Entrepreneurship

Sub-topic area Standardisation

Unit 8 Concept of Standardisation

Key unit competence: To be able understand basic concepts of standardisation.

A standard is a way of doing things that everyone uses. We use standards every day. Look at the pictures below. Then discuss the questions in class.

1. Which standards can you see in the three pictures?

2. Suggest other standards that you use every day.

3. Why do you think that standards are important?

A standard is a way of doing things that follows guidelines or regulations. Many standards follow rules that are set by an organisation. We use standards for many different reasons.Think, for example, of scientists who work in different countries and need to share their ideas and findings with each other.

The metric system is an example of a standard used in science. We measure items using metres and centimetres.We also use a standard way of writing the symbols for chemicals. Think, for example, of scientists working with the metal gold. In French, gold is ‘or’ and in Kinyarwanda it is ‘zahabu’, but a scientist will always use the symbol ‘Au’ for gold. In this way, the scientist can share knowledge with scientists in other countries.

Case study activity

Read the case study ‘Following food safety standards to grow export’. Then answer the questions.

Following food safety standards to grow export

If Rwandan food producers want to export products to other countries, they need to make sure that there are no harmful bacteria in their products. Today, the producers can follow a food safety standard called Hazard Analysis and Critical Control Points (HACCP).

This system checks that bacteria do not get into the food at any point from harvest to packaging. The system is used around the world and Rwandan producers who follow this system can export their products to other countries.

Questions

1. What is HACCP?

2. Why do producers need to follow HACCP?

3. HACCP is a standard used in agriculture, food and business. Do research and give an example of a standard used in the following fields:

a) transport

b)housing

c) medicine

d) education.

Standardisation is the process of setting standards. When we set a standard we need to decide what we can measure and check. For example, we can measure the size of a bicycle tyre using the metric system and we can check that there are no bacteria in food using the HACCP system.

Case study activity

Read the case study ‘Setting Fairtrade standards’. Discuss the questions that follow in class.

Setting Fairtrade standards

Fairtrade is a system of standards developed for producers and traders. Many customers today want to know where the products that they buy come from and how they were produced. Fairtrade standards are used for producers of many food products, such as nuts, coffee and fresh fruit. A trader who follows Fairtrade standards must pay a minimum price to the producer. The producer must work as a cooperative and follow health and safety standards.

Questions

1. List three rules of Fairtrade standards.

2. Fairtrade standards prohibit (forbid) child labour. Why do you think that this is important?

3. a) Why do you think health and safety standards are important?

b)List two examples of health and safety hazards (dangers) to farm workers.

4. The Fairtrade standard was introduced to reduce poverty. How do you think following a Fairtrade system can reduce poverty?

A standards body is an organisation that sets and controls standards.The Rwanda Standards Board (RSB) sets standards that protect customers and promote trade for Rwandan businesses.The International Organization for Standardization (ISO) sets standards for many different industries. These standards all start with the letters ISO. For example, the standard number for environmental management is ISO 14000.

                          

Create and name a standard body for your class. Then set a standard that everyone in the class must follow for one week. This standard must be something that you can measure and control. You can, for example, decide that every learner must wear an armband or bring an unusual item such as a toothbrush to school every day.Draw up a control sheet and do spot checks every morning.

A spot check means selecting a random number of learners.After completing this activity, discuss your standard as a class. How well did the class follow and control the standard that was set?  

Sometimes standards in different countries are not the same. We can measure the size of a shoe, for example, using different systems. Some countries also use different systems for measuring distance or temperature.To harmonise standards, we agree on one standard that we should follow. When we harmonise standards, we make the standard easier for everyone to understand, follow and control.

Case study activity

Read the case study ‘Tax harmonisation in East Africa’. Then answer the questions.

Tax harmonisation in East Africa

The East African Community (EAC) is harmonising tax laws so that they are similar in all the countries in the region. This means that some countries have increased taxes and others have reduced taxes.

Questions

1. Explain what is meant by standard harmonisation.

2. The East African Community (EAC) acts as a standards body.

a) Give the name of another standards body.

b)Explain what work the standards body does.

3. The EAC wants to harmonise tax laws to promote free trade and protect citizens.

Explain how harmonising tax laws can help achieve this goal.

Standards are important for many different reasons. When a product follows standards, we know what the quality of the product is and what materials are used to make it. A product that follows standards can be sold to other countries.Some standards give us important information, for example, that the business that made the product did not harm the environment. A standard can also protect workers, for example, health and safety standards. Customers also need to know that products are safe to use.

Divide into groups and role play a visit by the Rwanda Standards Board (RSB) to a business that wants to start aquaculture (fish farming) using tilapia. Select one of the following scenarios:

A. The RSB representative explains that following standards means that the business can export their products.

B.The RSB representative explains that the business must follow standards to ensure that the fish is fresh and safe to eat.

C. The RSB representative explains that they will check that the standards are followed and that it is important to be reliable and honest.

Standards are an important method of control in business. When you follow standards, you can manage your business better.Important standards in a business include:

• the quality of a product or service

• the quantity of materials that are used to produce a product

• the time that it takes to make a product or provide a service

• the safety and health of workers that produce the product or provide the service

• the cost of producing the product or service.

Work in groups to pretend that you have a business that makes paper chains. Your school is celebrating an important occasion and has ordered paper chains to decorate a classroom.

1. Read the order from the school below.

2. Elect three class members to act as inspectors from the school.

3. Work for twenty minutes to make the paper chains.

4. At the end of the twenty minutes, investigate the following for each group:

a) Did the inspectors accept the quality of the chain?

b)Did the group predict the length of chain correctly?

c) Did the group make a profit or a loss?

5. Evaluate the results of the investigation and discuss the importance of setting and following standards.

You will need: A4 paper, scissors, staplers, rulers, pencils You have: a business with five workers and twenty minutes to complete the task

You can:

• hire any number of workers from your group

• rent any number of tools to complete the task

• buy as many sheets of paper as you like (but you cannot return paper).

he costs for your business

• Wages for one worker are RWF 1,500 for twenty minutes

• Rent for one pair of scissors is RWF 1,000 for twenty minutes

• Rent for one ruler and pen is RWF 1,000 for twenty minutes

• Rent for one stapler is RWF 1,000 for twenty minutes

• One sheet of A4 paper costs RWF 1,400.

How to make a paper chain

1. Use a ruler to measure strips of paper. Each strip must measure 3 cm × 30 cm.

2. Use the scissors to cut the paper into strips.

3. Fold the first strip into a loop and use the stapler to staple the ends together to make a circle.

4. To make a second loop, put another strip of paper through the first loop and staple the ends together. Continue to make loops.

We use standards in all fields.

There are different levels of standardisation:

• International standardisation means that all countries make use of the standard. An example is standards set by the International Organization for Standardization (ISO).

• Regional standardisation means that countries from a specific region use the standard. Examples include European Standards (EN) and standards used by the East African Community (EAC) or the European Union (EU).

• National standardisation is specific to one country. An example is the National Examination Council that sets the standards for grades and progression to the next stage of education in Rwanda.

1. Invite a guest speaker to the class who can share his or her knowledge on standards.

2. Write a definition for the following terms and select an example for each type:

a) International standardisation

b)Regional standardisation

c) National standardisation.

Imagine that you are a consultant who has been asked to assist a coffee cooperative.

1. Write a paragraph to explain to the cooperative why standards are important.

2. Describe a process standard that the cooperative could adhere to (follow).

3. Draw a sketch that shows the space that you will use to test the standards used in the cooperative.

rederick Nshimiyimana is the owner of Mutunda Clays, a business he started in 2012. Since consulting with a mentor, his profits have increased by 5%.

1. Explain the difference between personal growth and business growth. (5)

2. List two ways that Mutunda Clays can increase profit. (5)

3. What type of business is Mutunda Clays? (2)

4. Suggest a good location for Mutunda Clays in your community. (3)

5. Mutunda Clays sells bricks and tiles. Suggest a product standard and a process standard that this business follows. (5)

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Section B

1. As an entrepreneur you need to pay attention to indicators of business growth and success as well as indicators of business failure.

a) Explain what is meant by an indicator of business growth and list three examples. (5)

b)Why is empty stock an indicator of business failure? (2)

2. All successful businesses follow standards.

a) Discuss why following a standard is important for a business. (5)

b)List three different types of standards. (3)

c) What is the role of a standards body? List an example of a standards body. (5)

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Section C

Imagine that you are selling honey in jars at a local market. Develop and design a product standard and a testing standard for producing and selling your honey. (10)

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                                                                                                                                       Total marks: 50

accountant – a person who keep financial accounts

 accounting – the work of keeping financial accounts

arable – land usable for growing crops

attitude – approach to life

bookkeeping – keeping records of financial transactions in a business

brainstorm – group discussion to produce ideas and ways of solving problems

budget – a plan that shows how you are going to manage money

business failure – when a business cannot sell enough products or services to pay for expenses

business finance – financial management for a business

cash crops – crops sold at a market

collateral – something offered as security for repayment of a loan, to be forfeited if the loan is not paid

collective savings scheme – a group of people save their money in one fund

commission – a fee that is a percentage of a sale

competition – a business that sells a similar product, service or offers an alternative

corruption – dishonest conduct by a person in power, typically involving bribery

credit card – small plastic card that allows the holder to buy goods or services on credit

current account – account where money can be withdrawn without notice

 

customers – people who buy a product or service

debit card – small plastic card that allows the holder to pay money from their bank account electronically

debt – owing money to a person or an institution

economics – social science studying how people choose to use resources

economist – a person who studies economics

equity – money invested in a business by the owner

export – send goods and services to another country for sale

external – outside

financial statements – formal record of financial activities

grant – money given by a government or other organization for a particular purpose

import – bring goods and services into a country from abroad to sell

indicator – measurement that shows the state of something

innovative – original and creative in thinking

instalment – a number of equal payments spread over a period of time

interest rate – proportion of a loan that is charged as interest to the person borrowing

internal – inside

life skills – skills needed to deal with problems in everyday life

loan – money that must be paid back

 

 

mentor – a person who can help you with your personal development

micro lenders – types of banks that lend small amounts of money to people

motto – a short statement describing a goal or an ideal

objectives – things aimed for; goals

personal finance – financial management for an individual or a family PIN (personal identification number) – a unique code used for debit and credit cards

population density – the number of people per square kilometer

potential – the capacity to develop one’s abilities primary needs – goods or services that we need, for example, food, clothing, shelter and health care

profit – the difference between the amount earned and the costs

 raw materials – basic material from which a product is made, for example, wood or iron

receipt – a bill that is marked as paid

reputation – an opinion held about a person or a business

resources – something that we have and can use to assist us

retirement – when a person stops working, usually at sixty-five years of age

risk – the possibility of failure

savings account – an account provided by a bank to save money and earn interest

secondary needs – goods or services that are not necessary, but that we desire or wish for, for example, designer clothes s

elf-awareness – being able to identify and recognize your own emotions, personal strengths and interests

shareholder – a person who owns a part of a business

social media – tools that allow people to share information via Internet networks, for example, Facebook and Twitter

standard – a way of doing things that has been approved or accepted by a recognized organization standing

order – instruction to a bank to add a fixed amount into an account every month

subsistence – growing crops to meet your family’s needs

sustainable development – development that does not use up (deplete) resources

target market – a group of customers with similar characteristics that the business wants to sell to

tax – money paid to the government of a country

trade credit – an agreement where a customer can buy goods and pay the supplier at a later date trend – change in a general direction

viable – capable of success

withdrawal – taking money out of an account