AS-Solved Past Paper Business 9609 P1 2023-2022

AS – Solved Past Papers (March 2022 to Nov 2023)
Sir Danish Tabassum (0345-2091270)
March 2023/12
1 (a) Define the term opportunity cost. [2]
Opportunity cost refers to the benefits lost or costs incurred when choosing one option over
another. It involves the value of the best alternative that must be given up in order to pursue a
certain action. For instance, if a company decides to invest in new technology rather than in
market expansion, the opportunity cost is the potential growth that could have been achieved
with the expansion.
1 (b) Explain one quality an entrepreneur needs for business success. [3]
One critical quality that an entrepreneur needs for business success is resilience. Resilience
enables an entrepreneur to withstand the inevitable setbacks and challenges faced in the
business world. For example, if an entrepreneur's initial product launch fails, their resilience will
determine their capacity to analyze the failure, learn from it, and attempt a new strategy,
maintaining their motivation and drive throughout.
2 (a) Define the term product life cycle. [2]
The product life cycle describes the stages a product goes through from its initial design and
introduction to the market, through its growth phase, maturity, and eventual decline until it is
removed from the market. This cycle helps businesses anticipate changes in sales and profits
and manage product strategies effectively.
2 (b) Explain one way a business could extend the life of a product. [3]
A business can extend the life of a product by implementing product enhancements and
innovations. For example, by adding new features or improving the product’s design, a business
can reinvigorate customer interest and demand, thus prolonging the product's market presence
and profitability.
3 (a) Define the term induction training. [2]
Induction training is the initial training given to new employees to familiarize them with the
business systems, organizational culture, and layout of the business. This training helps new
hires adjust quickly and efficiently to their roles within the company.
3 (b) Explain one benefit to a business of training its employees. [3]
Training employees enhances their skills and knowledge, which leads to increased efficiency and
productivity within the organization. For example, when employees are well-trained, they make
fewer errors and can handle tasks more independently, reducing the need for supervision and
allowing for smoother operational processes.
4 Analyze one way a business might raise productivity levels. [5]

One effective way to raise productivity levels in a business is through the use of automation and
technology. By automating repetitive tasks, employees can focus on more complex and value-
adding activities. This not only speeds up production but also reduces errors, enhancing overall
productivity. For instance, if a business automates its data entry processes, it can allocate more
resources to analysis and decision-making, which are crucial for business growth.
5 (a) Analyze two ways in which accurate cost information can be used to improve business
performance. [8]
Accurate cost information involves precise data about the expenses incurred in production,
operations, and management of a business. This information is crucial for decision-making,
allowing businesses to set realistic budgets, price products competitively, and manage resources
efficiently.
One way accurate cost information can improve business performance is through targeted cost
reduction strategies. Cause: Knowing exactly where and how money is spent allows businesses
to identify areas where expenses can be cut without compromising quality. Impact: This leads to
reduced overall operational costs. Consequence: The consequence of reduced costs is an
increase in profit margins, making the business more competitive and financially stable.
Another way is through enhanced strategic planning. Cause: With accurate cost information,
companies can forecast future spending and align their financial strategies with market
conditions and business goals. Impact: This strategic alignment helps in optimal resource
allocation. Consequence: As a result, the business can avoid unnecessary expenditures and
focus investments on areas that generate the highest returns, leading to sustained growth and
market competitiveness.
5 (b) Evaluate whether cash flow forecasting is the most important activity for a new
restaurant to succeed. [12]
Cash flow forecasting (CFF) is a financial management tool that predicts the inflow and outflow
of cash to a business over a specified period. It is vital for ensuring that a business can meet its
financial obligations as they arise.
The first point in favor of CFF being crucial for a new restaurant's success involves its role in
managing liquidity. Cause: A new restaurant faces initial high costs and possibly slow initial
revenue. Impact: Forecasting cash flows helps manage these financial challenges by providing a
clear picture of when cash shortages might occur. Consequence: The business can take
proactive steps, like arranging for credit facilities or adjusting payment terms with suppliers to
manage liquidity. However, relying solely on CFF could overlook the need to generate revenue
actively and attract customers, which are equally critical for survival.
Another point supports the importance of CFF in terms of capital investment decisions. Cause:
New restaurants need to invest in equipment, decor, and initial marketing. Impact: Through
effective CFF, the restaurant can plan these expenditures without jeopardizing its operational
funds. Consequence: This careful financial planning prevents overinvestment and maintains
cash reserves. Therefore, while CFF helps in balancing expenditures, it must be complemented
by aggressive revenue-generation strategies to ensure the restaurant not only survives but
thrives.
An alternative strategy to consider is the integration of robust marketing efforts. Impact:
Effective marketing can increase customer footfall and revenue. Consequences: While CFF helps
in managing finances, without a solid customer base and revenue stream, the restaurant's
financial stability may still be at risk regardless of how well cash flows are managed.
In conclusion, while cash flow forecasting is undoubtedly essential for a new restaurant, it
should not be viewed as the most critical activity in isolation. Balancing cash management with
aggressive marketing and customer engagement strategies provides a more comprehensive
approach to ensuring the restaurant's success and long-term viability.
6 (a) Analyze two reasons why changing a business’s objectives might affect its shareholders.
[8]
A business's objectives define its strategic direction and priorities, directly influencing its
operations and decision-making processes. These objectives are crucial for shareholders as they
impact the company's profitability and the value of their investments.
One reason why changing objectives might affect shareholders is the shift in investment focus.
Cause: If a business shifts its objectives from rapid growth to sustainability, it may reduce short-
term profitability to focus on long-term environmental and social gains. Impact: This change can
lead to decreased dividend payouts or a temporary drop in stock value. Consequence:
Shareholders looking for quick returns might be dissatisfied, potentially leading to a sell-off of
shares, affecting the stock's market stability.
Another reason involves the alteration in risk profile. Cause: Changing from a domestically-
focused to an internationally-focused business objective increases operational and market risks
due to exposure to foreign markets and currencies. Impact: This new risk profile can lead to
volatility in earnings. Consequence: Shareholders might find the new risk level unacceptable,
which could result in decreased investor confidence and lower stock prices.
6 (b) ‘The main reason why many niche cake manufacturing businesses fail is that they grow
too quickly.’ Evaluate this view. [12]
Business growth is a common objective for many companies, but rapid expansion can lead to
significant challenges, particularly for niche markets like cake manufacturing, where the
demand dynamics can be highly specific and variable.
The first point to consider is operational strain. Cause: When a niche cake manufacturing
business grows too quickly, it may struggle to scale up production effectively to meet increased
demand. Impact: This rapid expansion often leads to operational inefficiencies and quality
control issues. Consequence: The business may face increased customer dissatisfaction and
returns, harming its reputation and brand loyalty. However, strategic planning and phased
growth could mitigate these risks by ensuring that expansion is manageable and sustainable.
Another point involves financial overextension. Cause: Quick growth usually requires significant
investment in resources, which can strain the financial stability of a business if not managed
properly. Impact: The business may take on excessive debt or deplete cash reserves.
Consequence: This financial vulnerability could lead to insolvency during downturns or when
facing unexpected expenses. Therefore, maintaining a balance between growth and financial
health is crucial, possibly through cautious financial planning and perhaps slower, more organic
growth strategies.
An alternative strategy to consider is focusing on market consolidation rather than expansion.
Impact: By strengthening its position in existing markets and improving operational efficiencies,
a business can ensure stable growth without the risks associated with rapid expansion.
Consequences: This approach helps in building a strong brand and customer loyalty, which are
vital for long-term success in niche markets.
In conclusion, while rapid growth can contribute to business failure, it is not the sole reason. A
nuanced approach that combines cautious expansion with robust operational and financial
management can allow niche cake manufacturing businesses to grow sustainably and avoid the
pitfalls of unchecked rapid expansion.
June 2023/11
Question 1(a): Define the term fixed cost. [2]
Fixed costs are expenses that do not change in total regardless of the output level of a business
over a certain period. This includes costs like rent, salaries, and insurance, which remain
constant whether the business produces nothing or a large volume of goods or services.
Question 1(b): Explain one way that a business may reduce its variable costs. [3]
One effective way for a business to reduce its variable costs is through the negotiation of lower
prices for raw materials. By securing cheaper raw materials, the business can decrease the cost
associated with each unit of production. This can be achieved by buying in bulk to benefit from
volume discounts or by switching to less expensive suppliers who can offer competitive rates
without compromising on quality.
Question 2(a): Define the term product differentiation. [2]
Product differentiation is a strategy employed by businesses to make their products or services

stand out from those of competitors. It involves highlighting and communicating the unique
features or benefits of a business's offerings, which are distinct from those available in the
market, enhancing consumer perception and preference.
Question 2(b): Explain one reason why product development may be important to a business.
[3]
Product development is crucial for a business as it allows the company to adapt to changing
market conditions and consumer preferences. For example, by developing new or improved
products, a business can meet evolving customer needs, such as increasing demand for eco-
friendly products. This helps the business stay relevant and competitive in the market,
potentially increasing its market share and customer base.
Question 3(a): Define the term commission. [2]
A commission is a type of compensation paid to an employee based on the value or volume of
sales they generate. It is typically calculated as a percentage of the sales achieved, providing an
incentive for employees to increase their sales performance.
Question 3(b): Explain one type of training that a business may use. [3]
Induction training is a common type used by businesses to orient new employees. This training
introduces them to the company's policies, procedures, and culture, and ensures they
understand their roles and responsibilities. Effective induction training can help new employees
become productive more quickly and smoothly integrate into the company.
Question 4: Analyse one responsibility to a business of an employee as a stakeholder. [5]

Employees have a responsibility to perform their duties effectively and uphold the company's
values and policies. By consistently fulfilling their roles and responsibilities, employees
contribute to the smooth operation and reputation of the business. For example, by adhering to
quality standards in their work, employees help maintain product quality, which can lead to
customer satisfaction and repeat business, thereby supporting the company's profitability and
long-term success.
Question 5(a): Analyse two benefits to a business of holding high levels of inventory. [8]
Inventory refers to the goods and materials a business holds for the ultimate goal of resale or
production. Holding high levels of inventory can be strategic for managing supply chain and
production demands effectively.
One benefit of maintaining high levels of inventory is ensuring product availability to meet
customer demand spikes. Cause: This happens when a business anticipates fluctuations in
market demand or faces uncertain supply conditions. Impact: By having products readily
available, the business can continue sales without interruption, enhancing customer
satisfaction. Consequence: This readiness can lead to increased customer loyalty and higher
sales volumes, contributing to business stability and growth.
A second benefit is the ability to take advantage of bulk buying discounts. Cause: Suppliers often
offer these discounts to encourage larger orders, which can be economically beneficial for both
parties. Impact: Lower purchase costs per unit of inventory. Consequence: This can lead to
improved profit margins as the cost of goods sold decreases, enhancing the financial health of
the business.
Question 5(b): Evaluate whether supply chain management is the most important operational
activity to the success of a manufacturer of electric cars. [12]
Supply chain management (SCM) involves the oversight and administration of a network that
interconnects different entities aimed at producing and delivering a finished product to the end
consumer. For manufacturers of electric cars, SCM encompasses the procurement of raw
materials, coordination of manufacturing processes, and delivery of the final products.
One reason SCM is crucial is the reliance on rare and specific components like lithium batteries,
which are critical for electric cars. Cause: The specialized nature of these components requires
robust SCM to ensure their availability. Impact: Effective SCM ensures these essential
components are available when needed, preventing production delays. Consequence: This can
lead to smooth production flows and on-time deliveries to customers, boosting the company's
reputation. However, reliance on specific suppliers for key components can make the
manufacturer vulnerable to supply disruptions.
Another point is the environmental and ethical implications associated with sourcing raw
materials. Cause: The mining of materials like lithium can have significant environmental and
social impacts. Impact: Robust SCM can mitigate these impacts by ensuring suppliers adhere to
sustainable and ethical practices. Consequence: This not only ensures regulatory compliance
but enhances brand image among increasingly environmentally conscious consumers.
Therefore, while this approach may increase operational costs, it contributes to long-term
sustainability and customer trust.
An alternative to heavy reliance on SCM might be investment in research and development
(R&D) to innovate less resource-intensive technologies or recycling used batteries. Impact and
Consequence: While this requires substantial upfront investment, it could reduce dependency
on external suppliers and lower long-term operational costs, potentially providing a competitive
edge in a rapidly evolving market.
While SCM is undeniably crucial for the success of an electric car manufacturer, it is not the sole
determinant. Integrating strong SCM with other strategic initiatives like R&D and sustainability
practices can offer a more balanced approach to achieving long-term success.
Question 6(a): Analyse two reasons why a business should set SMART objectives. [8]
SMART objectives are specific, measurable, achievable, relevant, and time-bound goals that
guide business operations and strategy implementation.
One reason to set SMART objectives is to provide clear, focused goals for employees, which can
enhance their motivation and productivity. Cause: When objectives are well-defined and
articulated, employees understand exactly what is expected of them. Impact: This clarity can
increase employee engagement and effort towards achieving these targets. Consequence: The
direct result can be higher productivity and efficiency, directly impacting the company's bottom
line.
Another reason is that SMART objectives facilitate better planning and resource allocation.
Cause: When goals are measurable and time-bound, businesses can better plan the necessary
resources to achieve them. Impact: This strategic resource allocation helps ensure that the
company is not wasting resources on non-essential activities. Consequence: Efficient use of
resources leads to cost savings and more focused business operations.
Question 6(b): ‘Ethics should always influence the human resource management (HRM)
activities of a mining business.’ Evaluate this view. [12]
Ethics in human resource management involves the incorporation of moral principles into the
management of staff, including fair treatment, respect for rights, and consideration of their well-
being.
One reason ethics are crucial in HRM for mining is the inherently hazardous nature of the work.
Cause: Mining operations often pose significant health and safety risks. Impact: Ethical HRM
practices ensure that safety protocols are prioritarily enforced and that workers are trained
adequately. Consequence: This reduces workplace accidents and improves employee morale.
However, maintaining high ethical standards in safety can increase operational costs due to the
need for advanced safety equipment and training.
Another reason is the potential for labor exploitation issues, especially in less regulated regions.
Cause: Mining businesses operating in such areas might face less scrutiny. Impact: Ethical HRM
can prevent exploitative practices such as underpaying or overworking employees.
Consequence: This fosters a more loyal and motivated workforce, reducing turnover and
increasing productivity. Therefore, while it might limit short-term profits due to higher wages, it
can stabilize operations and enhance the company's reputation in the long run.
Focusing solely on ethics might overlook efficiency aspects in HRM. An integrated approach that
also includes performance management and technological adoption can ensure that the
workforce is not only treated fairly but is also highly productive.
Ethics are undeniably essential in the HRM activities of a mining business. However, integrating
ethical practices with other management strategies provides a holistic approach that can drive
both ethical integrity and operational excellence.
June 2023/12
1 (a) Define the term demand. [2]
Demand refers to the quantity of a product that consumers are willing and able to purchase at
various prices during a certain period of time.
1 (b) Explain one factor that influences the supply of a product. [3]
One significant factor that influences the supply of a product is the cost of production. Changes
in production costs, such as alterations in the cost of raw materials, labor, and manufacturing
processes, directly affect the supply. For instance, an increase in the cost of raw materials might
reduce the quantity a producer is willing to supply at a given price because it squeezes profit
margins, leading to decreased production unless prices adjust upward.
2 (a) Define the term factors of production. [2]
Factors of production are the resources used by businesses to produce goods and services,
which includes land, labour, capital and enterprise.
2 (b) Explain one stage of the transformational process. [3]
One stage of the transformational process is the input stage, where resources such as raw
materials, labor, and energy are gathered to be used in production. For example, a bakery
collects ingredients like flour, sugar, and yeast, along with the labor of bakers and energy for
ovens, as inputs that are necessary to produce bread. This stage is crucial as it sets the
foundation for the quality and quantity of the final products.
3 (a) Define the term equality. [2]
Equality in a business context means ensuring that all individuals are treated fairly and equally,
without discrimination based on characteristics such as gender, race, age, religion, or sexual
orientation.
3 (b) Explain one benefit to a business of employing a diverse workforce. [3]
Employing a diverse workforce can enhance creativity and innovation within a business. A
diverse team brings a variety of perspectives, experiences, and problem-solving approaches,
which can lead to more innovative solutions and improvements in products and services. This
variety enables a business to better meet the diverse needs of its customer base, leading to
increased customer satisfaction and potentially expanding its market reach.
4 Analyze one way in which conflict between stakeholders may affect a business. [5]
Conflict between different stakeholder groups, such as management and employees, can lead to
industrial actions like strikes or work slowdowns. Such conflicts often arise from disagreements
over wages, working conditions, or changes in operational procedures. Industrial actions disrupt
business operations, affect productivity, and can harm the business's reputation, ultimately
impacting its profitability and long-term sustainability.
5 (a) Analyse two benefits to a business of government grants as a source of finance. [8]
Government grants are funds provided by the government to businesses and organizations
without the requirement to pay them back. These funds are often allocated to stimulate
economic growth, innovation, or support specific industries and sectors.
The first benefit of government grants is financial relief without increasing debt. Cause:
Government grants provide financial resources without the obligations associated with loans.
Impact: Businesses can use these funds to invest in infrastructure, research and development,
or expansion without the pressure of repayment. Consequence: This can lead to growth and
expansion of business capabilities without affecting cash flow or financial stability.
A second benefit is the ability to leverage additional private investment. Cause: With the initial
funding risk mitigated by government grants, businesses may appear more credible and stable
to private investors. Impact: This increased credibility can attract additional funding from private
sources. Consequence: The business can access more comprehensive financial resources than it
could with private funding alone, enabling larger or more strategic projects.
5 (b) Evaluate whether the most likely reason for the failure of a small retailer is poor
management of its working capital. [12]
Working capital management involves the administration of current assets and current liabilities
to maintain liquidity while operating effectively.
The first point is that poor management of working capital can lead to cash flow problems.
Cause: Inadequate management of the components of working capital, like accounts receivable
and inventory, can strain a retailer’s cash flow. Impact: If a business cannot convert sales into
cash efficiently, it may struggle to meet its immediate financial obligations, such as paying
suppliers or employees. Consequence: Continued cash flow problems can lead to insolvency.
However, effective cash flow forecasting and tighter credit control can mitigate these risks.
A second point considers the narrow focus on working capital neglecting broader strategic
failures. Cause: Focusing solely on working capital ignores other potential issues such as poor
market positioning or ineffective marketing. Impact: Even with good working capital
management, a small retailer might fail if it does not attract enough customers or if its business
model is uncompetitive. Consequence: The business could still collapse despite healthy liquidity.
Therefore, diversification and strategic marketing become essential components for survival and
growth.
Implementing robust financial controls combined with aggressive marketing strategies and
continuous market analysis can provide a more balanced approach to managing business risks.
While poor management of working capital can significantly affect a small retailer, it is often not
the sole reason for failure. A holistic approach addressing multiple operational aspects is crucial
for sustainability and growth.
6 (a) Analyse two benefits to a business of having a product with a unique selling point (USP).
[8]
A unique selling point (USP) is a distinct feature or benefit that sets a product apart from its
competitors in the marketplace, providing a competitive edge.
The first benefit is increased market differentiation. Cause: A USP makes a product unique,
distinguishing it from competitors. Impact: This differentiation can attract more customers who
are looking for specific features that only this product offers. Consequence: Increased customer
attraction typically leads to higher sales volumes and market share.
Another benefit is the ability to charge premium prices. Cause: Consumers often perceive a
product with a USP as more valuable or superior. Impact: This perception allows businesses to
set higher prices compared to standard products. Consequence: Higher prices lead to improved
profit margins, enhancing the financial health of the business.
6 (b) ‘Marketing is the most important factor that will affect the success of a new coffee shop.’
Evaluate this view. [12]
Marketing in the business context refers to the activities a company undertakes to promote the
buying or selling of a product or service, including advertising, selling, and delivering products
to consumers or other businesses.
The first factor is brand recognition and customer acquisition. Cause: Effective marketing
strategies increase visibility and awareness of the new coffee shop. Impact: Higher visibility can
attract more customers, essential for a new business. Consequence: Increased customer base
directly influences sales and profitability. However, reliance solely on marketing may ignore the
importance of product quality and customer service, which are also crucial for retaining
customers in the competitive food and beverage industry.
The second factor is market positioning and competitive advantage. Cause: Strategic marketing
helps define a coffee shop's unique attributes that appeal to a specific consumer demographic.
Impact: Proper market positioning can differentiate the coffee shop from competitors in a
crowded market. Consequence: A well-positioned brand will likely enjoy customer loyalty and
repeat business. Therefore, continuous innovation and adaptation to customer preferences are
necessary to maintain a competitive edge.
Besides marketing, the coffee shop should focus on product quality, exceptional customer
service, and creating a unique customer experience.
Although marketing is crucial, the success of a new coffee shop depends on a combination of
factors including product quality, customer experience, and operational efficiency. A balanced
approach addressing these areas will more likely result in long-term success.
June 2023/13
Question 1(a): Define the term ‘social enterprise’. [2]
A social enterprise is a type of business that primarily aims to address social issues rather than
maximizing profit for shareholders. Such enterprises often reinvest the majority of their profits
to further their social goals, for instance, by improving community facilities or providing
employment opportunities for disadvantaged groups.
Question 1(b): Explain one weakness of family businesses. [3]
One notable weakness of family businesses is the potential for conflict due to personal
relationships interfering with business decisions. Family members may have disagreements over
business strategies or operations, which can be exacerbated by emotional ties, potentially
leading to ineffective decision-making and a detrimental impact on the business's overall
performance.
Question 2(a): Define the term ‘dismissal’. [2]
Dismissal refers to the termination of an employee's contract by the employer due to reasons
such as poor performance, misconduct, or redundancy. It is a formal process that typically
follows a set of predefined procedures to ensure that the dismissal is justified and lawful.
Question 2(b): Explain how one human need may be satisfied at work. [3]
The need for social interaction can be satisfied at work through teamwork and collaborative
projects. By working in teams, employees can form professional relationships, which help fulfill
their social needs while also enhancing communication and cooperation, leading to a more
engaging and supportive workplace environment.
Question 3(a): Define the term ‘mass marketing’. [3]
Mass marketing is a strategy that involves targeting a large, general group of consumers with
the same marketing message. This approach assumes that the product will appeal to a broad
audience and does not differentiate between different segments of the market.
Question 3(b): Explain one advantage to a business of segmenting its market. [3]
Segmenting the market allows a business to tailor its products and marketing efforts to specific
groups, enhancing customer satisfaction and loyalty. For example, a business can identify and
target a niche market with specific preferences, which often leads to more effective marketing,
better customer retention, and potentially higher sales in that segment.
Question 4: Analyse one reason why labour productivity is important to a business. [5]
Increasing labour productivity is crucial as it directly enhances a business's output without
necessarily increasing the input costs. For instance, if employees can produce more goods in the
same amount of time, this lowers operational costs per unit, allowing the business to price
competitively and potentially increase its market share while maintaining or improving profit
margins.
Question 5(a): Analyse two purposes of a cash flow forecast for a business. [8]
A cash flow forecast (CFF) is a financial tool used by businesses to predict future cash inflows
and outflows over a specific period. It helps businesses manage their financial resources more
effectively by anticipating periods of cash surplus or shortage.
One purpose of a CFF is to anticipate financial shortfalls, allowing a business to arrange for
necessary funding in advance. The cause of this is the business's seasonal or cyclical sales
patterns which might result in periods of low cash inflow. The impact on the business is
potential liquidity issues, where it may not meet its short-term financial obligations. The
consequence is that without sufficient liquidity, the business could face operational disruptions
or fail to capitalize on market opportunities.
Another purpose of a CFF is to help businesses plan significant expenditures, such as capital
investments or expansion projects. The cause here is the planned growth or expansion that
requires large outflows of cash. The impact is that without a CFF, a business might not have the
funds available when needed, leading to project delays. The consequence is that these delays
could result in lost market opportunities or higher costs in the future if the business cannot
expand efficiently.
Question 5(b): Evaluate whether break-even analysis is the most important finance activity for
a new manufacturer of bicycles. [12]
Break-even analysis determines the point at which a company's revenues equal its costs,
indicating no net loss or gain. This analysis is crucial for new businesses to understand when
they will start generating a profit.
One key benefit of break-even analysis is that it helps the business understand the volume of
sales needed to cover its costs. The cause of this is the need to ensure financial viability. The
impact is that management can set realistic sales targets and pricing strategies accordingly. The
consequence is the potential stabilization of cash flows, ensuring the business can sustain
operations long-term. However, break-even analysis assumes static costs and prices, which can
be unrealistic in a dynamic market environment.
Additionally, break-even analysis assists in decision-making regarding cost control and pricing
strategies. The cause is the need to optimize both pricing and cost structures. The impact is that
strategic adjustments can be made to influence the break-even point, potentially lowering it.
The consequence is enhanced competitiveness and profitability. However, overemphasis on
reaching break-even can lead a business to neglect other essential aspects like quality and
customer service, which can adversely affect brand reputation.
An alternative strategy to consider is conducting sensitivity analysis alongside break-even
analysis. Sensitivity analysis examines how the outcome changes in response to alterations in
assumptions, providing a deeper understanding of potential financial risks and outcomes. This
approach helps mitigate the risk of relying solely on fixed assumptions in break-even analysis,
offering a more flexible and comprehensive financial planning method.
In conclusion, while break-even analysis is a critical financial tool for a new bicycle
manufacturer, it should not be considered in isolation. Integrating it with sensitivity analysis
offers a more robust strategy, ensuring the business can adapt to changing market conditions
and maintain financial health.
Question 6(a): Analyse two benefits to a business of using external recruitment to employ a
manager. [8]
External recruitment involves hiring employees from outside the company, often providing
access to a broader pool of candidates with diverse skills and new ideas.
One benefit of external recruitment is the introduction of fresh perspectives and innovative
ideas. The cause is the exposure of the business to candidates with varied experiences and
backgrounds. The impact is enhanced creativity and innovation within the team, potentially
leading to improved problem-solving and product development. The consequence is a stronger
competitive position in the market due to differentiated offerings.
Another benefit is the ability to quickly fill skills gaps within the organization. The cause is the
immediate need for specialized skills not available internally. The impact is the rapid acquisition
of essential skills and knowledge, accelerating project development or entry into new markets.
The consequence is enhanced operational efficiency and quicker returns on investment, as the
business does not have to wait to develop these skills internally.
Question 6(b): ‘A motivated workforce is the most important factor for the success of a low-
price airline.’ Evaluate this view. [12]
Employee motivation in a low-price airline context refers to the level of energy, commitment,
and creativity that the airline's employees bring to their jobs.
A motivated workforce enhances customer service quality. The cause is employees taking pride
and being proactive in their roles. The impact is superior customer interaction and service
delivery, critical in the competitive airline industry. The consequence is increased customer
satisfaction and loyalty, which are vital for repeat business. However, high employee motivation
must be maintained consistently to ensure ongoing customer satisfaction.
Additionally, a motivated workforce can lead to lower turnover rates. The cause is greater job
satisfaction among employees. The impact is fewer resignations and terminations, reducing the
costs associated with hiring and training new staff. The consequence is a more stable and
experienced workforce, leading to operational efficiencies. However, the airline must continue
to invest in employee development and recognition programs to sustain high motivation levels.
An alternative strategy is to focus on technological innovations, such as automated check-ins
and AI-driven customer service solutions. These technologies can reduce operational costs and
improve customer experience, potentially offsetting the reliance on employee motivation alone.
In conclusion, while a motivated workforce is undeniably important for the success of a low-
price airline, it should not be the sole focus. Balancing human resources with technological
advancements provides a more sustainable model for long-term success.
November 2023/11
1(a) Define the term labour turnover. [2]
Labour turnover refers to the rate at which employees leave a business over a given period,
typically expressed as a percentage. This figure is calculated by dividing the number of
employees who have left by the average number of employees during the period and then
multiplying by 100.
(b) Explain one role of a workforce plan. [3]
A key role of a workforce plan is to ensure that the business has the right number of employees
with the necessary skills to meet its future production and operational requirements. For
example, if a business anticipates an increase in demand due to market growth, the workforce
plan would help the business decide whether to hire additional staff or train existing employees
to handle increased production tasks, thereby aligning human resources with its strategic
objectives.
2(a) Define the term capital intensive. [2]
A capital-intensive process is one where a business uses more capital—such as machinery,
equipment, and technology—relative to labor to produce goods or services. This often involves
significant investment in automated and high-technology systems to enhance productivity.
(b) Explain one benefit to a business of labour intensive operations. [3]
One benefit of labour-intensive operations is the flexibility in production, particularly in

industries where customization and craftsmanship are key. For example, in a custom tailoring
business, having skilled workers allows for greater personalization of products, which can be a
significant competitive advantage, as it allows the business to meet specific customer
preferences effectively, enhancing customer satisfaction and loyalty.
3(a) Define the term margin of safety. [2]
Margin of safety is the quantity by which actual or projected sales exceed the break-even sales
level in a given period. It is calculated as the difference between current sales and break-even
sales, indicating how much sales can fall before a business starts to incur losses.
(b) Explain one way a business can decrease its break-even level of output. [3]
One way to decrease the break-even level of output is by reducing fixed costs, such as
renegotiating rent or lowering utility expenses. This reduction lowers the overall cost structure
of a business, meaning it needs to sell fewer units to cover its costs, thereby lowering the break-
even point. For instance, if a business reduces its annual rent by negotiating a better lease
agreement, its fixed costs decrease, which directly lowers the break-even level of output.
4. Analyse one way that a business may be affected by a dynamic business environment. [5]
A dynamic business environment can affect a business through rapid technological changes,
requiring businesses to continuously adapt their processes and products. For example, a
company in the consumer electronics sector must constantly innovate due to technological
advancements and changing consumer preferences. This need for continual product
development and adaptation can lead to increased research and development costs, but it also
offers opportunities for growth and maintaining competitive advantage by introducing new and
improved products that meet current market demands.
5(a) Analyse two advantages to a business of mass marketing. [8]
Mass marketing is a strategy that targets a large, broad market with a single basic marketing
plan. It is commonly used by companies with products or services that have universal appeal
and are not dependent on the individual preferences of consumers.
One advantage of mass marketing is its ability to create extensive brand recognition. The cause
of this is the broad reach of mass marketing campaigns, which are designed to cover a wide
audience through various media channels. The impact is significant; by reaching a large
audience, the business enhances its visibility and brand awareness. The consequence is a
potentially increased customer base, as the business becomes a go-to name for consumers
looking for that product type.
Another advantage is cost efficiency in advertising. Mass marketing allows companies to spread
their advertising budget over large audiences rather than targeting specific segments. This
approach reduces the cost per potential customer reached, which is the cause. The impact is
more efficient use of the marketing budget, leading to economies of scale in advertising
spending. The consequence is that the business can allocate resources to other areas like
product development or price reduction, further enhancing its competitive position.
5(b) Evaluate whether primary sector businesses should use product differentiation to
increase sales. [12]
Product differentiation in the primary sector involves making a product distinct from its
competitors in the market through unique features, quality, or branding. This strategy is
particularly challenging in industries that typically produce undifferentiated goods like raw
materials or basic crops.
A primary sector business might use product differentiation by focusing on quality
improvements, such as producing organic or non-GMO crops. The cause is the growing
consumer demand for health-conscious and environmentally friendly products. The impact is an
increase in market share as consumers choose these differentiated products over standard
offerings. The consequence is potentially higher prices and profits due to the perceived higher
value. However, the increased costs of maintaining organic certifications and the limited scale of
operations might reduce overall profitability.
Another method is the use of branding and certifications like Fair Trade or Rainforest Alliance.
The cause here is the ethical consumerism trend where buyers prefer products that are sourced
responsibly. The impact on businesses is increased consumer loyalty and a premium pricing
capability. The consequence is that businesses not only enhance their brand reputation but also
contribute to sustainable practices. However, obtaining and maintaining these certifications
involves significant ongoing costs and compliance to strict standards, which could be a logistical
and financial burden for smaller producers.
An alternative strategy could be to engage in vertical integration. By controlling more stages of
the production and distribution process, a primary sector business could increase its control
over product quality and costs, reducing reliance on differentiation through external
certifications. The impact would be increased market responsiveness and potential cost savings.
The consequence is a more stable business model less dependent on external certification
bodies, although this requires significant investment and management expertise.
In conclusion, while product differentiation has its benefits for primary sector businesses in
terms of appealing to niche markets and justifying premium prices, the challenges associated
with differentiation in terms of cost and scalability must not be underestimated. Each business
must carefully evaluate its capacity to sustain these efforts and consider alternative strategies
such as vertical integration to enhance competitiveness.
6(a) Analyse two ways a business could use employee participation in the management of
business activity. [8]
Employee participation in management involves including employees in decision-making

processes and management activities, aiming to leverage their insights and increase their
engagement.
One way to implement employee participation is through the establishment of work councils.
The cause is the need for a structured method of communication between management and
employees regarding workplace issues. The impact is enhanced dialogue and transparency,
leading to better-informed decisions that consider employee input. The consequence is a more
motivated workforce that feels valued and heard, which can reduce turnover rates and improve
productivity.
Another method is the implementation of suggestion boxes and regular feedback sessions,
which encourage employees to contribute ideas for improvements. The cause of this is the
recognition that front-line employees often have valuable insights into operational
inefficiencies. The impact is the collection of diverse ideas that can lead to practical innovations
and efficiency improvements. The consequence is an organizational culture that promotes
continuous improvement and employee empowerment, fostering a sense of ownership and
accountability among staff.
6(b) Evaluate whether McClelland’s three needs theory is the best way to meet employee
needs in a software business. [12]
McClelland's Three Needs Theory identifies three motivational drivers: the need for
achievement, the need for affiliation, and the need for power. These needs vary among
individuals and can influence their effectiveness in different roles within an organization.
In a software business, leveraging the need for achievement can be particularly effective. The
cause is that software development often involves complex, challenging projects that require
innovation and problem-solving. The impact of aligning tasks with employees' need for
achievement is increased motivation and job satisfaction as employees meet challenging yet
achievable goals. The consequence is higher productivity and innovation rates, driving business
growth and competitive advantage. However, overly challenging projects without adequate
support or rewards can lead to burnout and dissatisfaction.
Applying the need for power, by allowing software developers to lead projects or make
significant decisions, can also be motivating. The cause is that developers often possess unique
technical skills and insights that can guide project directions effectively. The impact is enhanced
employee engagement and a sense of ownership over their work. The consequence is improved
project outcomes and a more dynamic team environment. However, without proper checks and
balances, this can lead to power struggles or mismanagement if employees are not adequately
prepared for leadership roles.
An alternative approach could be to incorporate Herzberg’s Two-Factor Theory, focusing on
improving both hygiene factors and motivators. Enhancing workplace conditions, job security,
and salaries (hygiene factors) along with providing recognition and career advancement
opportunities (motivators) could comprehensively address employee needs. The impact is a
holistic improvement in employee satisfaction and retention. The consequence is a robust and
motivated workforce, though it requires a balanced investment in both areas.
Conclusively, while McClelland's Three Needs Theory provides a useful framework for
understanding individual motivations within a software business, it should not be used in
isolation. Integrating insights from multiple motivational theories, such as Herzberg’s, could
provide a more rounded approach to meeting diverse employee needs and enhancing
organizational effectiveness in the dynamic tech industry.
November 2023/12
1a Define the term job description. [2]
A job description is a formal document that outlines the main duties and responsibilities
associated with a specific job. It typically includes the title of the position, the department or
area in which the job is located, the person to whom the employee reports, and detailed lists of
the tasks or processes for which the employee is responsible.
b Explain one advantage to an employer of using a person specification. [3]
Using a person specification provides several advantages to an employer, including enhancing
the recruitment process by clearly identifying the ideal characteristics and qualifications that
candidates should possess. This specificity helps in attracting suitable applicants and streamlines
the selection process by making it easier to match candidates' attributes with job requirements.
Ultimately, it increases the likelihood of hiring individuals who are well-suited to the job and
organization, which can improve employee retention and reduce turnover costs.
2a Define the term business enterprise. [2]
A business enterprise refers to an organizational entity engaged in commercial, industrial, or
professional activities. Enterprises can be for-profit entities or non-profit organizations that
operate to fulfill a charitable mission or further a social cause.
b Explain one reason why a business might fail. [3]
A common reason why businesses fail is poor financial management which includes a lack of
proper budgeting, inadequate financial planning, and insufficient cash flow management.
Without a solid understanding of finances and effective management practices, businesses
struggle to make informed decisions, fail to invest in necessary resources, and might not be able
to sustain operations during financial downturns or when unexpected expenses arise, ultimately
leading to failure.
3a Define the term bankruptcy. [2]

Bankruptcy is a legal process through which individuals or businesses unable to meet their
financial obligations can seek relief from some or all of their debts. In the context of a business,
this process involves the liquidation of assets to repay creditors and may result in the business
ceasing operations.
b Explain one advantage of using retained earnings as a source of finance. [3]
Retained earnings are profits that a company has earned to date, less any dividends or other
distributions paid to investors. This form of internal funding has the advantage of not requiring
any external financing, such as loans or new equity investments that might dilute existing
shareholders' stakes or impose additional financial burdens on the company. Using retained
earnings can provide a business with flexibility, allowing it to fund initiatives or expansion efforts
without the need to adhere to external conditions or requirements typically associated with
other forms of financing.
4 Analyse one way a business might improve the efficiency of its operations. [5]
One effective way to improve the efficiency of business operations is through the
implementation of technology solutions, such as automation and business management
software. Automation can streamline operations, reduce human error, and free up employee
time for more strategic tasks. Meanwhile, management software can help in better planning
and allocation of resources, improve communication among different parts of the organization,
and provide valuable data for decision-making. Both tools can lead to more efficient operations
by optimizing various business processes and enhancing productivity.
5a Analyse two methods that a business could use to help employees satisfy their self-
actualization needs, as defined by Maslow. [8]
Self-actualization is the highest level in Maslow's hierarchy of needs, where individuals strive to
realize their fullest potential and express their true self. In a business context, satisfying
employees' self-actualization needs involves creating opportunities for growth, creativity, and
achieving personal goals within the workplace.
One method to help employees achieve self-actualization is by providing opportunities for
creative work. The cause of this method is the recognition that many individuals have a deep-
seated need to express their creativity. The impact of fulfilling this need within the business is
significant, leading to enhanced innovation and the development of new ideas. This, in turn, can
result in improved product offerings or more efficient processes. The consequence of these
improvements is a competitive advantage in the market, potentially leading to increased market
share and profitability.
Another method is through career advancement opportunities which address the cause of
employee motivation stemming from career growth aspirations. The impact of this method on
the business is the creation of a more skilled and capable workforce, which enhances
operational effectiveness and efficiency. The consequence of this development is a more robust
organizational structure capable of handling complex challenges and seizing new opportunities.
This method not only motivates employees but also prepares the business for future growth
and adaptation to changing market conditions.
5b Evaluate whether an ability to motivate others is the most important role of a hotel
manager. [12]
Motivation is a critical managerial function that involves the stimulation of people to achieve
high levels of performance and overcome barriers to success in the workplace. It is especially
crucial in hospitality, where employee performance directly affects customer satisfaction and
business success.
One role of a hotel manager in motivating staff is through recognition and rewards. The cause of
using this approach is the intrinsic need for recognition seen in most individuals, which when
acknowledged, significantly boosts morale. The impact of effective employee recognition is
higher job satisfaction and reduced staff turnover, which enhances overall productivity. The
consequence is a more stable work environment and consistent service quality, key components
of customer satisfaction in the hospitality industry. However, reliance solely on extrinsic rewards
may lead to diminished intrinsic motivation over time, potentially reducing the effectiveness of
such motivational strategies.
Another critical role is creating a positive work environment that fosters team collaboration and
employee empowerment. The cause here is that employees in a supportive environment are
more likely to take initiative and commit to the organization’s goals. The impact of a positive
work environment on the business is an increase in innovation and efficiency, as employees feel
secure to express ideas and solutions. The consequence is the establishment of a strong
organizational culture that promotes continuous improvement and adaptability. However,
creating such an environment requires continuous effort and resources, which could be
challenging to maintain during economic downturns or periods of organizational stress.
An alternative strategy that must be considered is the implementation of continuous
professional development programs. The impact of this strategy is the enhancement of
employee skills and knowledge, which keeps the workforce updated with the latest industry
standards and practices. The consequence faced by the business is increased operational costs;
however, the long-term benefits of a highly skilled workforce can outweigh these costs through
improved service quality and customer satisfaction.
In conclusion, while the ability to motivate others is undeniably crucial, it should not be viewed
as the sole important role of a hotel manager. Balancing motivation with operational
management and continuous professional development is essential for sustaining business
growth and adapting to evolving market demands.
6a Analyse two reasons why there should be a close link between the marketing objectives of
a business and its corporate objectives. [8]
Marketing objectives are specific goals set by the marketing department to support the broader
corporate objectives of a business, which encompass its overall mission and strategic aims.
One reason for the close link is the alignment of market growth goals with corporate revenue
targets. The cause is the necessity for marketing efforts to directly support the business's
overarching goal of revenue maximization. The impact of this alignment on the business is that
marketing campaigns are specifically designed to attract customers and generate sales, which
directly contributes to achieving financial goals. The consequence is an increased overall
efficiency in resource allocation, ensuring that marketing expenditures contribute directly to
corporate objectives, enhancing ROI and profitability.
Another reason is the consistency of brand messaging across all company platforms and
interactions. The cause of this necessity is the potential confusion and dilution of brand value
that can occur if marketing objectives are not aligned with the overarching messages and values
of the corporation. The impact on the business is that with consistent messaging, customers
receive the same brand experience regardless of how they interact with the company, which
strengthens brand loyalty and recognition. The consequence is a stronger market presence and
competitive advantage, as a unified brand is more easily recognizable and trusted by
consumers.
6b 'This new airline will only succeed if it offers the lowest prices in the market'. Evaluate this
view. [12]
The success of a new airline in the competitive aviation industry can hinge on multiple factors,
of which pricing is undoubtedly significant.
Offering the lowest prices can be a powerful strategy to attract initial customer interest and
build market share. The cause of this strategy is the high price sensitivity among consumers in
choosing airlines, especially for budget and leisure travel. The impact of low pricing on the
business is a potential rapid increase in customer base. The consequence of this strategy is that
while it can lead to initial high volume, it might not be sustainable in the long run as it can erode
profit margins and limit the airline's ability to invest in service quality and expansion.
However, competing solely on price can be risky. An alternative strategy is to focus on
differentiating service offerings, such as better customer service, more routes, and loyalty
programs. The impact of this strategy is creating a unique selling proposition that can attract
and retain customers who are willing to pay a premium for higher service levels. The
consequence for the business is a more sustainable revenue stream that is not solely dependent
on being the low-cost leader, potentially leading to greater financial stability and customer
loyalty.
An additional alternative strategy would involve investing in sustainability and environmental

efficiency. By focusing on becoming the greenest airline, the company could tap into the
growing market of environmentally conscious consumers. The impact of this strategy includes
not only differentiating the airline in a crowded market but also potentially qualifying for tax
benefits and government grants related to environmental conservation. The consequence is
that while upfront costs may be higher, the long-term benefits could include loyalty from a
niche market segment, reduced operational costs due to efficiency improvements, and
compliance with increasingly stringent international environmental regulations.
In conclusion, while low pricing can be an effective tool for a new airline to enter the market, it
should not be the sole focus. A balanced approach that includes competitive pricing, service
differentiation, innovative marketing, and a commitment to sustainability can provide a more
robust foundation for long-term success. Success in the airline industry often requires more
than just competitive pricing; it demands a comprehensive strategy that considers both market
conditions and consumer preferences.
November 2023/13
1 (a) Define the term organic growth. [2]
Organic growth refers to the expansion of a business achieved through its own resources and
capabilities, without relying on external assistance such as acquisitions or mergers.
1 (b) Explain one reason a business may choose to remain small. [3]
One reason a business may choose to remain small is to maintain control and preserve the
quality of its products or services. Smaller scale operations often allow the owner to oversee
every aspect of the business, ensuring a high level of quality and personalized service that might
be lost in larger, more bureaucratic organizations. This can be particularly important in
industries where craftsmanship or detailed customer service is valued, helping the business to
maintain a distinct competitive advantage.
2 (a) Define the term curriculum vitae. [2]
A curriculum vitae (CV) is a comprehensive document detailing an individual’s academic and
professional history. It includes education, qualifications, work experience, skills, and sometimes
personal interests. This document is typically used to apply for employment, presenting a profile
of an individual's achievements and capabilities.
2 (b) Explain one benefit to an employee of having an employment contract. [3]
Having an employment contract provides an employee with a clear set of terms and conditions
regarding their employment, which includes job security, roles, responsibilities, and benefits
such as salary, leave entitlements, and other employment conditions. This formal agreement
helps protect the rights of the employee and ensures a mutual understanding between the
employer and employee, reducing the potential for disputes and misunderstandings.
3 (a) Define the term venture capital. [2]
Venture capital is a type of private equity and financing that investors provide to startup
companies and small businesses that are believed to have long-term growth potential. This
capital is usually provided in exchange for an equity stake in the business.
3 (b) Explain one disadvantage of using trade credit as a source of finance. [3]
One disadvantage of using trade credit is the potential cost implications associated with missing
early payment discounts. Trade credit may allow businesses to purchase goods or services on
account without immediate payment, but taking longer to pay can lead to missed discounts for
early payment, thus increasing the overall cost of the goods or services. Additionally,
consistently stretching trade credit limits can strain supplier relationships, potentially leading to
less favorable terms or the cessation of credit facilities in the future.
4 Analyse one impact on a business’s marketing decisions of using product portfolio analysis.
[5]
Using product portfolio analysis impacts a business’s marketing decisions by providing crucial
insights into which products are performing well and which are not. This analysis can lead
businesses to allocate more resources to profitable products while phasing out or reevaluating
underperforming ones. For example, a business might use product portfolio analysis to identify
that a particular product line is not generating expected revenues despite significant marketing
investment. This insight allows the business to redirect its marketing efforts and resources
towards more promising products, optimize its product mix, and potentially develop new
products that better meet market demands. This strategic decision-making tool thus helps in
maximizing the effectiveness of marketing budgets and enhancing the overall profitability of the
business.
5a Analyse two qualities an intrapreneur should possess to be successful. [8]
An intrapreneur is an employee within a company who is given the freedom to develop new
projects and ideas without the responsibility of being a company's executive.
One crucial quality an intrapreneur should possess is innovation. The cause for this need stems
from the intrapreneur's role in driving new projects which require fresh and unique ideas to
succeed. The impact of innovation is significant; it can lead to the development of new products
or services that can open up new markets or improve market share for the business. The
consequence of such innovative activities is the potential transformation of the business
landscape for the company, securing a competitive edge in the industry.
Another essential quality is the ability to take calculated risks. Intrapreneurs must often venture
into untested waters with their initiatives. The cause of this risk-taking is the need to implement
new ideas that might not have proven track records but have the potential for high rewards. The
impact of risk-taking can manifest in potentially high returns from successful projects. The
consequence is that it fosters a culture of bold decision-making that can lead to significant
business advancements or occasionally, learning from failures that inform future strategies.
5b ‘Ethics should significantly influence the marketing activities of all retail clothing
businesses.’ Evaluate this view. [12]
Ethics in business refers to the moral principles that guide the behavior of the firm in the world.
In marketing, this involves promoting honesty, fairness, and responsibility in both message and
product delivery. Ethical marketing practices ensure that the company’s activities align with the
broader social and ecological standards of the community.
One critical reason ethics should influence marketing activities is consumer trust. The cause of
emphasizing ethics is to align business practices with consumer expectations and societal
norms. The impact of ethical marketing is a stronger brand loyalty and customer satisfaction, as
consumers are more likely to support companies they perceive as ethical. The consequence is a
sustainable customer base and potentially increased market share. However, a focus on ethics
might limit aggressive marketing strategies, potentially slowing down rapid business growth.
Another reason is the long-term viability of the business. Ethical marketing helps avoid legal
issues and sanctions from misleading or harmful advertising. The cause here is regulatory
compliance and social responsibility. The impact of adhering to ethical standards is a reduction
in the risk of legal challenges and public backlashes. The consequence is enhanced business
stability and reputation. Therefore, prioritizing ethics can lead to better risk management and a
sustainable business model.
An alternative strategy to consider is aggressive marketing. This approach focuses on
maximizing sales and market penetration quickly, regardless of ethical considerations. The
impact might be rapid growth and higher short-term profits. The consequence, however, could
be potential consumer alienation and legal risks, which might undermine the business’s
reputation and financial stability in the long term.
While aggressive marketing might offer short-term gains, the significant influence of ethics on
marketing activities, especially in the retail clothing industry, provides a foundation for long-
term success and brand strength. Ethical marketing not only helps in building trust and loyalty
but also safeguards the company against legal and social risks. Thus, ethics should indeed play a
crucial role in shaping the marketing strategies of retail clothing businesses.
6a Analyse two ways in which operations contributes to added value in a business. [8]
Adding value through operations means enhancing the worth of products or services to
customers, distinguishing the business from its competitors.
One way operations add value is through improving efficiency. The cause of focusing on
efficiency is to minimize waste and optimize resource use, which directly affects cost
management. The impact of improved efficiency is reduced operational costs, allowing the
business to offer competitive pricing or higher profit margins. The consequence is increased
competitiveness in the market, attracting more customers or enhancing profitability.
Another way is through enhancing product quality. The cause is the pursuit of excellence and
meeting customer expectations, which are essential in a competitive market. The impact of
high-quality operations is the creation of superior products that exceed customer expectations.
The consequence is enhanced customer satisfaction and loyalty, leading to repeat business and
a strong brand reputation.
6b ‘Supply chain management has the most significant impact on the effectiveness of a
hospital.’ Evaluate this view. [12]
Supply chain management (SCM) in healthcare involves the complete coordination of all
resources, processes, and activities involved in creating and delivering healthcare services, from
procurement of materials to delivery of treatment to patients.
One significant impact of SCM on hospital effectiveness is the continuous availability of medical
supplies. The cause of effective SCM is ensuring that all necessary medical materials, from drugs
to medical devices, are available when needed without overstocking. The impact is the
uninterrupted provision of healthcare services, crucial for patient care quality. The consequence
is improved patient outcomes and hospital efficiency. However, over-reliance on just-in-time
delivery models can lead to vulnerabilities in the face of supply chain disruptions, as seen during
global crises.
Another impact is cost management. Effective SCM can significantly reduce wastage and lower
procurement costs. The cause is optimized purchasing and inventory management. The impact
of reduced costs allows hospitals to allocate more resources to patient care and advanced
medical technologies. The consequence is an overall improvement in healthcare services and
patient satisfaction. However, excessive cost-cutting in supply chain management can lead to
quality compromises, potentially affecting patient care adversely.
An alternative strategy is the integration of advanced technologies in operations management.
Implementing technologies like AI for inventory predictions and blockchain for traceability can
enhance SCM efficiency. The impact is a more responsive and transparent supply chain. The
consequence, however, might include high initial technology and training costs, which could be
a barrier for some hospitals.
While supply chain management is crucial for ensuring operational effectiveness in hospitals,
integrating technology and maintaining a balanced approach towards cost management are
equally important. Effective SCM ensures that hospitals operate smoothly and are prepared for
both regular operations and unexpected demands, thereby significantly impacting hospital
effectiveness.
March 2022/12
Question 1(a): Define the term ‘marginal cost’. [2]
Marginal cost is defined as the additional cost incurred from producing one more unit of output.
This concept is crucial for businesses to understand the implications of scaling production and
to determine the most efficient production level where profits are maximized without
unnecessarily increasing costs.
Question 1(b): Explain one use of break-even analysis. [3] – according to new paper pattern
Break-even analysis is a critical tool for businesses. Firstly, it helps businesses understand the
impact of changes in cost structures, such as variable and fixed costs, on their operations. By
assessing how these changes affect the break-even point, businesses can make informed
decisions about pricing, scaling production, or implementing cost-saving measures.
Question 2(a): Define the term ‘commission’. [2]
Commission is a payment mechanism where sales personnel are rewarded based on the sales
they generate. It is typically a percentage of the sales value, motivating salespeople to increase
their sales performance, which in turn can boost the company's revenue.
Question 2(b): Explain one disadvantages to a business of using empowerment to motivate its
employees. [3] – according to new paper pattern
Using empowerment to motivate employees can lead to challenges. Initially, if employees are
given more control over their work without adequate support or skills, it can lead to poor
decision-making and inefficiency.
Question 3: Analyse one problems a sole trader might have if they change the legal structure
to a partnership. [5] – according to new paper pattern
When a sole trader transitions to a partnership, a significant problem that can arise is the
potential loss of autonomy in decision-making. As a sole trader, the individual has complete
control over all business decisions, from daily operations to strategic direction. However, in a
partnership, all partners must typically agree on major decisions, or at least consult each other,
which can lead to conflicts or delays. This shift can impact the efficiency and speed at which the
business can react to market changes or opportunities, potentially slowing down operations and
affecting business performance.
Question 4(a): Define the term ‘customer (market) orientation’. [2]

Customer orientation is a business strategy that involves prioritizing the needs and preferences
of customers in the company’s operations and decision-making processes. This strategy is
essential for aligning product offerings with market demand and for building strong, lasting
customer relationships.
Question 4(b): Explain one limitation to a business of using market segmentation. [3] –
according to new paper pattern
Market segmentation, while useful, has its limitations. It can lead to increased costs and
complexity. Specifically, researching and developing products for different segments can be
costly and time-consuming.
Question 5(a): Analyse two benefits of using internal sources of finance for business growth.
[8] – according to new paper pattern
Internal sources of finance include funds found within the company from operations or through
accumulated assets. These sources are crucial because they involve no new equity or debt
commitments, such as retained profits, depreciation provisions, or sale of assets.
The primary benefit of using internal financing, such as retained earnings, is the absence of
interest costs. This stems from the company not needing to borrow from external creditors,
reducing financial risk and interest payments. The impact on the business is significant financial
savings and enhanced profitability. The consequence is a stronger balance sheet and increased
autonomy over financial decisions, allowing the business to invest in new projects without the
pressure of satisfying external funders’ expectations.
Another benefit is the immediacy and availability of funds. Internal financing such as sale of
unused assets or depreciation funds are typically readily available and can be mobilized quickly
without the need for lengthy approval processes or market conditions that external funding
might entail. The impact is increased agility in capitalizing on investment opportunities. The
consequence is that the business can adapt more swiftly to market changes or internal growth
needs, thereby maintaining or enhancing competitive advantage.
Question 5(b): Discuss whether the published accounts of a luxury hotel provide a good
measure of the performance of the business. [12]
NO MORE IN AS SYLLABUS
Question 6: ‘The most effective way for a loss-making retail clothing business to survive is to
change the price element of its marketing mix.’ Evaluate whether you agree with this
statement. [12] – according to new paper pattern
The marketing mix refers to the strategic combination of factors under a company’s control that
can be manipulated to influence consumers' purchasing decisions. The price element
specifically relates to how much customers are charged for a product.
Reducing prices might initially seem beneficial as it can increase the attractiveness of products
to consumers, particularly in a competitive retail market. The cause of this strategy is to
stimulate demand and clear out inventory, potentially leading to improved cash flow. The
impact could be an immediate boost in sales volumes. The consequence, however, might
include reduced profit margins and possibly a dilution of the brand's perceived value, signaling
that the products are less desirable or of lower quality. Therefore, while effective in the short
term, this strategy could harm the brand’s reputation and financial health in the long term.
Alternatively, strategic price increases or implementing premium pricing strategies might
strengthen the brand's market position as a provider of high-quality goods. The cause here is
leveraging brand perception to justify higher prices. The impact could be higher profit margins
per product sold. The consequence of this approach can be an improved perception of quality
and exclusivity, enhancing customer loyalty among a specific target market. However, raising
prices risks reducing sales volumes if customers do not perceive the value increase, which could
exacerbate the loss situation.
Beyond adjusting prices, diversifying the product range or improving product quality could make
the business more competitive without relying heavily on price adjustments. This could involve
introducing limited edition items or enhancing product designs to create unique selling points.
The impact could be a strengthened brand identity and increased customer engagement, with
the consequence of potentially higher sales volumes and customer loyalty.
Changing the price element of the marketing mix alone is not necessarily the most effective
survival strategy for a loss-making retail clothing business. It should be part of a broader
strategic review that includes product diversification, market positioning, and brand
management. Employing a combination of strategies will likely yield better long-term results
than relying solely on pricing adjustments.
Question 7(a): Analyse factors that might determine the relocation of a business. [8]
Question 7(b): Discuss whether flexibility of operations might improve the sales of a toy
manufacturing business. [12]
June 2022/11
1a Define the term 'social enterprise'. [2]

A social enterprise is primarily a business that has social objectives at its core, such as projects
focused on social or environmental issues. Instead of maximizing profit for shareholders, these
businesses reinvest their profits into the community or towards furthering their social goals.
1b Explain one advantage to a business of being a social enterprise. [3] – according to new
paper pattern
One significant advantage of being a social enterprise is the enhanced public image and
customer loyalty it fosters. Consumers today are increasingly seeking products and services
from companies that demonstrate ethical practices and contribute positively to society. This
preference can lead to increased customer base and potentially higher revenue, as consumers
may be willing to pay more to support such businesses.
2a Define the term 'emotional intelligence'. [2]
2b Explain two benefits to a business of autocratic leadership. [3]
3 Explain how price elasticity of demand influences the pricing decisions of a business. [5]
4a Define the term ‘Computer Aided Manufacture’ (CAM). [2]
4b Explain two disadvantages to a business of introducing CAM. [3]
5a Analyse two benefits to a business of focusing on the 4Cs when planning to increase its
market share. [8] – according to new paper pattern
The 4Cs—Customer value, Cost, Convenience, and Communication—represent a marketing
model that prioritizes the interests and needs of consumers over the traditional emphasis on
just the product. This approach helps businesses align their offerings more closely with what
consumers are actively seeking.
Focusing on Customer value, which is about understanding and enhancing what the customer
perceives as the value of a product, causes businesses to tailor products more closely to
customer needs. The impact of this is often an increased desirability of the product among
target consumers. The consequence is a strengthened brand loyalty and potentially increased
market share, as satisfied customers are more likely to make repeat purchases and recommend
the product to others.
Concentrating on Convenience involves making products and services more accessible to
customers, which may involve optimizing the distribution channels or simplifying the purchasing
process. The cause of this is to remove barriers to purchase, leading to an immediate impact of
increased sales volume. The consequence of such enhancements is a solid competitive
advantage in the marketplace, as customers tend to gravitate towards businesses that offer ease
and practicality.
5b Evaluate the usefulness of secondary market research to a business planning to launch a
new luxury perfume. [12] – according to new paper pattern
Secondary market research involves analyzing data that has already been gathered for other
purposes, such as previous market studies, reports, or any available market data. This method is
typically less costly and faster than conducting primary research from scratch.
One benefit of secondary market research is that it provides a broad understanding of the
market landscape quickly, which is caused by the ready availability of existing data. The impact
on the business is the ability to speed up the decision-making process, providing a foundation
for strategy development. The consequence is potentially reduced risks associated with product
launch. However, the data may not be specifically tailored to the nuances of the luxury perfume
market, which might lead to less precise market insights.
Secondary research can also help identify industry trends and competitor strategies. This
happens because the collected data often includes information on competitive offerings and
market shifts. The impact here is the strategic positioning of the new perfume in a way that
capitalizes on current consumer behaviors and gaps in the market. The consequence could be a
stronger market entry with a well-defined unique selling proposition. However, since this data is
not exclusive, competitors might also have access to it, leading to potential strategy overlaps.
An alternative strategy would be to complement secondary research with targeted primary
research, which involves gathering new data specific to the intended consumer demographic for
the luxury perfume. This approach would allow the business to gain deeper insights into
consumer preferences and fine-tune the product and marketing strategy accordingly. The
impact would be a more tailored product offering, leading to better market acceptance, and the
consequence might be a stronger brand loyalty and customer base.
In conclusion, while secondary market research provides valuable insights quickly and cost-
effectively, for a luxury product like perfume, where consumer preference is highly specific, it is
crucial to supplement it with primary research to ensure the product accurately meets
consumer expectations and stands out in the competitive market.
6. ‘Non-financial motivators are the most effective way of improving employee motivation in
a house building business.’ Evaluate this view. [12] – according to new paper pattern
Non-financial motivators include aspects like job satisfaction, work-life balance, recognition, and
opportunities for career advancement, as opposed to financial rewards such as bonuses and pay
raises.
Recognizing employees' efforts through verbal praise or awards causes them to feel valued and
appreciated. The impact on the business is an increase in employee morale and motivation,
which can enhance productivity and reduce turnover rates. The consequence is a more stable
and committed workforce, contributing positively to ongoing projects and company goals.
However, this approach may not sufficiently motivate all employees, particularly if their basic
financial needs are not being met, highlighting the necessity of a balanced motivational
strategy.
Providing career advancement opportunities by offering training and development programs
can cause employees to see a long-term future with the company. The impact of this investment
is typically a more skilled and efficient workforce. The consequence is enhanced company
performance and a reputation as a desirable employer, which aids in attracting top talent.
However, the effectiveness of this strategy depends significantly on the individual aspirations of
employees, which may vary.
An alternative consideration is the role of financial motivators, which are crucial in industries
like house building, where physical labor is intensive and the job demands are high. Offering
competitive salaries and performance bonuses can directly influence job satisfaction and loyalty.
The impact of such financial incentives is often immediate and clear, leading to straightforward
employee retention and satisfaction. The consequence is a workforce that is not only motivated
by money but also feels respected and fairly compensated for their hard work.
Conclusively, while non-financial motivators are important and can lead to significant
improvements in employee motivation and company culture, they must be part of a broader
strategy that includes financial incentives, particularly in labor-intensive industries such as
house building. Balancing these motivational approaches is key to achieving sustained employee
engagement and optimal performance.
7a Analyse two benefits to a business of using break-even analysis. [8] – according to new
paper pattern
Break-even analysis is a financial calculation to determine the point at which revenue received
equals the costs associated with producing the goods or services—known as the break-even
point.
Utilizing break-even analysis helps businesses understand the minimum sales volume needed to
cover costs, which causes managers to make informed pricing and production decisions. The
impact of this analysis is better financial management and risk assessment. The consequence is
that businesses can avoid losses by ensuring that sales exceed the break-even point, thus
maintaining profitability.
Another benefit of break-even analysis is that it provides clear targets for sales teams and
production units, facilitating goal alignment throughout the organization. The cause of this is
the clear, quantifiable objective that all team members can focus on. The impact is improved
coordination and efficiency in operations, aiming to meet or surpass the break-even point. The
consequence is enhanced organizational performance and the ability to plan for growth and
expansion more effectively.
7b Evaluate the most appropriate source of finance for a private limited company to purchase
an additional factory. [12] – according to new paper pattern
Sources of finance for a private limited company to fund significant capital expenditures like
purchasing a factory include bank loans, issuing new shares, or obtaining government grants.
A long-term bank loan is a conventional source of finance due to its relative accessibility and the
ability to spread repayment over several years, which causes less immediate financial strain on
the company's cash flow. The impact is the preservation of working capital for operational
needs. The consequence is enhanced liquidity and financial stability, allowing the business to
operate efficiently while still expanding. However, this could lead to long-term financial
commitments and interest payments that may affect future profitability.
Issuing new shares to existing or new investors can inject significant capital into the company
without the burden of debt. This approach causes dilution of existing shareholdings but avoids
interest costs and debt pressures. The impact is a strengthened capital base to support
expansion. The consequence is that the company might have more resources to invest in other
strategic areas, improving overall business prospects. However, the control of the original
shareholders might be reduced, affecting decision-making.
Government grants, if available, provide a non-repayable source of finance, which can
significantly reduce the financial risk associated with expansion. The impact of receiving a grant
is significant cost savings, as these funds do not require repayment. The consequence is greater
financial flexibility and potential for higher profit margins since there are no interest payments.
However, grants may come with specific conditions or limitations on how the funds can be used,
which could restrict the company’s operational choices.
In conclusion, while all these sources have their merits, the most appropriate choice depends
on the company’s current financial health, growth strategy, and risk tolerance. A balanced
approach, possibly combining multiple sources of finance, could offer the optimal solution to
fund the acquisition of an additional factory, ensuring both financial stability and strategic
flexibility.
June 2022/12
1a Define the term ‘piece rate’. [2]
Piece rate refers to a payment system where employees are compensated based on the number
of units they produce. It is essentially a performance-based payment method where the
earnings are directly proportional to the amount of work completed by an individual.
1b Explain one advantage to a business of using a time based payment method. [3] –
Using a time-based payment method offers several advantages to a business. Firstly, it simplifies
payroll calculation as wages are based on the hours worked, reducing administrative burdens
and errors.
2a Define the term ‘franchise’. [2]
A franchise is a type of business arrangement where one party (the franchisor) grants another
party (the franchisee) the rights to use its brand and operate under its business model.
2b Explain one advantage to a business of buying a franchise. [3] – according to new paper
pattern
Buying a franchise offers significant advantages. The first is immediate is the support from the
franchisor, which often includes training, product development, and marketing strategies,
reducing the risks commonly associated with starting a new business.
3 Analyse one reason why a business manager needs to understand the difference between
capital expenditure and revenue expenditure. [5] – according to new paper pattern
Understanding the difference between capital expenditure and revenue expenditure is crucial
for a business manager because it affects financial statements and tax obligations. Capital
expenditures are for assets that will provide benefits over several years, such as machinery or
buildings, and are thus capitalized and amortized over their useful life. In contrast, revenue
expenditures are short-term expenses used for the daily function of the business and are
deducted from earnings in the year they are incurred. Proper classification ensures accurate
financial reporting and compliance with tax laws, which in turn affects the strategic planning
and operational budgeting within the business.
4a Define the term ‘price elasticity of demand’. [2]
NOT IN AS SYLLABUS
4b Explain two benefits to a business of knowing the price elasticity of demand of its
products. [3]
NOT IN AS SYLLABUS
5a Analyse two advantages to a business of using mass customization. [8] – according to new
paper pattern
Mass customization is a business strategy that combines elements of mass production with
customization, allowing businesses to manufacture products that meet individual customer
requirements while still achieving economies of scale.
Mass customization enables businesses to offer products tailored to specific customer
preferences, causing increased customer satisfaction. The impact of this is a higher perceived
value of products, leading to greater customer loyalty. Consequently, this can result in repeat
purchases and positive word-of-mouth, enhancing the business's market position and revenue.
By producing goods only when they are demanded, mass customization helps reduce inventory
costs. The cause is the avoidance of overproduction, which aligns production closely with
customer demand. The impact is less capital tied up in unsold inventory, reducing storage and
holding costs. Consequently, the business can allocate resources more efficiently and increase
its operational flexibility.
5b Evaluate the importance to a hotel of having effective inventory control. [12] – according
to new paper pattern
Inventory control in a hotel involves managing the stock levels of various items, such as food
supplies, bedding, and cleaning materials, essential for daily operations to ensure they are
available when needed without overstocking.
Effective inventory control ensures that all necessary items, like toiletries and linens, are
available for guest use, which prevents service interruptions. The cause of shortages can lead to
guest dissatisfaction; thus, maintaining adequate inventory impacts guest experiences
positively. Consequences of positive guest experiences include higher ratings and return visits.
However, overstocking as a preventive measure can lead to increased operational costs.
Proper inventory control helps manage costs by preventing over-purchase and waste,
particularly of perishable items like food. The cause here is the efficient use of resources, which
impacts the hotel’s profitability by minimizing unnecessary expenses. Consequently, the hotel
can maintain competitive pricing and profitability. However, stringent control may lead to
understocking, risking guest satisfaction during peak times.
Adopting a Just-In-Time (JIT) inventory system could be considered as an alternative strategy.
This approach aligns inventory delivery closely with demand, minimizing storage needs and
reducing waste. The impact of implementing JIT could be significant cost savings and improved
efficiency. However, the risk involves potential disruptions in the supply chain affecting
availability.
Effective inventory control is crucial for maintaining operational efficiency and guest satisfaction
in hotels. While it helps manage costs and enhance guest experiences, alternative methods like
JIT should be considered to address potential challenges in traditional inventory systems.
6 Discuss the importance of emotional intelligence to a manager of a luxury holiday resort.
[20]
NOT IN AS SYLLABUS
7a Analyse two advantages to a business of using online advertising. [8] – according to new
paper pattern
Online advertising involves the use of internet platforms to promote products and services to a
global audience. This method leverages digital technologies to reach a broad demographic and
is highly adaptable to various marketing strategies.
Online advertising is more cost-effective than traditional media. The cause is the digital nature
of the media, which does not require physical materials or extensive distribution networks. The
impact is reduced advertising costs, allowing businesses to allocate budget more efficiently or
increase the frequency of their ads. Consequently, the business can achieve a higher return on
investment and reinvest savings into other areas of operation.
Online advertising allows businesses to target specific demographics using data analytics. This
precision causes a more effective marketing approach, impacting the business by increasing the
conversion rates of advertisements. Consequently, the business experiences higher sales
volumes and improved customer acquisition costs.
7b Evaluate the usefulness to a furniture retailer of using secondary market research when
planning to enter a new market. [12] – according to new paper pattern
Secondary market research involves the analysis of data that has been collected previously for
other purposes but can be repurposed to gain insights into market trends, customer
preferences, and competitive landscapes.
Using secondary market research is cost-effective for a furniture retailer, as it avoids the high
expenses associated with primary market research. The cause is the utilization of already
available data, which impacts the business by reducing research expenses. Consequently, the
retailer can allocate more funds to other critical areas like product development and marketing.
However, the data may not be entirely relevant or up-to-date, potentially leading to misguided
business strategies.
Secondary market research provides quick access to data, enabling faster decision-making. This
speed causes the business to react more promptly to market opportunities. The impact is a
more agile business operation that can capitalize on market trends. However, the lack of
specificity and possible data obsolescence can lead to less accurate market analysis.
Combining secondary with primary market research could be an alternative strategy. This
approach would allow the retailer to verify the relevance and accuracy of the secondary data
with targeted primary research. The impact of this comprehensive approach is a more balanced
and informed market entry strategy, potentially leading to greater market success.
While secondary market research offers cost and time advantages to a furniture retailer
entering a new market, its usefulness can be limited by the relevance and currency of the data.
A combined approach with primary research is recommended to enhance decision-making
accuracy and market entry success.
June 2022/13
1a Define the term ‘workforce planning’. [2]
Workforce planning involves assessing the number of employees required and the skills they
need to meet the future objectives of the business.
1b Explain one advantage to a business of using induction training. [3] – according to new
paper pattern
Induction training provides new employees with a clear understanding of their roles within the
business and the expectations placed on them. This initial training helps integrate employees
into the company culture and workflows, enhancing their efficiency and reducing the time it
takes for them to become productive members of the team.
2a Define the term ‘corporate social responsibility’ (CSR). [2]
Corporate social responsibility (CSR) refers to a business model in which companies integrate
social and environmental concerns in their business operations and interactions with their
stakeholders.
2b Explain one disadvantage to a business of having CSR as a business objective. [3] –
Having CSR as a business objective can introduce additional costs since implementing
sustainable practices often involves investments in cleaner technologies, training, and system
changes. Moreover, prioritizing CSR might lead to conflicts of interest among stakeholders, as
different groups may have different expectations and priorities, making it challenging to satisfy
all parties and potentially leading to a dilution of the company's focus on profitability.
3 Analyse one reason why a business might choose to hold low levels of inventory. [5] –
One reason a business might choose to maintain low inventory levels is to reduce holding costs,
which include storage, insurance, and spoilage costs. Keeping inventory levels low also
minimizes the risk of obsolescence, especially in industries where products rapidly evolve, such
as technology or fashion. This strategy can improve cash flow and reduce the capital tied up in
unsold goods, making funds available for other critical areas of operation or investment.
However, it requires efficient inventory management to avoid stockouts and potential sales
losses.
4a Define the term ‘price discrimination’. [2]
Price discrimination occurs when a company sells the same product at different prices to
different buyers, not based on differences in cost but rather on variations in the willingness to
pay among different market segments.
4b Explain one disadvantage to a business of using competitive pricing. [3] – according to new
paper pattern
Using competitive pricing can lead to reduced profit margins as businesses lower prices to
match or undercut competitors. This strategy can also trigger price wars, further eroding
profitability and potentially damaging long-term brand value as customers might perceive
lower-priced products as inferior in quality.
5a Analyse two disadvantages to a sole trader of changing to a partnership. [8] – according to
new paper pattern
A sole trader is an individual who owns and operates a business alone, having full control over
all decisions and bearing complete responsibility for the business’s finances. A partnership, on
the other hand, involves two or more people sharing ownership, responsibilities, and profits of
a business.
One significant disadvantage of changing from a sole trader to a partnership is the loss of
complete control. In a sole trader setup, one individual makes all critical decisions, allowing for
swift and cohesive management. Shifting to a partnership means decisions must be agreed
upon by all partners, causing potential delays and conflicts. The impact of this can lead to
slower response times to market changes, possibly resulting in missed opportunities.
Consequently, this could hinder the business's ability to innovate and adapt, ultimately affecting
its competitiveness and growth.
Another disadvantage is the requirement to share profits. As a sole trader, the individual retains
all earnings, but in a partnership, profits must be distributed among the partners according to
their share agreements. This division can lead to reduced personal income for the original sole
trader, especially if the business is highly profitable. The consequence of this is potentially lower
financial motivation for the sole trader, which might affect their drive to expand or enhance the
business further.
5b Evaluate whether entering into a franchise agreement is the best way for a new
entrepreneur to start a business. [12] – according to new paper pattern
A franchise agreement involves a contractual relationship where a franchisor grants a franchisee

the rights to operate under its brand name, using its business model and systems in exchange
for a fee and ongoing royalties.
One advantage of a franchise is instant brand recognition. New entrepreneurs benefit from an
established brand which attracts customers more effectively than a new, untested business. The
cause is the franchisor’s proven track record and established customer base, leading to
immediate footfall and quicker profitability. The consequence is a potentially faster return on
investment. However, this comes at the cost of high initial fees and ongoing royalties that can
significantly reduce net earnings.
Franchisors often provide comprehensive support and training, which is crucial for new
entrepreneurs lacking business experience. This support includes marketing, operational
procedures, and ongoing advice, leading to reduced risks associated with starting a business.
The impact is increased chances of business survival and growth. The consequence is a more
streamlined operation adhering to proven standards. However, this can lead to a lack of
autonomy, as franchisees must adhere to the franchisor’s strict guidelines and operational
methods.
An alternative to entering a franchise agreement is starting an independent business. This route
offers complete control over the business, allowing for unique branding and personalized
business strategies, potentially leading to distinctive market positioning. The impact is full
creative and operational freedom, with the consequence of potentially higher profit margins
since there are no franchisor fees.
While franchising offers significant advantages such as brand recognition and support, the lack
of autonomy and financial commitments can be restrictive. For an entrepreneur who values
creativity and independence and is willing to accept higher risks for potentially greater rewards,
starting an independent business might be more appropriate. However, for those seeking
stability and support, franchising could be considered the best entry strategy into business
ownership.
6 'The published accounts of a public limited company are only useful to internal
stakeholders.’ Evaluate this view. [20]
NOT IN AS SYLLABUS
7a Analyse two benefits to a business of niche marketing. [8] – according to new paper
pattern
Niche marketing targets a specific segment of the market, focusing on a distinct customer base
with unique preferences and needs. This approach allows businesses to concentrate their
efforts on a clearly defined audience.
The primary benefit of niche marketing is the ability to engage in highly targeted marketing
strategies. The cause is the business’s focus on a specific group, which leads to more tailored
and effective marketing efforts. The impact is a higher engagement rate from customers who
feel the product or service meets their specific needs. The consequence is increased customer
loyalty and potentially higher profit margins as customers are often willing to pay more for
products that precisely meet their requirements.
Niche marketing often results in reduced competition. By specializing in a particular area, a
business can establish itself as a leader in that niche, facing fewer competitors. The cause is the
unique positioning and specialized offerings that are not widely available. The impact is a more
dominant presence in that segment of the market, with the consequence of sustained business
growth and higher barriers to entry for potential new competitors.
7b Evaluate whether a successful soft drinks business needs to continue to carry out market
research. [12] – according to new paper pattern
Market research involves gathering, analyzing, and interpreting information about a market,
including products, customers, and competitors, to support decision-making processes.
For a successful soft drinks business, continuous market research helps maintain
competitiveness. The cause is the dynamic nature of consumer preferences, especially in the
beverage industry. The impact of ongoing market research is the ability to quickly adapt to
changing trends and consumer needs, ensuring the business remains relevant and competitive.
The consequence is sustained or increased market share. However, the cost of continuous
market research can be high, potentially reducing overall profitability if not managed carefully.
Continued market research supports innovation and product development, which are crucial in
the fast-paced soft drinks industry. The cause is the need to continually offer new and improved
products to meet consumer demands. The impact is the introduction of products that may
capture new customer segments or increase consumption among existing customers. The
consequence is enhanced business growth and brand loyalty. However, there is a risk of
innovation fatigue where too frequent changes might alienate existing customers who prefer
consistency.
An alternative to traditional market research could be direct customer feedback systems, such
as online surveys or interactive platforms. This approach can provide real-time, actionable
insights at a potentially lower cost than broad market research. The impact is more direct
customer engagement and quicker adaptations to feedback, with the consequence of a more
responsive business model that is closely aligned with customer needs.
While continuous market research involves costs that could affect profitability, its benefits in
terms of maintaining competitiveness and supporting innovation are vital for a successful soft
drinks business. Thus, it remains an essential activity, albeit complemented by cost-effective
customer feedback mechanisms to optimize its advantages.
November 2022/11
Question 1 (a): Define the term ‘emotional intelligence’. [2]
Question 1 (b): Explain two of Goleman’s emotional intelligence competencies. [3]
2a Define the term ‘opportunity cost’. [2]
Opportunity cost is defined as the value or benefit that is forgone in order to pursue a certain
action. In simpler terms, it is the cost of not choosing the next best alternative when a decision
is made to follow one course of action over another.
2b Explain one reason why a new business might fail. [3] – according to new paper pattern
A new business might fail due to poor cash flow management and inadequate market research.
Poor cash flow management can lead to situations where a business does not have enough
liquidity to sustain operations despite being potentially profitable.
3 Analyse one internal source of finance a business could use to support its growth and
development. [5] – according to new paper pattern
Retained earnings are an internal source of finance that a business can use for growth and
development. This funding option involves using the profits that the company has generated
and reinvested back into the business rather than distributing them to shareholders as
dividends. Using retained earnings does not incur interest costs like borrowing does and avoids
diluting ownership, as issuing new shares would. This method provides a cost-effective way to
finance expansion projects, research and development, or upgrading facilities and equipment,
facilitating sustainable growth with existing resources.
4a Define the term ‘efficiency’. [2]
Efficiency in a business context is generally defined as the ability to maximize output from a
given set of inputs, or minimizing the inputs used to produce a given output. Essentially, it
reflects the optimum usage of resources to achieve the best possible results.
4b Explain one way a business might increase the efficiency of its manufacturing operations.
A business can increase the efficiency of its manufacturing operations by adopting more
advanced technology and improving workforce training. Utilizing cutting-edge technology in
manufacturing can significantly enhance productivity by speeding up processes and reducing
errors. Simultaneously, investing in employee training ensures that the workforce is more skilled
at handling these technologies and can operate them at optimal levels, further boosting
productivity.
5a Analyse two ways how marketing can add value to a product [8] – according to new paper
pattern
Added value is the increase in worth that a business creates for a product or service, essentially
the difference between the cost of producing the product and the price it is sold at.
Marketing adds value through brand development, which involves creating a unique identity
and value proposition for the product. Cause: Effective marketing campaigns use storytelling
and targeted messaging that resonate with consumers, building a recognizable brand. Impact:
This recognition increases consumer trust and loyalty, leading to higher sales volumes and the
ability to charge premium prices. Consequence: The brand's perceived value increases,
enhancing profitability and market share.
Another way marketing adds value is through detailed market research. Cause: Market research
helps identify consumer needs and preferences, which can lead to the development of products
that closely match the market demand. Impact: Products that meet consumer expectations
more effectively are more likely to succeed, resulting in better customer satisfaction and
retention. Consequence: High customer satisfaction and retention lead to sustained revenue
streams and less expenditure on acquiring new customers, boosting overall business
profitability.
5b Evaluate the view that the marketing objectives of a hotel will only be achieved with a
close working relationship between the marketing, finance, and human resource departments
of the business. [12] – according to new paper pattern
Marketing objectives are the goals set by a business when promoting its products or services to
potential consumers that should be achieved within a given timeframe. A close working
relationship implies effective coordination and communication between departments to align
their strategies and resources towards common business goals.
A unified approach in promotional campaigns can greatly enhance marketing effectiveness.
Cause: When marketing, finance, and HR departments collaborate, they ensure that the
promotional strategies are well-funded and supported by the right personnel. Impact: This
integration allows for seamless execution of marketing campaigns, better budget utilization, and
effective staff deployment during promotions. Consequence: The result is a more consistent and
powerful customer experience that boosts brand loyalty and revenue. However, without
frequent and open communication, departments may struggle to align their strategies
effectively, potentially leading to inconsistent customer experiences.
Efficient allocation of resources is another critical aspect of achieving marketing objectives.
Cause: The finance department's involvement ensures that marketing budgets are adhered to
without compromising financial stability. Impact: Careful financial planning aids in maximizing
the impact of marketing efforts without overspending. Consequence: This fiscal discipline helps
sustain long-term marketing strategies and prevents financial overextension. However, overly
strict budget constraints can limit marketing's creative potential and responsiveness to market
changes.
Enhancing employee engagement should also be considered as a vital strategy. Impact:
Motivated employees are more likely to provide exceptional service, contributing directly to the
marketing goal of enhancing customer satisfaction. Consequences: High levels of employee
engagement can lead to better customer interactions, directly boosting customer loyalty and
advocacy, essential components of successful marketing.
While the collaboration between marketing, finance, and human resources is undoubtedly
beneficial, it is not the sole factor in achieving marketing objectives. A balanced approach that
also includes employee engagement and adaptability to market dynamics is crucial. Thus, while
interdepartmental cooperation is important, it should be part of a broader strategic framework
that addresses multiple facets of business operations.
6 'The best way to improve the quality of teaching in a school is to use Herzberg’s two-factor
theory of motivation.' Evaluate this view. [12] – according to new paper pattern
Herzberg’s two-factor theory of motivation distinguishes between hygiene factors that can
cause dissatisfaction if not addressed and motivating factors that can drive positive job
satisfaction and performance improvements. This theory is often applied to workplace
environments, including educational settings, to enhance employee motivation and satisfaction.
Addressing hygiene factors in schools, such as salary, job security, and working conditions, is
essential. Cause: Ensuring these factors are adequately managed prevents dissatisfaction among
teachers. Impact: When teachers are not worried about their basic working conditions, they can
focus more on teaching quality and student engagement. Consequence: This leads to improved
educational outcomes and teacher retention rates. However, focusing solely on hygiene factors
might not lead to enhanced motivation as these factors do not increase job satisfaction but
merely prevent dissatisfaction.
Enhancing motivating factors such as recognition, responsibility, and opportunities for personal
growth can directly improve teaching quality. Cause: By acknowledging and rewarding teachers'
efforts and providing opportunities for professional development, teachers feel valued and
motivated. Impact: Motivated teachers are likely to be more engaged and innovative in their
teaching methods. Consequence: This can lead to higher student achievement and more
dynamic classroom environments. However, the application of motivating factors requires
careful planning and resources, which might be constrained in some educational settings.
An alternative strategy to consider is implementing collaborative teaching methods. Impact:
This approach fosters teamwork and sharing of best practices among teachers, enhancing
professional development and job satisfaction. Consequences: Collaborative environments can
lead to more innovative teaching strategies and a supportive teaching community, further
enhancing the quality of education.
While Herzberg’s two-factor theory provides valuable insights into teacher motivation, it should
not be seen as the sole approach to improving teaching quality. A combination of addressing
hygiene factors, enhancing motivating factors, and incorporating collaborative teaching
strategies provides a more comprehensive and effective way to boost teaching quality in
schools.
7a Analyse two benefits to a business of using a cash flow forecast. [8] – according to new
paper pattern
A cash flow forecast is a financial tool that projects future cash inflows and outflows over a
specific period, helping businesses manage their finances by predicting potential surpluses or
shortages.
One benefit of using a cash flow forecast is enhanced financial planning. Cause: By predicting
future cash flows, businesses can plan their expenditures more effectively. Impact: This planning
helps avoid situations where the business might run out of cash, ensuring financial stability.
Consequence: As a result, the business can make informed decisions about investments,
expenses, and loans, optimizing its financial health.
Another benefit is the management of financial risk. Cause: Cash flow forecasts allow
businesses to identify potential shortfalls in cash before they occur. Impact: With this
knowledge, businesses can take proactive steps, such as arranging for additional financing or
adjusting upcoming expenses. Consequence: This proactive management reduces the likelihood
of financial crises, thereby supporting continuous business operations without interruptions.
7b Evaluate the view that the most important factor in the success of a restaurant is the
availability of accurate cost information. [12] – according to new paper pattern
Accurate cost information involves precise calculations of all costs associated with running a
restaurant, including food, labor, overhead, and other operational expenses. This information is
crucial for effective management and pricing strategies.
Accurate cost information is vital for developing an effective pricing strategy. Cause: Knowing
the exact cost of dishes helps in setting prices that cover costs and generate a profit. Impact:
Properly priced menu items ensure the restaurant remains financially viable. Consequence: This
leads to sustained profitability and business growth. However, focusing solely on cost when
setting prices might not take into account customer value perception, potentially leading to
pricing that either drives away customers or leaves money on the table.
It also plays a critical role in budget control. Cause: With accurate cost data, restaurants can
better manage their budgets and reduce wasteful spending. Impact: Effective cost control helps
maintain a healthy cash flow. Consequence: This financial health allows the restaurant to invest
in quality improvements and marketing efforts. However, excessive cost-cutting can compromise
the quality of food and service, negatively impacting customer satisfaction.
An alternative strategy to consider is focusing on enhancing the customer experience. Impact:
Providing exceptional service and quality can justify higher menu prices and encourage repeat
business. Consequences: This approach can create a loyal customer base and enhance the
restaurant’s reputation, driving long-term success.
While accurate cost information is crucial for the financial management of a restaurant, it is not
the sole determinant of success. A balanced approach that also emphasizes customer
experience and service quality is essential for achieving sustainable success in the competitive
restaurant industry.
November 2022/12
1a Define the term ‘motivation’. [2]
Motivation refers to the factors that encourage or drive employees to be productive and
effective. It encompasses the desire or will that employees have to work hard, achieve
objectives, and perform efficiently.
1b Explain one non-financial motivators that could be used for a business’ employees. [3] –
One non-financial motivator is job security, which significantly boosts employee commitment
and motivation. When employees feel secure in their jobs, they are more likely to invest in their
roles and perform effectively.
2a Define the term ‘ethics’. [2]
Ethics involves a set of moral principles that govern a person's or group's behavior. In a business
context, ethics affects how a company conducts its activities, promoting fairness, truthfulness,
and responsibility towards social and environmental concerns.
2b Explain one way ethics might affect the activities of a business. [3] – according to new
paper pattern
Ethical practices affect the selection of business partners and suppliers, ensuring that these
partners also adhere to ethical standards such as fair labor practices and environmental
responsibility.
3 Explain why the published accounts of a business might give a misleading description of its
performance. [5]
4a Define the term ‘economies of scale’. [2]

4b Explain two reasons why a business might experience diseconomies of scale. [3]
5a Analyse two benefits to a business of market segmentation. [8] – according to new paper
pattern
Market segmentation involves the process of dividing a broad consumer or business market,
normally consisting of existing and potential customers, into sub-groups of consumers (known
as segments) based on some type of shared characteristics. This approach helps businesses
tailor their strategies to specific groups, enhancing the effectiveness of their marketing efforts.
The first benefit of market segmentation is the ability to identify and target customer groups
with specific characteristics. This happens because businesses can gather and analyze
substantial market data to identify patterns and common traits among consumers. The impact is
more precise marketing efforts, leading to increased efficiency in advertising and promotional
strategies. Consequently, this results in better customer engagement and higher conversion
rates, as marketing messages are more closely aligned with the needs and desires of each
segment.
A second benefit is the optimization of resources. By focusing marketing efforts on specific
segments, businesses can allocate their resources more efficiently, reducing waste in broad-
spectrum campaigns. The cause here is the targeted approach that prevents the dilution of
resources across an undifferentiated market. The impact is a reduction in marketing costs while
maintaining or increasing the effectiveness of these efforts. Consequently, the business sees an
improved return on investment (ROI) from marketing expenditures, which contributes to overall
profitability.
5b Evaluate the view that marketing is the most important function for a business that
manufactures and sells motor cars. [12] – according to new paper pattern
Marketing in the automotive industry involves all activities and strategies aimed at promoting
and selling motor vehicles, including market research, advertising, sales, and customer service.
It serves as a crucial function by driving consumer awareness and demand.
The first point to consider is brand building and consumer loyalty. Marketing creates brand
recognition and loyalty among consumers, which is crucial in the competitive automotive
market. The cause of this is the effective communication of brand values and benefits through
advertising and promotions. The impact is heightened brand awareness, which can lead to
increased sales volumes. The consequence is sustained business growth through repeat
customers and word-of-mouth referrals. However, excessive focus on marketing over product
quality can lead to customer dissatisfaction and harm the brand reputation in the long term.
Another critical point is the role of marketing in market expansion. Effective marketing
strategies can help car manufacturers enter and expand into new geographic and demographic
markets. The cause of this expansion is targeted marketing campaigns that cater to the specific
preferences and needs of different consumer groups in various regions. The impact is the
opening of new revenue streams and diversification of the customer base. The consequence is
reduced business risk and dependence on a single market. However, entering new markets
requires significant investment and poses risks if market research is not adequately conducted.
An alternative strategy to consider is innovation in product development. Besides marketing,
focusing on innovation, especially in areas like electric vehicles and autonomous driving
technology, can significantly impact a car manufacturer's success. This approach directly
addresses evolving consumer preferences and regulatory requirements for sustainability.
In conclusion, while marketing is undeniably vital for car manufacturers, it should not
overshadow the importance of product quality and innovation. Balancing these functions is
essential for long-term success in the automotive industry.
Question 6: ‘Good leaders will be more important than effective managers if the business
performance of an international hotel chain is to improve.’ Evaluate the extent to which you
agree with this view. [12] – according to new paper pattern
Leadership in an international hotel chain refers to the ability of individuals at the top levels of
management to inspire, set vision, and direct the organization towards achieving its goals.
Management, meanwhile, involves the planning, organizing, leading, and controlling of
organizational resources to achieve specific objectives efficiently and effectively.
The first point is the role of visionary leadership in steering organizational change and
innovation. Good leaders can foresee industry trends and guide the hotel chain towards
strategic innovation, such as implementing eco-friendly practices or adopting new technologies
for customer service enhancement. The cause of these initiatives is often a leader's foresight
and commitment to sustainable and innovative growth. The impact on the business is a
strengthened competitive edge and alignment with consumer expectations, leading to
increased market share and customer loyalty. The consequence is a sustainable improvement in
business performance. However, visionary leadership must be grounded in realistic and
achievable goals to prevent overextension of resources and ensure strategic alignment with
market conditions.
Another point to consider is the importance of effective management in maintaining
operational excellence across the hotel chain. Managers ensure that the strategic vision is
translated into day-to-day operations that meet quality standards and cost efficiency. The cause
here is the systematic approach to management that ensures consistent service delivery. The
impact is enhanced customer satisfaction due to reliable and high-quality service. The
consequence is positive brand reputation and repeat business, crucial for long-term success.
However, excessive focus on control and standardization can stifle creativity and adaptability in
a fast-changing hospitality industry.
An alternative perspective is the synergy between leadership and management. Instead of
viewing them as competing priorities, they should be seen as complementary forces. Effective
leaders set the vision and inspire, while efficient managers handle the operational execution to
realize that vision.
In conclusion, while leadership plays a crucial role in setting direction and fostering innovation,
effective management is equally important for operational excellence. The best approach for
improving the performance of an international hotel chain is a balanced emphasis on both
inspirational leadership and meticulous management to ensure both strategic direction and
operational excellence are achieved.
7a Analyse two benefits to a business of a labour intensive production process. [8] – according
to new paper pattern
A labor-intensive production process is characterized by a high proportion of labor costs relative
to capital costs. This approach relies more on human labor than on machinery, which can be
beneficial in various industries, particularly those requiring detailed craftsmanship or
personalized customer service.
The first benefit of a labor-intensive production process is the potential for enhanced product
quality and customization. The cause of this benefit stems from the hands-on attention to detail
that skilled workers can provide, which machines might not replicate precisely. The impact on
the business is the production of high-quality, customized products that can meet specific
customer preferences, leading to increased customer satisfaction. The consequence is a
stronger brand reputation and potentially higher prices and profit margins due to the perceived
value of the meticulously crafted products.
A second benefit is flexibility in production. Labor-intensive processes typically allow for quicker
adaptation to changes in product design or customer requirements compared to capital-
intensive processes, which may require significant reconfiguration of machinery. The cause is
the direct involvement of human labor, which can easily switch tasks or adapt to new
production techniques. The impact is the business’s ability to respond swiftly to market changes
or customer feedback, maintaining relevance and competitiveness. The consequence is
sustained business operations and potentially increased market share due to the ability to cater
quickly to consumer needs.
7b Discuss the view that the intellectual capital of an information technology business is its
most important asset. [12]
November 2022/13
1a Define the term ‘person specification’. [2]
A person specification is a detailed description outlining the qualifications, skills, attributes,
experience, and knowledge a candidate must possess to perform a specific job effectively. This
description is utilized in the recruitment process to ensure that the right candidate is selected
for the role.
1b Explain one purposes of a job description. [3] – according to new paper pattern
A job description serves multiple critical purposes in the context of employment and
management. It clearly outlines the main duties and responsibilities associated with a job,
providing prospective job holders with a clear understanding of what their role will entail.
2a Define the term ‘public sector’. [2]
The public sector refers to organizations that are owned, controlled, and operated by
government bodies, either at a central or local level. These organizations are primarily
established to provide essential services to the public and are typically funded through
government resources.
2b Explain one reasons why some organisations operate in the public sector. [3] – according to
new paper pattern
Organisations may operate in the public sector for various reasons, primarily focusing on serving
the public interest over making profits. One reason is to ensure that essential services, such as
healthcare and public transportation, are accessible to all segments of the population,
regardless of economic status.
3 Analyse one way how a business might improve its cash flow. [5] – according to new paper
pattern
One effective way for a business to improve its cash flow is to enhance its receivables
management. By implementing stricter credit control measures, such as reducing the credit
terms offered to customers or following up promptly on overdue accounts, a business can
accelerate cash inflows. Additionally, offering discounts for early payments can incentivize
customers to pay sooner, thereby increasing the availability of cash on hand for operational
needs and reducing the reliance on external financing options. This improvement in cash
management can help ensure that the business has sufficient liquidity to meet its obligations
and invest in growth opportunities.
4a Define the term ‘transformation process’. [2]
The transformation process in business refers to the conversion of inputs, such as raw materials,
labor, and technology, into outputs, which are the finished goods or services. This process is
central to the operations of a business, impacting productivity and efficiency.
4b Explain two ways process innovation could improve the efficiency of business operations.
[3]
5a Analyse two benefits to a business of product portfolio analysis. [8] – according to new
paper pattern
Product portfolio analysis involves assessing the range of products a company currently offers to
determine how to allocate resources most effectively. This strategic tool helps businesses
understand the life cycle of each product, guiding decisions related to development, marketing,
and discontinuation.
One benefit of product portfolio analysis is enabling a business to identify high-performing
products that provide a substantial return on investment. Cause: By analyzing sales data and
market trends, businesses can pinpoint which products are market leaders. Impact: This leads to
more focused marketing and resource allocation toward these successful products.
Consequence: Consequently, the business can optimize its profits and invest in growing these
key areas, enhancing overall financial health.
Another benefit is the identification and management of underperforming products. Cause:
Through analysis, a company can recognize products that are not meeting sales expectations or
are in decline. Impact: This allows the company to either reposition or phase out these
products. Consequence: As a result, the business avoids sinking resources into unsuccessful
products, potentially saving on costs and reallocating efforts to more lucrative areas.
5b Evaluate the importance of branding when promoting a soft drink. [12] – according to new
paper pattern
Branding in the context of soft drinks involves creating a distinctive identity for a product that
resonates with consumers, distinguishing it from competitors in the market. This identity is
crafted through logos, packaging, advertising, and overall consumer experience.
A strong brand identity causes consumer recognition and loyalty. Cause: Effective branding
creates a memorable impression on consumers. Impact: This recognition can translate into
repeat purchases and brand loyalty. Consequence: The ongoing consumer commitment secures
steady revenue streams for the business. However, this loyalty can be compromised if the
product fails to consistently meet consumer expectations, leading to a potential loss in market
share.
Branding also supports premium pricing strategies. Cause: Well-branded products are often
perceived as higher quality. Impact: This perception allows businesses to charge more for their
branded product compared to generic alternatives. Consequence: The result is higher profit
margins. Therefore, if the brand cannot sustain the perceived value, consumers may turn to
cheaper alternatives, impacting profitability.
An alternative strategy involves focusing on cost leadership. By minimizing production and
marketing costs, a business can offer lower-priced products without a strong brand identity.
Impact and Consequences: This can attract price-sensitive customers, potentially increasing
market share, but may also lead to reduced profit margins and perceived product quality.
Ultimately, while branding is a powerful strategy for promoting soft drinks, it must be managed
carefully to maintain consumer trust and justify premium pricing. Balancing brand investment
with product quality and innovative marketing remains crucial to sustaining long-term success.
6 ‘Human resource management (HRM) is the most important business function in a hospital’.
Evaluate the extent to which you agree with this view. [12] – according to new paper pattern
Human Resource Management (HRM) in hospitals encompasses the strategic management and
development of hospital staff to ensure efficient service delivery and patient care.
HRM is crucial due to its role in recruitment and training. Cause: Effective HRM practices ensure
that hospitals attract and retain skilled healthcare professionals. Impact: This directly affects the
quality of patient care and operational efficiency. Consequence: As a result, the hospital
maintains high standards of care and patient satisfaction. However, HRM's effectiveness
depends significantly on the available resources and support from hospital administration.
Another critical aspect of HRM is managing employee well-being and development. Cause: HRM
develops policies that support staff welfare and career progression. Impact: This leads to
improved job satisfaction and motivation among staff. Consequence: High morale and
motivation reduce turnover rates and enhance patient care quality. Therefore, without
continuous investment in staff development, hospitals risk a decline in service quality due to
staff burnout and attrition.
Alternative business functions such as financial management and operations also play critical
roles in hospital management. Impact and Consequences: Efficient financial management
ensures the sustainability of resources, while operational management ensures that hospital
services are delivered efficiently.
In conclusion, while HRM is undoubtedly critical in a hospital setting, it should not be viewed in
isolation. Effective integration with other business functions like financial and operations
management is essential to ensure comprehensive service excellence and sustainability in
healthcare institutions.
7a Analyse two advantages of a public limited company (plc) as a legal structure for a
business. [8] – according to new paper pattern
A public limited company (plc) is a legal structure that allows a firm to sell shares to the public
through a stock exchange, providing both transparency and access to capital.
One advantage of a plc is the ability to raise significant capital by issuing shares to the public.
Cause: The openness of the stock market allows a wide pool of potential investors to contribute
financially. Impact: This influx of capital can fund expansion and innovation projects.
Consequence: As a result, the company can grow at a much faster rate than it could through
internal financing alone.
Another advantage is the enhancement of the company’s public profile. Cause: Listing on a
stock exchange increases public awareness and credibility. Impact: This visibility can attract
more business opportunities and partnerships. Consequence: Consequently, the company
benefits from increased market presence and potential revenue streams.
7b Evaluate the view that the activities of banks should be significantly influenced by ethics.
Ethics in banking involves adhering to moral principles and values in decision-making processes,
ensuring fairness, transparency, and integrity in all operations.
Ethical banking can build customer trust and loyalty. Cause: When banks operate ethically, they
are seen as more reliable and trustworthy by customers. Impact: This perception enhances
customer retention and attracts new clients. Consequence: The resulting increase in customer
base and deposits can significantly boost the bank’s profitability. However, maintaining ethical
standards can sometimes limit short-term profitability, as ethical practices may prevent
participation in high-risk, high-return activities.
Furthermore, ethical behavior reduces regulatory and legal risks. Cause: Ethical banks are less
likely to engage in practices that could lead to legal sanctions or fines. Impact: This compliance
reduces potential legal costs and reputational damage. Consequence: Banks that adhere to
ethical practices experience more stable long-term growth. Therefore, failure to maintain
ethical standards can lead to severe financial and reputational repercussions.
An alternative strategy is focusing on aggressive competitive tactics, such as undercutting
competitors on loan rates or fees, to gain market share. Impact and Consequences: While this
can quickly boost performance figures, it may undermine ethical standards and long-term
customer relationships.
In conclusion, while ethical conduct may sometimes constrain immediate financial gains, the
long-term benefits of maintaining a trustworthy reputation and reducing legal risks far outweigh
these limitations. Banks should prioritize ethics to ensure sustainable success and public trust.

AS-Solved Past Paper Business 9609 P1 2023-2022

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AS – Solved Past Papers (March 2022 to Nov 2023)

Sir Danish Tabassum (0345-2091270)

4 Analyze one way a business might raise productivity levels. [5]

Product differentiation is a strategy employed by businesses to make their products or services

Question 4: Analyse one responsibility to a business of an employee as a stakeholder. [5]

One benefit of labour-intensive operations is the flexibility in production, particularly in

Employee participation in management involves including employees in decision-making

3a Define the term bankruptcy. [2]

An additional alternative strategy would involve investing in sustainability and environmental

Question 4(a): Define the term ‘customer (market) orientation’. [2]

1a Define the term 'social enterprise'. [2]

A franchise agreement involves a contractual relationship where a franchisor grants a franchisee

4a Define the term ‘economies of scale’. [2]

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