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Business Studies · May / June 2021 · Paper 21 · Question 1

0450

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  • 1(a)[8]

    Explain four reasons for changes in the relative importance of the primary, secondary and tertiary sectors in a country. One mark for each reason for the change (maximum of 2). Award a maximum of 1 additional mark for each explanation. Note: There are no application marks for this question. Relevant reasons might include:

    Change in the primary sector – increase due to new discovery of natural resources / decreases due to depletion of natural resources
    Change in the secondary sector – increase due to industrialisation / decreases due to deindustrialisation
    Change in the tertiary sector – increase due to increased consumer incomes
    Increase in incomes / economic growth / increase in GDP – this could lead to a change in the secondary or tertiary sector
    Increase in demand for manufactured goods – increase in the size of secondary sector
    Increase in tertiary sector – as consumers have higher disposable income to spend on services
    Increased mechanisation / increased technology – reduces number of employees in the secondary sector
    People move into the tertiary sector to provide services – as demand for services grows as a country develops e.g. tourism
    Increase in exported products – more need to be manufactured in secondary sector
    Reduced employment in primary sector – as now primary products produced using mechanisation / rural to urban migration
    Primary products are now processed in own country – increased manufacturers / secondary sector to process the raw materials into finished products
    Government policies to encourage development
    Increased globalisation
    Actions of environmental groups / pressure groups leading to sectoral change – primary extraction or dirty manufacturing in the secondary sector For example: Incomes have increased (1)

    and consumers have more purchasing power for manufactured goods increasing the importance of the secondary sector (1).

  • 1(b)[12]

    Consider the following three problems for FO as it grows through takeovers. Which problem will be the easiest for FO to overcome? Justify your answer.

    More difficult to control the business
    Lack of finance
    Clash of business cultures Level Description Sound application of knowledge and understanding of relevant business concepts using appropriate terminology. Detailed discussion of at least two problems. Well-justified conclusion. Candidates discussing all three problems in detail, in context and with a well-justified conclusion including why the alternative problems were rejected should be rewarded with the top marks in the band. 9–12 Sound application of knowledge and understanding of relevant business concepts using appropriate terminology. Detailed discussion of at least one problem. Judgement with some justification / some evaluation of choices made. Candidates discussing two or more problems in detail and applying it to the case should be rewarded with the top marks in the band. 5–8 Limited application of knowledge and understanding of relevant business concepts. Limited ability to discuss the problems with little/no explanation. Simple judgement with limited justification / limited evaluation of choices made. Candidates outlining all three problems in context should be rewarded with the top marks in the band. 1–4 No creditable response. Relevant points might include: More difficult to control the business (as a result of growth by takeovers)
    Increased number of employees at the three factories means managers may not be in direct contact with employees
    Need to employ more supervisors to control workers – increases costs as more wages to pay
    May mean some workers are not supervised and may not work efficiently – less output from each worker
    Difficulty of communication with employees across the three factories Lack of finance (as a result of growth by takeovers)
    As the private limited company has grown by taking over other two businesses then expansion costs have been high / may be high for future takeovers
    Take out loans to finance the takeovers – increased interest payments for loans / increased costs – lower profits
    Cannot sell shares to the public only family and friends as they are a private limited company – so amount raised may be limited Clash of business cultures (as a result of growth by takeovers)
    If the other two businesses that have been taken over have very different cultures and ways of doing things – may have clashes between staff
    Employees not working effectively together as leadership styles were different at the two companies – reduced efficiency as output per employee drops
    Resistance by workers to do things differently – reduces efficiency – workers demotivated after the takeover Conclusion
    Controlling the new business after the takeover is the easiest to overcome by employing new supervisors who can pass on important messages from managers to employees in the three factories. As it is only a private limited company share issue will raise only limited capital. Cultures are embedded in businesses making employees very resistant to change.
    Lack of finance may be the easiest to overcome as it has been a successful business for over 20 years, and this will give confidence to banks to make loans.
    The clash of cultures may be the easiest to overcome as it involves ensuring different leadership styles in the three original businesses are modified. Employee participation could be used to make everyone accept working in a new environment.
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