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General Certificate of Education
June 2010

GCE Business Studies BUSS2

Mark Scheme
Mark schemes are prepared by the Principal Examiner and considered, together with the
relevant questions, by a panel of subject teachers. This mark scheme includes any
amendments made at the standardisation meeting attended by all examiners and is the scheme
which was used by them in this examination. The standardisation meeting ensures that the
mark scheme covers the candidates’ responses to questions and that every examiner
understands and applies it in the same correct way. As preparation for the standardisation
meeting each examiner analyses a number of candidates’ scripts: alternative answers not
already covered by the mark scheme are discussed at the meeting and legislated for. If, after
this meeting, examiners encounter unusual answers which have not been discussed at the
meeting they are required to refer these to the Principal Examiner.

It must be stressed that a mark scheme is a working document, in many cases further
developed and expanded on the basis of candidates’ reactions to a particular paper.
Assumptions about future mark schemes on the basis of one year’s document should be
avoided; whilst the guiding principles of assessment remain constant, details will change,
depending on the content of a particular examination paper.

Further copies of this Mark Scheme are available to download from the AQA Website: www.aqa.org.uk

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 Business Studies - AQA GCE Mark Scheme 2010 June series

Assessment Objectives
The Assessment Objectives represent those qualities which can be
demonstrated in candidates’ work and which can be measured for
the purposes of assessment.

AO1
Demonstrate knowledge and Candidates give accurate definitions of relevant terms. Candidates
understanding of the can also gain credit for identifying a point relevant to the question.
specified content

AO2
Apply knowledge and Candidates should apply their knowledge to the business context in
understanding to problems which the question is set, through recognition of some specific
and issues arising from both business aspect, the management of the business or the problems
familiar and unfamiliar or issues faced by the business.
situations Candidates will not be rewarded for simply dropping the company
name or product category into their answer.
AO3
Analyse problems, issues Candidates use relevant business theory and select information
and situations from a range of sources, using appropriate methods, to analyse
business problems and situations. For example, candidates may
be asked to build up an argument that shows understanding of
cause and effect.
AO4
Evaluate, distinguish Candidates evaluate evidence to reach reasoned judgements.
between and assess This can be shown within an answer, through the weighting of an
appropriateness of fact and argument or It can also be shown within a conclusion, perhaps by
opinion, and judge weighing up the strength of the candidate’s own arguments for and
information from a variety of against a proposition.
sources
Candidates will not gain credit by the simple use of drilled phrases
such as “On the other hand” or “Business operates in an ever-
changing environment”.

Quality of Written The quality of written communication is assessed in all assessment

Communication units where candidates are required to produce extended written
material. Candidates will be assessed according to their ability to:
• ensure that text is legible, and that spelling, grammar and
punctuation are accurate, so that meaning is clear.
• select and use a form and style of writing appropriate to
purpose and complex subject matter
• organise information clearly and coherently, using specialist
vocabulary when appropriate
The assessment of the quality of written communication is included
in Assessment Objective 4.

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 Business Studies - AQA GCE Mark Scheme 2010 June series

1 Total for this question: 40 marks

1(a) Using the information in Figure 1, calculate the Eden Project’s change in unit costs per
visitor between 2005/6 and 2006/7. (6 marks)

Correct answer: £0.09 or 9 pence (6 marks)

£0.08 or 8 pence (6 marks)

£0.10 or 10 pence (5 marks)

Cumulative Marking

Implicit formula (1 mark)

2005/2006 £18.06m
1.18m (1 mark)
= £15.30 or £15.31 (accept £15.305) (1 mark)

2006/2007 £17.66m
1.16m (1 mark)
= £15.22 (accept £15.224) (1 mark)

Unit costs fell by 9 pence or £0.09 (1 mark)

(6 marks)

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 Business Studies - AQA GCE Mark Scheme 2010 June series

1(b) Analyse two reasons why the Eden Project’s cash flow may have been negative during
the financial years 2005/6 and 2006/7. (7 marks)

Level Descriptor Marks

L5 Good application and Good analysis 7
L4 Good application or analysis and Limited application or analysis 6–5
L3 Limited application and analysis or Good application or analysis 4
L2 Knowledge and/or Weak application/analysis 3–2
L1 Limited knowledge 1

Relevant answers might include the following:

• the falling number of visitors in 2006/7 may have resulted in cash inflows being lower than
forecast
• Eden has paid back substantial amounts of its loans – they fell from £15 million in 2005/6 to
£6.6 million in 2006/7
• the business has invested heavily in its facilities including technology to reduce expenditure
on energy. However, this will have involved substantial outflows prior to any gains being
made
• technical problems with the new boiler system will have added unexpectedly to the
business’s cash outflows.

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 Business Studies - AQA GCE Mark Scheme 2010 June series

1(c) Discuss the actions that the Eden Project’s managers might have taken to maximise the
performance of the Eden Project’s workforce as it grew from 5 to 750 employees.
(12 marks)

Level Descriptor Marks

L5 Good application and Good analysis 8
L4 Good application or analysis and Limited application or analysis 7–6
L3 Limited application and analysis or Good application or analysis 5–4
L2 Knowledge and/or Weak application/analysis 3–2
L1 Limited knowledge 1

Relevant answers might include the following:

• careful recruitment and selection of employees with the right skills as the workforce has
expanded so rapidly – 50% of managers from within to ensure continuity and understanding
of the business
• adapting the organisational structure to meet the enterprise’s needs to, for example, avoid
too wide spans of control and poor communication flows
• by making the workforce responsive to change in demand through the use of seasonal
workers
• using volunteers helps to reduce the cost of employing people
• the use of teams to allow a greater degree of employee empowerment and flexibility to
meet different needs
• high quality training to meet changing needs such as provision of education for schools
• financial motivation for certain employees such as retail staff.

Ideas for Evaluation might include the following:

• getting the right employees has probably been the key factor in improving employee
performance
• the move to teamwork recognises the diverse workload placed on the workforce and how
this has changed quickly.

Level Descriptor Marks

Candidate offers judgement plus full justification.
Ideas are communicated using a coherent structure with consistent
E3 4–3
and appropriate use of technical terms. There are few errors in
accepted conventions of written communication.
Candidate offers judgement plus limited justification.
Ideas are communicated using a logical structure with some
E2 2
appropriate use of technical terms. There are occasional errors in
accepted conventions of written communication.
Candidate offers undeveloped judgement based on evidence.
Ideas are communicated with some structure evident, with
E1 1
occasional use of appropriate technical terms. There are some
errors in accepted conventions of written communication.

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 Business Studies - AQA GCE Mark Scheme 2010 June series

1(d) Has the Eden Project improved its competitiveness as a business over time? Justify
your view. (15 marks)

Level Descriptor Marks

L5 Good application and Good analysis 11–10
L4 Good application or analysis and Limited application or analysis 9–7
L3 Limited application and analysis or Good application or analysis 6–4
L2 Knowledge and/or Weak application/analysis 3–2
L1 Limited knowledge 1

Relevant answers might include the following:

• a competitive business is one which is able to compete in its market place.
Arguments against the Eden Project being considered a competitive business:
• the number of visitors into the business fell from 1.18 million to 1.16 million between 2006
and 2007
• the business’s cash flow has been negative for the past two years – minus £580 000 in
2007
• the amount of waste being recycled is declining (although Eden could be producing less).
Arguments for the Eden Project being considered a competitive business:
• customer numbers have risen rapidly since 2001
• the Eden Project’s location in Cornwall – a popular tourist destination – with few similar
enterprises to act as competition
• the percentage of visitors who are satisfied or very satisfied is high and rising
• Eden has established itself as a major visitor attraction within a few years of being
established
• the ability to control its costs – Eden’s total costs fell between 2006 and 2007
• Eden is engaged in a range of activities such as staging concerts and publishing
• the business’s unit costs have fallen by 8 or 9 pence over the past two years (OFR here).
Issues for evaluation may include the following:
• do standard measures of competitiveness apply here? Surely it is about raising awareness
of environmental issues?
• competitiveness for this business is about attracting customers and generating revenue.
Eden has been pretty successful in doing this.

Level Descriptor Marks

Candidate offers judgement plus full justification.
Ideas are communicated using a coherent structure with consistent
E3 4–3
and appropriate use of technical terms. There are few errors in
accepted conventions of written communication.
Candidate offers judgement plus limited justification.
Ideas are communicated using a logical structure with some
E2 2
appropriate use of technical terms. There are occasional errors in
accepted conventions of written communication.
Candidate offers undeveloped judgement based on evidence.
Ideas are communicated with some structure evident, with
E1 1
occasional use of appropriate technical terms. There are some
errors in accepted conventions of written communication.

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 Business Studies - AQA GCE Mark Scheme 2010 June series

2 Total for this question: 40 marks

2(a) Analyse two possible factors that might influence George Liddell’s choice of
promotional mix. (6 marks)

Level Descriptor Marks

L5 Good application and Good analysis 6
L4 Good application or analysis and Limited application or analysis 5
L3 Limited application and analysis or Good application or analysis 4–3
L2 Knowledge and/or Weak application/analysis 2
L1 Limited knowledge 1

Relevant answers might include the following:

• the promotional mix refers to the combination of ways which a business can communicate
with its customers
• the finance available to GL Ltd – it has made a loss in the most recent year
• the type of customer buying the product – in this case it is relatively well-off 30–50 year olds
• what promotional methods have worked in the past, eg sending out catalogues by post
• his reluctance to use retailers because of their mark ups.

2(b) Examine two possible drawbacks to GL Ltd of using financial methods to motivate its
employees. (8 marks)

Level Descriptor Marks

L5 Good application and Good analysis 8
L4 Good application or analysis and Limited application or analysis 7–6
L3 Limited application and analysis or Good application or analysis 5–4
L2 Knowledge and/or Weak application/analysis 3–2
L1 Limited knowledge 1

Relevant answers might include the following:

• financial methods of motivation involve the use of monetary systems to try to improve the
performance of employees
• the company’s financial position is not strong and perhaps it cannot afford this approach to
motivation
• will the system for departmental managers be effective given that the business has made a
loss in 2009?
• expenditure on wages and salaries is above budget and is an area George needs to control
• the company is experiencing rising problems with quality - paying bonuses based on
assembly targets may not help to resolve this problem.

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 Business Studies - AQA GCE Mark Scheme 2010 June series

2(c) (i) Identify two examples of adverse variances from the data in Figure 2. (2 marks)

1 mark for each example identified (1 + 1).

The following are examples of adverse variances:

• sales revenue
• wages and salaries
• total costs
• profit.

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 Business Studies - AQA GCE Mark Scheme 2010 June series

2(c) (ii) The best way for George Liddell to improve the profitability of his business would be
to sell his watches through retailers. To what extent do you agree with this
statement? (11 marks)

Level Descriptor Marks

L5 Good application and Good analysis 7
L4 Good application or analysis and Limited application or analysis 6–5
L3 Limited application and analysis or Good application or analysis 4
L2 Knowledge and/or Weak application/analysis 3–2
L1 Limited knowledge 1

Relevant answers might include the following:

• profits are the surplus of revenues over costs for a trading period.
Reasons for:
• he may be able to sell at higher prices using retailers
• sales may be higher through retailers
• selling through retailers would bring his watches to the attention of more customers.

Reasons against:
• if demand really is price inelastic he should just increase prices to increase revenue
• the 2009 mailshot was successful and should be repeated on a larger scale
• wages and salaries are significantly over budget given the lower than expected level of
sales – he may need to review production targets or abandon them
• it would be better to reduce the level of faulty products produced by the business.

Ideas for Evaluation might include the following:

• increasing the price might bring about a quick improvement in profits and might help to
emphasise the quality of the product
• he may need to consider his business model and to use more mainstream methods of
distributing his products to consumers.

Level Descriptor Marks

Candidate offers judgement plus full justification.
E3 Ideas are communicated using a coherent structure with consistent 4–3
and appropriate use of technical terms. There are few errors in
accepted conventions of written communication.
Candidate offers judgement plus limited justification.
E2 Ideas are communicated using a logical structure with some 2
appropriate use of technical terms. There are occasional errors in
accepted conventions of written communication.
Candidate offers undeveloped judgement based on evidence.
E1 Ideas are communicated with some structure evident, with 1
occasional use of appropriate technical terms. There are some
errors in accepted conventions of written communication.

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 Business Studies - AQA GCE Mark Scheme 2010 June series

2(d) Is George right to say that the benefits of his quality assurance system will only be
realised in the long term? Justify your view. (13 marks)

Level Descriptor Marks

L5 Good application and Good analysis 8
L4 Good application or analysis and Limited application or analysis 7–6
L3 Limited application and analysis or Good application or analysis 5–4
L2 Knowledge and/or Weak application/analysis 3–2
L1 Limited knowledge 1

Relevant answers might include the following:

• quality assurance is a system used by businesses to ensure that quality standards are
agreed by all employees and that products meet these standards.
Arguments against George’s view:
• the benefits in terms of the reduction in faulty products could be received fairly quickly, once
any stocks are used up
• the introduction of a quality assurance system may result in motivational techniques relying
more on job design and could offer some quick benefits – especially as the financial system
does not appear to be working
• the training will have to be implemented quickly and may help to improve motivation and
employee performance in the short term.
Arguments for George’s view:
• any financial benefits might only be received in the long term as the costs of training will
increase short-term costs
• there may be teething problems as employees adapt to new roles and responsibilities
• an effective system of quality assurance involves all employees in the business and the
training and new systems will take time to complete.

Issues for Evaluation might include the following:

• George does not seem to be fully in support of introducing a system of quality assurance
which may mean that its benefits will not be immediately apparent
• it depends on how quickly George introduces the new system and whether he is prepared
to invest heavily on training to complete the programme as quickly as possible.

Level Descriptor Marks

Candidate offers judgement plus full justification.
Ideas are communicated using a coherent structure with consistent
E3 5–4
and appropriate use of technical terms. There are few errors in
accepted conventions of written communication.
Candidate offers judgement plus limited justification.
Ideas are communicated using a logical structure with some
E2 3–2
appropriate use of technical terms. There are occasional errors in
accepted conventions of written communication.
Candidate offers undeveloped judgement based on evidence.
Ideas are communicated with some structure evident, with
E1 1
occasional use of appropriate technical terms. There are some
errors in accepted conventions of written communication.

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