SWB is in the secondary sector. It produces 150000 wooden bookcases each week using batch production. SWB sells all its output to one customer. Quality control is important. SWB has 240 1 employees, of which 100 are part-time workers. SWB’s managers use noticeboards around the factory and meetings with employees every month to help reduce communication barriers. The Operations Manager is considering introducing just-in-time inventory control to reduce the amount of waste. Define ‘secondary sector’. (a) … … … … [2] Identify two factors a business should consider when deciding whether to introduce just-in-time inventory control. (b) Factor 1: … … Factor 2: … … [2] Outline one advantage and one disadvantage to SWB of using quality control. (c) Advantage: … … … … Disadvantage: … … … … [4] Explain two possible communication barriers that might exist at SWB. (d) Communication barrier 1: … … Explanation: … … … … Communication barrier 2: … … Explanation: … … … … [6] Do you think it is a good idea for a business to have only one customer? Justify your answer. (e) … … … … … … … … … … … … [6]

1(a) Define ‘secondary sector’. Award 2 marks for a full definition. Award 1 mark for a partial definition. Firms that process and manufacture goods from natural resources [2] OR Manufacture goods using the raw materials provided by the primary sector [2] OR Uses manufacturing to transform the raw materials generated in the primary sector into a product [2] Partial definition e.g. makes products [1] 2 Do not award examples. 1(b) Identify two factors a business should consider when deciding whether to introduce just-in-time inventory control. Award 1 mark for each factor identified. Points might include: • Reliability of suppliers / time / speed of delivery / availability of inventory at suppliers / distance from suppliers • Whether there is steady production / predictable demand • Efficient system of ordering materials / good communication systems • Whether discounts are available for bulk purchases • Cost/availability of storage space Other appropriate responses should also be credited. 2 Only award the first two responses given. 1(c) Outline one advantage and one disadvantage to SWB of using quality control. Award 1 mark for each relevant advantage/disadvantage. Award 1 mark for each relevant reference to this business. Points might include: Advantages: • Tries to eliminate faults before customer receives products / reduces likelihood that customers get faulty products [k] as only has one customer [app] • Not all workers need to be trained (as inspectors employed to check quality) [k] which is important as has 240 employees [app] Disadvantages: • Cost/need to recruit inspectors/employees to check [k] the bookcases [app] • Does not find out how/where fault occurred [k] in each batch [app] • High cost if products must be scrapped / reworked / service repeated [k] which clashes with its objective to reduce waste [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 may be appropriate for this question: • 150 000 / bookcases or related words such as wood • Batch production • 240 employees / 100 or part-time employees / 140 full time • Factory • One customer • Just-in-time inventory control • Objective is to reduce waste Other appropriate examples in context can still be credited. 1(d) Explain two possible communication barriers that might exist at SWB. Award 1 mark for identification of each relevant communication barrier (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: • Technical language / jargon / different language spoken [k] so workers do not understand [an] so make wrong number of bookcases [app] • Lack of feedback / no opportunity for feedback [k] so do not know / cannot check if message received / understood (correctly) [an] so not able to help reduce waste [app] • Noise [k] so employees may not hear / mishear orders [an] in the factory [app] • Employees may not be at work [k] as 100 work part-time [app] so not able to obtain the information [an] • Too much information / detail [k] so not possible to absorb / take it all in [an] • Employees may not see/read message [k] on the noticeboard [app] • Not listening / not paying attention [k] in the meeting [app] • Wrong communication method/medium used [k] • Receiver may not trust the sender [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 may be appropriate for this question: • 150 000 / bookcases or related words such as wood • Batch production • 240 employees / 100 or part-time employees / 140 full-time • Factory • Reducing waste • Meetings (every month) • Noticeboards • Just-in-time inventory control Other appropriate examples in context can still be credited. 1(e) Do you think it is a good idea for a business to have only one customer? 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 a justified decision as to whether it is a good idea for a business to have only one customer. Points might include: • Only one source of revenue / sales [k] so if the customer does not buy, the business could fail / experience cash flow issues [an] • Can focus / specialise on the needs of that customer [k] increasing customer loyalty [an] • Can help planning / know what need to order [k] reduces amount of wastage [an] • No need to advertise [k] leading to lower marketing costs [an] • Can give customer too much power to influence prices [k] • Less administration (compared to several customers) [k] Other appropriate responses should also be credited. Justification might include: Having a single customer can make it easier to focus on the needs of that customer [k] so more likely to build customer loyalty [an.] However, can spread the risk if more than one customer [k] so if one stops buying they can rely on the other customers [an]. I think having a single customer is too high a risk as the business is totally dependent on one other business for its own success [eval] as it ties its success to the other business over which it has little control. [eval] 6 This is a general question so there are no marks for application. (a) To earn 2 marks, define the secondary sector as firms that process and manufacture goods from natural resources, or use raw materials from the primary sector to make products. A partial definition, like 'makes products,' earns 1 mark. (b) To earn marks, identify two distinct factors a business should consider, such as supplier reliability, demand predictability, communication systems, bulk purchase discounts, or storage costs.

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 must define 'fixed cost' as costs that do not change with the level of output or sales, or that 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. Full marks are awarded for the correct answer (7500 units), and one mark for showing the correct method even if the answer is incorrect.

BGR is a private limited company. It operates 6 cinemas in different towns. Effective internal communication is important for BGR. The Finance Director has been analysing BGR’s accounts 4 and an extract is shown in Table 4.1. BGR plans to open another cinema and will need to recruit 10 new employees. The new cinema will cost $8m. The Finance Director has to decide whether BGR should issue new shares or use a bank loan to finance the expansion. Table 4.1 Extract from BGR’s Income statement for year ending 2020 ($000’s) X Revenue 180 Cost of sales 720 Gross profit Y Expenses 400 Profit Define ‘cost of sales’. (a) … … … … [2] Calculate X and Y. (b) X: … Y: … [2] Identify four stages of the recruitment process. (c) Stage 1: … … Stage 2: … … Stage 3: … … Stage 4: … … [4] Explain two reasons why effective communication might be important to BGR. (d) Reason 1: … … Explanation: … … … … Reason 2: … … Explanation: … … … … [6] Do you think issuing new shares is a better way for a limited company to finance expansion than using a bank loan? Justify your answer. (e) … … … … … … … … … … … … [6]

4(a) Define ‘cost of sales’. Award 2 marks for a full definition. Award 1 mark for a partial definition. Cost of producing or buying in the goods sold by the business during a period of time [2] OR Cost of purchasing the goods used to make the products sold [2] OR Variable cost of making the goods sold [2] OR Cost per unit x number of output sold [2] OR Opening inventory + purchases – closing inventory [2] Partial definition e.g. money spent on materials [1] 2 Do not award examples or answers which include references to expenses. 4(b) Calculate X and Y. Award 1 mark for each correct calculation. X 900 000 or 900 Y 320 000 or 320 2 4(c) Identify four stages of the recruitment process. Award 1 mark per stage. Four from: • Job analysis / identify vacancy • Job description • Person/job specification • Advertising (the vacancy) • Application forms sent out/received • Short listing/screening • Interview/testing • Selection / job offer / hire Other appropriate responses should also be credited. 4 Only award the first four responses given. Note: Answer must be from the business viewpoint not the applicants e.g. CV or letter of application. 4(d) Explain two reasons why effective communication might be important to BGR. Award 1 mark for identification of each relevant reason (max 2). Award 1 mark for each relevant reference to this business (max 2). Award 1 mark for each relevant explanation (max 2). Points might include: • To ensure employees / suppliers carry out the instructions correctly / understand what to do [k] to make sure the right thing is done / there is no wastage [an] • Speed up decision-making [k] at the new location [app] so able to quickly react to changing customer tastes [an] • To ensure customers are given correct information [k] which can help improve customer loyalty [an] • Find customer preferences [k] so can use the information to help improve its services / make it more competitive [an] • Motivates employees [k] increasing efficiency [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: • Cinemas (or cinema related words such as movies, suppliers of popcorn) • New location • $320 000 expenses • Recruit 10 more employees Other appropriate examples in context can still be credited. 4(e) Do you think issuing new shares is a better way for a limited company to finance expansion than using a bank loan? 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 a justified decision as to whether issuing new shares is a better way for a limited company to finance expansion than using a bank loan. Points might include: Issue new shares: • Permanent source of capital [k] so no need to repay [an] • Access to greater amounts of capital [k] as no restriction on number of shares [an] • No interest to pay [k] so fixed costs do not increase [an] so can avoid increasing debt [an] • Possible loss of control / risk of takeover [k] making it difficult to manage or take decisions [an] • Cost/time to arrange [k] so not able to focus on other issues [an] • Shareholders might expect dividends [k] 6 This is a general question so there are no marks for application. Candidates can discuss other options, but evaluation must focus on whether new shares is better than a bank loan to finance expansion. 4(e) Bank loan: • Increase debt [k] which can increase gearing ratio [an] • Need to repay [k] • Must pay interest [k] which increases expenses [an] • Have long time to repay [k] allows time to gain extra revenue to meet repayments [an] • Can keep profits for future/emergency [k] • Can borrow large amount / all the money [k] Other appropriate responses should also be credited. Justification might include: Issuing new shares give access to large amounts of capital [k] as there is no restriction on the number of shares. [an] Bank loans require interest payments [k] which will increase costs. [an] It can depend on the current level of debt as a bank loan will increase financial risk[eval] so it may be safer to issue shares as a limited company will not be required to repay the funds. [eval]

GCF is a public limited company. It provides a range of computer services to businesses including designing websites and creating apps. The Human Resources Director use ideas based on Maslow’s 4 Hierarchy of Needs to help keep GCF’s 250 employees well-motivated. An extract of methods used is shown in Table 4.1. GCF plans to expand by taking over one of its competitors. This will cost $50m. To finance the takeover, GCF is considering issuing new shares. Table 4.1 Extract of methods used at GCF to motivate employees ‘Employee of the month’ award Organises team building courses Identify two features of a public limited company. (a) Feature 1: … … Feature 2: … … [2] Identify the level of Maslow’s Hierarchy of Needs each of the following methods belongs to. (b) ‘Employee of the month award’:… Organises team building courses: … [2] Outline two advantages to GCF of having well-motivated employees. (c) Advantage 1: … … … … Advantage 2: … … … … [4] Explain one advantage and one disadvantage to GCF of issuing new shares as a source of finance. (d) Advantage: … … Explanation: … … … … Disadvantage: … … Explanation: … … … … [6] Do you think the number of employees is the best way to measure the size of a tertiary sector business? Justify your answer. (e) … … … … … … … … … … … … [6]

4(a) Identify two features of a public limited company. Award 1 mark for each feature identified. Points might include: • Limited liability • Can sell shares to the general public / shares quoted on stock exchange • Must publish its accounts / more regulations • Separate legal identity / business survives death of owners • Minimum of two owners • Must hold an Annual General Meeting (AGM) 2 Only award the first two responses given. 4(b) Identify the level of Maslow’s Hierarchy of Needs each of the following methods belongs to. Award 1 mark per correct answer. ‘Employee of the month award’: Level 4 OR esteem Organises team building courses: Level 3 OR social/belonging 2 Do not award self-esteem as alternative to esteem (as this is not a level). 4(c) Outline two advantages to GCF of having well-motivated employees. Award 1 mark for each relevant advantage. Award 1 mark for each relevant reference to this business. Points might include: • High / higher productivity / efficiency / output / work quick or quicker [k] when working for its business customers [app] • Less likely to leave / low labour turnover [k] of its 250 employees [app] • Less absenteeism [k] so easier to offer computer services [app] • Willing to accept change / new methods of working [k] which could be important when its looking to take over a competitor [app] • Good / better (quality) service / fewer mistakes / less errors [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 may be appropriate for this question: • Computer services or examples such as designing apps / websites • 250 (employees) • Business customers • Takeover (a competitor) / plans to expand Other appropriate examples in context can still be credited. 4(d) Explain one advantage and one disadvantage to GCF of issuing new shares as a source of finance. 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: Advantages: • Access to large amounts of capital [k] so able to fund expansion [an] as need to raise $50m [app] • No interest / finance costs to pay [k] so fixed costs do not increase [an] so can invest in its computer services / designing websites [app] • Permanent source of capital [k] so no need to repay [an] • Avoid increasing debt [k] Disadvantages: • Cost/time to arrange [k] so not able to focus on other issues [an] such keeping its employees well-motivated [app] • Increased risk of takeover / original owners may lose control [k] which could change the direction / objectives of the business [an] • Shares might not be bought / no guarantee can raise planned amount [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 may be appropriate for this question: • Computer services or examples such as designing apps / websites • $50m • Takeover (a competitor) / plans to expand • Well-motivated employees • Public limited company Other appropriate examples in context can still be credited. 4(e) Do you think the number of employees is the best way to measure the size of a tertiary sector business? 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 a justified decision as to whether the number of employees is the best way to measure the size of a tertiary sector business. Points might include: Employees: • Some businesses make use of a lot of technology/equipment [k] so it does not need as many workers [an] • Some businesses may have a lot of part-time workers [k] which can be difficult to compare businesses [an] • Simple/easy to calculate [k] Other points might include: • Value of sales / revenue / output [k] as high value can suggest many customers [an] resulting in higher revenue [an] • Capital employed [k] but some types of business may have a high level of non-current assets / technology / shops whereas others do not [an] • Number of outlets/branches [k] but could be (in area of) low demand [an] • Market share [k] • Number of customers/services [k] Other appropriate responses should also be credited. 6 This is a general question so there are no marks for application. Do not award profit as a measure of size. 4(e) Justification might include: Using employees may not be a good measure as some businesses make use of a lot of technology [k] so it does not need as many workers. [an] A better way is value of sales [k] which can suggest a business has many customers [an]. I think value of sales is the better measure, as all businesses will have sales revenue [eval] whereas the number of employees can depend on the type of tertiary sector business. [eval] (a) To earn marks, identify two distinct features of a public limited company, such as limited liability, ability to sell shares to the public, requirement to publish accounts, or separate legal identity. (b) To earn marks, correctly identify 'Employee of the month award' as belonging to Level 4 (esteem) and 'Organises team building courses' as belonging to Level 3 (social/belonging) of Maslow's Hierarchy of Needs.

Cambridge O Level Business Studies · 7115

O-Level Business Studies (7115) People in business past paper questions

People-in-business questions test motivation, organisation and management, recruitment and training, and communication, drilling the theories (Maslow, Herzberg, Taylor) and the point-plus-application the mark scheme rewards.

43 free questions from 2017–2021, each with its marking scheme. Open the full topical bank to filter by subtopic, paper, and year.