Business Studies · May / June 2024 · Paper 11 · Question 2

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ADN is a food retailer. It has 5 shops and 300 full-time employees. All ADN’s employees receive off-the-job training. ADN has a tall hierarchical structure. Managers have a narrow span of control 2 and all use an autocratic leadership style. ADN’s directors are planning to expand the business and cannot decide whether it is better for a business to use internal growth or external growth.

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2(a)[2]
Define ‘span of control’. Award 2 marks for a full definition. Award 1 mark for a partial definition. (Number of) subordinates working directly under a manager [2]
OR (Number of) subordinates reporting to each supervisor/manager [2]
OR (Number of) subordinates someone has within their authority/under their control [2]
Partial definition e.g. (number of) staff that a manager is responsible for [1]
OR subordinates who work under a manager [1]
Notes
2(b)[2]
Define ‘autocratic leadership style’. Award 2 marks for a full definition. Award 1 mark for a partial definition. Leader/manager makes all the decisions [2]
OR Where the manager expects to be in charge of the business and to have their orders followed [2]
Partial definitions e.g. employees are simply told what to do [1]
OR employees have no say in decisions [1]
2 For two marks the candidates need to show awareness that the decision making is by a leader or manager not a director or person in the company.
2(c)[4]
Outline two benefits to ADN of having full-time employees. Award 1 mark for each relevant benefit (max 2). Award 1 mark for each relevant reference to this business (max 2). Points might include:
Consistent service [k] at the 5 shops [app]
Workers likely to be loyal/less likely to leave [k] the food retailer [app]
Easy to communicate with/update [k] the 300 employees [app]
Need to recruit/train fewer employees [k] Other appropriate responses should be credited. 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 or related words
5 (locations)
Shops/retailer
300 employees
Tall hierarchical organisational structure
Narrow span of control
Autocratic leadership style
Planning to expand/internal growth/external growth Other appropriate examples can be credited. Notes
2(d)[6]
Explain one benefit and one limitation to ADN of using off-the-job training. Award 1 mark for identification of each relevant benefit/limitation (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: Benefits:
Learn the latest/new methods [k] for use in the 5 shops [app] so business can remain competitive [an]
Broad range of skills can be taught [k] to the full-time employees [app] so they can be become more efficient [an]
Can learn from experts/specialists [k] which may be helpful as trying to expand [app]
Can focus 100% on training [k] therefore make less mistakes [an]
Mistakes when learning don’t affect the business [k] which can protect the reputation [an] of the food retailer [app]
Workers do not learn bad habits [k] so mistakes are avoided [an]
It does not disrupt work of other employees [k]
Increased motivation of employees [k] 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 or related words
5 (locations)
Shops/retailer
300 employees
Full-time
Narrow span of control
Autocratic leadership style
Planning to expand / internal growth / external growth Other appropriate examples can be credited. Notes Limitations:
High cost/expensive [k] as have 300 employees [app] which increases expenses [an]
Loss of working time [k] leading to less work done/fewer sales [an]
Not necessarily tailored to individual business [k]
Additional qualifications mean it is easier for the employee to leave/find another job [k] increasing time/cost of recruitment [an] Other appropriate responses should be credited. Notes
2(e)[6]
Do you think it is better for a business to use internal growth or external growth when planning to expand? 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 it is better for a business to use internal growth or external growth when planning to expand. Points might include: Internal growth:
Easier to control/manage growth [k] which can help avoid diseconomies of scale [an]
Lower investment may be needed [k] so less need to borrow (as much) [an]
Slow method [k] so business may become uncompetitive/may miss business opportunities [an]
Less risk [k] External growth:
Quick method [k] so able to take advantage of new market opportunities [an] which can increase revenue [an]
Removing a competitor [k] increases market share/power [an] may be able to set/influence prices [an]
Large amounts of finance may be required [k] which increases finance costs [an] Other appropriate responses should be credited. 6 This is a general question so there are no marks for application. Advantages of one method can be presented as disadvantages of the other method but do not award the same point twice as mirror answers are not accepted. Do not award general advantages and disadvantages of growth such as economies of scale as applies to both methods. For evaluation to be awarded justification will usually follow on from relevant analysis of points. Notes Justification might include: One advantage of internal growth is it is easier to control the rate of growth [k] which can help avoid diseconomies of scale [an]. However, external growth can be faster [k] so the business can take advantage of opportunities [an]. Overall external growth is better as by taking over a competitor market share can be increased [eval] increasing market power [eval]. Notes

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