Business Studies · May / June 2023 · Paper 21 · Question 2
0450
As printed in the paper
Show the answer and mark scheme
2(a)[8]
Explain two advantages and two disadvantages of VP’s Restaurant Managers delegating tasks to their Assistant Managers. One mark for each advantage/disadvantage (max 2 advantages/max 2 disadvantages). Award a maximum of one additional mark for each explanation of the advantage/disadvantage in the context of VP. Advantages could include:
Restaurant Managers cannot carry out every job themselves/reduce workload – they can then focus on the most important tasks at the fast- food restaurant and make better decisionsRestaurant Managers are less likely to make mistakes – as they can focus on specific tasks such as marketing new menusGives the Restaurant Managers time to assess employees performance below them in the hierarchy – they can then identify where employees need more support/training in developing/cooking new recipesMay increase motivation/feel more trusted for Assistant Managers – improved speed of serving fast-foodAssistant Managers may develop new skills Disadvantages could include:Restaurant Managers could lose some control over subordinates – mistakes may be made leading to worse reputation if food is served longer than 5 minutes after orderingRestaurant Managers may be reluctant to give up some control – if Assistant Managers do a good job carrying out the delegated tasks such as ordering new ingredients for the mealsThe Assistant Manager may not have the skills to carry out the tasks that have been delegated to them/may need additional training – may lead to poor decisions being made such as unskilled chefs being employed at the restaurantAssistant Managers may not like having tasks delegated to them/feel overloaded with work by Restaurant Managers For example: Restaurant Managers can focus on their most important tasks (1)which will help them to make better decisions for the fast-food restaurants (app). Application could include: fast food;
restaurant;
vegetarians;
meals;
public limited company;
food outlets across the country;
diners;
menus;
recipes;
cooking;
serving;
ingredients;
50 employees;
receive a meal in less than 5 minutes;
service is the fastest possible.
2(b)[12]
Using Appendix 2 and other information, consider the two countries VP could choose to locate its new restaurants. Which country should VP choose? Justify your answer. Level Description Sound application of knowledge and understanding of relevant business concepts using appropriate terminology. Detailed discussion of both countries Well-justified recommendation. Candidates discussing both countries in detail, in context and with well-justified recommendation including why the alternative country is 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 country. Judgement with some justification / some evaluation of choices made. Candidates discussing at least one country 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 countries with little/no explanation. Simple judgement with limited justification / limited evaluation of choices made. Candidates outlining both countries in context should be rewarded with the top marks in the band. 1–4 No creditable response. Relevant points might include: Benefits Drawbacks Country A
Gross profit is $14, and Country B is $8Highest price per meal at $20 – possibly highest revenue if demand remains highMany competitors may indicate that there is high demand for fast- food restaurantsThere are many competitors so demand may be lower – may have to reduce price to attract customers – possibly reducing revenueMay have to spend more on marketing as there are many competitors in the market in order to enter the new market abroad – increasing costsHigher wage costs at twice the cost of Country B – may lead to higher costs overallHarder to recruit new workers as unemployment is low – may have to offer more fringe benefits to attract employees from their many competitors Country BLowest variable cost per meal at $2 rather than $6 in country A – makes it easier to charge the lowest price of $10 per mealHigh unemployment makes it easier to recruit new employees for the restaurants – more likely to remain with VP as few alternative employment opportunities in country B – lowering recruitment costs/training costs in the futureLowest wage costs at $5 per hour – reducing total labour costsLow price at $10 per meal may attract many customers – possibly increasing revenueLower gross profit between price of $10 and costs of $2 = $8, whereas it is $14 in country AFew competitors may indicate that demand for vegetarian fast- food in country B is low – VP needs to spend on market research to be sure there is a market in country B – investment could be wasted if there is not a sufficient demand to make the expansion successful Recommendation Justification may include:VP should choose country A as it can charge the highest price of $20 per meal which may lead to higher revenue and costs are likely to be lower as variable costs are lower at $6 which gives a higher gross profit, so after expenses have been paid, it may lead to higher profit. Country B should not be chosen because it has a lower price per meal and unemployment is high and there may be lower demand.VP should choose country B as it has the lowest wage costs, and it will be easy to recruit new employees as there is high unemployment there.
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