people who practise UBUNTU? Explain briefly
how this person lives out the principle of UBUNTU.
In 2004 South Africa celebrated its first decade of democracy. Over a

period of ten years, and thereafter, much has been done to try and redress
economic imbalances.
Activity 1:
To discuss a topic and formulate a definition thereof
[LO 2.2]
In groups, discuss what UBUNTU means and write a short explanatory
definition.
Discuss the different groups’ definitions and ask the class to compile
one clear definition.
Activity 2:
To answer questions relating to a specific issue
[LO 2.2]
This is how John Monqu describes the experiences of his everyday life.
“We now have brick houses which are not as cold and wet in winter. There
is a tap with clean, running water on the corner of every street, and it is
accessible to all. Children are sick less often and the clinic supplies good
medicine if somebody becomes ill. All my children can read and write,
because the school bus picks them up on the street corner in the morning,
and drops them in the afternoon. We have not had a fire in our area for a
long time, as people now have electricity in their homes, so that they do not
have to resort to paraffin stoves and candles. However, our work is still a
problem. Most of the industries are far from here and taxis do not offer a
very reliable and safe means of transport. At night it is still very dangerous
outside. Gangster activities are rife and the police are not visible enough to
really make a difference.”
a) First study this excerpt carefully and then…
list the changes (improvements) that have already been effected by the
present government, according to John;
also identify the areas that still need attention;
compare John’s view of the changes with changes you are
experiencing in your own communities.
b) Conduct interviews with other grade 7 learners and write down their
ideas on how government can still make adjustments to redress
imbalances.
Assessment
LO 2

processes.

2.2 identifies steps required to redress socio- economic imbalances

and poverty.
Memorandum
According to the case-study:
Mr Wall
Take note of the positive effect it has on the lives of other people
Activity 1
Learners formulate their own definitions of Ubuntu with reference to

the case-study.
Activity 2
Houses (built of bricks)
Drinking water from a tap

Clinics
Access to schools
Transport to schools
Electricity supply
Far from workplace
Poor public transport
Unsafe residential areas
Crime
Central issues of the Union of SA and the new SA
Grade 7
Module 14
Central issues of the Union of South Africa and the New South
Africa
1931
In 1931, twenty-one years after the founding, or the coming of age of the
Union of South Africa in 1910, things looked rather gloomy.
On the economical front things were not going well:
The world was in the grip of a depression since 1929.

Within four years, the production of the manufacturing sector dropped
by one-fifth.
The contribution of agriculture was down 50%.
Capital was flowing out of the country.
Jan Smuts wrote:
“The country’s economy had never been put to a test of this nature.”
Three crises in particular were identified:
1. white Afrikaners and the English speaking community were not united;
the gold-mines had a limited lifespan the manufacturing sector was
struggling.
(Problems on the economical front)
2. Farmers were dealing with serious agricultural challenges. The country

was caught in a race against time to produce enough food for a fast-growing
population.
(Problems on the agricultural front)
3. The black population was growing rapidly. This gave rise to white fears
that numbers would eventually play a decisive role. What if the blacks took
revenge? Would the blacks not one day bring harm to the whites who
subjected them to their power?
(Problems on the racial front)
2006
What is the situation 12 years after the establishment of a “New South

Africa” regarding the same three aspects that were considered in 1931
(on the previous page)?
1. Today white unity is not the issue any more; it is national unity that
counts. A recent opinion poll showed that a rift is developing between black
and Indians on the one hand, and white and Coloured people on the other.
The first group (60%) believe that relations between the two groups in
question are improving, while the second group (40%) are disillusioned,
especially as a result of:
The distorted image of black empowerment and preferential treatment

of blacks when posts are filled.
The change in name of places and buildings.
Interference in the selection of sports teams.
2. Over the past seventy years the following happened on the economic
front:
The country has freed itself from its dependence on gold and
agriculture, and a strong manufacturing sector was established.
The country has managed to provide for its own provision of food.
Market-oriented capitalism based on private ownership is unrivalled
today. But the problem that South Africa cannot provide jobs for all its
people persists. Strong unions and low productivity have caused the
country to lag behind its competitors. And now we are facing the
nightmare of Chinese competition at our front door. About 40% of the
country’s workers have no jobs.
3. One fear has become a reality, namely that a fast-growing black

population would eventually undermine white authority. This happened in
the 1990s.
(This information comes from an article by Hermann Giliomee in Die

Burger of 10 August 2006.)
Market-oriented Capitalism
An economic system where most of the assets (money and land) are in
privately owned hands. In a communist country it would be owned by the
state.
Chinese competitorship
Because China has such a large population, human labour is extremely

cheap. Items such as clothing in particular, is manufactured at very low
costs. These cheap articles are sold across the world at very low prices.
Local manufacturers cannot compete with these prices – hence the loss of
business and eventually they have to close down their factories. People lose
their jobs and in the process unemployment figures soar.
Activity 1:
To understand the meaning of the word depression

[LO 2.1]
Make a tick next to the correct meaning of the word Depression:
When there is no economic growth . . . .

When there is a world-wide crisis . . .
When there is a laxity in trade . . . .
A tip
• When the value of money decreases, we speak of the depreciation of a

money unit.
• When we say someone suffers from depression, it means that a person is

constantly feeling miserable, or not in good spirits. The person’s mood is
very low. In that case someone is said to suffer from depression.
Therefore we can say that the economy is “depressed” of “down” when

there is a depression.
Activity 2:
To determine what products are imported or exported
[LO 2.1]
In some cases South Africa produces enough food, to the effect that the
country can also export some of it.
Tick the foodstuffs that are being imported or exported:

Product Export Import
Deciduous fruit
Grapes
Wine
Wheat
Mealies
Sugar
Meat
Dairy products
Assessment
LO 2

processes.

2.2 identifies steps required to redress socio- economic imbalances

and poverty.
Memorandum
This learning unit offers guidelines to the learners which will enable them
to attempt projects and tasks on some of the following:
affirmative action
trade agreements with other countries in Africa and elsewhere
the manufacturing industry in South Africa
Import of agricultural products from other countries (meat and dairy
products from Australia and South America, wheat and maize from
North America, etc.)
Activity 1
All three possibilities are correct.
The learners can do a group task on the Great Depression of 1929 and what
the consequences were for the people of this country. Personal contributions
of older members of the family would be invaluable.
Activity 2
South Africa’s main agricultural products are listed in the table. When
there is a surplus, export to other countries might take place, and
shortages might necessitate the import of products.
The trade balance might also require imports or exports to or from certain
countries. Sometimes products are imported at lower prices than what local
farmers can produce. At the present moment dairy products are more
expensive than the imported products.
Farmers who produce deciduous fruit, on the other hand, get higher prices
for their products on the overseas market because of the favourable
exchange rate at the present moment.
It can therefore be said that the products in the table are sometimes
exported, and sometimes imported.
Electronic banking services
Grade 7
TELECOMMUNICATION SERVICES
Module 15
ELECTRONIC BANKING SERVICES
Introduction
What is telecommunication?
To send or transmit signals over long distances to make communication possible.
We listen to the radio, watch television, or speak to our friends on the telephone every
day: either from a public telephone or via one of our most prized possessions – the
cell phone!
Radio networks, telephone networks and television networks enable us to

communicate over long distances.
Apart from that, computer networks are fast becoming the most important network in
all areas of life. You only have to think of the Internet, e-mails and internet-faxes, to
name but a few.
The Internet is a worldwide network of computers. The worldwide web (www.) is a

global information space where people can write and read via computers linked to the
Internet. Within seconds we can communicate with other people or institutions right
across the world.
Also businessmen and -women and companies use these networks to run their
companies and conduct their affairs.
Electronic banking services

1.Autobank Services
Business owners are busy people who cannot afford to spend too much time on
banking matters. Fortunately banks now offer various time-saving electronic
solutions.
All people can have access to electronic banking services. In each town or city the
different banks provide electronic facilities for the benefit of their clients.
Even the bigger garages offer automatic banking facilities, called autobanks, where
people can do their banking without queuing inside the bank. The following
transactions can be done at an autobank:
draw cash
deposit money or cheques
get a balance enquiry
get mini-statements
make internal account transfers
2. Online Banking Services
This service makes it possible to conduct your banking from the comfort of your
home or office.
Cell phone Internet Services
This system allows you to access the bank’s cell phone banking service via the
Internet using your cellphone. The following transactions can be conducted:
Get balance enquiries

Make account payments
Make inter-account transfers
Get mini-statements of the last five transactions
Recharge MTN and Vodacom prepaid airtime
Increase or decrease your overdraft limit
3. Telephone Banking Services
Your telephone gives you access to your bank accounts 24 hours a day, seven days a
week. You can do your banking from your home or office, from your car, and even
the beach.
Once you have registered for telephone banking services, you can:
make payments
transfer money between your linked accounts
receive fax confirmation of transactions and copies of your statements
get balance enquiries on all your linked accounts
increase or decrease overdraft limit
recharge prepaid airtime on cell phones
confirm transactions per fax
receive statements per fax
4. Internet Banking
This facility gives you access to you personal and business accounts online, anytime,
anywhere. The service is available seven days a week, 24 hours a day. The system
gives you the freedom to choose your own banking hours, giving you greater control
of your finances. It’s secure, fast and easy to use.
This system offers you the following:
get provisional statements

make account payments
make a once-off payment
set up future-dated payments
set up repeat payments
make inter-account transfers
stop debit orders and cheques
increase and decrease overdraft limits
Activity 1:
To indicate the different services offered by each type of banking

service
[LO 3.4]
Use a tick or cross to indicate the service offered in each column.
InternetBanking TelephoneBanking Cell
phoneBanking
Provides an
up-to-date
balance
Provides
mini-
statements
Provides
provisional
statements
Make
account
payments
Make inter-
account
transfers
Increase or
decrease
overdraft
limits
Stop
payments and
debit orders
Assessment
LO 3
MANAGERIAL, CONSUMER AND FINANCIAL KNOWLEDGE AND

SKILLSThe learner will be able to demonstrate knowledge and the ability to
apply responsibly a range of managerial, consumer and financial skills.
3.3 describes the importance of administration in managing a business (record

keeping, storing documentation);3.4 discusses the use of technology in
telecommunication services (e.g. cell phones) and financial transactions (e.g.
ATM, Internet) in improving administration, communication and access to
information.
Memorandum
Electronic banking
Learners can get information brochures and pamphlets from different banks.
They must study the information and report to the class.
The teacher then discusses the different banking solutions in the module.
Learners can also make posters from advertisements in newspapers and
magazines that advertise banking services.
Activity 1
InternetBanking TelephoneBanking CellphoneBanking
Provides
an up-to-
yes yes yes
date
balance
Provides no no yes
mini-
statements
Provides
provisional yes yes no
statements
Make
account yes yes yes
payments
Make
inter-
yes yes yes
account
transfers
Increase or
decrease
yes yes yes
overdraft
limits
Stop
payments
yes yes no
and debit
orders
Telkom services
Grade 7
Module 16
Telkom services
Telkom, the company responsible for South Africa’s telephone network,
offers a variety of telecommunication services. Apart from offering services
to meet the country’s present needs, this semi-state business is also working
on our future needs.
Consumers have a choice of many types of telephone services. On the first

pages of the telephone directory you will find a list of available products
and services.
Likewise, companies and businesses, big and small, also make use of a
variety of available products and services. This learning unit covers only a
few of these services that help to simplify matters on a technological level.
Telkom offers digital connections with more band-width (ISDN Basic

Rate), faster speed and quicker access to the Internet than an ordinary
telephone line. It supports various services, such as speech and video
telephones, video conferences, faxes, data and image transfers.
a) TelkomEDI (Electronic Date Interchange)
This system enables businesses to exchange information and details with

trade partners in other parts of the country, and even the world. It eliminates
unnecessary paperwork and offers highly profitable advantages.
There’s no need for mailing orders and invoices. This means that the trade
cycle is accelerated, and businesses receive their money much sooner.
It is remarkably time-saving and fewer employees are needed for

administrative and bookkeeping purposes.
b) CyberTrade
The Internet is used for fast and safe business transactions, as well as for
those between businesses and consumers.
Buying and selling are done electronically. In other words, trade is

conducted safely on the Internet. Buying transactions are processed
electronically, including bank authorisation and payment.
Once again, this saves a lot of time, and a smaller staff can function very
efficiently.
c) Video and Tele-Conferences
By means of telephonic and video connections, meetings can be held

between persons in different cities.
This service enables businesses to reach distant cities and towns within
seconds, and to conduct their business.
Decisions can be made much more quickly, travelling expenses are cut and
the discomfort of long distance travelling is eliminated.
This is regarded as the fastest way to conduct business in today’s

technology-driven world.
d) Telephone Conferences
This service offers a simple and efficient means to discuss matters with
clients, suppliers or staff. Up to seven persons at a time can make use of this
facility.
e) Fax Services
Faxes are received and stored 24 hours per day when the fax-line is
busy or out of order. Fax messages can be retrieved if necessary.
One fax message can be sent to hundreds or even thousands of national
and international destinations. Many precious business hours are saved
in the process.
One fax and document number is made available to clients, providing
them with updated information relating to documents and brochures.
The client simply dials the fax number and retrieves the documents by
following the voice messages.
f) Telkom Internet- Satellite
General business and home users around the country who cannot access the
web via traditional phone lines, can do so by using the satellite service.
A satellite dish is installed to provide a faster and more reliable two-way

connectivity.
Memorandum
Telkom services
Learners consult the yellow pages of the telephone directory where the
Telkom services are explained.. They report to the class.
The Telkom web page can also be consulted by those who have access
to the Internet. The web page address is www.telkom.co.za.
The information in the module is discussed.
Shopping via the internet
Grade 7
Module 17
Shopping via the Internet
Music in your pocket
The iPod is no ordinary music-player; it has developed into a symbol of our

day. It has become a fashion item of children of all ages, adding to their
“image”.
The sales of this digital favourite exceeded all expectations. Between July
and September 2004, two million iPods were sold over the counter. At
Christmas sales were expected to reach ten million. As far as looks are
concerned, iPods are considered as cool as hell, both inside and outside.
The iPod Photo has space for 15 000 songs on its hard-drive of 60 giga-
bytes and it offers you the possibility of photo displays.
The iPod mini is exactly what the name suggests: smaller, lighter and
thinner than its elder brother, but less powerful. Its battery needs to be
charged sooner, and it can store only 1 000 songs on the hard-drive of 4
giga-bytes.
In the meantime other companies, following in the footsteps of Apple who

developed the iPod, have come up with their own models. Dell brought the
Digital Jukebox onto the market. Philips produced the HDD and Packard
Bell the Pocket M@estro. The latter is hardly bigger than a credit card, with
a hard-drive of 5 giga-bytes and a built-in FM radio transmitter and a
dictaphone as well.
Philips’ ADD 120 however, has lost out, because this model was slow and
cumbersome to handle, and came with useless earphones. Besides, it was
much more expensive.
The Internet-shop iTunes Music Store sells more than four million songs
per week, bringing the provisional total to about 200 million. Impressive, to
say the least, even if the figure does not mean much compared with the 150
milliard songs that have been down-loaded illegally during the previous
year, via filesharing services such as Kazaa, Grokster and eDonkey.
However, the results of iTunes Music Store are encouraging, as it proves
that consumers are actually prepared to pay for their music. Customers pay
about R10,00 per song, and they seem to regard it as a reasonable price.
From: Knack, 24 November 2004
You have read the article on iPods and made up your mind that you simply
can’t go without one. The only problem the shops in your town don’t sell
them. The only solution is to go shopping on the Internet. Your
knowledgeable friend advises you to go to the kalahari.net web page,
because apart from selling books, they also offer DVD’s, video’s, music,
electronics and cameras, and a variety of other services.
Activity 1:
To shop via the Internet
[LO 3.4]
Step 1:
Type in the web address.
Step 2:
When the home page appears on the comput on Electronics and Cameras.
Step 3:
Click on 2 in the text box Audiovisual Bestsellers. Apple iPod Video 30

GV3 – white.
Step 4:
The information on the iPod appears on the screen.
Step 5:
Click on Add to basket.
Click on Create Profile.
The order form appears on the screen.
Step 6:
Supply your personal details.
KYou received a catalogue in the post from a large chain store that sells
electronic goods.
How do the price compare with those on the Internet?

Now what?
Assessment
LO 3

financial skills.

(record keeping, storing documentation);3.4 discusses the use of
technology in telecommunication services (e.g. cell phones) and
financial transactions (e.g. ATM, Internet) in improving
administration, communication and access to information.
Memorandum
Shopping on the Internet
The purpose of this learning unit is to become acquainted with the

rapidly expanding phenomenon of e-Commerce on the Internet.
Activity 1
This activity can be done on computers if the facilities are available at

the school. Because the information on the Internet regarding e-
Commerce may change on a daily basis, the instructions might not
necessarily correspond. Keep it in mind!
Similar activities can be done by the learners.
Information technology in business and administration
Grade 7
Module 18
Information technology in business and administration

1. What is information technology?
Information technology (IT) is applied to manage and process information,

particularly in business organisations. It is done by means of electronic
computers and computer software that processes, protects, stores and
retrieves information.
1. What is a database?
A database is an organised collection of data and information. Previously all

the information of a business undertaking were kept in files in filing
cabinets by secretaries. The documents were either arranged alphabetically,
according to subjects or dates, etc. A system was necessary to enable
speedy retrieval of information.
An electronic database is a collection of records that is stored systematically

so that a computer programme can be applied to retrieve the files. In other
words, the information of the company is stored on the hard drive of a
computer, and is managed by a computer programme.
1. What is the nature of the information that is stored on the database?
All the records of the company (wholesale and retail) is stored on the
database. Amongst others it includes the following:
Purchases
Stock
Manufacturing
Orders
Staff records
Clients
Marketing reports
Planning
Income and expenditure
In other words, the “paper work” of all facets of the business enterprises
where records are kept, must be stored electronically.
4. Who are the staff members that benefit from the information stored on
the database?
a) On management level they are:
The General Manager
It is important that the General Manager has access to all the information
with regard to the company.
The Marketing and Sales Manager
Sales statistics is the most important source of information to the sales and
marketing manager. It determines the sales strategies that are applied to
generate sales.
The Human Resources Manager
Information on each staff member is stored on the database for retrieval by

the human resources manager when needed. It includes progress reports,
achievement assessments, salaries, penalties, company perks, etc.
The Financial Manager
All the information related to income and expenditure is retrieved from the
database to compile the monthly and annual financial statements. The cash
flow statement is managed according to information on the database. All
the information relating to finances must be available at all times.
Depending on the nature of the business, there will also be other managers
in the company, e.g. system managers, section managers, etc. They all need
access to the information on the database at all times in order to do their
jobs effectively. They also generate information that has to be stored on the
database.
b) On administrative level they are the following:
The administrative or clerical staff in the company is responsible for the

book-keeping and records of the company. It includes all financial
transactions regarding income and expenditure, payment of accounts
(creditors) and sending of accounts (debtors). Record must be kept of stock
continually. Salaries must be paid. Information regarding these aspects, is
stored on the database.
Activity 1:
To perform a task by using information on the computer
[LO 3.3]
The manager has instructed your department urgently to do the following:
“We were informed that the Department of Housing of the government has
accepted out tender for 200 steel framed windows. The order must be
executed within 30 days otherwise the tender is cancelled. Find out
immediately whether it will be possible. I must know within half an hour.
You will find all the relevant information on the company database.”
What will you do to perform the task? Answer the questions by using the
clue in brackets.
1. What will you do first? (stock)

2. If there are not enough frames at the head office, what then? (branches)
3. If there still are not enough frames, what then? (manufacturing)
Will the price of the new frames be the same as that of the old frames?
(price increase)
Will there be enough time?
Assessment
LO 3

financial skills.

(record keeping, storing documentation);3.4 discusses the use of
technology in telecommunication services (e.g. cell phones) and
financial transactions (e.g. ATM, Internet) in improving
administration, communication and access to information.
Memorandum
Let the learners visit a business enterprise and talk to the manager
about tasks that are done electronically with regard to administration
and management.
Discuss with the learners what a database is and how electronic
information is applied in a company.
Activity 1
Obviously all the information of the company will be found on the

database.
1. Stock statistics will be consulted to determine the stock level of the

merchandise involved.
2. Statistics of the stock at the branches will also be available on the
database.
3. If there is still not enough stock to execute the order on tender, an
order for new stock will have to be placed urgently. The details of the
manufacturer can be retrieved from the database.
4. A quote will be required from the manufacturer. It will be compared
with the previous quote which is stored on the database. The new
quote will possibly be higher than the previous quote due to price
escalations, etc. Obviously the profit margin will be lower because the
tender price must be matched.
5. If the limited time available, is a problem, the manufacturer will have to

be asked to work overtime. That involves additional costs. But then again
the company will forfeit the tender if the order cannot be executed on time.

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1.

ECONOMIC AND MANAGEMENT SCIENCES

A. Self-employment in South Africa

No lazing around for young Crossroads boy

“I did not want to be bored and unoccupied, so I started cutting hair.

“The number of customers grew and I needed to work faster.”

His customers vary from toddlers to scholars, as well as “Oobhiti” – older

Xolisa says he is not afraid of competing with established town barbers.

“He did a good job,” he said.

From: Sunday Times Cape Metro, 21 November 1993

A. Self-employment in other countries

The number of people working for themselves is increasing worldwide.

To interpret statistics and make inferences

Self-employment in various countries

Which country has the lowest percentage of people in the labour

The situation has changed, however. Nowadays there are many

Some economic principles

In time, however, certain communities came to grow in numbers and

To choose the correct statement and motivate your choice

Select the correct statement:

What is the reason for this situation?

The price system

The various communities quickly realised that knowledge and products

Can you suggest a solution to this problem?

Initially, people considered the use of commodities such as salt, which

To choose the correct statement and motivate your choice

≤ Consumers want more shoes.

≤ Consumers want fewer shoes.

≤ More entrepreneurs will enter the shoe trade.

≤ Fewer entrepreneurs will enter the shoe trade.

≤ There won’t be any difference.

Reasons for your answer:

What will work better:

Selling whole cakes?

Do you think it is wise to have a cake stall at a school market day?

It is important to sell products in which consumers have some interest.

THE ECONOMIC CYCLEThe learner will be able to demonstrate

We know this when the learner:

ENTREPRENEURIAL KNOWLEDGE AND SKILLSThe learner

We know this when the learner:

4.1 compares essential characteristics and skills needed to be

4.2 uses idea generation techniques to make recommendations on

Study the information that has been given about self-employment in

Here learners come to realise that (the development of) “money” as a

Here learners are guided to understand the fine balance between an

ECONOMIC AND MANAGEMENT SCIENCES

DEMAND AND SUPPLY

What is meant by demand and supply?

Before motor cars appeared on our roads, people used to travel on

Does the government decide to build factories in Uitenhage and tell

Of course government did nothing of the kind. Consumers bought more

Eventually the demand for horses decreased by 90% in the previous

Similar changes constantly occur in the economic field, as buyers’

“Free” and “Economic” goods

What is the difference between wants and needs?

Write the following items in the appropriate column:

CD’s, bicycle, ski-vacation, swimming-pool, iPod, medical services,

cellphone, bread flour, clean air, purified water

Far too many flat-screen television sets