Business Studies · Oct / Nov 2019 · Paper 11 · Question 4

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VXH produces a range of soft drinks made from fruit using batch production. VXH uses specialisation in its factory. The business has grown quickly over the last two years. VXH has increased the number of production workers from 40 to 80. This has increased the span of control for each manager. It has been difficult for VXH to keep workers motivated. The Human Resources Manager has to decide whether it is better to use job rotation or financial bonuses to improve employee motivation.

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4(a)[2]
What is meant by ‘span of control’? Clear understanding [2]: Number of subordinates working directly under an individual OR manager Number of subordinates reporting to each supervisor / manager Some understanding [1]: E.g. number of subordinates working under an individual OR manager Who you are responsible for 2
4(b)[2]
What is meant by ‘uses specialisation’? Clear understanding [2]: E.g. way in which work is divided so each worker concentrates on a specific task so become expert at it When people or business concentrate on what they are best at Some understanding [1]: E.g. workers only do one job 2 Notes
4(c)[4]
Identify and explain two possible reasons why VXH has grown quickly. Knowledge [2 × 1] – award 1 mark for each reason identified Application [2 × 1] – award 1 mark for each explanation in context Points might include:
Closure / takeover of competitor [k] so fewer businesses making soft drinks [app]
Changes in customer tastes / fashion [k]
Spotted a new opportunity in the market [k]
Change in legal controls / rules [k]
Introduction of new technology [k] so able to take advantage of specialisation [app]
Increase in productivity [k] Application marks may be awarded for appropriate use of the following:
fruit or related words e.g. flavours
soft drinks
batch production
specialisation
factory
40 OR 80 (workers)/motivation problems
job rotation or financial bonus
2 years
Span of control (increased) Notes
4(d)[6]
Identify and explain two possible reasons why VXH uses batch production. Knowledge [2 × 1] – award 1 mark for each relevant reason 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:
Allows variety of products to be made [k]
Flexible [k] as able to change product easily to meet changes in customer demand [an] for different flavours [app]
Provides some variety of jobs to workers [k] helping improve employee motivation [app] so fewer employees might leave [an]
Allows use of specialist skills [k] so able to take advantage of specialisation [app] to increase output [an]
Level of demand does not justify the use of flow production [k]
Since larger numbers are made [k] lower unit costs [an]
Production not affected if machinery breaks down [k]
Buying in bulk [k] 6 Application marks may be awarded for appropriate use of the following:
fruit or related words e.g. flavours
soft drinks
specialisation
factory
40 OR 80 (workers) / motivation problems
job rotation or financial bonus
2 years
Span of control (increased) Notes
4(e)[6]
Do you think VXH should use job rotation or financial bonuses to increase employee motivation? Justify your answer. Knowledge [1]
– award 1 mark for identification of relevant point(s) Application [1]
– award 1 mark for a 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 VXH should use job rotation or financial bonuses to increase employee motivation Points might include: Job rotation:
Prevents workers becoming bored doing the same task repeatedly [k] which could increase output [an]
Need to provide training [k] to the 80 employees [app] which increases cost [an]
Helps improve flexibility [k] as workers can switch if someone is absent [an]
Workers may not be good at the new task [k] so productivity decreases [an] 6 Application marks may be awarded for appropriate use of the following:
fruit or related words e.g. flavours
soft drinks
batch production
specialisation
factory
40 OR 80 (workers) motivation problems
2 years
Span of control (increased) Notes Financial Bonus:
Increases costs to the business [k]
Some employees may not be motivated by money [k]
Can lead to conflict / demotivation if some workers don’t get this [k]

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