What is meant by ‘added value’?

Clear understanding [2]: e.g. difference between price of a finished product

and the cost of the inputs involved in making it
OR difference between the selling price of a product and the cost of bought
in materials and components [2]
OR improvement to the product that makes it worth more plus a relevant
example [2]

What is meant by ‘specialisation?

-way in which work is divided so each worker concentrates on a specific
task so become expert at it OR when people and businesses concentrate
on what they are best at.

Identify two characteristics of a successful entrepreneur.

risk- taker, innovator, creative, self-confident, optimistic, hardworking,
independent, effective
communicator, leadership, initiative, self-motivating /determined, results
driven, good at
networking, multi-skilled

What is meant by ‘private sector’?

- when individuals own business activities/run by individuals
OR not controlled directly by government [1]
OR aim to make a profit [1]
Identify two examples (other than farming) of business activity in the
primary sector.
-mining, fishing,forestry, oil extraction, logging.

What is meant by ‘redundancy’?

-job position has gone and hence person is no longer required

Do you think it would be better for the business to use full-time or

part-time employees? Justify your answer.: Part-time:
• More flexible hours [k] as it is a hotel [app] need staff all the time [an]
• Easier to ask workers to work at busy times [k] if more guests [app] more
employees are needed [an]
• When not working no need to pay wages [k] so is less expensive than full
time [an] as which could help this new
business [app]
• Need to recruit/train more employees [k] so uses up more of budget [app]
which will take time [an]
• May leave for full time job elsewhere [k]
Full-time:
• Consistency of service [k] helps its luxury image [app] so could help boost
reputation/ attract more customers [an]
• Workers likely to be more committed to business [k]
• Easy to communicate/update [k] as employees always there [an]
• Internal pool of candidates for future promotion [k]
• Fewer workers needed [k]

Identify two ways to measure the size of a business.

• Sales value OR value of output OR revenue,
• Market share
• Capital employed/value of balance sheet
• Number of employees

Calculate the percentage (%) of businesses in country R which are

partnerships.
Good application [2] 10%
Some application [1], e.g. number of partnerships/total number of
businesses OR 0.5 m/5 m

What is meant by the ‘primary sector’?

-Involves extraction/production of raw materials
OR use the natural resources of the earth to produce raw materials used by
other businesses.

What is meant by a ‘sole trader’?

- ownership of business in the hands of one individual/person..
What is meant by ‘public limited company’?
- a company whose shares can be sold on the stock exchange
What is meant by ‘private limited company’?
- a company whose shares cannot be sold to the general public.

What is meant by ‘tertiary sector’?

- industry which provides/sells services [1] to consumers and/or
other sectors of the economy.
Identify and explain two disadvantages to a business of being a
public limitedcompany.
• have to disclose accounts [k] so less able to keep financial details secret
from rivals
[an]
• many legal requirements/regulations [k] which is expensive and time
consuming [an]
• selling shares expensive [k] because shares need to be listed on the
stock market
• shares are freely traded [k] so there is a greater risk of takeover/danger
that original owners might lose control [an]

Consider the advantages and disadvantages for All Active of being

converted to a public limited company? Do you think All Active
should become a public limited company? Justify your answer.
Advantages:
• Access to greater sources of finance [k] so help fund expansion [an] of 5
more clubs
[app]
• Greater prestige/status [k] so might be able to attract better
managers/employees [an]
Disadvantages:
• More legal requirements to meet [k]
• Already have limited liability [k] as private limited company [app] so is
there much benefit
[eval]
• business is already successful [k] as profits have increased [app] so might
have funds
for expansion already [an]
• Greater Risk of takeover [k]

Identify and explain two reasons why shareholders might be

interested in the accounts of a business.

• will want to know how well the company has performed (e.g. are they
making a profit) [k]
to know how much dividend they might receive [an]/whether it is worthwhile
to CARRYon investing in the company [an]
• potential investors will want to know if it is worth investing in company
[an] as if returns
are poor they will look for alternative investments [an]
• is the company being run efficiently (e.g. liquidity, debt levels) [k]
• whether likely to see a rise in share price if business is successful [k]
• to compare with other businesses accounts [k] to decide which one to
invest in [an].

Identify and explain three factors that a business should consider

before issuing more shares.
Factors might include:
• likely take up by the market (ease of selling) [k]
• anticipated impact on share price [k]/impact on market’s view of the
company [k] if
market don’t like issue it could affect reputation or share price [an]
• risk of takeover [k] or loss of control of existing shareholders [k] who
might not allow HTB
to issue more shares [an]
• do they have any other options of raising capital [k]/is it an appropriate
way to raise the
amount needed [k].

What is meant by a ‘partnership’?

– 2 [or more] people who agree to own and run a business together

Identify and explain two advantages to Moeen and Ali of forming a

private limited company.
• Access to more capital [k] which could help increase their budget/so can
afford to create luxury image [app]
• Benefit from limited liability [k] if new business fails [app]
• Continuity of existence [k] if anything happens to one of them will not have
to close hotel [app]
• Separate legal identity [k]
• Control over who buys shares [k]
Identify and explain one advantage and one disadvantage of a business being
a public limited company.
Advantages:
• Able to sell shares on stock market [k] so no limit to potential number of
shareholders [app]
• Access to more sources of finance [k] so do not have to ask for support from
Government [app]
• Limited liability [k]
• Separate legal identity [k] of mining business and owners [app]
• Better status OR seen as lower risk [k] so suppliers more willing to offer
credit [app]
Disadvantages:
• Have to disclose accounts [k] so less able to keep expansion plans secret
[app]
• Many legal requirements/regulations [k]

What is meant by ‘dividends’?

-payment to shareholders [1] from profits of a company [+1] Return to
shareholders for investing in the company

Identify and explain two advantages to a business of being a

multinational company.
• Access to new market/increase sales/market share [k] as people need
food [app]
• Reduce production costs, e.g. lower labour costs OR lower health and
safety costs OR land costs [k] as X is a
developing country [app];
• Spread risk [k] when selling chemicals [app]
• Easier access to raw materials [k] for all its factories [app]
• Avoid barriers to trade [k]
• Remain competitive [k]
• Reduce transport costs (as can produce goods nearer market)
• Economies of scale, e.g. purchasing, finance [k] (only once)
• Reduce tax liability/take advantage of favourable tax laws
• Access government grants [k]

What is meant by ‘multinational company’?

– a business with factories, production or service
operations in more than one country
OR a business with production or service operation in another country
outside its normal area of operation.

Identify and explain one advantage and one disadvantage of a

business being a business partnership.
Advantage:
• More ideas [k] about what type of tours to offer [app] can help increase
business sales [an]
• Access to more capital (than sole trader) [k] can help solve cash flow
problems [app] improving chance of survival [an]
• Share workload OR decision making [k] so making business more
efficient [an]
• More skills OR expertise OR can specialise [k], Richie does the finance
[app] allowing time for Justin to focus on his job [an]
• Share loss OR risk [k] so do not have to carry all the financial burden [an]
especially if buy new bus [app]
Disadvantage:
• Disagreements [k] about expansion [app] leading to lost sales OR low
productivity [an]
• Unlimited liability OR each responsible for debts of other [k] so if cannot
repay the $28 000 [app] their personal belongings are at risk as well [an]
• Have to share profits [k] with each brother [app]
• Slower decision-making [k] on whether to lease [app] so lose competitive
advantage [an]

Identify and explain one advantage and one disadvantage to Cory and
Phoebe of being in a business partnership.

Advantage:
• More ideas [k] which could make business more competitive [an]
• More capital (than sole trader) [k] which may help solve cash flow
problems [app] so less need to borrow money [an]
• Share responsibilities OR workload OR Specialisation OR more skills
[k] so have time to focus on what they are good at [an] as Corey
focuses on finance [app]
• Share risk OR losses [k]
Disadvantage:
• Different objectives [k] such as Phoebe wants to keep current supplier
[app] leading to disagreements [an]
• Have unlimited liability [k] Phoebe could lose her home [app] as
personal belongings at risk if business fails [an]
• Have to share profits [k] so each person makes less than if it’s a sole
trader [an]
• Do not have separate legal identify [k]
• Slow decision making OR risk of disagreements [k] as takes times to
resolve differences [an]

Identify and explain two advantages to business of being a private

limited company.
• Limited liability [k] compared to when it was a partnership [app]
• Easier to raise money / capital [k] as business is expanding quickly
[app]
• More credibility with suppliers [k] could get better terms when buying
furniture [app]
• Continuity [k]
• No need to publish (detailed) accounts [k] of its 10 shops [app]
• Separate legal identity/ incorporated [k]
• Control over who can buy shares/ less risk of takeover [k]

What is meant by a ‘business plan’?

- a document containing the business aims/objectives and important details
about the operations, finance and owners of a business

Identify two ways to measure the size of a business (other than

number of employees).

• Sales value OR value of output OR revenue

• Capital employed
• Value of balance sheet
• Market share
Identify two way(s of measuring the size of a company.
Measures include:
• sales value OR value of output OR revenue
• capital employed
• number of employees
• value of balance sheet
• market share.
 Identify two possible objectives a business could have.
- expansion OR growth/survival/increased market share OR more
customers OR increased sales/customer service/profit/enter new overseas
markets/added
value.

Identify and explain two advantages to Si and Ramon of having a

business plan.
• Support loan applications [k] as bank/lenders will want to know that the
$12 500 [app]
can be repaid [an]
• Clear aims/guidance for business [k] so they know what they have to do
to get there [an]
• help decision making [k] as Si believe there is customer demand for
service before start
[app] so will not waste time and money targeting the wrong people [an]
• helps understand the possible risks [k] as they might not have run a
business before
[app]
• provides an estimate of costs [k] for the photography business [app] so
they will know
how much they need [an]
• provides a checklist [k] as they set up [app] so that they don’t forget any
important task
[an]

Identify two reasons for a business to set objectives.

• Measure of success (to judge performance)
• Helps decision-making OR planning OR budgeting
• Gives sense of purpose and direction OR know what you have to do
• Aim or target
• Motivate
Identify two possible reasons why the owners of a business might
want it to expand.
• Spread risk
• Increase sales revenue
• Increase profits
• Increase customer base
• Increase market share
• Prestige/ reputation
• Personal goal
• Economies of scale
Identify two stakeholder groups of a business. Explain how a
business could act in an ethical way with each stakeholder group.
• Employees/management [k] if set up in developing country [app] should
pay fair wages [an] or offer good conditions
[an]
• Suppliers [k] pay fair price/pay on time [an] for the chemicals [app]
• Community [k]
• Pressure groups [k] by trying to prevent pollution/environmental damage
[an] caused by factory [app]
• Government [k] paying its taxes on time/not do tax avoidance [an]
• Lenders/bank [k] if borrow $100 m [app]
• Owners/shareholders [k] as public limited company [app]
• Customers [k] do not exploit them by charging high prices [an] to farmers

Identify and explain three reasons why effective communication

within a business is important to the management.
• improves efficiency [k]
• as workers as feel involved in the business decisions [k] so more
productive [an]
• ensures the right orders are passed to the right people [k] so orders are
completed
properly or on time [an]
• avoids confusion or misunderstanding [k] so less mistakes [an]
• avoids duplication of work [k] which can waste time and resources
• less mistakes as know what to do [k] so prevents faults [an].

Identify and explain two possible communication barriers for a

business.
• Problems with medium, e.g. inappropriate medium used [k] as workers
might not always have access to emails [app]
• Problems with sender, e.g. language problems/jargon [k] so workers don’t
understand terms used by the manager
[app]
• Overload of information [k] which confuses production workers [app]
• Problems with receiver, e.g. workers do not read messages [k] as three
workers are part-time [app] OR customers do
not read letters [k] so don’t know about its furniture [app]
• Technical issues, e.g. no internet connection [k] without electricity cannot
send emails [app]
• No opportunity for feedback [k]
• Wide span of control [k[ as manager responsible for eight [app]
• Wrong message sent [k]

Identify and explain two ways in which good internal communication

can help a business be more efficient.
• Clearer instruction/prevent misunderstandings/fewer mistakes [k] prevents
need for rework/reduces waste [an]
• Increase production/speed up work [k] for furniture orders [app]
• Faster decision making/problem solving [k]
• Employees aware of objectives [k] so its eight production workers [app]
can/might work faster [an]
• Better co-ordination between departments [k] if only order wood needed
[app] reducing costs of storage [an]
• Reduce barriers to communication [k]
• Improve relations between employer and employees/better
management/improve motivation [k]
• More ideas [k]

Identify and explain two methods that CYB could use to communicate
with its customers.
• Email [k] so that can include attachments such as balance sheets [app]
• Letter [k] explaining customer benefits of new system [app]
• Meeting [k] with representatives from multinational companies [app]
• Phone [k]
• FaceTime OR Skype [k] with someone from the small team [app]
• Text OR SMS OR messages on mobile phone [k]
• Social media e.g. Facebook [k]

Identify and explain one advantage and one disadvantage to Josh of

using text (SMS) messages as a method of internal communication.

Advantage:
• Quick to send [k] which helps as always busy [app]
• Can send at any time [k] so can finish cleaning before having to
respond [app]
• Can be sent simultaneously [k] to all 6 employees [app]
• Can be read when receiver has time [k]
• Able to refer back to it later [k] so can check details of the
cleaning job [app]
Disadvantage:
• Only contain limited information OR might not understand [k] so
cleaners may not have all details [app]
• Might not receive the message OR no power on the phone OR
may not have a signal [k] leading to poor service [app]

RECRUITMENT
Do you think it is better for a business to use internal or external
recruitment for the new manager? Justify your answer.

• Wider pool of candidates [k] can help attract right person [an]
• Bring in new ideas [k] as need to improve efficiency [app]
• Increased recruitment costs [k] which will increase expenses [an] when
profit has not increased [app]
• New person has no knowledge of business [k] so will need to spend
time or money while get to know things [an]
• Are suitable candidates available [k] if many people leave each year
[app]
Internal
• Act as incentive OR motivation for employees [k] which could increase

efficiency [app]
• People know the business [k] so can start work quicker [an]
• Company knows the people [k]
• Generate stability and experience [k] so reducing labour turnover [app]

Identify and explain two advantages to a business of having part-time

employees.
• More flexible/easier to ask employees to work at busy times [k] such as
the picking
season [app] when some additional help is needed [an]
• Help to attract new employees [k] because it fits around their other
commitments [an],
those who may not want to work full-time [app]
• Lower labour costs [k] outside of harvest time [app] as there is less work
[an]
• Provide a wide range of skills/knowledge [k]
• May be more motivated [k] and therefore have greater productivity [an]
• Easier to find workers [k].
Identify two ways (other than its website) that a business could use to
advertise job vacancies.
- local newspaper, local radio, local TV, word-of-mouth, notices on
farm gate, Job Centre/government agency, specialist magazine, social
media/facebook,recruitment agency, contacting previous employees.

Do you think that the new legal controls for employment will benefit
business’semployees? Justify your answer.
• Safer conditions [k] as might require guards on farm machinery [app] so
less likely to
have accidents [an]
• Higher pay [k] as minimum wage increased to $8.50 per hour [app] so
better able to
satisfy basic needs [an]
• Fewer jobs [k] so less than 10 full-time jobs [app] therefore they become
unemployed
[an]
• Less pay [k] as restriction on hours [app] might mean cannot work as long
as want
[an].

Identify one advantage and one disadvantage to Josh of using off-

the-job-training.

Advantages:
• Other workers not affected [k] so able to do more cleaning jobs
[app] to keep up with demand [an]
• Worker has access to skilled trainers [k] so know what needs to
do to provide a quality service [app] helping maintain reputation
[an]
• Workers do not learn bad habits [k]
• Workers focus 100% on training [k]
Disadvantages:
• Expensive OR high cost [k] which increases costs for the
business [an] to train all 6 workers [app]
• Not necessarily tailored to individual company [k] so might not
cover the equipment Josh uses [app]
• Workers are training rather than cleaning [k + app] and so less
output is produced [an]

Explain how each of the following stages could help CYB in the
recruitment process.
Person (job) specification
• Sets out the qualifications needed [k] such as accountancy degree [an] so
know whoever is chosen can do tasks required [an]
• Sets out the skills needed [k] such as team worker [app] so able to work
effectively with the others in the group [an]
• Sets out experience necessary [k] such as working with multinationals
[app] so able to be effective quickly [an]
Advertising the job vacancies
• Make people aware [k] about the 3 jobs [app] increasing the number of
potential applicants [an]
• Provide people with information about culture OR business [k] such as
working in small teams [app] so more likely to join CYB than competitor
[an]
• Can target suitable people [k] in accountancy magazines [app]

Do you think it would be better for a business to use on-the-job or

off-the-job training? Justify your answer.
Off-the-job training:
• Not necessarily tailored to individual business [k] so not cost effective [an]
• Have to pay more OR high cost for specialists [K] which increases costs
[an]
• Skills might not be available in the business [k] so benefit from new
techniques [an]
• Allows for mistakes [k] so can build employees confidence in new
computer system [app] reducing waste [an]
• Workers have access to skilled trainers [k] so know how to use the
system [app]
• Workers can focus 100% on training [k]
On-the-job training:
• Can reinforce errors OR bad practices [k] reducing sales OR damage
reputation [an]
• Fewer new ideas OR skills will be taught [k]
• Control what is taught [k] so workers only learn skills needed [an]
• Employees can carry on working [k] within their team [app] improving
productivity [an]
• Cheaper (than off-the-job) [k]
Identify and explain two advantages to Camille of employing part-
time workers.
• More flexible [k] so able to cover when one of the 5 workers not available
[app]
• Help meet demand during busy times [k]
• Help extend opening hours [k] so able to remain popular [app]
• Can fit around employees other commitments [k] so might help attract
new employees[app]
• Less expensive than full-time worker [k] so has money to help expand
[app]
• Can add more skills / experience to business [k] so able to offer more
hairstyles [app]
• Help keep experienced workers [k]

Identify and explain two problems for Camille of using on-the-job

training.
• Trainer not as productive [k] so not able to cut as many people’s hair [app]
leading to less revenue [an]
• Pass on bad habits to trainee [k] which could lead to poor quality work /
bad reputation[an] for the salon [app]
• Trainer might not be available [k] as work part time [app] so trainee might
have nothing to do / need someone else to train them [an]
• Customers don’t want trainee / unskilled person [k] to let them wash / cut
their hair [app]
• How to organise training [k] with almost as many trainees as trainers [app]
Identify two stages in recruitment.
• Job analysis /identify a vacancy
• Job description
• Person / job specification
• Advertising
• Shortlisting
• Interview
• Selection

Identify two stages of the recruitment process.

Job analysis, job description, person specification, advertising,
shortlisting, interview, selection.
What is meant by ‘piece rate’?
-payment system where workers are paid depending on the quantity of
products they have produced OR paid for what done [1] so money earned
is linked to output/volume of the worker

What do you think are the most important factors for the Human
Resources Director to consider when selecting which workers to
make redundant? Justify your answer.
Factors could include:
• what is the job
• level of experience
• workers’ capabilities and skills
• disciplinary record
• length of service
• cost/salary
• amount of redundancy payments required
• productivity of workers

What is meant by a ‘job description’?

- outlines the responsibilities and duties [1] expected to be done by
someone employed to do a specific job [+1].

Identify two possible features of a person specification.

-knowledge of various elements such as qualifications, experience, skills,
personal qualities

Identify and explain two suitable places where Manuel could

advertise the vacancies.

Places include:
• internal – notice board/staff publication.
• external – job centre/advertising in local paper or local radio/specialist
trade magazines/
recruitment agency/internet or jobs website or online.

What is meant by ‘on-the-job training’?

Training which involves watching a more experienced worker
doing the job in the work place.

Identify and explain one advantage and one disadvantage of off-the-

job training for business.
• experienced worker’s production is not affected as training happens
away from work
place
• learner has access to trainers who are skilled in the task
• workers will not learn bad habits of on-the-job trainer
• quality of product maintained as all work completed by experienced
workers
• less impact on output as current workers do not have to spend time
training new people.
Disadvantages include:
• more expensive than on the job which increases costs for the business.
For example
transport costs/paid trainer
• loss of first hand experience/not necessarily tailored to individual
company
• no output produced by learner whilst training taking place.

MOTIVATION
What is meant by ‘economies of scale’?
-factors that lead to lower average costs as a business increases in size.

What is meant by ‘autocratic leadership style’?

-managers expect to be in charge of business and expect their
orders to be followed OR managers make decisions without consulting
workers [2]

Do you think paying higher wages is the best way for NMBJ to
improve employee motivation? Justify your answer.
• Only a short term incentive [k] have to pay, whatever the output [an]
• Money is the main motivator [k]
• Other ways to motivate e.g. job rotation, enrichment, fringe benefits [k]
• Help retain workers [k] so not as many people leave [app] leading to lower
recruitment costs [an]
• This will increase costs for the business [k] by $15 000 per month [app] so
output
per worker would need to rise [an]

Identify and explain two advantages to a business of introducing

non-financial methods.
• Some options cost little OR no money [k] so less need to pay good
wages [app]
• Improve motivation [k] when using flow production [app]
• Help retention [k] so lower percentage want to leave each year [app]
• New ideas [k] as workers may suggest ways to improve efficiency [app]
• Can lead to more flexible work force [k]

Do you think that customers e will benefit from the takeover? Justify
your
answer.
• Impact on prices e.g. Lower prices [k] due to cost savings [app] so able
to afford to take/have more holidays [an] OR so might see prices remain
the same/rise [k] as fewer alternatives to pick from [an]
• More variety [k] as now offers activity holidays as well [app] so easier to
find exactly what they want [an]
• Close shops [k] so have to spend more time/travel further [an] for
specialist advice [app]
• Impact on service e.g. Loss of personal service [k] as business looks to
cut costs [app].
Identify and explain two possible reasons why 'Taylor’s theory of
motivation might not work' at a business.
• Financial rewards might not motivate workers [k] because they enjoy what
they do
[app]
• Taylor assumes workers are lazy [k] these workers want to win more
awards [app]
• It assumes you can measure output [k] but only have output at harvest
time [app]
• Non-financial factors might be more important [k] e.g. Being able to work
part-time
[app].

Camille thinks that her laissez-faire leadership style will have to

change as her business grows. Do you agree? Justify your answer.
• New employees might need guidance [k] so poor decisions might be
made [an]
• Communication can be difficult [k] as clear direction is not given [an]
• Not a large a business [k] even with 8 people [app]
• Harder to manage with more people [k] so need rules to avoid disputes
[an]
• Her style might be one reason for success [k] so change might damage
popularity [app]
• Has she the skills to use different approach [k]
• Workers might leave / demotivated [k] as they like the freedom that
laissez-faire allows
[an] so she will need to recruit more than 3 new people [app]
• Democratic style allows employees a say in what they do [k] but let
Camille keep control
[an]
• Autocratic style would mean telling workers what to do [k]

Identify and explain one advantage and one disadvantage of the

Managing Director’s leadership style.
Advantages:
• Encourages loyalty / motivation [k] as managers can run own shops
[app] so less likely to leave [an]
• Maximise skills of employees [k] could help reduce number of
complaints [app] increasing sales [an]
• MD has time to focus on strategic/other issues [k] such as expansion
to more cities [app]

Disadvantage:
• No real direction / different opinions [k] of shop managers [app]
leading to wrong decisions/ disputes [an]
• Employees may not have skills / experience to make decisions [k]
leading to mistakes [an] when doing recruitment [app]
• Higher costs [k] as shops arrange own inventory [app] so no
economies of scale [an]
• Work might not get done in time [k] so customer complaints [app]
leading to poor reputation [an]

Identify and explain three suitable ways to improve motivation of staff

at a business.
• job enrichment [k] by adding more responsibility to workers, they will feel
important so
increasing job satisfaction [an]
• job rotation/enlargement [k] workers won’t become bored by doing the
same jobs all
the time [an]
• increased pay [k]
• use of incentives e.g. bonuses, employee of the month
• chance of promotion [k]
• offer fringe benefits e.g. discounts on stays at hotel/use of facilities [k]
• training [k]

Identify and explain two problems for a business caused by many of

its staff leaving.
• poor level of service [k] so fewer customers might want to return/lower
sales [an]
• higher training costs [k] as new workers need to learn what to do [an]
• existing staff have to work harder/demotivated [k] output/efficiency drops
[an]
• higher costs of recruitment [k] as will have to spend time/money
advertising/
interviewing new staff [an]
• poor reputation [k] so more difficult to recruit new workers [an]
• reduction in output/efficiency [k] as takes time for new workers to learn
the necessary
processes [an]

Identify and explain two benefits to a business of having skilled

workers.
• skilled workers likely to work more efficiently [k] so more suits can be
made in less
time [app]
• likely to make fewer mistakes [k] so less wastage of fabrics/materials
[app]
• higher quality [k] can encourage good reputation so attract more
customers to buy their
suits [app] OR important as making handmade suits [app]
• added value [k] as people likely to pay more for handmade/quality suits
[app]
• can meet customer individual requirements [k] as have ability to make
complex
designs [app]

Identify and explain two benefits to a business of having skilled

workers.
Points might include:
• skilled workers likely to work more efficiently [k] so more suits can be
made in less
time [app]
• likely to make fewer mistakes [k] so less wastage of fabrics/materials
[app]
• higher quality [k] can encourage good reputation so attract more
customers to buy their
suits [app] OR important as making handmade suits [app]
• added value [k] as people likely to pay more for handmade/quality suits
[app]
• can meet customer individual requirements [k] as have ability to make
complex designs [app]
What is meant by ‘organisational structure’?
Clear understanding [2] e.g. the number of levels of management and
division of responsibility/authority within a business [2]/staff and their
positions in relation to each other
What is meant by ‘chain of command’?
- structure within an organisation through which orders are passed down
from senior management to the lower levels of management/pass
messages up and down the hierarchy.

Identify and explain two possible disadvantages for a business of

having a wide span of control.
• difficult to control so many people [k] so less work is done [an]
• communication problems as too many subordinates to inform/ask [k] so
harder to get feedback about the work [an]/messages lost [an]
• workers might not have enough skills to cope with extra responsibility [k]
so more mistakes are made [an]
• supervisors might not have the right skills to manage so many people [k]
• fall in productivity [k] as hard to motivate so many people [an].

The Managing Director believes ‘our workers like change’. Do you

think that all the workers at a business would like the introduction of
new technology? Justify your answer.
• need for re-training [k] which could create promotion opportunities [an]
• impact on motivation (either positive or negative) [k]
• fear of change [k]
• fear of redundancy as machines replace jobs [k] could decrease
motivation [an]
• deskilling [k]
• implications for pay e.g. lower wages [k] so lower living standards [an]
• opportunities to learn new skills [k]
• chances for self improvement or promotion [k]
• safer conditions as up to date technology [k] so less risk of injury [an].

Identify and explain one advantage and one disadvantage of a

business’s organisational structure.
Advantages
• Employees have a clearly defined role [k] so know where they fit into
delivery process [app]
• Clear chain of command OR know their manager [k] so know who to ask
for help if problem with a parcel [app]
• Employees have a clear career structure [k] so can see how to progress
from driver [app]
• Specialists can be employed [k]
Disadvantages
• Slow communication [k] due to many number of levels [app]
• Heavy workload for managers [k] so do they have time to focus on
expansion [app]
• Communication between departments can be difficult [k] which could
damage its good reputation [app]
• Can create rivalry between departments [k]
• Workers can feel isolated [k]