Business Studies · Oct / Nov 2023 · Paper 11 · Question 4

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MRN is a food retailer. It has 490 shops and 70000 employees. MRN has announced plans to close 80 of its shops. The Human Resources Director said: ‘20% of management jobs will be 4 removed. We want to encourage delegation. MRN will continue to follow legal controls over employment.’ MRN’s directors know it is important that businesses respond to increased competition.

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4(a)[2]
Define ‘delegation’. Award 2 marks for a full definition. Award 1 mark for a partial definition. Giving a subordinate the authority to perform particular tasks [2]
OR When a manager gives authority to another employee to complete a task, although the manager retains the ultimate responsibility for the completion of the task [2]
OR Passing responsibility to perform tasks to employees (lower down the organisation) [2]
Partial definition e.g. manager gives task to employee [1]
OR subordinate given task to do [1]
OR giving authority to a subordinate/employee [1]
2 For two marks needs the idea of who is giving/receiving authority/responsibility and for what. Do not award answers which identify reasons for using delegation e.g. motivates, create time for managers to do other jobs [0].
4(b)[2]
Identify two legal controls over employment. Award 1 mark per legal control (max 2). Points might include:
(Unfair) dismissal
Discrimination/equal opportunities
Health and safety
Legal minimum wage
Legal minimum age/child labour
Contract of employment/conditions of employment
Redundancy Other appropriate responses should also be credited. 2 Only award the first two responses given. Notes
4(c)[4]
Outline two functions of MRN’s shop managers. Award 1 mark for identification of each relevant function (max 2). Award 1 mark for each relevant reference to this business (max 2). Two from:
Planning [k] so have the necessary resources for this food retailer [app]
Organising [k] to ensure everyone is working effectively in each of the 490 stores [app]
Commanding [k] to help guide the 70 000 employees [app]
Co-ordinating [k] so better placed to respond to increased competition [app]
Controlling [k] 4 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:
Food
490/410 shops
80
70 000 employees
(Increased) competition
20% (management) jobs
Delegation
Legal controls over employment Other appropriate examples can be credited. Do not award answers such as motivate/communicate as knowledge. Notes
4(d)[6]
Explain two factors MRN should consider when deciding which shops to close. Award 1 mark for identification of each relevant factor (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:
Level of demand/where its customers are/number of sales [k] of food [app] as some might have lower revenue [an]
Level of competition/number/type of shops in area [k] which could reduce sales/demand [an]
Rent/rates [k] for each of the 80 locations [app] as this could make some sites too expensive to run [an]
Distance from suppliers [k] increased transport costs [an]
Space [k] as in some locations there may not be (enough) room to display everything [an]
Shops which are too close together [k]
Economic state of area/area in decline [k]
Local wage rates/labour availability [k] leading to higher costs [an]
Number of workers employed [k] to reduce redundancy payments [an]
Profitability of each shop [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:
Food
490/410 shops
70 000 employees
80
Increased competition
20% management jobs
Delegation
Legal controls over employment Other appropriate examples can be credited. Some points can be awarded as [k] or [an] but do not award the same point twice. Award the word costs [k] only once if no specific costs identified. Increased competition can be [k] or [an] but only award once. Notes
4(e)[6]
Explain two ways a retail business could respond to increased competition. Which would be the best way to use? 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 which is the best way a retail business could respond to increased competition. Points might include:
Introduce new products [k] therefore gaining a unique selling point [an] but may have limited shelf space [an]
Lower prices/change pricing method [k] can sell more products/increased market share [an] increasing revenue [an]
Improve quality of service/products [k] but this might increase (training) costs [an] but this may lower its profit margin [an]
Maintain/build good customer relationships [k] which could encourage customer loyalty [an]
Increase promotion/advertising (only award once) [k]
Renovating shop [k]
Relocate [k]
Merger/takeover [k] Other appropriate responses should also be credited. Justification might include: The business could lower its prices [k] therefore sell more products [an]. Introducing new products [k] may appeal to a wider range of customers [an]. Introducing new products is a better way because price might not be important to the customer [eval] therefore lowering the price will simply reduce profit margin [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 could apply to more than one way but do not award the same point twice as mirror answers are not accepted.

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