BUISNESS

Question 1

4 sectors of industry

Answer 1

primary - businesses that are involved in extracting or exploiting natural resources

secondary - businesses that are involved in manufacturing and construction

tertiary - businesses and organisations that are involved in providing services rather than goods

quaternary - businesses involved in providing information and knowledge based services

Question 2

objectives 
for private(public limited company) and public sector

Answer 2

managerial objectives
this happens with managers in larger companies pursue their own objectives which will bring them more status

corporate social responsibility (CSR)
when organisations interact in an ethical way or any way that benefits either society or the environment

satisficing
this happens when the business makes enough sales to keep shareholders happy, rather than putting their effort into maximising profit

maximising growth
where business becomes larger with more branches meaning it can help businesses achieve economies of sale

Question 3

public limited company in terms of ownership finance and control

Answer 3

ownership - owned by shareholders who by one or more shares in the business and as such own part of the business

control - controlled by a board of directors are managed by a managing director

sources of finance - issuing shares, government grants, bank loans, retained profit from previous years

Question 4

public sector in terms of ownership control and finance

Answer 4

ownership - public sector organisations are owned by the government and the taxpaying public

control - public sector organisations are controlled overall by the central or local government and run by elected officials

sources of finance – public sector organisations are funded by government from taxes and national insurance

Question 5

horizontal and lateral integration disadvantages

method of growth

Answer 5

• The takeover may breach EU competition rules so may not be allowed to go ahead
• as there will be less competition quality may suffer
• due to the lack of competition customers may have to pay higher prices for the same goods

Question 6

forward and backwards vertical integration disadvantages

method of growth

Answer 6

-The business may not be capable of managing these new activities efficiently which could lead to higher costs
-focusing too much on new activities can negatively affect the core activities of the business
-monopolising markets may lead to legal action by the competition

Question 7

conglomerate integration disadvantages

method of growth

Answer 7

• The business may take on a business in another market that they know nothing about and this may cause the new business to fail
• having too many products across different markets may cause the business to lose focus on its core activities
• The business could become too large and inefficient to manage this is called diseconomies of sale

Question 8

impact of positive employee relation

Answer 8

• employees will feel they have the chance to discuss changes meaning they will feel happier and more secure in the work place
• the organisation will gain a good image for treating its employees well meaning high quality staff will be attracted to work for them
• workers will be committed meaning they will help to ensure the business meets its objectives
• staff will feel they have been consulted meaning they will understand changes more meaning problems are less likley to arise

Question 9

impact of negative employee relation

Answer 9

• due to low morale employee performance and productivity will decrease
• as employees will be stressed and demotivated staff absenteeism will arise
• employees will leave for a better work environment leading to high staff turnover and increase recruitment and training costs

Question 10

employee participation

Answer 10

employees need to feel as if they have a say in the organisation and use worker directors, works consils and quality circles to give employees a voice

Question 11

advantages of CAD

Answer 11

-accuracy of the drawing is increased with no human error
-Ideas can be saved modified printed and can show visual 3D concept
-no hardcopies needed which saves on storage


Question 12

disadvantage of CAD

Answer 12

• The initial expense of equipment and software as expensive

- staff need to be trained how to use CAD

Question 13

advantages of outsourcing

Answer 13

• The outsourced business will have greater expertise and specialist equipment this means that the quality will be higher
• outsourcing allows the business to focus on its core activities meaning it’s more likely to meet its objectives
• The business is able to use the outsourced service only when needed meaning costs are saved

Question 14

disadvantages of outsourcing

Answer 14

-The business has less control over outsourced work this means that quality may fail
-Communication between businesses may not be clear meaning it may result in complaints
-outsourced business may cost more than in-house staff meaning that costs will increase

Question 15

external factors
PESTEC
environmental

Answer 15

poor weather,
— long spells of bad weather such as snow can affect deliveries to customers, customers may end up having to buy products from competitors resulting in a loss of market share

increase in recycling,
— organisations that adopt and publicise their recycling efforts will gain a better reputation than their competitors and attract customers with an interest in the environment

Question 16

how to check desions have been effective

Answer 16

• issue questionnaires to customers to evaluate their response
• check to see if profits have increased
• check to see if staff absenteeism has reduced

Question 17

external factors

political

Answer 17

• changes in legislation if the government increases the minimum wage the organisation will have a higher wage costs meaning lower profits
• economic policy if the government increases the base rate then interest rates set by banks on loans will increase which will reduce spending on luxury items
• competition policy businesses cannot collide with other organisations to fix prices

Question 18

external factors

econmic

Answer 18

• stage of the economic cycle if the countries in the boom stage this means that the business may be able to increase prices without losing business to competition
• Exchange rates in value of the pound is low compared to foreign currencies UK exporters will be able to sell more goods overseas and will be less expensive for customers outside the uk

Question 19

external factors

social

Answer 19

• U.K.’s aging population of businesses adapt their products To older customers this means that in your market segment open up increasing profits
• changing in fashion trends some products have very short shelf life meaning there needs to be constant high research and development costs
• evolving worklife balance as people have more leisure time they tend to eat out which means that businesses in these sectors have the opportunity to maximise growth

Question 20

external factors

technological

Answer 20

• social media having a strong social media presence means the organisation can keep in touch with customers worldwide
• 4G if an organisation operates in a 4G area its employees will be able to communicate quickly improving efficiency

Question 21

external factor

competitve

Answer 21

• competition lowers prices this will force the business to lower their own prices which will reduce profits
• e-commerce if a competition start selling online they will increase their market share in brand awareness which could lead to reduction in sales

Question 22

pricing stratigies

advantages market skimming

Answer 22

• sufficient hype and a new product enables the higher prices to be charged which can increase profits
•  Lack of competition also allows maximum prices to be charged

Question 23

pricing stratigies

market skimming disadvantage

Answer 23

-high initial price can put some customers off buying the product

Question 24

pricing stratigies

penitration pricing advantages

Answer 24

• encourages customers to try a new product due to the lower price
• The business hopes to gain repeat custom once the price rises

Question 25

pricing stratigies | penitration pricing disadvantage

Answer 25

-very little profit can be generated during the initial low price period

Question 26

tall structure

Answer 26

a tall structure occurs when there are many levels of management and decisions are passed down from senior staff through each level to employees at the bottom of the pyramid

Question 27

tall structure advantages

Answer 27

- many levels come with many promotion opportunities this means that staff will be more motivated and less likely to leave for another job - managers can provide more support to help subordinates as they will have less staff to manage

Question 28

tall structure disadvantages

Answer 28

- Communication takes time as it has to flow down through levels which means that decision making could be slower - managers have fewer staff this means that there may not be enough staff to delegate tasks to

Question 29

flat structure

Answer 29

A flat structure occurs when there are few levels of management and a shorter chain of staff

Question 30

flat structure advantages

Answer 30

- information can be communicated quickly between levels this means that decision-making will be faster - managers have to delegate tasks to staff which means that staff morale is raised as staff will feel trusted

Question 31

flat structure disadvantages

Answer 31

-fewer levels means fewer promotions this means that staff may leave to gain promotion in larger organisations

Question 32

Purpose of an income statement

Answer 32

-calculates the profit made from buying and selling – comparison can be made about an organisations profit or loss over a period of time – it can be used to calculate ratios which can then be used to inform decision-making

Question 33

role of a manager

Answer 33

pOCc-DM PLAN ORGINAISE-management must set tasks for other employees that need to be carried out to achieve targets COMMAND-managers must issue clear instructions to employees CO-ORDINATE CONTROL DELEGATE-managers should give employees authority to carry out management tasks to help achieve tasks on time MOTIVATE -managers must give their team a reason to enjoy their work

Question 34

2 types of market research

Answer 34

feild and desk

Question 35

desk research advantage

Answer 35

- cost effective, desk research is readily available and quick to gather TMT responses to changes in the market are quick

Question 36

desk research disadvantages

Answer 36

- not appropriate, the information is not fit for the exact purpose this means that information may have to be changed to fit the businesses needs - not objective, it is collected and presented by someone else meaning the information could be biased leading to unacrruate results

Question 37

feild research advantages

Answer 37

- appropriate, the information is fit for the businesses needs meaning time isn't waisted searching through un useful information - up to date, the information is gathered when needed TMT desioins based on the information will be more accurate

Question 38

feild research disadvantage

Answer 38

not cost effective - as it requires trained and paid interviewers or expensive research companies TMT costs will increase

Question 39

feild research methods

Answer 39

online survey | focus groups

Question 40

online survey advantages

Answer 40

one of the cheapest surveys saving money | customers can be surveyed over a wide geographical area

Question 41

online survey disadvantages

Answer 41

- people may ignore emails etc and don't do the survey meaning there will be a low Response rate - limits people who don't have access to the internet

Question 42

focus groups advantages

Answer 42

- more In depth feedback can be gatherd | - more people likely to show up as they've agreed to participate

Question 43

focus group disadvantages

Answer 43

- customers may be intimidated to say how they really feel about the product - one loud voice may sway the whole group a specific way

Question 44

product portfolio advantages

Answer 44

star products allow a business to be Market leader in one area TMT the brand image will improve overall customers are more likely to purchase from a business with an already large existing portfolio this means that they will have a competivte advantage

Question 45

product portfolio disadvantages

Answer 45

staff may require training on different products TMT time will be waisted bad publicity of one product means the whole Portfolio could mean the whole portfolio could be tarnished

Question 46

social media in marketing

Answer 46

can be used to interact with customers and respond quickly improves brand loyalty and brand names more recognisable cost effective, advertising is usually free or cheaper on social media wide geographical area means more people can be reached

Question 47

purpose of cash budgeting to aid desion making

Answer 47

mesures performance of deparments TMT desions can be made in investing or closing down a department forecasts extra cash available TMT management can consider investing the money highlights when a negative cash balance is expected TMT costs can be cut back before problems arise

Question 48

solution to cash flow problems

Answer 48

to much money tied up in inventory = use JIT not enough sales revenue = change elements of marketing mix to encourage sales

Question 49

advantages of just in time inventory control (JIT)

Answer 49

no wearhouse required TMT costs can be reduced and money can be used more profitability else where no money is tied up in inventory TMT cash flow can be improved

Question 50

disadvantages of just in time inventory control (JIT)

Answer 50

bulk buying discounts cannot be used TMT costs will be higher late delvers cause a shortage of inventory TMT it could negatively effect their reputation

Question 51

advantages of capital intensive (automation)

Answer 51

- robots don't take breaks holidays or sick leave so can work 24/7 - produce products the same way which improves consistently

Question 52

disadvantages of capital intensive (automation)

Answer 52

- lack of creativity in products due to lack of human touch | - huge investment needed to automate a production line

Question 53

advantages of labor production

Answer 53

- less expensive than capital intensive production | - humans can use initiative and creativity which is often lacking in automated systems

Question 54

disadvantages of labor intensive production

Answer 54

- humans have to take breaks holidays ect which limits production time - training and wage costs need to be considered

Question 55

reasons for production choices

Answer 55

quality of goods required skills of the work force cost of labor finance available

Question 56

importance of ensuring quality

Answer 56

poor quality can lead to returns = a loss in sales | good quality = good reputation

Question 57

quality control compared with quality assurance

Answer 57

quality control is a method of inspecting raw materials or finished goods WHEREAS quality assurance is a method of checking quality at many different stages of the process preventing errors quality control creates a lot of waste as products are not checked until the end WHEREAS quality assurance less wastage which decreases costs quality control products have to be reworked from scratch costing the business time WHEREAS quality assurance its easy to identify faults this means that the fault can be identified quicker and resolved

Question 58

advantages of quality standards and symbols

Answer 58

higher prices can be charged as the product is high quality increasing costs customers are more likely to buy from a company with these standards

Question 59

disadvantages of quality standards and symbols

Answer 59

if it fails to meet standards their reputation may be damaged annual checks are needed which can cost the business time

Question 60

benchmarking advantage

Answer 60

the product will be as good as the best on the market increasing market share

Question 61

benchmarking disadvantage

Answer 61

will only ever be just as good as the benchmark at the time meaning they will never be market leader

Question 62

advantages of fair-trade (ethical issue)

Answer 62

attracts customers if the business has the fair-trade mark better relationship with suppliers improving efficiency

Question 63

disadvantages of fair-trade (ethical issue)

Answer 63

fair trade products are more expensive limited choice of suppliers

Question 64

appraisals

Answer 64

one to one 360 degree peer to peer

Question 65

advantages of one to one apraisls

Answer 65

- postitve feedback will be given which motivates the employee to continue to work well - training needs can be identified = better quality of products

Question 66

disadvantages of one to one apriasils

Answer 66

- negtative feedback could mean employees become demotivated - can become time consuming = time is waisted

Question 67

360 degree appraisal advantage

Answer 67

-increases communication between team members = better team work

Question 68

360 degree appraisal disadvantage

Answer 68

feedback could be bias as its done by peers

Question 69

Employee participation

Answer 69

Worker director works councils consultative committees

Question 70

worker director

Answer 70

where very low-level employees are given a seat on a board of directors but has no voting rights on the board

Question 71

works consuls

Answer 71

Groups which are equal part employees and managers which meets to discuss major suggestions for change in the organisation

Question 72

consultative committees

Answer 72

group made up equal parts employees and managers but also involve shareholders to discuss issues that effect the organisation

Question 73

Impact of the equality act

Answer 73

- organisations will have to invest in better accessibility e.g. lifts ramps - organisation will need to pay both genders the same amount

Question 74

benefits of workforce planning

Answer 74

- avoids overstaffing = unessesary costs | - relevant training can be given