Business Studies · May / June 2021 · Paper 11 · Question 3

0450

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Alex started APB as a sole trader business 4 years ago. APB provide printing services for local businesses such as leaflets and brochures. Alex thinks having a good location is important to any 3 business. All APB’s 6 employees receive on-the-job training. Alex has a democratic leadership style and uses job rotation to help keep employees motivated. To meet an increase in demand, Alex plans to buy an additional printing machine. This will cost $1800. Alex has to decide on an appropriate source of finance.

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3(a)[2]
Define ‘job rotation’. Award 2 marks for a full definition. Award 1 mark for a partial definition. Employees swapping around and doing each specific task for only a limited time [2]
OR Process of switching an employee between jobs over a period of time [2]
OR Increasing variety in the workplace by allowing workers to switch from one task to another [2]
Partial definition e.g. workers do a variety of tasks [1]
2
3(b)[2]
State two factors that a service sector business should consider when deciding where to locate. Award 1 mark per factor. Points might include:
Customers / level of demand
Cost of rent/taxes
Availability of land/space/parking
Government assistance
Cost/availability of labour
Legal controls
Competitors / near to other business
Transport / accessibility / technology / infrastructure or examples such as electricity, water, gas
Personal preference of owners
Climate Other appropriate responses should also be credited. 2 Only award the first two responses given. Do not award access to raw materials, as this is not appropriate for a service sector business. Do not award answers such as cost alone - must be explained. Notes
3(c)[4]
Outline one advantage and one disadvantage to APB of using on-the- job training. Award 1 mark for each relevant advantage/disadvantage. Award 1 mark for each relevant reference to this business. Points might include: Advantage:
Some output produced while training [k] so able to still print some brochures [app]
Costs less than off-the-job [k] and cost might be important issue as he is a sole trader [app]
Specific to business / control what is taught [k] using the printing machines [app]. Disadvantage:
Trainer may not produce as much output / potential disruption [k] when teaching the 6 employees [app]
Trainer may not have the necessary skills / may not know up-to- date methods [k] for the new machine [app]
Trainer may pass on bad habits / may be a poor-quality trainer [k]
Employees make more mistakes when learning which increases waste [k] Other appropriate responses should also be credited. 4 Note: To use words from the stem as application, the reference must be appropriate (i.e. make sense) in relation to the point being made. The following words are likely to be appropriate for this question:
Sole trader
Printing services / leaflets / brochures
Printing / new machine
6 employees Other appropriate examples in context can still be credited. Notes
3(d)[6]
Explain one advantage and one disadvantage of Alex having a democratic leadership style. Award 1 mark for identification of each relevant advantage/disadvantage (max 2). Award 1 mark for each relevant reference made to this business (max 2). Award 1 mark for each relevant explanation (max 2). Points might include: Advantage:
Improves motivation / sense of belonging [k] of his 6 employees [app] leading to increased output / productivity [an]
Help keep worker loyalty [k] employees are motivated [app], so less time/money spent on recruiting new employees [an]
Creates time for managers to do other work [k] leading to fewer mistakes [an]
Better decisions could be made as can use employees experience and skills [k] such as deciding which is the best machine to buy [app]
Positive work environment / better relations between manager and workers [k]
More ideas / advice provided / better communication / encourages feedback [k]. Disadvantages:
Some employees may not want / be able to cope with being consulted [k] slowing down the decision-making process [an] about what to print [app]
Unpopular decisions less likely to be made [k]
Mistakes can be made if workers are not skilled / lack experience [k] which can damage reputation [an] of this sole trader business [app]
Time-consuming / disagreements may arise [k] Other appropriate responses should also be credited. 6 Note: To use words from the stem as application, the reference must be appropriate (i.e. make sense) in relation to the point being made. The following words are likely to be appropriate for this question:
Sole trader
Printing services / leaflets / brochures
6 (employees)
Employees are motivated
Increased demand
Printing / new machine Other appropriate examples in context can still be credited. Award productivity changes only once as either an advantage or a disadvantage e.g. Improved motivation [k] increases productivity [an] and Decision-making takes time [k]which reduces productivity [an] Notes
3(e)[6]
Do you think the amount of money needed is the most important factor for a sole trader to consider when deciding on an appropriate source of finance? 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 the amount of money needed is the most important factor for a sole trader to consider when deciding on an appropriate source of finance. Points might include:
The business might not have sufficient funds [k] so would need to borrow [an]
A sole trader is likely to have access to fewer sources of finance [k]
Cost of finance / interest [k] would change expenses [an] altering profit margin [an]
Unlimited liability for sole traders [k] means that if the business cannot pay its debts the owner’s personal assets would be at risk [an]
Amount of debt [k] if a business already has a high level of borrowing banks may not lend any more money [an]
Purpose (why money is needed) [k] if buying a non-current asset then a long-term source would be used [an] allowing sufficient time to repay [an] Other appropriate responses should also be credited. Justification might include: The amount is important because a business might not have sufficient funds [k] so would need to borrow money [an]. This would involve interest [k] which would increase business expenses [an]. Unlimited liability is probably the most important factor for a sole trader because this reduces the finance options available [eval]. They are probably also seen as higher risk so whatever the amount finance is it is likely to be more expensive [eval]. 6 This is a general question so there are no marks for application. To gain both evaluation marks response must clearly relate to a sole trader. Do not award answers which only identify sources of finance. Notes

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