Business 9609/11 October/November 2021: question paper and mark scheme

Mark scheme

1(a) Define the term ‘partnership’. 2 • a business formed by two or more people • business structure/unincorporated business within the private sector (1) • shared management of a business (1) • with shared capital/investment (1) • sharing responsibility (1) • with shared profits (1) Sound definition given – two of the points listed above. 2 Partial definition – one of the points listed above. 1 No creditable content. 0 1(b) Explain two limitations of partnership as a business structure. 3 Answers could include: • unlimited liability for all partners – all personal assets at risk • profits have to be shared • all have to share losses • all partners bound by the decision of any one partner • compromises necessary in decision-making resulting in conflict • ability to raise capital limited – cannot sell shares • continuity is not assured – partnership will need to be reformed in the event of death of one or more partners • Accept any other valid response. Sound explanation of two limitations of partnership. 3 Sound explanation of one limitation, or partial explanation of two. 2 Partial explanation of one limitation or a list of two. 1 No creditable content. 0

Mark scheme

2(a) Define the term ‘performance-related pay’. 2 • usually a bonus payable in addition to basic salary (1) • for above average performance (1) • financial incentive/method of employee payment (1) • to encourage employees to meet (or exceed) agreed targets/complete set task (1) • the more they perform, the more they get (1) • method of motivating employees (1) • based on the quality of their work (1) Sound definition given – two of the points listed above. 2 Partial definition – one of the points listed above. 1 No creditable content. 0 2(b) Explain two advantages to employees of performance-related pay. 3 Candidates who give advantages to the business only cannot be awarded marks. Answers could include: • employees feel more motivated • may become more productive/efficient to increase their pay • more able to meet their needs, e.g. physical, self-actualisation • PRP will encourage some employees to focus more on targets • may be a link between high PRP and promotion opportunities • some employees will see PRP as a fairer system of payment – allows them to give extra effort and be rewarded • an attractive payment system for employees whose output is not measurable in quantitative terms, such as management and supervisory staff • incentivises employees to work hard and demonstrate their capability • Accept any other valid response. Sound explanation of two advantages of PRP for an employee. 3 Sound explanation of one advantage of PRP for an employee, or partial explanation of two. 2 Partial explanation of one advantage or a list of two. 1 No creditable content. 0

Mark scheme

3 Explain the link between corporate objectives and marketing 5 objectives of a business. Answers could include: • marketing objectives set out what a business seeks to achieve through its marketing activities • marketing objectives may include: market share, brand identity, increase sales, develop customer loyalty, increase customer satisfaction • the objectives set for the marketing department help a business achieve its overall objectives • marketing objectives must fit with the aims and mission of a business • corporate objectives present specific business wide objectives that can be broken down into departmental targets/objectives • corporate objectives include survival, growth, profit maximisation • a corporate objective of increasing revenue by 20% in each of the next five years – could lead to supportive marketing objectives of increasing market share and increasing consumer spend by an appropriate percentage • corporate and marketing objectives must be in alignment • Accept any other valid response. Effective explanation of the link between marketing objectives and corporate objectives – the link is made explicit. 4–5 Explanation of marketing/corporate objectives. 2–3 Understanding (descriptive information about) marketing/corporate objectives. 1 No creditable content. 0

Mark scheme

4(a) Define the term ‘capital-intensive production’. 2 • high quantity of capital equipment in the production process (1) • inputs converted to outputs (transformation process) by highly automated machinery (1) • compared with the labour input (1) Sound definition – two of the points listed above. 2 Partial definition – one of the points listed above. 1 No creditable content. 0 4(b) Explain two possible disadvantages for a business of labour-intensive 3 production. Answers could include: • a high level of labour input compared with capital equipment used in the production process • labour-intensive process can prevent economies of scale being realised/unit cost reductions because production levels are not high enough • the high cost of wages due to high skilled labour • labour-intensive production is more likely to have inconsistent quality • lower levels of productivity – higher level of errors/time consuming • demotivated employees can affect performance/output of others • need HRM function in labour-intensive production, e.g. need for training for efficient production • may need to consider ethical/safety issues, e.g. good working conditions which can increase costs • long working hours/routine/boring/tiring work causing de-motivation • Accept any other valid response. Sound explanation of two disadvantages of labour-intensive production. 3 Sound explanation of one disadvantage or partial explanation of two disadvantages. 2 Partial explanation of one disadvantage or a list of two. 1 No creditable content. 0

Mark scheme

5(a) Analyse the benefits for a business of an overdraft as a source of 8 finance. Level 4 – Good analysis of the benefits of an overdraft as a source of finance for a business. 7–8 Level 3 – Some analysis of the benefits of an overdraft as a source of finance for a business. 5–6 Level 2 – Some explanation/application of the benefits of an overdraft as a source of finance for a business. 3–4 Level 1 – Knowledge and understanding of an overdraft/source of finance/business. 1–2 Level 0 – No creditable content. 0 Answers could include: Knowledge and Understanding • Clear understanding of an overdraft • Clear understanding of source of finance Application • Reference to relevant business context, e.g. sources of finance Analysis • It is a line of credit from which a business can borrow and repay as needed • It gives a business the flexibility to borrow and pay back throughout the year, when needed, instead of repaying a fixed sum for a loan every month • Could be cheaper than a fixed loan • Can be used to smooth out cash flow variations, providing working capital to guarantee daily operations • Overdrafts can be arranged quickly • Provides quick inflow of money to deal with emergencies • A common way of financing small and medium-sized businesses, especially for those which experience fluctuations in working capital • Because of its short-term nature, the balance of an overdraft is not normally included in the calculation of a business’s financial gearing • Accept any other valid response. 5(b) Discuss the view that using only financial accounts to measure the 12 performance of a social enterprise may have important limitations. Level 4 – Effective evaluation of the view that using only financial accounts to measure the performance of a social enterprise may have important limitations. 9–12 Level 3 – Limited evaluation of the view that using only financial accounts to measure the performance of a social enterprise may have important limitations. 7–8 Level 2 – Application and analysis of the view that using only financial accounts to measure the performance of a social enterprise may have important limitations. 3–6 Level 1 – Knowledge and understanding of financial accounts/social enterprise/business performance. 1–2 Level 0 – No creditable content. 0 5(b) Answers could include: Knowledge and Understanding • Clear understanding of financial accounts • Clear understanding of social enterprise • Clear understanding of business performance Application • Reference to the use of relevant factors to measure the performance of a business Analysis • Financial accounting measures of performance include – measures associated with profitability, liquidity, debt – KPIs such as gross profit margin, net profit, net profit margin, current ratio • The distinctive characteristics of a social enterprise – a business with mainly social objectives – makes profit – but re-invests into society – triple bottom line – economic, social, environmental objectives • Using financial account measures to assess the performance of any business may have important limitations as non-financial factors may be ignored – qualitative aspects such as morale and skill of staff, reputation and goodwill of a business, organisation culture, innovation, market share, customer satisfaction Evaluation A candidate may make a judgement/conclusion as to the view that using only financial accounts to measure the performance of a social enterprise may have important limitations. These judgements/conclusions may be made at any point in the essay as well as in a concluding section. • An attempt is made to weigh up the evidence/arguments in support of the view expressed • Non-financial measures are even more important for social enterprises – where social and environmental objectives may outweigh the financial objectives – so while a social enterprise usually needs to make a profit – it is used to sustain the organisation and probably not the most important measure of performance – so financial measures are much more limited and relevant • The significance of financial measures may well depend on the history and current financial viability of a social enterprise, the support it may receive from central/local government, and the specific objectives/competence of the management of the social enterprise • Accept any other valid response.

Mark scheme

6 ‘The business leaders and managers of a school must have a high 20 level of emotional intelligence if they are to be successful.’ Discuss the extent to which you agree with this view. Level 5 – Effective evaluation of the extent to which the candidate agrees with the view that business leaders and managers of a school should have a high degree of emotional intelligence if they are to be successful. 17–20 Level 4 – Limited evaluation and good analysis of the extent to which the candidate agrees with the view that business leaders and managers of a school should have a high degree of emotional intelligence if they are to be successful. 13–16 Level 3 – Analysis of the extent to which the candidate agrees with the view that business leaders and managers of a school should have a high degree of emotional intelligence if they are to be successful. 11–12 Level 2 – Limited analysis, with application, of the extent to which the candidate agrees with the view that business leaders and managers should have a high degree of emotional intelligence if they are to be successful. 5–10 Level 1 – Knowledge and understanding of emotional intelligence/ business leaders/managers. 1–4 Level 0 – No creditable content. 0 6 Please note that many candidates will interpret business leaders and managers of a school as teachers/professors. This interpretation is acceptable and should be rewarded as per the mark scheme. Answers could include: Knowledge and understanding • Clear understanding of emotional intelligence • Clear understanding of business leaders/managers Application • Reference to the performance (successful or otherwise) of school business leaders/managers Analysis • Who are the business leaders and managers in an organisation? • Who are they in a school, e.g. head/principal/senior academics/ specialist leaders/managers? • Description and analysis of concept of emotional intelligence – review of Goleman’s EI competencies – ability to understand self and others who are managed and led • Description and analysis of the role, function and objectives of leaders and managers – to motivate, inspire, control in the pursuit of objectives • Application of EI to the roles of manager and leader (in a school) • A leader/manager without EI might well not encourage trust, confidence, teamwork, participation and negotiation • What is meant by high degree of EI? Evaluation A candidate may make a judgement/conclusion as to the extent to which the business leaders and managers of a school must have a high degree of emotional intelligence if they are to be successful. These judgements/conclusions may be made at any point in the essay as well as in a concluding section. • Evaluative comments made weighing up key arguments/evidence • Are there more important attributes of successful leaders/ managers? • Intellectual ability may not necessarily be the most important attribute of a leader/manager • Are there more important factors affecting success, such as clear objectives, vision, luck? • Accept any other valid response.

Mark scheme

7(a) Analyse how a business might use the internet in two elements of the 8 marketing mix. Level 4 – Good analysis of how a business might use the internet in two elements of the marketing mix. 7–8 Level 3 – Some analysis of how a business might use the internet in two elements of the marketing mix. 5–6 Level 2 – Some application of how a business might use the internet in element(s) of the marketing mix. 3–4 Level 1 – Knowledge and understanding of internet/marketing mix. 1–2 Level 0 – No creditable content. 0 Answers could include: Knowledge and understanding • Clear understanding of the internet • Clear understanding of the marketing mix Application • Reference to the use of the internet by a business Analysis • Product – the internet can be used to provide detailed information about a product through online videos, reviews, instruction manuals, technical assistance – can also be used to gather data from customers about the product, perceptions through market research • Price – can provide improved price transparency – differential pricing, dynamic pricing and online auctions • Place – channels through which products reach customers made clear – channels devised to reach the widest customer base at least cost – purchase points are varied – can be a seller-controlled site or a third- party seller-hosted site – delivery can be direct delivery to customers or supply through intermediaries • Promotion – internet offers new advertisement, sales promotion, public relations opportunities – to emphasise product features and to connect to customers – build visibility on internet inexpensively – user-friendly website designs to attract and retain the interest of customers • Internet offers opportunity to add new marketing activities to the traditional four Ps • Accept any other valid response. 7(b) Discuss the view that traditional retail stores will not survive unless 12 they change their activities to compete with online retailers. Level 4 – Effective evaluation of the view that traditional retail stores will not survive unless they change their activities to compete with online retailers. 9–12 Level 3 – Limited evaluation of the view that traditional retail stores will not survive unless they change their activities to compete with online retailers. 7–8 Level 2 – Application and analysis of the view that traditional retail stores will not survive unless they change their activities to compete with online retailers. 3–6 Level 1 – Knowledge and understanding of traditional retail stores and/or online retailers. 1–2 Level 0 – No creditable content. 0 Answers could include: Knowledge and understanding • Clear understanding of traditional retail stores • Clear understanding of online retailers Application • Reference to the business context of challenges facing traditional retail stores 7(b) Analysis • Traditional retailing provides a shopping experience in traditional stores/shops – a physical presence/experience • Online retailing allows the selling/purchasing of products using the internet • Online retailing continues to have a major impact on the retail industry – there are threats and opportunities • The reaction of retailers to the opportunity given to consumers by new technology to participate in online retailing • Many retailers have web and mobile offerings and are developing new ways of connecting with customers – new mixed business models have to be developed • Such developments have become essential for many businesses in the retail industry to remain competitive • Opportunities have been taken by some retailers to develop enlarged (global) marketplaces, new methods of communication, more cost- effective sales, improved brands • Threats to some retailers who have not kept pace with technological developments and retail trends – slow to change – continued focus on traditional places to do business – stagnated, liquidation, failure Evaluation A candidate may make a judgement/conclusion as to the view that traditional retail stores will not survive unless they change their activities to compete with online retailers. These judgements/conclusions may be made at any point in the essay as well as in a concluding section. • Opportunities and threats – online retailing provides a major threat – very much depends on the history, culture, management expertise of retailers as to how they react • Do traditional retailers and store managers require additional skills which they currently do not need to possess? For example, creative and innovative ideas required alongside technological expertise • Might government intervention be sufficient impetus to change, e.g. grants for inner city development? • Accept any other valid response.