Business (AS & A Level) · May / June 2022 · Paper 23 · Question 2

Clever Televisions (CTV) CTV is a public limited company that produces and sells televisions. It has been operating in country A for 30 years. CTV owns 3 factories and has over 100 employees. CTV’s factories use a combination of capital and skilled labour to produce the televisions. The leadership style in all the factories is autocratic. Employees’ pay is based on time worked each week. The CTV brand is known for high‑quality and reliability. It targets high‑income customers. CTV uses price skimming when it launches a new product. In total, 6 million televisions were sold in country A in 2019. Table 2.1 shows market growth data. Table 2.1: Television sales in country A Year Market growth 2020 +2% 2021 +1% 2022 –3% (forecast) The market for televisions in country A is very competitive and the business environment is dynamic. CTV plans to introduce a lower priced television brand to appeal to the mass market. This brand will be known as STV. CTV has decided to introduce automation into one of its factories to produce the STV televisions. This will lead to redundancies in that factory. The employees in the other two factories are concerned they might also face redundancy and so motivation is currently low. The Human Resources Director recommends that CTV should find ways in which employees can participate in the management and control of the business. 5 10 15 20

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