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Business Studies · Oct / Nov 2022 · Paper 21 · Question 4

0450

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  • 4(a)[8]

    Explain two possible effects on SA of the increase in the rate of inflation in country X. Award 1 mark for each effect (max 2). Award a maximum of 3 additional marks for each explanation of an effect on SA of an increase in the rate of inflation in country X – one of which must be applied to this context. Relevant answers might include:

    Likely rise in prices for safari tours – decreased demand / harder to attract tourists to country X – decreased revenue for SA if demand is price elastic – possible decrease in profits if costs rise more than revenue
    Increase in costs for SA – may need to spend time sourcing lower cost inputs / updating the brochures – keep recalculating prices / need to keep printing brochures with new prices
    More pressure to increase wages for SA employees – prices of basic goods may be increasing significantly in country X – as employees cannot maintain their standard of living without a wage increase – increases costs
    Increased cost of investment / equipment – may mean expansion is delayed For example: Prices of basic goods may be increasing significantly in country X (1)

    as the inflation rate is now 4% (app). This will mean there is more pressure on SA to increase the wages of employees (1)

    because employees cannot maintain their standard of living without a wage increase (1). Application could include: safari holidays;

    increase in tourists from other countries;

    high income tourists;

    luxury safari holidays;

    5 employees;

    only been operating for 2 years;

    sole trader;

    game reserve;

    camping / tent;

    wild animals;

    4 safari guides;

    4 safari vehicles;

    accommodation in local / luxury hotels;

    fuel.

  • 4(b)[12]

    Consider the advantages and disadvantages of two methods of training Tokumbo could use for his existing employees. Which method should he use? Justify your answer. Level Description Sound application of knowledge and understanding of relevant business concepts using appropriate terminology. Detailed discussion of both methods. Well-justified recommendation. Candidates discussing both methods in detail, in context and with a well-justified recommendation including why the alternative method was 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 method. Judgement with some justification / some evaluation of choice made. Candidates discussing both methods 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 methods with little / no explanation. Simple judgement with limited justification / limited evaluation of choice made. Candidates outlining both methods in context should be rewarded with the top marks in the band. 1–4 No creditable response. Relevant points might include: Advantages Disadvantages On-the-job training

    Individual training given on the safari tours – leads to training specific to SA
    There will be some output from the trainee as training is provided while a safari tour is being given
    Usually costs less than off-the-job training – as it will be provided by existing employees
    Some output will be lost by the trainer as they would usually be working instead of training
    The trainer may pass on bad habits to the trainee – and these may lead to bad reputation with tourists / lower productivity Off-the-job training
    Provided by experts – more knowledge of the different animals seen in the game reserve – better techniques taught
    The courses may be taught in the evening – so no tours are lost in the normal working day
    Employee may be taught a range of new skills that current employees may not know about – improves productivity
    Costs are usually higher – as tourist guides will usually be sent away to college or other training institution
    Employees are paid a wage, but no safari tours are being taken for the business whilst training
    Qualification gained by employees may make it easier for them to leave – may be attracted by another tourist business that will not then need to pay for training Recommendation Justification might include:
    On-the-job training is the best method to use because the employees will develop skills specific to the safari tours Tokumbo wants them to provide. If they undertake off-the-job training then it will not only cost more but it may not provide the training specific to SA, making it more expensive but less effective
    Off-the-job training is the best method to use because it will be delivered by experts who will have the most up-to-date knowledge of the wild animals in the game reserve leading to better trained employees and they may be better than the employees of competitors. This may give SA a competitive edge and lead to higher sales that will more than cover the additional costs of the training
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