Business 9609/12 October/November 2022: question paper and mark scheme

Mark scheme

1(a) Define the term ‘motivation’. 2 • The factors that stimulate/encourage/drive/commit/support/boost/persuade, employees, the desire/feelings/will that employees have (1) • To be (and are willing to be) productive, efficient, effective, interested, perform, work hard(er), at full capacity and achieve objectives, goals and tasks (1) Correct definition – 2 of the factors listed above. (2 marks) Partial definition – 1 of the factors listed above. (1 mark) No creditable content. (0 mark) 1(b) Explain two non-financial motivators that could be used for a 3 business’ employees. Do not accept fringe benefits as an acceptable answer. Do not award any marks for fringe benefits/perks. Answers could include: • Job security – important motivator – increases commitment • Challenging work – can come through mentoring, job re-design, job enlargement, and job enrichment • Recognition – formal and informal acknowledgement of good work is said to be a powerful source of motivation • Empowerment – opportunities for involvement in decision-making • Opportunities for advancement, development • Team-working • Training • Safe and clean environment • Accept any other valid response Correct explanation of two non-financial motivators that could be used for a business’ employees. (3 marks) Correct explanation of one non-financial motivator or partial explanation of two non-financial motivators. (2 marks) Partial explanation of one non-financial motivator or a list of two. (1 mark) No creditable content. (0 mark)

Mark scheme

2(a) Define the term ‘ethics’. 2 • A system of moral principles/norms/values (that may or may not mention an understanding of right and wrong) (1) • That affects the behaviour/manners of a business and encourages fairness, truthfulness, a concern for social responsibility, the environment, often in the form of a code of conduct or set of rules and regulations, or an example e.g. not using child labour (1) Correct definition – 2 of the factors listed above. (2 marks) Partial definition – 1 of the factors listed above. (1 mark) No creditable content. (0 mark) 2(b) Explain two ways ethics might affect the activities of a business. 3 Answers could include: • A business is likely to assess all of its objectives to ensure they are compliant with its ethical code • It may lead to the sacrifice of a measure of profit to accept social responsibility • A business will be concerned that all the practices of its suppliers are ethical, e.g. use of child and forced labour – production in sweatshops, violation of worker rights, health and safety standards • A business may be subject to influence of external stakeholders, e.g. pressure groups, consumer activism • Ethical and unethical behaviour can also relate to internal stakeholders e.g. ethical considerations by employees will affect the working environment and hence motivation and productivity • Common business areas where objectives are tested by ethics include – advertising, personal selling, contracts, pricing and suppliers • Attracts ethical customers • Leads to socially responsible activities • Accept any other valid response Correct explanation of two ways ethics might affect business activities. (3 marks) Correct explanation of one way or partial explanation of two ways ethics might affect business activities. (2 marks) Partial explanation of one way or a list of two ways ethics might affect business activities. (1 mark) No creditable content. (0 mark) misleading description of its performance. Answers could include: • Window dressing may occur that leads to inaccurate decision making • Non-financial factors will not be shown • Based on historic information that may not represent current levels of performance or position • Produced by inexperienced employee leading to errors • The accounts are presented in summary form, which may not provide relevant information for decision making • No predictive value • Accept any other valid response give a misleading description of its performance. (4–5 marks) misleading description of its performance. (2–3 marks) (1 mark) No creditable content. (0 mark)

Mark scheme

4(a) Define the term ‘economies of scale’. 2 • Results from increased output/scale/larger business (1) • Fall of (unit) costs (1) Correct definition – 2 of the factors listed above. (2 marks) Partial definition – 1 of the factors listed above. (1 mark) No creditable content. (0 mark) 4(b) Explain two reasons why a business might experience diseconomies 3 of scale. Answers could include: • Several reasons may explain diseconomies, which result from increased scale of production: – poor communication between different departments – chain of command lengthens, span of control widens – increasing inefficiencies in a business – delayed decision making – co-ordination and control problems, divisions working in different ways – motivation and morale may decrease in larger businesses – feel less involved, team environment lost • Accept any other valid response Correct explanation of two reasons why a business might experience diseconomies of scale. (3 marks) Correct explanation of one reason or partial explanation of two reasons why a business might experience diseconomies of scale. (2 marks) Partial explanation of one reason or a list of two reasons why a business might experience diseconomies of scale. (1 mark) No creditable content. (0 mark)

Mark scheme

5(a) Analyse the benefits to a business of market segmentation. 8 Level Description Marks 4 Good analysis of the benefits to a business of market 7–8 segmentation. 3 Limited analysis of the benefits to a business of 5–6 market segmentation. 2 Application of the benefits to a business of market 3–4 segmentation. 1 Knowledge and understanding of market 1–2 segmentation. 0 No creditable content. 0 Answers could include: Knowledge and Understanding 2 marks • Understanding of market segmentation Application 2 marks • Reference to market segmentation in a business context Analysis 4 marks • The identification of sub-groups in a market – customers have similar characteristics, which can be targeted – the division of a diverse market • Marketing plans can be tailored to specific segments – specialisation can be achieved in product distribution, promotion and pricing • Marketing efforts are more efficient – they are made more appropriate to specific customer segments that have been well defined • Gaps/opportunities in a market can be identified and exploited • Advantage to small firms that are not able to compete in the whole market • More focused marketing can increase sales and profits • Identify more opportunities for growth • Retain more customers by a marketing focus that prevents customers switching to competitors • Accept any other valid response 5(b) Discuss the view that marketing is the most important function for a 12 business that manufactures and sells motor cars. Level Description Marks 4 Effective evaluation of the view that marketing is the 9–12 most important function for a business that manufactures and sells motor cars. 3 Limited evaluation of the view that marketing is the 7–8 most important function for a business that manufactures and sells motor cars. 2 Analysis and application of the role of marketing for a 3–6 manufacturing business. 1 Knowledge and understanding of 1–2 marketing/manufacturing. 0 No creditable content. 0 Answers could include: Knowledge and Understanding 2 marks • Understanding of marketing • Understanding of car manufacturing/sales Application 2 marks • Reference to marketing by a car manufacturing/sales business Analysis 2 marks • The role and activities of marketing in business • Marketing objectives that underpin marketing activities – increase market share – strengthen a brand – establish competitive advantage • The importance of marketing objectives for successful achievement of corporate objectives • Analysis of specific marketing activities/methods – market research, marketing mix tactics, marketing strategies • The links between marketing activities and the activities of other business departments, such as operations, finance and HR • Marketing objectives specific to car manufacturing may be analysed – a marketing focus on taking advantage of an expanding market for fuel efficient cars (electric) Evaluation 6 marks Any judgements/conclusions can be made at any point in the essay not just in a concluding section. 5(b) A judgement may be made using the following arguments: • Discussion of whether other business activities might be as important, or more important, than marketing – such as product design, research and development, finance for capital investment, HR for relevant manufacturing skills • Supported judgemental comment on the relative importance of marketing • Accept any other valid response

Mark scheme

6 ‘Good leaders will be more important than effective managers if the 20 business performance of an international hotel chain is to improve’. Discuss the extent to which you agree with this view. Level Description Marks 5 Effective evaluation of the view that good leaders will 17–20 be more important than effective managers if the business performance of an international hotel chain is to improve. 4 Limited evaluation of the view that good leaders will 15–16 be more important than effective managers if the business performance is to improve. 3 Good analysis of the view that good leaders will be 11–14 more important than effective managers if business performance is to improve. 2 Limited analysis with application of the influence of 5–10 managers and/or leaders on business performance. 1 Knowledge and understanding of 1–4 leaders/managers/business performance/hotel chain. 0 No creditable content. 0 Answers could include: Knowledge and Understanding 4 marks • Understanding of leaders • Understanding of managers • Understanding of business performance • Understanding of a hotel chain Application 4 marks • Reference to the role of managers and/or leaders on business performance in a hotel chain Analysis 6 marks • The influence of effective managers on business performance • Critical functions of managers – control – co-ordination – operational efficiency – effective marketing, HR, financial, operational management • Possible reference to Mintzberg manager roles • Critical functions of leaders – inspire, visionary, take strategic decisions concern with the motivation and morale of employees • Analysis of the suggested distinction between managers and leaders in a business 6 Evaluation 6 marks Any judgements/conclusions can be made at any point in the essay not just in a concluding section. A judgement may be made using the following arguments: • What areas of business performance in a hotel could be susceptible to manager/leader initiatives/action? • What might be opportunities for performance improvement in a multi- national hotel chain? – brand management? – marketing focus? – customer experience focus? – pricing? – quality of rooms and service • How might this improvement be secured? – at operational and/or strategic level? – what factors/issues are important? • What is meant by `good` leaders and `effective` managers in the international hotel chain context? • Will management be more important in an international hotel chain? • Once the hotel chain is established on an international level, will management be more improvement than leadership? • Accept any other valid response

Mark scheme

7(a) Analyse the benefits to a business of a labour intensive production 8 process. Level Description Marks 4 Good analysis of the benefits of a labour intensive 7–8 production process. 3 Limited analysis of the benefits of a labour intensive 5–6 production process. 2 Application of the benefits of a labour intensive 3–4 production. 1 Knowledge and understanding of a labour intensive 1–2 production process. 0 No creditable content. 0 Answers could include: Knowledge and Understanding 2 marks • Understanding of a labour intensive production process Application 2 marks • Reference to the benefits of using a labour intensive production process in a business context Analysis 4 marks • More labour may provide the opportunity to give a more unique product in production processes, e.g. hand crafted furniture • More labour may provide the opportunity to give a more personal service when dealing with the customer face-to-face • Labour intensive production is more appropriate and necessary for some businesses, e.g. hotels and restaurants due to the customer service nature of the business • In certain situations, it is less expensive to use labour than expensive machines, especially in countries where labour is inexpensive • In some businesses, machines are not appropriate for the work being carried out, perhaps it involves a complex set of actions or decisions • Capital investment can be expensive, and finance may not be available • There is less of a fixed cost associated with many types of labour and, particularly in recession times, labour is more flexible, and costs can be cut by ‘laying off staff’ • Businesses might get government grants to support new jobs, encouraging labour intensive approaches • Accept any other valid response 7(b) Discuss the view that the intellectual capital of an information 12 technology business is its most important asset. Level Description Marks 4 Effective evaluation of the view that the intellectual 9–12 capital of an information technology business is its most important asset. 3 Limited evaluation of the view that the intellectual 7–8 capital of a business is its most important asset. 2 Analysis and application of the role of intellectual 3–6 capital and/or assets in a business. 1 Knowledge and understanding of intellectual 1–2 capital/business assets. 0 No creditable content. 0 Answers could include: Knowledge and Understanding 2 marks • Understanding of intellectual capital • Understanding of business assets Application 2 marks • Reference to the use of intellectual capital in a (information technology) business • Reference to the use of assets in a (information technology) business Analysis 2 marks • Intellectual capital is regarded or an important resource and a key contributor to the economic success and value creation of a business – an intangible value-driver • Intellectual capital is the intangible value of a business, including human capital (skills and expertise of employees), structural capital (databases and systems) and relational capital (links with suppliers/customers) • Intellectual capital is an asset in that it can provide knowledge, know- how, ability, creativity, innovation, rich productive cultures, business processes, data, intellectual property, business contacts, partners, investors and customers • In an information technology business intellectual capital could include the expertise of research and design staff, the relationships with local, national and international business and the unique systems and methods established to attract investors and government funding Evaluation 6 marks Any judgements/conclusions can be made at any point in the essay not just in a concluding section. 7(b) A judgement may be made using the following arguments: • How important an asset is intellectual capital in the business operations of an information technology business? • Without the hardware (tangible asset) to develop the ideas, the intellectual capital cannot be of use • A judgement may well be made between the intangible asset of intellectual capital and other assets (tangible and intangible) such as a sound financial base, IT hardware, an efficient management and leadership system, an effective HR policy for staff recruitment, an effective marketing strategy for products • Is there a recognition that the distinction between the other assets and the intangible intellectual capital assets of a business is not so clear cut as at first might appear? • Accept any other valid response