- Mark Scheme /

Question Answer Marks AO Element Notes Guidance

1 Identify and explain two 4 Application marks may

advantages to BGN of being a be awarded for
private limited company. appropriate use of the
following: furniture or
Knowledge [2 × 1] – award 1 mark
similar references such as
for each advantage identified
tables, 10 shops, different
Application [2 × 1] – award 1 mark cities, (increase in)
for each explanation in context customer complaints,
decisions over
Points might include: recruitment and / or
• Limited liability [k] compared to inventory, started as a
when it was a partnership [app] • partnership, expanded
Easier to raise money / capital [k] quickly
as business is expanding quickly
[app] • More credibility with
suppliers [k] could get better terms
when buying furniture [app] •
Continuity [k] • No need to publish
(detailed) accounts [k] of its 10
shops [app] • Separate legal
identity/ incorporated [k] • Control
over who can buy shares/ less risk
of takeover [k]
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Question Answer Marks AO Element Notes Guidance

2 Id entify and explain two 4

advantages to Moeen and Ali of
forming a private limited
company.
Knowledge [2 × 1] – award 1 mark
for each relevant advantage
Application [2 × 1] – award 1 mark
for each explanation in context
Relevant points might include: •
Access to more capital [k] which
could help increase their budget/so
can afford to create luxury image
[app] • Benefit from limited liability
[k] if new business fails [app] •
Continuity of existence [k] if
anything happens to one of them
will not have to close hotel [app] •
Separate legal identity [k] • Control
over who buys shares [k]
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Question Answer Marks AO Element Notes Guidance

3 Identify two financial statements 2 Only award the first two

a public limited company is responses given.
legally required to publish each
Do not award cash-flow
year.
forecast.
Award 1 mark for each financial
statement.
Two from:
• Income statement (Profit and
loss)
• Statement of financial position
(Balance sheet)
• Cash-flow statement/statement
of cash flows
• Statement of changes in
equity
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Question Answer Marks AO Element Notes Guidance

4 Define ‘public limited company’. 2

Award 2 marks for a full

definition.
Award 1 mark for a partial
definition.
Businesses owned by shareholders,
but they can sell shares to the public
and their shares are tradeable on the
stock exchange [2]
OR
Often a large company, owned by
shareholders who have limited
liability. The company can sell its
shares to the general public [2]
OR
A company that sells its shares to
the general public through a stock
exchange (because the company can
sell shares to anyone, it can raise
massive amounts of money) [2]
OR
A business whose shares can be
freely bought and sold to the
general public [2]
Partial definition e.g. a business that
can sell shares [1]
 - Mark Scheme /

Question Answer Marks AO Element Notes Guidance

5 Identify two features of a public 2 Only award the first two

limited company. responses given.
Award 1 mark for each feature
identified.
Points might include: • Limited
liability • Can sell shares to the
general public / shares quoted on
stock exchange • Must publish its
accounts / more regulations •
Separate legal identity / business
survives death of owners •
Minimum of two owners • Must
hold an Annual General Meeting
(AGM)

6 Identify two features of a sole trader. 2 Donotcreditinprivatesectorasthisappliesto

many forms of business
organisation.
Award 1 mark per feature.
Points might include:
• Keeps all the profit
• Unlimited liability
• Unincorporated/noseparatelegalidentity
• Takes all decisions / own boss
• Hastotalownershipofbusiness/ownedbyoneperson
• Few legal requirements
Otherappropriateresponsesshouldalsobecredited.
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Question Answer Marks AO Element Notes Guidance

7 Define ‘partnership’. 2 For 2 marks need idea of

two or more people and
Award 2 marks for a full
ownership.
definition.
Do not accept features
Award 1 mark for a partial
e.g. unlimited liability.
definition.
Two [or more] people who agree to
jointly own a business together [2]

OR An unincorporated business that

has more than one owner [2]
Partial definition e.g. 2 or more
people create / start a business
[1]
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Question Answer Marks AO Element Notes Guidance

8 Define ‘limited liability’. 2 Do not award ‘owners

have a separate legal
Award two marks for a full
identity to the business’
definition.
as this does not explain
Award one mark for a partial the term.
definition.
For 2 marks must have
The liability of shareholders / the idea of owners and
owners in a company is limited to the money invested.
only the amount they invested [2]

OR The shareholders in a limited

liability company which fails only
risk losing the amount they have
invested in the company (and not
any of their personal wealth) [2]
OR Its owners are not liable
(responsible) for a company’s debts
– this means that owners can lose
what they have invested (but not
their personal possessions). [2]
Partial definition e.g. Shareholder
only loses what they have put in [1]

OR Owners won’t lose their

personal assets if the business fails
[1]
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Question Answer Marks AO Element Notes Guidance

9 Identify and explain how the 8

following two stakeholder groups
of MF will be affected by the
production of this new product.

Knowledge [2 × 1] – award one

mark for how each stakeholder
group is affected
Analysis [2 × 1] – award one mark
for a relevant explanation of how
each stakeholder group is affected

Application [2 × 2] – award two

application marks for how each
stakeholder group is affected
Answers are likely to include:
Employees
• increased production – output per
worker increase
• increased job security – more
skills acquired • new production
methods used – workers may not
like change
• more training required – feel more
motivated – gain more
• job satisfaction – gain higher
wages
Customers
• more choice of products/ help to
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Question Answer Marks AO Element Notes Guidance

reduce weight for some consumers

• may not buy the new product – as

customers are unhappy with the
effect on the environment
• better meets the needs of some
customers – makes customers feel
more loyal to the company
• will have to pay a higher price if
customers want the new ice cream

Indicative response:
Increased production (1) as the new
sugar free ice cream will be
produced (ap). This will require
further training for employees as
the new equipment is different to
the original equipment in the
factory (1) and the new automated
equipment that has been installed
to produce the new ice cream will
require quite different skills (ap).

Possible application marks:

Sugar free ice-cream; MF has a
large market share of the food
markets; objectives are growth and
increased market share; new
automated production line required;
new skilled workers need
recruiting; increasing trends of
 - Mark Scheme /

Question Answer Marks AO Element Notes Guidance

people being overweight in country

X.
There may be other examples in
context that have not been included
here.
 - Mark Scheme /

Question Answer Marks AO Element Notes Guidance

10 Do you think the shareholders are 6 This is a general question

the most important stakeholder so there are no marks for
group to the success of a limited application.
company? Justify your answer.
Candidates may focus on
other stakeholders, but
Award up to 2 marks for the evaluation must focus
identification of relevant points. on whether shareholders
Award up to 2 marks for relevant are the most important
development of points. Award 2 stakeholder to the success
marks for justified decision as to of a limited company.
whether shareholders are the most
To gain both evaluation
important stakeholder group to the
marks, response must
success of a limited company.
clearly relate to a limited
Points might include: company.
Shareholders/owners
• Provide finance / invest money /
capital in business [k] which can
help the business expand / buy more
equipment [an] so can increase
output [an] • Influence the aims of
the business [k] • Have the power
to vote out the directors [k] • They
have little / no influence over
day-to-day decisions [k]
Other stakeholders can include:
• Customers [k] as they buy the
products [an] and if ignores their
needs the business will lose
sales/revenue [an] •
Directors/managers [k] are
responsible for day-to-day
decision-making [an] • Employees
 - Mark Scheme /

Question Answer Marks AO Element Notes Guidance

[k] make the products [an] so if

they become demotivated quality
may fall [an] • Suppliers [k] provide
materials/inventory [an] • Local
community [k] provide the workers
[an] • Government [k] provide the
legal framework in which the
business operates [an] • Bank [k]
provide finance/loans [an]
Other appropriate responses should
also be credited.
Justification might include:
Shareholders are important as they
invest money in the business [k]
which can help the business expand
[an]. However, once the business is
established, they have little / no
influence over day-to-day decisions.
Customers [k] matter as they buy
the products [an]. While
shareholders provide important
finance, without customers even a
limited company cannot generate
income [eval] and without t his
cannot cover its costs or make a
profit, so the customer is probably
the most important stakeholder.
[eval]
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Question Answer Marks AO Element Notes Guidance

11 Explain how two external 6 Note: To use words from

stakeholder groups might be the stem as application,
affected by the takeover. the reference must be
appropriate (i.e. make
Award 1 mark for each relevant
sense) in relation to the
stakeholder group.
point being made.
Award 1 mark for each relevant
The following words are
reference to this business.
likely to be appropriate
Award 1 mark for each relevant for this question:
explanation.
• Building
Points might include: materials/cement and
bricks • manufacturing •
• Banks [k] may have increased $25bn • Started 60years
demand for loans [an] to pay for ago • Main competitors •
taking over its main competitor Combined sales of $40bn
[app] • Government [k] as may • Business cycle • Interest
receive more tax revenue [an] if rates • Legal controls •
KTF can increase its $40bn sales Protecting the
[app] • [Local] community [k] may environment
be concerned about possible job
losses [an] • Suppliers [k] could Other appropriate
lead to fewer / increased orders [an] examples in context can
for building materials [app] • still be credited.
Pressure groups [k] • Consumers
Do not award answers
[k] as may lead to less choice [an]
which refer to internal
• Competitors [k] as they will be
stakeholders such as:
concerned about possible price
owners (shareholders),
drops due to the economies of scale
employees.
gained [an]
Other appropriate responses should
also be credited.
 - Mark Scheme /

Question Answer Marks AO Element Notes Guidance

12 Explain two ways in which local 6 Note: Ways can be either

communities might be affected by positive or negative.
CLN’s decision to close some of
Note: To use words from
its shops.
the stem as application,
Award 1 mark for identification of the reference must be
each relevant way (max 2). appropriate (i.e. make
sense) in relation to the
Award 1 mark for each relevant
point being made.
reference made to this business
(max 2). The following words are
likely to be appropriate
Award 1 mark for each relevant
for this question: • 30 or
explanation (max 2).
120 (shops) • Electrical
Points might include: products or examples
such as televisions /
• Job losses/higher unemployment computers • $250m (loss)
[k] so lower standard of living/have
less money to spend at other
businesses [an] as well as those Other appropriate
selling electrical goods [app] • examples in context can
Environmental benefits or examples still be credited.
such as less traffic [k] so less
pollution (leading to health issues)
[an] outside the 120 shops [app] •
Reduction in local facilities [k]
which could lead to higher prices
having to be paid [an] • Reduction
in house prices/damage image of
the local area [k]
Other appropriate responses should
also be credited.
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Question Answer Marks AO Element Notes Guidance

13 Identify and explain two ways in 6 Application marks may

which the objectives of GOP be awarded for
might be different if it was in the appropriate use of the
private sector. following:
Knowledge [2 × 1] – award 1 mark • public corporation
for each relevant way
• oil
Application [2 × 1] – award 1 mark
• 200 km OR pipeline
for each relevant reference made to
this business • planning permission
Analysis [2 × 1] – award 1 mark for • 2000 OR
each relevant explanation skilled/construction jobs
Relevant points might include:
• less need for businesses
• May look to maximise profit [k]
to import
from its pipeline [app] whereas in
public sector the objective may be • pressure group
social/to provide social welfare/to
offer services/products for free or • economic objectives of
at a low price [an] country X’s government

• May look to increase market share

[k] making it difficult for other Note: Analysis can be
businesses to survive [an] which awarded either for
could conflict with government comparing the difference
economic objectives [app] in objectives between the
two sectors OR relevant
• May look to increase revenue [k] development of a private
for its oil [app] whereas the public sector objective Note:
sector may offer subsidised prices Due to the wording of the
[an] question, private sector
objectives on own can be
• Protecting jobs may be more
accepted as [k]
important in the public sector [k]
whereas private sector firms may
 - Mark Scheme /

Question Answer Marks AO Element Notes Guidance

look to reduce costs [an]

14 Identify two stakeholder groups 6

of APQ. Explain how APQ could
act in an ethical way with each
stakeholder group.
Knowledge [2 × 1] – award 1 mark
for each relevant stakeholder
Application [2 × 1] – award 1 mark
if relevant reference made to this
business
Analysis [2 × 1] – award 1 mark for
each relevant explanation
Relevant points might include: •
Employees/management [k] if set
up in developing country [app]
should pay fair wages [an] or offer
good conditions [an] • Suppliers [k]
pay fair price/pay on time [an] for
the chemicals [app] • Community
[k] • Pressure groups [k] by trying
to prevent pollution/environmental
damage [an] caused by factory
[app] • Government [k] paying its
taxes on time/not do tax avoidance
[an] • Lenders/bank [k] if borrow
$100 m [app] •
Owners/shareholders [k] as public
limited company [app] • Customers
[k] do not exploit them by charging
high prices [an] to farmers [app]
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Question Answer Marks AO Element Notes Guidance

15 Identify two stakeholder groups 6

of APQ. Explain how APQ could
act in an ethical way with each
stakeholder group.
Knowledge [2 × 1] – award 1 mark
for each relevant stakeholder
Application [2 × 1] – award 1 mark
if relevant reference made to this
business
Analysis [2 × 1] – award 1 mark for
each relevant explanation
Relevant points might include: •
Employees/management [k] if set
up in developing country [app]
should pay fair wages [an] or offer
good conditions [an] • Suppliers [k]
pay fair price/pay on time [an] for
the chemicals [app] • Community
[k] • Pressure groups [k] by trying
to prevent pollution/environmental
damage [an] caused by factory
[app] • Government [k] paying its
taxes on time/not do tax avoidance
[an] • Lenders/bank [k] if borrow
$100 m [app] •
Owners/shareholders [k] as public
limited company [app] • Customers
[k] do not exploit them by charging
high prices [an] to farmers [app]
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Question Answer Marks AO Element Notes Guidance

16 Do you think Zoff should change 6

its objectives? Justify your
answer.
Knowledge [1] – award 1 mark for
identification of point (s) [max 1]

Application [1] – award 1 mark if

relevant reference made to Zoff’s
business
Analysis [2] – award up to 2 marks
for relevant development of point(s)

Evaluation [2] – justified decision

made as to whether Zoff should
change its objectives.
Either viewpoint is acceptable
Relevant points might include:
• Increase in competition [k] might
not be scope to continue to grow
[app] • Achieved its growth plan [k]
so need to have new objectives •
Poor management [k] MD was
dismissed [app] could suggest poor
decisions were taken [an] Different
people have different objectives [k]
new MD might have different goals
[app] • Financial issues [k] as
profits falling [app] so might not
have the funds to continue
expansion [an] • Improved
reputation [k] so customers might
 - Mark Scheme /

Question Answer Marks AO Element Notes Guidance

be attracted to better quality [app]

leading to higher sales [an]
Application marks may be awarded
for appropriate use of the following:
falling profits, wide range of
products, MD dismissal, rapid
growth, large manufacturer,
bicycles / washing machines
 - Mark Scheme /

Question Answer Marks AO Element Notes Guidance

17 Outline one possible objective for 4 To use words from the

each of the following stakeholder stem as application the
groups of CXN. reference must be
appropriate (i.e. make
Award 1 mark for each relevant
sense) in relation to the
objective (max 2).
point being made.
Award 1 mark for each relevant
The following words are
reference to this business (max 2).
likely to be appropriate
for this question:
Points might include:
• Glass/bottles • 130
Government: (employees) • (Export to)
39 countries • Flow
• Increase tax (revenue) / paid production • Sustainable
correct amount of tax [k] from the development •
manufacture of bottles [app] • Globalisation
Provide/increase number of jobs /
minimum unemployment benefits Other appropriate
to pay [k] • Expect business to stay examples in context can
within the law [k] still be credited.
Employees:
• Increase pay / wages / receive fair
wage / regular payments [k] for its
130 employees [app] • Better/safe
working conditions [k] when using
flow production [app] • Access to
training/development [k] because
the business is trying to contribute
to sustainable development [app] •
Job security [k] • Have contract of
employment [k] • Work provides
motivation / opportunities for
promotion [k]
 - Mark Scheme /

Question Answer Marks AO Element Notes Guidance

Other appropriate responses should

also be credited.

18 Identify and explain two 4 Application marks may

objectives Y2M might have if it be awarded for
was in the private sector. appropriate use of the
following:
Knowledge [2] award 1 mark for
each objective identified • bus or related words
e.g. tickets drivers,
Application [2] award 1 mark for
passengers, trips, routes,
each explanation in context
journey
Relevant point might include:
• appropriate use of
• profit [k] so prices for journeys numbers from the
could be set higher [app] Table
• reduce costs [k] as it is more • public sector
concerned about profit than
• increased number of
providing bus services [app]
customers
• increased returns to shareholders
• competitors
[k]
• pricing methods
• survival [k]
• higher / same wage
• growth / increase sales [k]
rate
• increased market share [k]
• break-even
• improved service [k]
Do not accept – Break
even on all bus routes as
this is their current public
sector objective.
 - Mark Scheme /

Question Answer Marks AO Element Notes Guidance

19(a) Identify and explain two reasons 4 Application marks may

why REW’s objectives might be awarded for
change over time. appropriate use of the
following:
Knowledge [2 × 1] Award 1 mark
for each reason identified • award winning
Application [2 × 1] Award 1 mark • carpets or rugs
for each explanation in context
• wool or local
Points might include: suppliers
• Change in economic conditions • survival (is main
e.g. decrease in interest rates / objective) / survive
decrease in taxes / decrease in
• GDP falling /
employment [k] as the country is
recession
seeing GDP falling [app]
• correct use of data from
• Previous objectives met / business
the table
has become established [k]
• selling in other
• Change in competition / market /
countries
demand e.g. decrease in demand [k]
for carpets [app] OR Competitors • market research
enter market [k] so survival suggests high demand
becomes main objective again
[app] Do not award examples
of new objectives
• Change in board of directors /
ownership OR changing demands Examiners note:
of stakeholders [k] candidates must state
there is a change or
• Change in profit / business costs identify the direction of
e.g. decrease in profit [k] change for [k]
 - Mark Scheme /

Question Answer Marks AO Element Notes Guidance

20 Identify two reasons why 2 Only award the first two

businesses need objectives. responses given.
Award 1 mark per reason (max 2).

Points might include:

• Provides targets/goals to work
towards
• Way to measure
success/judge/assess
performance
• Helps decision-making /
allocate resources
Other appropriate responses should
also be credited.
 - Mark Scheme /

Question Answer Marks AO Element Notes Guidance

21 Identify two objectives for a 2 Only award the first two

business organisation in the responses given.
public sector.
Award 1 mark per objective.
Points might include:
• Financial or examples e.g.
meet targets set by
government, improve
efficiency/reduce costs
• Make product/service
affordable to all
• Provide a service to everyone

• Protect or create jobs in

certain areas (social
objectives)
Other appropriate responses should
also be credited.
 - Mark Scheme /

Question Answer Marks AO Element Notes Guidance

22 Define ‘stakeholder groups’. 2

Award2marksforafuldefinition.Award1markforapartialdefinition.
Anypersonorgroupwitha(direct)interestintheperformance/activitiesof
a business [2]
Partialdefinitione.g.Anindividualorgroupwhichhasaninterestina
business [1]
OR Someone
affected by what a businessdoes [1]
OR Anybody inside or outside the
business who cares
about its operations [1]

23 ‘ Define business objective‘. 2 Do not award examples

as this does notexplain
Award 2 marks for a full definition. the term.
For 2 marks needs the
Award 1 mark for a partial idea of target andthat it is
definition. something to work
A statement of a specific target that towards.
a business works towards [2]
OR A statement of a specific target
to be achieved. (They should be
SMART) [2]
Partial definition e.g. target/goal
[1]
OR Something the business works
towards [1]
 - Mark Scheme /

Question Answer Marks AO Element Notes Guidance

24 State two objectives (other than 2 Only award the first two
expansion) a business might have. responses given.
Do not award growth as
Award one mark per objective this is the same as
Objectives might include: expansion.
• survival/stay in business beyond
first two years/breakeven/improve
cash flow
• make a profit
• increase market share/increase
sales/increase revenue/enter new
markets (or examples such as start
selling online)/become market
leader
• return to shareholders/increase
return on capital employed
• be
socially/ethically/environmentally
responsible (or examples but allow
only once)
• provide a service to the
community
• cuts costs/improve profit
margin/add value
Other appropriate responses should
also be credited.
 - Mark Scheme /

Question Answer Marks AO Element Notes Guidance

25(a) What is meant by ‘social 2 Do not award examples

enterprise’? e.g. provide jobs to
unemployed
Clear understanding [2]: e.g.
business with both social objectives Do not award not for
as well as aim to make a profit profit or non-profit
business
OR organisation whose primary /
main objective is social (and any
profit made is reinvested) [2]
Some understanding [1] e.g. not all
about profit OR profit is not only
objective
OR an organisation which has
social objectives [1]
OR business that aims to help /
benefit society [1]

26 What is meant by ‘shareholder’? 2

Clear understanding [2]:

Shareholders are the owners of a
limited company.
Some understanding [1]: some one
who owns part of business
 - Mark Scheme /

Question Answer Marks AO Element Notes Guidance

27 What is meant by ‘stakeholder 2 Do not award examples

group’? as this does not answer
the question.
Clear understanding [2]: any group
or person with a (direct) interest in Do not award
the performance / activities of a affects/influences the
business decisions
Some understanding [1]: someone
affected by a business [1] or
anybody inside or outside the
business who cares about its
operations [1]
 - Mark Scheme /

Question Answer Marks AO Element Notes Guidance

28 Do you think job enrichment is a 6

better way for a business to
motivate its employees than profit
sharing? Justify your answer.
Award up to 2 marks for
identification of relevant points.
Award up to 2 marks for relevant
development of points.
Award 2 marks for justified
decision as to whether job
enrichment is a better way for a
business to motivate its employees
than profit sharing.
Points might include:
Job enrichment:
• Business able to make most /
full use of employees skills [k]
which can help increase labour
flexibility [an]
• Training may be needed [k]
which can increase expenses
[an]
• Workers gain more job
satisfaction/ feel
recognised/valued [k]
• Not all workers are able / want
to do more complex work [k]
leading to mistakes/ waste [an]
 - Mark Scheme /

Question Answer Marks AO Element Notes Guidance

• Not easy to add extra tasks to

some jobs [k]
• Time consuming to redesign
tasks [k]
• May create conflict between
employees (as may not be
possible to offer opportunities
to all) [k]
Profit sharing:
• Money is a major motivator
for many employees [k]
• Can help build team spirit /
sense of belonging / common
goal [k]
• Not everyone is motivated by
money [k] If business makes
low/ no profit, then there is
little/ nothing to share [k]
which could decrease
motivation [an]
Other appropriate responses should
also be credited
Justification might include:
Job enrichment can help the
business make the most use of
employees skills [k] increasing
productivity [an]. A business
making no profit, has nothing to
share [k] which could decrease
rather than increase motivation [an].
 - Mark Scheme /

Question Answer Marks AO Element Notes Guidance

I think job enrichment is better as

making the job more interesting is
more likely to motivate employees
every day. [eval]. Profit-sharing is
at the end of the year, and therefore
is likely to have less impact on
daily effort. [eval]
 - Mark Scheme /

Question Answer Marks AO Element Notes Guidance

29 Explain two non-financial 6 This is a general question

methods a small tertiary sector so there are no marks for
business could use to keep its application.
employees well-motivated. Justify
which method should be chosen.

Award up to 2 marks for

identification of relevant points.
Award up to 2 marks for relevant
development of points.
Award 2 marks for a justified
decision as to which is the best
method for a small tertiary sector
business to use to keep its
employees well-motivated.
Points might include:
• Job rotation [k] as switching tasks
can make work more interesting
[an] • Job enrichment [k] as workers
feel they have been given more
responsibility / more important [an]
• Delegation/empowerment [k] so
workers feel more important/valued
[an] • Praise [k] helps employees
meet their esteem needs [an] •
Employee of the month awards [k]
recognition of hard work /
outstanding service [an] • Provide
opportunities for promotion [k] •
Team working [k]
Other appropriate responses should
 - Mark Scheme /

Question Answer Marks AO Element Notes Guidance

also be credited.
Justification might include:
Praise [k] helps employees meet
their esteem needs. [an] Another
method is job rotation [k].
Switching between tasks can help
keep the work interesting. [an] I
think praise is the better option as
the problem with job rotation is
whether a small tertiary business
may not have sufficient tasks to be
able to rotate everyone [eval]
whereas praise can easily be offered
to everyone which can help keep
everyone motivated rather than just
a few. [eval]
 - Mark Scheme /

Question Answer Marks AO Element Notes Guidance

30 Explain one advantage and one 6 To use words from the

disadvantage to GHT of using job stem as application, the
rotation to improve employee reference must be
motivation. appropriate (i.e. make
sense) in relation to the
Award 1 mark for identification of
point being made.
each relevant
advantage/disadvantage (max 2). The following words are
likely to be appropriate
for this question:
Award 1 mark for each relevant
reference made to this business • Steel / gates / garage
(max 2). doors • 600 employees •
Public limited company
Award 1 mark for each relevant
• 22 500 (break-even
explanation (max 2).
output) • 30 000 (units
Points might include: sold) • $100 (price per
unit) • $900 000 (fixed
Advantage: costs) • $60 (variable cost
• (As work more varied) fewer per unit)
workers might leave [k] from its Other appropriate
600 employees [app] leading to examples in context can
lower recruitment costs [an] • still be credited.
Business has a more flexible /
skilled workforce / multiskilling [k] Do not award motivate or
leading to higher productivity / demotivate employees as
higher output [an] • Easier to cover stated in the question.
/ replace others when someone is
absent [k] so may be able to meet
an order on time [an] • Can help
business identify where employees
work best [k]
Disadvantage:
• Increased training needed [k]
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Question Answer Marks AO Element Notes Guidance

increasing costs/expenses [an] so

may increase its break-even output
above 22 500 [app] • Workers may
not be familiar with each task / less
specialist in task / not good at all
tasks [k] lowering quality / increase
waste / leads to mistakes [an]
increasing variable cost above $60
[app] • Takes time to learn different
tasks / switch between jobs [k]
Other appropriate responses should
also be credited.
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Question Answer Marks AO Element Notes Guidance

31 Do you think increasing wages is 6 This is a general question

a better way for a business to so there are no marks for
motivate employees than application.
introducing profit sharing?
Some points could be
Justify your answer.
awarded for different
Award up to 2 marks for options, but do not award
identification of relevant issues. the same point twice.
Award up to 2 marks for relevant For evaluation to be
development of points. awarded justification will
usually follow on from
Award 2 marks for justified
relevant analysis of
decision as to whether increasing
points.
wages in a better way for a business
to motivate employees than
introducing profit sharing.
Points might include:
Increase wages:
• Taylor’s theory suggests that
higher wages increases motivation/
Herzberg’s theory states pay is a
hygiene factor and not a motivator
[k] • Higher wages add to business
costs [k] which may not be covered
by the additional output [an] • Only
a short-term boost to
motivation/likely to be paid the
higher amount whether they work
harder or not [k] so any increase is
productivity is only temporary [an]
• Will provide a regular/steady
income [k] to maintain standard of
living [an]
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Question Answer Marks AO Element Notes Guidance

Profit sharing:
• Creates team spirit/common
goal/sense of belonging/all
employees focused on success of
business [k] which could lead to
higher overall profit/increase output
[an] • Only receive/pay out if profits
made [k] • Sharing profits might
reduce retained profit [k] which
could mean less capital for
expansion [an] • Other factors can
affect profit which employees
cannot control [k] so there is no
guarantee they will receive
any/much from profit sharing [an]

Other appropriate responses should

also be credited.
Justification might include:
Higher wages add to business costs
[k] which might increase more than
output increases [an]. Whereas
sharing profits might reduce
retained profit [k] which could
mean less capital for expansion [an]
However, I think profit sharing is
the better way. This is because
higher wages will automatically
have to be paid whether business
makes a profit or not which could
also reduce the potential profit that
a business can make so it is better
to use profit sharing as the business
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Question Answer Marks AO Element Notes Guidance

only has to give it when a profit has

been made. [eval] [eval]
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Question Answer Marks AO Element Notes Guidance

32 Do you think VXH should use job 6 Application marks may

rotation or financial bonuses to be awarded for
increase employee motivation? appropriate use of the
Justify your answer. following:
Knowledge [1] – award 1 mark for • fruit or related words
identification of relevant point(s) e.g. flavours
• soft drinks
Application [1] – award 1 mark for
• batch production
a relevant reference made to this
business • specialisation
Analysis [2] – award up to 2 marks • factory
for relevant development of
point(s) • 40 OR 80 (workers)
motivation problems
Evaluation [2] – justified decision
made as to whether VXH should • 2 years
use job rotation or financial bonuses • Span of control
to increase employee motivation (increased)
Points might include:
Job rotation:
• Prevents workers becoming bored
doing the same task repeatedly [k]
which could increase output [an]

• Need to provide training [k] to the

employees [app] which increases
cost [an]
• Helps improve flexibility [k] as
workers can switch if someone is
absent [an]
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Question Answer Marks AO Element Notes Guidance

• Workers may not be good at the

new task [k] so productivity
decreases [an]
Financial Bonus:
• Increases costs to the business [k]

• Some employees may not be

motivated by money [k]
• Can lead to conflict / demotivation
if some workers don’t get this [k]
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Question Answer Marks AO Element Notes Guidance

33 Do you think Y2M should pay its 6 Application marks may

workers the same wage rate as its be awarded for
competitors? Justify your appropriate use of the
answer. following:
Knowledge [1] – award 1 mark for • bus or related words
identification of relevant issue(s) e.g. tickets, drivers,
passengers, trips, routes,
Application [1] – award 1 mark for
journey
a relevant reference made to this
business • appropriate use of
numbers from the Table
Analysis [2] – award up to 2 marks
for relevant development of point(s)
• public sector
Evaluation [2] – justified decision • private sector
made as to whether Y2M should
• increased number of
pay its workers the same wage rate
customers
as its competitors
• variable costs
Points might include:
• break even
• Help retain employees [k] so
fewer drivers leave [app] saving on • $2.20
recruitment costs [an]
• Increase labour costs [k] leading
to a higher break-even point [an] so
need to attract more passengers
[app] to be able to cover its costs
[an]
• Total costs may rise [k] which
may lead to higher prices [an]
which could reduce demand [an]
for its buses [app]
• Employees may be happy with
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Question Answer Marks AO Element Notes Guidance

their current pay [k] in the public

sector [app] because they receive
other benefits [an]
• Higher pay may lead to reduced
services [k]
• Increasing pay may motivate
workers [k]
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Question Answer Marks AO Element Notes Guidance

34 Explain two ways Ben could 6 Application marks may

improve employee motivation. be awarded for
Recommend which way Ben appropriate use of the
should choose. Justify your following:
answer.
• small (business) •
Award 1 mark for identification of gardening or related
relevant point (s) words such as cutting
grass • (business) success
Award 1 mark for relevant
• service • customer
reference made to this business
recommendation •
Award up to 2 marks for relevant seasonal (as gardening
development of point(s) may not be needed all
year) • ordered to do jobs
Award up to 2 marks for a justified • 15 years ago • 4
decision made as to which way Ben (part-time), 2 (full-time)
should use to improve employee • hourly wage rate
motivation.
• employed for a number
Points might include: of years
• change method of payment / Do not award bonus as
increased rate of pay [k] • training knowledge (currently
[k] so feel more valued [an] • does offer this)
involve workers in decision making
[k] so workers feel more important For evaluation marks to
[an] to the gardening business [app] be awarded two relevant
• change leadership style [k] Ben ways must have been
orders workers to do jobs [app] • explained
chance for promotion / become full
time [k] • job rotation [k] for the 6
employees [app] so employees are
not bored doing the same thing [an]
• job enlargement [k] • job
enrichment [k] • employee of the
month [k] therefore workers feel
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Question Answer Marks AO Element Notes Guidance

like their hard work is being

recognised [an] • praise [k] meeting
employees esteem needs [an] • team
working / communication [k] •
fringe benefits [k]
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Question Answer Marks AO Element Notes Guidance

35 Identify and explain two 6 Application marks may

non-financial methods of be awarded for
motivation which Ruby could use. appropriate use of the
following: • festivals OR
celebrations • sole trader
Knowledge (2 × 1) – award 1 mark
• individually designed •
for identification of each relevant
greetings cards OR
issue (max 2)
related words such as
Application (2 × 1) – award 1 mark paper • hand made •
for each relevant reference made to quality cards are
this business important • three
(employees) • job
Analysis (2 × 1) – award 1 mark for production • part-time •
each relevant development piece rate
Relevant points may include: Do not accept financial
• Job rotation [k] could help staff methods such as pay
to become multi-skilled and more rises, bonuses, shares,
flexible [an] when producing hand pension, commission as
made cards [app] • Job enlargement this does not answer
[k] as greater variety of work can question
help keep them satisfied [an] to help
meet the higher orders during
festivals [app] • Job enrichment [k]
which may increase quality which
is important to Ruby [app] as
workers feel they have been given
more responsibility [an] • Ruby
could use fringe benefits (allow
only once) [k] as she is a sole trader
[app] • Praise [k] • Employee of the
month awards [k] • Team working
• Delegation OR empowerment OR
decision making [k] • Opportunity
for promotion [k]
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Question Answer Marks AO Element Notes Guidance

36 Do you think Yanis should 6 Application marks may

change the way he motivates his be awarded for
chefs? Justify your answer. appropriate use of the
following:
Knowledge [1] – award 1 mark for
identification of relevant points (s) • kitchen • restaurant, •
correct use of numbers •
4 (chefs) • skilled • many
Application [1] – award 1 mark for
workers leave • no
relevant reference made to this
bonuses • part time
business
(contract) • high hourly
Analysis [2] – award up to 2 marks rate
for relevant development of point(s)
Do not award chefs as
application as stated in
Evaluation [2] – justified decision question. Can discuss
made as to whether Yanis should other ways to motivate
change the way he motivates his chefs e.g. performance
chefs related pay, training but
evaluation must focus on
Relevant points might include: whether he should
• Depends on reason why people change the way he
are leaving [k] as only a parttime motivates his chefs.
contract [app] • Little incentive with Do not award answers
current method to work harder [k] which discuss advantages
as no bonuses [app] • May not be of motivated workforce,
able to afford alternative methods e.g. increased
[k] as planning to open another productivity, work
restaurant [app] • Workers may harder, better quality as
expect high wages [k] as skilled this is not the question
[app] • Current system offers set.
flexibility to employees [k] • Could
offer bonuses [k] which increases
costs [an] so may not be able to
afford to expand [an] • Increase
 - Mark Scheme /

Question Answer Marks AO Element Notes Guidance

hours [k] • Offer job rotation [k] so

there is more variety [an]

37 Identify and explain two 6 Application marks may

advantages to SF of few be awarded for
employees leaving each year. appropriate use of the
following: weekly
Knowledge [2 × 1] – award 1 mark
newsletter, 200, full-time,
for each advantage identified
new ways of working,
Application [2 × 1] – award 1 mark pickles or jams or related
if relevant reference made to this words
business
Analysis [2 × 1] – award 1 mark for
each relevant explanation
Relevant points might include:
• Saves time [k] so managers can
focus on other issues [an] • Better
reputation [k] can help attract
workers [an] especially if SF keeps
expanding [app] • Lower
recruitment costs [k] do not need to
advertise for people [an] to make
jam [app] • Lower training costs [k]
as workers already know what to
do [an] • Keep expertise/knowledge
[k] which may not be easy to
replace [an] helping SF become
successful [app]
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Question Answer Marks AO Element Notes Guidance

38 Identify and explain two ways 6

that TWH could improve the
motivation of its employees.
Knowledge [2 × 1] – identification
of relevant way [max 2]
Application [2 × 1] – award 1 mark
for each way if relevant reference
made to TWH
Analysis [2 × 1] – award 1 mark for
each relevant explanation
Relevant points might include:
• Job rotation [k] swapping between
making different toys [app] they are
not bored doing the same thing [an]
• training [k] on the new technology
[app] so employees feel valued [an]
• better communication with
management [k] so workers feel
that they are important to the
business [an] so efficiency
improves [app] • improve pay [k]
they pay $6 [app] as pay $.50 less
per hour [an] OR bonuses/piece rate
[k] so make more toys [app] to get
paid above their usual wage [an] •
improved working
conditions/environment [k]
Note: other options acceptable e.g.
fringe benefits (allow only once),
job enrichment, promotion
Do not accept work harder alone as
 - Mark Scheme /

Question Answer Marks AO Element Notes Guidance

analysis because a reason for this

must be given
Application marks may be awarded
for appropriate use of the following:
relevant use of numbers, toys,
average costs, efficiency, new
technology.
 - Mark Scheme /

Question Answer Marks AO Element Notes Guidance

39 Do you think that using financial 6

rewards is the best way for A2Z
to motivate its pilots? Justify your
answer.
Knowledge [1] – award 1 mark for
identification of relevant issue(s).
Positive or negative points allowed
or alternative methods (points can
be for business or employee) [max
1]
Application [1] – award 1 mark if
relevant reference made to this
business
Analysis [2] – award up to 2 marks
for relevant development of point(s)

Evaluation [2] – justified decision

made as to whether financial
rewards are the best way for A2Z
to motivate its pilots. Candidate’s
final decision can be either for or
against the statement. Note:
evaluation must be from the
viewpoint of the business not the
employee
Relevant points might include:
• High wages help retain workers
[k] • Can the business afford to pay
high wages [k] • High skilled jobs
[k] so will expect high levels of
financial rewards [an] otherwise
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Question Answer Marks AO Element Notes Guidance

they will look for a job at rival

airline [app] • Money does not
motivate everyone / already highly
paid [k] • Training might be offered
[k] as high risk job [app] so safety
might be more important • profit
sharing [k] as small airline [app] so
might work as pilots may feel they
have a direct impact on
performance [an] • Opportunities
for promotion [k] could have
limited value [an] as it is a small
airline [app] • Job security [k] •
Travel discounts for pilot and/ or
family [k] so able to obtain cheap
tickets [app]
Application marks may be awarded
for appropriate use of the following:
small, expansion, successful,
references to risk involved in flying,
tickets, highly qualified / highl y
skilled, highly paid, irregular work
hours, passengers
Do not accept pilots as application
as it is stated in the question
 - Mark Scheme /

Question Answer Marks AO Element Notes Guidance

40 Outline two ways MBH can use 4 To use words from the
ideas from Herzberg’s theory to stem as application, the
motivate its employees. reference must be
appropriate (i.e. make
Award 1 mark for each relevant sense) in relation to the
point. point being made.
Award 1 mark for each relevant The following words are
reference to this business. likely to be appropriate
Points might include: for this question:

• Could give employees more • 440 / doctors

responsibility [k] in the • (5) Hospitals / or
hospital [app] related words
• Offer more interesting work • 5600 employees
[k] as many are skilled
employees [app] • Public sector
• Offer more praise for good • Communication
work [k] barriers
• Give chances for promotion • Phone/email Long
[k] as there is a tall chain of
organisational structure command
[app]
• Tall organisational
Other appropriate responses should structure
also be credited.
• Skilled
employees
Other appropriate
examples in context can
still be credited.
Do not award examples
of hygiene factors on
their own e.g., Pay,
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Question Answer Marks AO Element Notes Guidance

improve working
conditions as these are
not motivators

[Total: 174]