Business Studies · Oct / Nov 2019 · Paper 11 · Question 2

7115

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The question as text

WKN sells household goods such as plates and brushes. Last year sales in WKN’s 200 shops increased but profit fell by 80% to $5m. WKN’s Human Resources Director said: ‘All retailers are finding this stage of the business cycle challenging. WKN has to reorganise the business. This will mean redundancy for 1800 shop workers. WKN plans to create 100 new jobs in the marketing department at head office to help maintain customer loyalty. The company is working with trade unions to carry out these changes.’ WKN has to decide whether to select the candidates for the new jobs from the workers being made redundant.

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2(a)[2]
Identify two stages of the business cycle. Award 1 mark for each stage identified. Stages: Growth, boom, recession, slump.
2(b)[2]
What is meant by ‘redundancy’? Clear understanding [2]: e.g. job position has gone and so the employee is no longer required Termination of employment because the job is no longer needed Some understanding [1]
e.g. loses job (through no fault of their own) [1]
or job role has gone [1]
For 2 marks must clearly understand idea that it is the role that no longer exists Do not award reasons why the job may no longer exist Notes
2(c)[4]
Identify and explain two ways a trade union could help WKN’s employees. Knowledge [2 × 1] – award 1 mark for each way identified Application [2 × 1] – award 1 mark for each explanation in context Points might include:
Negotiate or help improve pay [k] for shop employees [app]
Improved working conditions or health and safety [k] in head office [app]
Gives strength in numbers/collective bargaining so more likely to achieve demands [k] when dealing with head office [app]
Take action (strikes/protests) [k] to prevent redundancy [app]
Provides services such as insurance / training / social activities / discounts [k]
Resolve conflict between employer and employees [k]
Advice / legal support [k] 4 Application marks may be awarded for appropriate use of the following:
retailer
household goods OR plates OR brushes
challenging stage of business cycle
marketing department OR head office
1800 OR redundancy
200 OR shops
profit fell 80% OR $5m
100 new jobs Notes
2(d)[6]
Identify and explain two advantages to WKN of maintaining customer loyalty. Knowledge [2 × 1] –award 1 mark for each relevant advantage Application [2 × 1] – award 1 mark for each relevant reference made to this business Analysis [2 × 1] – award 1 mark for each relevant explanation Relevant points might include:
Increase sales [k] of its household goods [app]
Easier to match products to existing customer needs [k] so know what to stock in its shops [app] reducing wastage [an]
Maintain competitiveness [k]
Current customers recommend products [k] so less promotion needed [an]
Cheaper than trying to attract new customers [k]
Reputation / brand image improves [k]
May be able to increase prices and keep customers [k]
Provides a sense of security for owners [k] 6 Application marks may be awarded for appropriate use of the following:
retailer
sells household goods OR plates OR brushes
challenging stage of business cycle
marketing department OR head office
1800 OR redundancy
200 OR shops
profit fell 80% OR $5m
100 new jobs
trade union Do not award ways to increase customer loyalty Notes
2(e)[6]
Do you think WKN should select all the workers for the new jobs from those about to be made redundant? Justify your answer. Knowledge [1]
– award 1 mark for identification of relevant point (s) Application [1]
– award 1 mark if relevant reference made to this business Analysis [2]
– award up to 2 marks for relevant development of point(s) Evaluation [2]
– justified decision made as to whether WKN should select the workers for the new jobs from those facing redundancy Points might include:
Do not need to advertise jobs externally [k] so lower (recruitment) costs [an]
Know abilities and skills of employees [k]
Existing employees have good knowledge of customer requirements [k] as have experience of working in its shops [app]
Workers might not have skills [k] which could lead to poor work [an] reducing customer loyalty [app]
May not want or be able to move locations [k] to head office [app] so few employees will want to apply [an]
Recruitment of new workers will bring fresh ideas [k] 6 Application marks may be awarded for appropriate use of the following:
retailer
household goods OR plates OR brushes
challenging stage of business cycle
marketing department OR head office
1800
200 OR shops
profit fell 80% OR $5m
100 new jobs
trade union
customer loyalty The analysis must relate to the impact upon the business rather than the employee Do not award answers which discuss how the candidates are selected for redundancy Notes

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