Business Studies · May / June 2025 · Paper 12 · Question 2

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FLD is a furniture retailer. It has 460 shops and 20000 employees. Internal recruitment is used when recruiting new shop managers. The Managing Director wants to know whether job rotation 2 is the best method of motivation for a large business to use. The Finance Director is reviewing FLD’s income statement. An extract is shown in Table 2.1. She is concerned that FLD’s gross profit is decreasing. Table 2.1 Extract from FLDs income statement for year ending April 2025 ($ million) 400 Revenue 200 Gross profit 60 Expenses 140 Profit

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2(a)[2]
Define ‘profit’. Award 2 marks for a full definition. Award 1 mark for a partial definition.
(Total) income of a business (revenue) less total cost [2]
(Total) revenue minus total costs [2]
Difference between revenue and total cost [2]
Gross profit – expenses [2]
Partial definition e.g.
Revenue minus costs [1]
Other appropriate responses should also be credited. 2 Max 1 mark if refer to money rather than revenue/income.
2(b)[2]
Identify two expenses a business might have. Award 1 mark for each expense (max 2). Points might include:
Rent
Rates
Electricity/gas/heating/lighting/water/utilities
Insurance
Interest
Storage
Marketing/advertising
Salaries
Maintenance/repairs
Phone/internet Other appropriate responses should be credited. 2 Only award the first two responses given.
2(c)[4]
Outline two possible reasons why FLD’s gross profit is decreasing. Award 1 mark for identification of each relevant reason (max 2). Award 1 mark for each relevant reference to this business (max 2). Points might include:
Low/fall in amount of sales/demand/customers [k] at its 460 shops [app]
Change in price / increase/decrease (selling) price [k] for the retailer [app]
Increase in cost of sales /variable cost / increase in cost of inventory [k] so gross profit is at $200 million [app] 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:
Furniture or related words e.g. chair
460 (locations)
Large business
Shop/retailers
20 000 employees
$400 million (revenue)
$200 million (gross profit) Other appropriate examples can be credited. Accept decreased revenue where no specific examples given e.g. fall in number of sales/change in price.
2(d)[6]
Explain two advantages to FLD of using internal recruitment when recruiting new managers. Award 1 mark for 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:
Cheaper/lower advertising costs (than external recruitment) [k] so lower/maintain expenses [an] of $60 million [app]
Already knows the business/how the business works [k] so can be productive sooner [an] to help sell furniture [app]
Less/no (induction) training needed [k]
Can motivate employees [k] at the 460 locations [app] reducing labour turnover/increase employee loyalty/increase sales [an]
The business knows the person/their ability/reliability/potential/can trust them [k] reducing chance of selecting the wrong person [an]
Recruitment is quicker [k] so able to focus on other business tasks [an] such as increasing its revenue above $400 million [app] Other appropriate responses should 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:
Furniture or related terms e.g. chair
460 (locations)
Large business
Shop/retailers
20 000 employees
$60 million (expenses)
$400 million (revenue)
$200 million (gross profit) Other appropriate examples can be credited.
2(e)[6]
Do you think job rotation is the best method for a large business to use to motivate its employees? 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 job rotation is the best method for a large business to use to motivate its employees. Points might include: Job rotation:
More flexible/gain new skills [k] leading to higher productivity [an]
Can cover/replace others when someone is absent [k] so may be able to meet an order on time [an]
Makes the work more interesting/less boring for employees [k] so lower absenteeism/labour turnover/increase productivity [an]
Increased training needed [k] increasing costs/expenses [an]
Workers may not be willing/able to do different tasks [k] lowering quality/increasing waste/leading to mistakes [an]
Takes time to switch to/learn different tasks [k] Other methods might include:
Job enrichment [k] adding more responsibilities/challenging work/making workers feel more valued/recognised/trusted [an]
Bonus [k] only pay out if target reached [an]
Praise [k] involves no additional cost [an]
Training [k] which provides new skills [an]
Promotion (opportunities) [k] Other appropriate responses should be credited. 6 This is a general question so there are no marks for application. To access knowledge candidates must name and not simply describe the method. For evaluation to be awarded justification will usually follow on from relevant analysis of points. Guidance Justification might include: One advantage is the work is less boring for employees [k] which can lower absenteeism [an]. Another method is increasing wages [k] but this will increase expenses [an]. Job rotation is best for a large business because lower absenteeism would reduce costs of bringing in additional employees [eval] which could offset the higher labour costs for a large business which is likely to have many employees [eval].

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