Nadia started her successful hairdressing business 4 years ago. Maintaining quality has always been important to Nadia. She said: ‘I started with no experience of business plans, recruitment, 2 cash flow or profit. I did not understand how economic issues such as inflation could affect a business. Now I have 5 hairdressing shops and 20 employees. Last year I made a profit of $100000.’ Nadia is planning to expand her business. One way she could do this is by selling franchises. Define ‘business plan’. (a) … … … … [2] Identify two stages in the recruitment process. (b) Stage 1: … … Stage 2: … … [2] Outline one advantage and one disadvantage to Nadia’s business of selling franchises to expand. (c) Advantage: … … … … Disadvantage: … … … … [4] Explain two possible effects of an increase in the rate of inflation on Nadia’s business. (d) Effect 1: … … … … … … Effect 2: … … … … … … [6] Do you think making a profit is more important for a growing business than managing cash flow? Justify your answer. (e) … … … … … … … … … … … … [6]

2(a) Define ‘business plan’. Award 2 marks for a full definition. Award 1 mark for a partial definition. A document containing the business aims/objectives and important details about the operations, finance and owners of a business [2] OR A detailed written document outlining the purpose and aim of a business which is often used to persuade lenders or investors to finance a business proposal [2] OR States aims and/or objectives and shows how business plans to achieve them [2] Partial definition e.g. A document stating the aims of the business [1] 2 For one mark must have idea of outlines business objectives/goals. The second mark can outline why it is used, information it contains or other relevant development. 2(b) Identify two stages in the recruitment process. Award 1 mark per stage. Two from: • Job analysis / identify a vacancy • Job description • Person/job specification • Advertising (the vacancy) • Application forms sent out / received • Shortlisting/screening • Interview/testing • Selection / job offer Other appropriate responses should also be credited. 4 Only award the first two responses given. Note: Answer must be from the business viewpoint not the applicant. To award, candidates must identify, and not simply describe the stages. 2(c) Outline one advantage and one disadvantage to Nadia’s business of selling franchises to expand. Award 1 mark for each relevant advantage/disadvantage. Award 1 mark for each relevant reference to this business. Points might include: • Receives a fee to use her brand name / franchisee has to buy a licence / franchisee has to pay start-up costs [k] of her hairdressing business [app] • Expansion is much faster [k] so will not take as long to open the next 5 shops [app] • Nadia will receive a share of franchisee’s profits/royalties [k] helping increase her $100 000 profit [app] • Franchisees will have local knowledge [k] which is helpful as business only started 4 years ago [app] • Management of outlet is responsibility of franchisee [k] • All products sold must be obtained from franchisor [k] Disadvantages: • Poor management of one franchise could damage whole business reputation [k] as maintaining quality is important [app] • The franchisee keeps some/most of the profits from the outlet [k] • Has to offer franchisees help and advice / training [k] which may take time as when she started she had no experience [app] Other appropriate responses should also be credited. 4 Note: To use words from the stem as application, the reference must be appropriate (i.e. make sense) in relation to the point being made. The following words are likely to be appropriate for this question: • Hairdressing/shop • Maintain quality (is important) • $100 000 (profit) • 5 (shops) • 20 (employees) • 4 years ago • (No experience of) business plans • Inflation Other appropriate examples in context can still be credited. Do not award answers which focus on whether she should expand or benefits of growth in general e.g. more well known, increase sales. 2(d) Explain two possible effects of an increase in the rate of inflation on Nadia’s business. Award 1 mark for identification of each relevant effect (max 2). Award 1 mark for each relevant reference made to this business (max 2). Award 1 mark for each relevant explanation (max 2). Points might include: • Lower demand / fewer sales (as people have less money to spend) [k] for hairdressing [app] reducing revenue [an] • Workers may demand higher wages [k] in her 5 shops [app] increasing labour costs [an] • May want to delay plans to expand [k] such as selling franchises [app] • May need to increase prices [k] [an] leading to fewer customers [an] Other appropriate responses should also be credited. 6 Note: To use words from the stem as application, the reference must be appropriate (i.e. make sense) in relation to the point being made. The following words are likely to be appropriate for this question: • Hairdressing/shops • Maintain quality (is important) • $100 000 • 5 (shops) • 20 employees • 4 years ago • (No experience of) Business plans • Selling franchises / looking to expand Other appropriate examples in context can still be credited. Do not award points such as less disposable income as this does not identify the effect on the business. 2(e) Do you think making a profit is more important for a growing business than managing cash flow? Justify your answer. Award up to 2 marks for identification of relevant points. Award up to 2 marks for relevant development of points. Award 2 marks for justified decision as to whether making a profit is more important for a growing business than managing cash flow. Points might include: Profit: • Main objective is to make a profit [k] without it owners will question point of business [an] • A source of finance [k] which can allow for expansion [an] • A measure of success [k] • Reward for risk taking [k] • Important for long-term survival [k] • Can help attract investors [k] Cash flow: • Need cash to pay day-to-day costs [k] such as suppliers, otherwise might not have sufficient materials to continue production [an] • Helps avoid cash flow problems [k] • A negative cash flow means business is receiving less cash than it is spending [k] • If negative might mean business is insolvent / forced into liquidation [k] whether business makes a profit or not [an] • Sales may be on credit [k] so even if making a profit may not receive money until later [an] so need cash to pay other costs [an] • Less likely to need overdraft [k] which could add to cash outflows / higher expenses [an] Other appropriate responses should also be credited. 6 This is a general question so there are no marks for application. For both evaluation marks response must be linked to a growing business. Do not award answers which state profit is used to pay day-to-day costs. Do not award definitions of profit or cashflow as this does not answer the question. 2(e) Justification might include: • The main objective for most private sector businesses is making a profit [k] without it owners will question point of business [an]. However, a business needs to manage its cash flow to make sure it can pay day-to- day costs [k] such as suppliers otherwise it might not have sufficient materials to continue production [an]. I think cash flow is more important as a business can continue for a while without making a profit, but it will find it very difficult to survive without cash [eval] especially at a time when a business is growing as it will need to be in a position to purchase additional items. [eval]

Alex started APB as a sole trader business 4 years ago. APB provide printing services for local businesses such as leaflets and brochures. Alex thinks having a good location is important to any 3 business. All APB’s 6 employees receive on-the-job training. Alex has a democratic leadership style and uses job rotation to help keep employees motivated. To meet an increase in demand, Alex plans to buy an additional printing machine. This will cost $1800. Alex has to decide on an appropriate source of finance. Define ‘job rotation’. (a) … … … … [2] State two factors that a service sector business should consider when deciding where to locate. (b) Factor 1: … … Factor 2: … … [2] Outline one advantage and one disadvantage to APB of using on-the-job training. (c) Advantage: … … … … Disadvantage: … … … … [4] Explain one advantage and one disadvantage of Alex having a democratic leadership style. (d) Advantage: … … Explanation: … … … … Disadvantage: … … Explanation: … … … … [6] Do you think the amount of money needed is the most important factor for a sole trader to consider when deciding on an appropriate source of finance? Justify your answer. (e) … … … … … … … … … … … … [6]

3(a) Define ‘job rotation’. Award 2 marks for a full definition. Award 1 mark for a partial definition. Employees swapping around and doing each specific task for only a limited time [2] OR Process of switching an employee between jobs over a period of time [2] OR Increasing variety in the workplace by allowing workers to switch from one task to another [2] Partial definition e.g. workers do a variety of tasks [1] 2 3(b) State two factors that a service sector business should consider when deciding where to locate. Award 1 mark per factor. Points might include: • Customers / level of demand • Cost of rent/taxes • Availability of land/space/parking • Government assistance • Cost/availability of labour • Legal controls • Competitors / near to other business • Transport / accessibility / technology / infrastructure or examples such as electricity, water, gas • Personal preference of owners • Climate Other appropriate responses should also be credited. 2 Only award the first two responses given. Do not award access to raw materials, as this is not appropriate for a service sector business. Do not award answers such as cost alone - must be explained. 3(c) Outline one advantage and one disadvantage to APB of using on-the- job training. Award 1 mark for each relevant advantage/disadvantage. Award 1 mark for each relevant reference to this business. Points might include: Advantage: • Some output produced while training [k] so able to still print some brochures [app] • Costs less than off-the-job [k] and cost might be important issue as he is a sole trader [app] • Specific to business / control what is taught [k] using the printing machines [app]. Disadvantage: • Trainer may not produce as much output / potential disruption [k] when teaching the 6 employees [app] • Trainer may not have the necessary skills / may not know up-to- date methods [k] for the new machine [app] • Trainer may pass on bad habits / may be a poor-quality trainer [k] • Employees make more mistakes when learning which increases waste [k] Other appropriate responses should also be credited. 4 Note: To use words from the stem as application, the reference must be appropriate (i.e. make sense) in relation to the point being made. The following words are likely to be appropriate for this question: • Sole trader • Printing services / leaflets / brochures • Printing / new machine • 6 employees Other appropriate examples in context can still be credited. 3(d) Explain one advantage and one disadvantage of Alex having a democratic leadership style. Award 1 mark for identification of each relevant advantage/disadvantage (max 2). Award 1 mark for each relevant reference made to this business (max 2). Award 1 mark for each relevant explanation (max 2). Points might include: Advantage: • Improves motivation / sense of belonging [k] of his 6 employees [app] leading to increased output / productivity [an] • Help keep worker loyalty [k] employees are motivated [app], so less time/money spent on recruiting new employees [an] • Creates time for managers to do other work [k] leading to fewer mistakes [an] • Better decisions could be made as can use employees experience and skills [k] such as deciding which is the best machine to buy [app] • Positive work environment / better relations between manager and workers [k] • More ideas / advice provided / better communication / encourages feedback [k]. Disadvantages: • Some employees may not want / be able to cope with being consulted [k] slowing down the decision-making process [an] about what to print [app] • Unpopular decisions less likely to be made [k] • Mistakes can be made if workers are not skilled / lack experience [k] which can damage reputation [an] of this sole trader business [app] • Time-consuming / disagreements may arise [k] Other appropriate responses should also be credited. 6 Note: To use words from the stem as application, the reference must be appropriate (i.e. make sense) in relation to the point being made. The following words are likely to be appropriate for this question: • Sole trader • Printing services / leaflets / brochures • 6 (employees) • Employees are motivated • Increased demand • Printing / new machine Other appropriate examples in context can still be credited. Award productivity changes only once as either an advantage or a disadvantage e.g. Improved motivation [k] increases productivity [an] and Decision-making takes time [k]which reduces productivity [an] 3(e) Do you think the amount of money needed is the most important factor for a sole trader to consider when deciding on an appropriate source of finance? Justify your answer. Award up to 2 marks for identification of relevant points. Award up to 2 marks for relevant development of points. Award 2 marks for justified decision as to whether the amount of money needed is the most important factor for a sole trader to consider when deciding on an appropriate source of finance. Points might include: • The business might not have sufficient funds [k] so would need to borrow [an] • A sole trader is likely to have access to fewer sources of finance [k] • Cost of finance / interest [k] would change expenses [an] altering profit margin [an] • Unlimited liability for sole traders [k] means that if the business cannot pay its debts the owner’s personal assets would be at risk [an] • Amount of debt [k] if a business already has a high level of borrowing banks may not lend any more money [an] • Purpose (why money is needed) [k] if buying a non-current asset then a long-term source would be used [an] allowing sufficient time to repay [an] Other appropriate responses should also be credited. Justification might include: The amount is important because a business might not have sufficient funds [k] so would need to borrow money [an]. This would involve interest [k] which would increase business expenses [an]. Unlimited liability is probably the most important factor for a sole trader because this reduces the finance options available [eval]. They are probably also seen as higher risk so whatever the amount finance is it is likely to be more expensive [eval]. 6 This is a general question so there are no marks for application. To gain both evaluation marks response must clearly relate to a sole trader. Do not award answers which only identify sources of finance.

GHT is a public limited company. It produces steel products including gates and garage doors. GHT has a flat organisational structure and a short chain of command. GHT has many stakeholder 3 groups including 600 employees. The Managing Director is considering introducing job rotation to improve employee motivation. He has also been analysing some financial data. An extract is shown in Table 3.1. Table 3.1 Extract of revenue and cost data for one of GHT’s products (product X) 30000 Units sold in 2020 $100 Price per unit $60 Variable costs per unit $900000 Fixed costs 22500 Break even output (units) Define ‘fixed cost’. (a) … … … … [2] Calculate the margin of safety for product X in 2020. Show your working. (b) … … … … [2] Outline two advantages to GHT of having a short chain of command. (c) Advantage 1: … … … … Advantage 2: … … … … [4] Explain one advantage and one disadvantage to GHT of using job rotation to improve employee motivation. (d) Advantage: … … Explanation: … … … … Disadvantage: … … Explanation: … … … … [6] Do you think the shareholders are the most important stakeholder group to the success of a limited company? Justify your answer. (e) … … … … … … … … … … … … [6]

3(a) Define ‘fixed cost’. Award 2 marks for a full definition. Award 1 mark for a partial definition. Costs that do not change with the level of output/sales [2] OR Costs that do not vary in the short run with the number of items sold or produced. [2] Partial definition e.g. costs that do not change [1] 2 Do not accept examples. Do not award also ‘known as overhead costs’ as this does not define the term. 3(b) Calculate the margin of safety for product X in 2020. Show your working. Award 2 marks for correct answer. Award 1 mark for correct method but incorrect answer. Correct answer: 7500 (units) [2] Correct method but incorrect answer: e.g. Current output – breakeven output [1] OR 30 000 – 22 500 [1] 2 Award only 1 mark if 7500 is written as part of the answer but is not given as the final answer. Where candidates present their answer with a $ sign award only 1 mark as this is not a financial value. If correct answer given with no working shown, award 2 marks. 3(c) Outline two advantages to GHT of having a short chain of command. Award 1 mark for each relevant advantage. Award 1 mark for each relevant reference to this business. Points might include: • Communication is quicker / communication is more accurate / quicker decision-making [k] within the public limited company [app] • Easier to delegate tasks / more delegation [k] to its 600 employees [app] • Workers feel more motivated [k] • Lower costs as fewer managers/supervisors needed [k] Other appropriate responses should also be credited. 4 Note: To use words from the stem as application, the reference must be appropriate (i.e. make sense) in relation to the point being made. The following words are likely to be appropriate for this question: • Steel / gates / garage doors • 600 employees • Public limited company • Flat (organisational structure) • Job rotation • Improve employee motivation • 22 500 (break-even output) • 30 000 (units sold) • $100 (price per unit) • $900 000 (fixed costs) • $60 (variable cost per unit) Other appropriate examples in context can still be credited. Only award points about communication once. 3(d) Explain one advantage and one disadvantage to GHT of using job rotation to improve employee motivation. Award 1 mark for identification of each relevant advantage/disadvantage (max 2). Award 1 mark for each relevant reference made to this business (max 2). Award 1 mark for each relevant explanation (max 2). Points might include: Advantage: • (As work more varied) fewer workers might leave [k] from its 600 employees [app] leading to lower recruitment costs [an] • Business has a more flexible / skilled workforce / multiskilling [k] leading to higher productivity / higher output [an] • Easier to cover / replace others when someone is absent [k] so may be able to meet an order on time [an] • Can help business identify where employees work best [k] 6 To use words from the stem as application, the reference must be appropriate (i.e. make sense) in relation to the point being made. The following words are likely to be appropriate for this question: • Steel / gates / garage doors • 600 employees • Public limited company • 22 500 (break-even output) • 30 000 (units sold) • $100 (price per unit) • $900 000 (fixed costs) • $60 (variable cost per unit) Other appropriate examples in context can still be credited. Do not award motivate or demotivate employees as stated in the question. 3(d) Disadvantage: • Increased training needed [k] increasing costs/expenses [an] so may increase its break-even output above 22 500 [app] • Workers may not be familiar with each task / less specialist in task / not good at all tasks [k] lowering quality / increase waste / leads to mistakes [an] increasing variable cost above $60 [app] • Takes time to learn different tasks / switch between jobs [k] Other appropriate responses should also be credited. 3(e) Do you think the shareholders are the most important stakeholder group to the success of a limited company? Justify your answer. Award up to 2 marks for identification of relevant points. Award up to 2 marks for relevant development of points. Award 2 marks for justified decision as to whether shareholders are the most important stakeholder group to the success of a limited company. Points might include: Shareholders/owners • Provide finance / invest money / capital in business [k] which can help the business expand / buy more equipment [an] so can increase output [an] • Influence the aims of the business [k] • Have the power to vote out the directors [k] • They have little / no influence over day-to-day decisions [k] 6 This is a general question so there are no marks for application. Candidates may focus on other stakeholders, but the evaluation must focus on whether shareholders are the most important stakeholder to the success of a limited company. To gain both evaluation marks, response must clearly relate to a limited company. 3(e) Other stakeholders can include: • Customers [k] as they buy the products [an] and if ignores their needs the business will lose sales/revenue [an] • Directors/managers [k] are responsible for day-to-day decision-making [an] • Employees [k] make the products [an] so if they become demotivated quality may fall [an] • Suppliers [k] provide materials/inventory [an] • Local community [k] provide the workers [an] • Government [k] provide the legal framework in which the business operates [an] • Bank [k] provide finance/loans [an] Other appropriate responses should also be credited. Justification might include: Shareholders are important as they invest money in the business [k] which can help the business expand [an]. However, once the business is established, they have little / no influence over day-to-day decisions. Customers [k] matter as they buy the products [an]. While shareholders provide important finance, without customers even a limited company cannot generate income [eval] and without t his cannot cover its costs or make a profit, so the customer is probably the most important stakeholder. [eval] (a) To earn marks, you need to define 'fixed cost' as costs that do not change with the level of output/sales, or do not vary in the short run with the number of items sold or produced. A partial definition, such as 'costs that do not change,' earns one mark. (b) To earn marks, you need to calculate the margin of safety by subtracting the break-even output from the current output (30,000 - 22,500). A correct answer of 7500 units earns two marks, while showing the correct method but an incorrect answer earns one mark.

SCT is a small business that manufactures handmade tables. SCT has 50 trained employees. The Operations Manager uses an autocratic leadership style when making decisions. Some of SCT’s 4 employees are demotivated and the business has a high rate of labour turnover. SCT is planning to relocate to a new factory in the same country. Identify two ways of measuring the size of a business. (a) Way 1: … Way 2: … [2] Identify two methods of training employees. (b) Method 1: … Method 2: … [2] Outline two effects of a high rate of labour turnover to SCT. (c) Effect 1: … … … … Effect 2: … … … … [4] Explain two factors SCT should consider when deciding on the location of a new factory in the same country. (d) Factor 1: … … Explanation: … … … … Factor 2: … … Explanation: … … … … [6] Do you think autocratic leadership is the best style for a small business to use? Justify your answer. (e) … … … … … … … … … … … [6]

4(a) Identify two ways of measuring the size of a business. Award 1 mark per way [max 2]. Points might include • (Value of) capital employed • Market share • Value of output / value of sales / revenue • Number of employees • Value of business • Number of customers / volumes of output / number of services Other appropriate responses should also be credited. Only award the first two responses given. 4(b) Identify two methods of training employees. Award one mark per method (max 2). Two from: • Induction • On-the-job • Off-the job 2 Only award the first two responses given. 4(c) Outline two effects of a high rate of labour turnover to SCT. Award one mark for each relevant effect (max 2). Award one mark for each relevant reference to this business (max 2). Points might include: • (Higher) cost of recruiting new / replacing workers [k] as have 50 employees [app] • (Higher) cost of training new employees [k] as all workers need to be trained [app] • Disruption to production / lower productivity / lower output / more mistakes / lower quality [k] when making tables [app] • Can damage business reputation / more difficult to recruit new employees [k] especially as manager has an autocratic leadership style [app] • Takes managers time away from other important work [k] which might be a problem as it’s a small business [app] • Time taken to recruit new / replace workers [k] for the factory [app] • Time taken to train new employees [k] Other appropriate responses should also be credited. 4 To use words from the stem as application the reference must be appropriate (make sense) in relation to the point being made. The following words are likely to be appropriate for this question: • 50 employees • Trained (employees) • (Handmade) Tables or associated words such as wood • Factory • Autocratic leadership style • Relocate • Small (business) Other appropriate examples can still be credited. 4(d) Explain two factors SCT should consider when deciding on the location of a new factory in the same country. Award one mark for identification of each relevant factor (max 2). Award one mark for each relevant reference made to this business (max 2). Award one mark for each relevant explanation (max 2). Points might include: • Cost of land [k] to see if they can afford it [an] as they are a small business [app] • Availability / cost of (suitable) labour [k] as they will need trained employees [app] otherwise quality may drop [an] • Government influence or examples such as grant / legal controls [k] which may influence or restrict where / how the business is allowed to operate [an] when making tables [app] • Access to suppliers / raw materials [k] as if far away could increase transport costs [an] • Transport / communication links [k] • Access to power / water [k] • Possible external economies of scale [k] • Enough space / scale of production [k] Other appropriate responses should also be credited. 6 To use words from the stem as application the reference must be appropriate (make sense) in relation to the point being made. The following words are likely to be appropriate for this question: • 50 employees • Trained (employees) • Tables • High labour turnover • Small (business) Other appropriate examples can still be credited. 4(e) Do you think autocratic leadership is the best style for a small business to use? Justify your answer. Award up to two marks for identification of relevant points. Award up to two marks for relevant development of points. Award up to two marks for justified decision as to whether autocratic leadership is the best style for a small business. Points might include: Autocratic leadership • Decisions can be made quickly [k] so able to respond to opportunities quicker / so work can happen more quickly [an] • No employee involvement / employees cannot give opinions / ideas / one-way communication [k] which can demotivate them [an] leading to absenteeism / higher labour turnover [an] • Employees are closely supervised [k] so leaders / managers have less time to spend on other tasks [an] could lead to more mistakes [an] Other leadership styles might include: Democratic leadership [k] • Can lead to more / better ideas [an] increasing productivity [an] • Allows for better relationships between workers and managers [an] • Involving employees in decisions / likely to delegate [an] can help improve employee motivation [an] • Takes time to ask people especially when many employees [an] • Unpopular decisions cannot be made using this method [an] • Some employees may not want / cope with extra responsibility [an] 6 This is a general question so there are no marks for application. Advantages of one method can be presented as disadvantages of the other method but do not award the same point twice as mirror answers are not accepted. For evaluation to be awarded justification will usually follow on from relevant analysis of points. 4(e) Laissez-faire leadership [k] • Highly motivating for employees as given most responsibility [an] • Task / work may not be suitable to delegate power [an] Other appropriate responses should also be credited. Justification might include: Decisions are made more quickly with autocratic leadership [k] so employees can get on with their tasks sooner [an]. One problem is that there is no input from employees [k] so the business could miss out on new ideas [an]. Overall, I think it can be a good style when you need to make quick decisions but as a small business is less likely to have specialist managers for each department, they need to embrace the ideas of all employees, even if this takes longer [eval] [eval]. (a) To earn marks, you must identify two distinct ways of measuring business size, such as capital employed, market share, or number of employees. (b) To earn marks, you must identify two distinct methods of employee training, such as induction, on-the-job, or off-the-job training.

DCN is a large chemical company. It has 8000 employees across its 3 factories. DCN has agreed to set up a joint venture with a glass making business to develop a new type of environmentally 4 friendly packaging. DCN’s Managing Director said: ‘There are disadvantages to a joint venture. The companies have different leadership styles and business objectives. We will need to look at ways to overcome possible communication barriers.’ Define ‘business objective’. (a) … … … … [2] Identify two ways that business activity might affect the environment. (b) Way 1: … … Way 2: … … [2] Identify four examples of communication barriers. (c) Example 1: … … Example 2: … … Example 3: … … Example 4: … … [4] Explain two possible advantages to DCN of setting up a joint venture with the other business. (d) Advantage 1: … … Explanation: … … … … Advantage 2: … … Explanation: … … … … [6] Do you think autocratic leadership is the most effective style for managers to use when an organisation has a large number of employees? Justify your answer. (e) … … … … … … … … … … … … [6]

4(a) Define ‘business objective’. Award 2 marks for a full definition. Award 1 mark for a partial definition. A statement of a specific target that a business works towards [2] OR A statement of a specific target to be achieved. (They should be SMART) [2] Partial definition e.g. target/goal [1] OR Something the business works towards [1] 2 Do not award examples as this does not explain the term. For 2 marks needs the idea of ‘target’ and that it is something to work towards. 4(b) Identify two ways that business activity might affect the environment. Award 1 mark per way. Points might include: • Pollution (or examples such as air pollution, noise pollution, water pollution) • (Traffic) congestion / transport of goods • Deplete / use of natural resources • Use up green space / land use / deforestation / loss of habitat • Energy use • Emission of greenhouse gases / global warming • Waste (or examples such as IT waste, packaging waste, commercial waste) Other appropriate responses should also be credited. 2 Only award the first two responses given. Max 1 for answers which identify different examples of pollution. 4(c) Identify four examples of communication barriers. Award 1 mark per example. Points might include: • Problem with receiver / examples given – e.g. not paying attention, does not check messages • Problems with medium / examples given – e.g. message gets lost, distorted, technology breaks down, wrong channel used • Problems with sender / examples given – e.g. (different) language used, technical language, speaks too quickly, sends wrong message, message too long • No opportunity for feedback • Different time zones • Long chain of command / wide span of control • Cultural differences Other appropriate responses should also be credited. 4 Only award the first four responses given. 4(d) Explain two possible advantages to DCN of setting up a joint venture with the other business. Award 1 mark for identification of each relevant advantage (max 2). Award 1 mark for each relevant reference made to this business (max 2). Award 1 mark for each relevant explanation (max 2). Points might include: • Increase capital / share costs [k] when making the packaging [app] which can help reduce borrowing [an] • Access to new knowledge / expertise [k] as may learn things from their different leadership styles [app] which could lead to greater productivity / efficiency / higher output [an] • Access new markets [k] as no longer just selling chemicals [app] leading to higher revenue [an] • Share risk [k] • Share resources / share distribution networks / wider range of contact [k] • Avoid/reduce competition [k] increasing market share [an] • May be a legal requirement (in some countries) / avoid government restrictions [k] • Increase production capacity [k] so able to meet potential demand [an] Other appropriate responses should also be credited. 6 Note: To use words from the stem as application, the reference must be appropriate (i.e. make sense) in relation to the point being made. The following words are likely to be appropriate for this question: • Chemical • Glass making • Packaging • Different leadership styles • 8000 employees Other appropriate examples in context can still be credited. 4(e) Do you think autocratic leadership is the most effective style for managers to use when an organisation has a large number of employees? Justify your answer. Award up to 2 marks for identification of relevant points. Award up to 2 marks for relevant development of points. Award 2 marks for justified decision as to whether autocratic leadership is the most effective style for managers to use when an organisation has a large number of employees. Points might include: Autocratic: • Quick decision-making possible [k] so may be able to respond to opportunities as soon as they become available [an] • Demotivating workers (as have no say) [k] leading to higher absenteeism / workers leaving / less employee loyalty / less output / lower productivity[an] • No new ideas [k] Democratic [k] • (Workers have a say) which can motivate employees [an] • As it can help lead to more / better ideas / better decisions [an] • Takes time / time consuming / disagreements might arise [an] • Creates time for managers to do other work [an] • Can help maintain employee loyalty [an] reducing recruitment costs [an] • Mistakes can be made if workers not skilled / lack experience [an] could damage reputation [an] • Some workers might not want to be consulted [an] slowing down decision-making [an] • Unpopular decisions difficult to make using this method [an] 6 This is a general question so there are no marks for application. Advantages of one style can be disadvantages of another, but do not award the same point twice as mirror arguments are not accepted e.g. democratic motivate / autocratic demotivate. Candidates can discuss other leadership styles, but evaluation should focus on whether autocratic leadership is the best style to use when an organisation has a large number of employees. Do not award definitions. 4(e) Laissez-faire [k] • Can be highly motivating [an] • Encourages employees to show creativity / responsibility / take decisions [an] • Task/work may not be suitable to delegate power (especially if low skilled workers) [an] • Does not allow for consistent approach [an] which can damage reputation [an] Other appropriate responses should also be credited. Justification might include: The problem with an autocratic leadership style is that there is no opportunity for employees to be involved in key decisions which can demotivate workers [k] leading to lower quality work [an]. Democratic [k] takes time to ask people especially as there are a lot of employees [an]. Therefore, I think autocratic is the best method in this situation as when quick decisions need to be taken it may not be possible to use democratic leadership [eval] especially as there are a large number of employees, and the business may miss an opportunity if it waits to hear everyone’s views. [eval]