Business Studies · Oct / Nov 2022 · Paper 12 · Question 3

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DBG is a construction company. It builds hospitals, roads and schools. DBG has 2000 employees. Managers use a democratic leadership style. They know effective internal communication is 3 important. DBG plans to change its organisational structure.This will lead to some employees being made redundant. The Managing Director has to decide how changes in government spending might affect business activity.

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3(a)[2]
Identify two reasons why effective internal communication is important for a business. Award 1 mark per reason (max 2). Points might include:
Fewer mistakes / less waste (of resources)
Improve efficiency / better productivity / increase output
Improve co-ordination (between departments)
Enable faster/better decision-making
Better collaboration better between workers/manager
Improve motivation / job satisfaction Other appropriate responses should also be credited. 2 Only award the first two responses given.
3(b)[2]
Define ‘organisational structure’. Award 2 marks for a full definition. Award 1 mark for a partial definition. Refers to the levels of management and division of responsibility within an organisation [2]
OR The formal, internal framework of a business that shows how it is managed and organised [2]
Partial definition e.g. shows who reports to who [1]
2 Notes
3(c)[4]
State four factors a business should consider when deciding which employees to make redundant. Award 1 mark per factor (max 4). Points might include:
Importance of role being performed / whether job still needed
Performance / experience / skills / flexibility / qualities / qualifications
Length of time worked for business / redundancy costs
Attitude / behaviour / attendance / disciplinary record
Wages/salary paid
Which departments need to lose/retain workers
Whether anyone offers/volunteers to leave job Other appropriate responses should also be credited. 4 Only award the first four responses given.
3(d)[6]
Explain two advantages to DBG of its managers using a democratic leadership style. Award 1 mark for identification of each relevant advantage (max 2). Award 1 mark for each relevant reference to this business (max 2). Award 1 mark for each relevant explanation (max 2). Points might include:
Employees could be motivated [k] leading to increase in output/productivity [an] when constructing [app]
Helps keep employee loyalty / lower labour turnover [k] leading to lower recruitment costs [an] for a business of 2000 employees [app]
Workers may have more experience/understanding of problems [k] leading to better decisions [an]
More ideas / better communication [k] Other appropriate responses should also be credited. 6 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:
Construction / hospitals, roads, or schools
2000 (employees)
Organisational structure
Redundant Other appropriate examples in context can still be credited. Notes
3(e)[6]
Do you think all businesses benefit from an increase in government spending? Justify your answer. Award up to 2 marks for identification of relevant points. Award up to 2 marks for relevant development of points. Award up to 2 marks for a justified decision as to whether all businesses benefit from an increase in government spending. Points might include:
Increase in demand/sales [k] leading to higher revenue [an]
Can create jobs [k] so able to maintain/increase output [an] but may be difficult for some businesses to recruit skilled workers [an]
May have to pay higher taxes (to pay for spending) [k] which increases costs [an] which could delay investment [an]
Obtain grants/subsidies [k] generating additional funds for the business to spend [an]
Can encourage business start-ups [k] increasing competition [an] Other appropriate responses should also be credited. Justification might include: An increase in government spending could increase sales [k]. However, it could increase taxes [k] which increases costs leading to higher prices [an]. Overall, I think all businesses can benefit. For example, if the government decides to build new roads, construction businesses are likely to benefit the most as can receive an increase revenue from the extra sales, but other businesses still benefit from better transport links which can helps all businesses send or receive goods on time. [eval] [eval]. 6 This is a general question so there are no marks for application. For evaluation to be awarded justification will usually follow on from relevant analysis of points. Some points can be [k] or [an] but only award once. Notes

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