Business Studies · May / June 2026 · Paper 12 · Question 1

0450

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APL is a public limited company. It manufactures mobile phones. APL has 20000 employees working in its 5 factories in country X. The business uses many methods to motivate its employees 1 including paying bonuses. Managers are encouraged to use different leadership styles. APL uses external recruitment when recruiting new employees.

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1(a)[2]
Define ‘bonus’. Award 2 marks for a full definition. Award 1 mark for a partial definition.
An additional payment above basic pay as a reward for good work [2]
An additional reward paid to employees for achieving targets (set by managers) [2]
Extra amount of money to motivate employees to work harder/faster [2]
Partial definition e.g.
Amount of money/pay above/alongside their normal pay [1]
Additional payment to salary/wage [1]
Extra amount of money / extra pay [1]
Extra amount added to salary [1]
2 First mark needs the idea of additional/extra money. Second mark is for the reason why it is given (+1 only). Notes:
Needs the idea of good performance/hard work Do not award:
Additional salary/wage/more pay
Good behaviour instead of good work/performance
Lump sum payment
One off payment
1(b)[2]
Identify two reasons why people work. Award one mark per reason (max 2). Points might include:
Financial / (earn) money/wage/salary/ improve standard of living / pay for needs/wants /gain fringe benefits / physical/basic needs
Safety/ (job) security
Job satisfaction / feel like you have done a good job / enjoyment / personal interest
Social / belong/feel part of a group / meet people / make friends
Esteem / recognition / status / feel important/valued / self-confidence / become successful/sense of purpose / promote themselves
(Opportunity to) reach your potential / challenge yourself (to do new things) / improve/use skills / gain (work) experience / reach (personal) goals / achievement / self- actualisation
Help people/provide a service to community/others / help society Other appropriate responses should be credited. 2 Only award the first two responses given.
1(c)[4]
Outline two advantages to APL of using external recruitment. Award 1 mark for identification of each relevant advantage (max 2). Award 1 mark for each relevant reference to this business (max 2). Points might include:
Bring in (new/more) ideas/skills/experience/ new perspective / skills may not be available within the business [k] when making phones [app]
More/wider choice of (potential) applicants [k] for this public limited company [app]
Less likely to cause internal conflict/disagreements/jealousy / less likely to upset current employees (if someone internal gets promoted) [k] so maintain their motivation [app]
Bring in valuable knowledge/experience of the competitors/other business [k] in 20 000 workforce [app]
Avoids creating a vacancy which will need to be filled [k] in the factories [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:
Public limited company / PLC
(Mobile) phones
20 000 employees
Factories
5 locations
(Different) leadership styles Other appropriate examples can be credited. Do not award:
Avoid internal competition
Less training costs
Increase production/productivity
1(d)[6]
Explain two leadership styles APL’s managers could use. Award 1 mark for identification of each relevant leadership style (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: Autocratic [k]
When managers tell workers what to do / managers make all the decisions [an] in the factory [app]
Employees are not involved in the decision making [an]
Fast decision-making (especially in urgent situations) [an]
Clear direction for employees [an] which is important as have 20 000 employees [app] Democratic [k]
Managers may ask employees for their opinions/ideas (before making decisions) [an] about the phones [app]
Can lead to more/better ideas [an]
Employees are involved in decision making [an]
Increase employee motivation [an] Laissez-faire [k]
Where manager leaves it to the employees (to make decision) / employees decide what to do [an] at the public limited company [app]
Encourages creativity/innovation [an] which helps increase motivation [app]
Employees can make decisions [an]
Employees can organise their own work [an] 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:
Public limited company / PLC
(Mobile) phones
20 000 (employees)
Factory/factories
5 (locations)
Bonuses
External recruitment
(Methods of) motivation / motivate Other appropriate examples can be credited. Notes:
For [k] must name the leadership style (not describe them).
For [an] candidates can explain how the style works or an advantage of using it.
Motivation can be [app] or [an] but only award once.
Can accept mirror answers on this question for [an] e.g. employees involved /not involved in decision making. Do not award:
Delegation
Disadvantages of leadership styles
Refers to owners rather than managers
1(e)[6]
Do you think the advantages of being a public limited company are always greater than the disadvantages? 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 justified decision about whether the advantages of being a public limited company are always greater than the disadvantages. Points might include: Advantages:
Can raise large amounts of finance / banks are more willing to lend to them [k] so can continue to grow/expand [an] leading to possible economies of scale [an]
Can sell shares to the public/stock market / no restrictions on buying/selling shares [k] so can raise capital/finance [an] AND/OR which can help fund expansion [an]
Limited liability [k] so personal assets are not at risk if the business cannot repay its debts / only liable up to amount invested [an]
High status/better reputation/more suppliers are more likely to offer credit/favourable terms / banks more willing to lend to them (due to lower perceived risk) [an]
Incorporated business / separate legal identity [k] so the business itself can own assets and enter contracts in its own name / owners are not liable for business debts [an]
Continuity [k] so the business will not have to close on the death on any owner [an] 6 This is a generic question so there are no marks for application. To access evaluation marks must refer to an advantage and a disadvantage. Notes:
Some points can be [k] or [an] but only award once e.g.
takes time away from other activities
loss of control for (original/other) owners/shareholders
banks are more willing to lend
suppliers are more willing to give credit
time consuming to sell shares
Grow/expand is [an] only. Do not award:
Quick way to raise funds
Easy/quick to get loan
Points about tax Guidance Disadvantages:
More legal formalities/regulations [k] which is time- consuming / takes time away from other activities / increases costs [an]
Must publish its accounts/financial information [k] so competition knows how well business has performed [an]
Separation of ownership and control / owners have little/no say in decisions [k] which could lead to conflict/inefficiency [an]
Risk of takeover [k] so original owners may lose control [an] so have no control over who buys the shares [an] OR could result in a change of business objectives [an]
Dividends (expected) to be paid [k] which can lower retained profit [an]
High cost/lengthy process to sell shares [k] so the business may face delays in raising finance for expansion [an] Other appropriate responses should be credited. Justification might include: A public limited company can raise large amounts of finance [k] so can continue to grow [an]. A disadvantage is that there are legal formalities to complete [k] which can take time away from other activities [an]. The advantages are greater because without sufficient funds, the business may have to delay any expansion plans risking its ability to be competitive [eval] which is likely to be worth the time taken to complete the legal formalities [eval].

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