GCSE Business Studies

GCSE Business Studies 413002 Growing As A Business Final Mark Scheme 4130 June 2017 Version/Stage: v1.0

Mark schemes are prepared by the Lead Writer and considered, together with the relevant questions, by a panel of subject teachers. This mark scheme includes any amendments made at the standardisation events which all associates participate in and is the scheme which was used by them in this examination. The standardisation process ensures that the mark scheme covers the students responses to questions and that every associate understands and applies it in the same correct way. As preparation for standardisation each associate analyses a number of students scripts. Alternative answers not already covered by the mark scheme are discussed and legislated for. If, after the standardisation process, associates encounter unusual answers which have not been raised they are required to refer these to the Lead Writer. It must be stressed that a mark scheme is a working document, in many cases further developed and expanded on the basis of students reactions to a particular paper. Assumptions about future mark schemes on the basis of one year s document should be avoided; whilst the guiding principles of assessment remain constant, details will change, depending on the content of a particular examination paper. Further copies of this mark scheme are available from aqa.org.uk Copyright 2017 AQA and its licensors. All rights reserved. AQA retains the copyright on all its publications. However, registered schools/colleges for AQA are permitted to copy material from this booklet for their own internal use, with the following important exception: AQA cannot give permission to schools/colleges to photocopy any material that is acknowledged to a third party even for internal use within the centre.

Marking Guidance for 9 Mark Questions In order to help clarify the marking of these questions for new and existing examiners please note the following points: 1. Changes to the marking grid In each of the grids for the 9 mark questions you will find additional detail/clarification for the Evaluation Level 2 (E2) descriptors as follows: one very well explained reason or two or more reasons with at least one well explained 5 marks one reason well explained or two valid reasons explained 4 marks (default) one valid reason for the judgement explained 3 marks Reasons might include justifying why other options have not been chosen. ( I did not choose option B because.. ). These do not replace your professional judgement but are typical examples of how marks can be awarded. Please note that the default E2 mark is 4 marks. 2. Treatment of Quality of Written Communication (QWC). This can be seen as a nudge mark and the level criteria are defined below. E1: Ideas communicated in simple way/limited use of business terms. There are noticeable errors in accepted conventions of written communication. E2: Ideas are communicated with structure/correct use of business terms. There are occasional errors in accepted conventions of written communication If the QWC is considerably weaker than would be expected at the appropriate evaluation level then the mark should be reduced to 1(E1) or 3 or 4 (E2). Please note that the level of response should not be determined by QWC nor should it be seen as a bonus mark as the expected QWC level is embedded into the default mark. 3. Annotation It is essential that Levels are indicated in the body of the answer both for Knowledge / Application and Analysis (L1/L2/L3) and for evaluation (E1/E2). These are available as pre-set annotations and must be used. Failure to do so could, and has resulted in markers not being allowed to continue marking as it is unclear why they have allocated the marks that they have awarded. 4. Styles of response and where to find the judgement Not all students make their judgement at the end of the 9 mark questions. Often what might appear to be a brief judgement may only be summary statement of an answer that has been evaluative throughout following the initial judgement. Having reached the end of marking a 9 mark question it is essential to go back to the beginning to make an accurate judgement on the evaluation mark. Equally some candidates may start with a supported judgement that they contradict in looking at alternative options. This is unlikely to reach beyond the bottom of the E2 mark range unless a further well developed evaluation is provided at the end of the answer. Students who have made clear efforts to support their judgements must be awarded E1 marks 3 of 15

1 Total for this question: 21 marks 1 (a) State two stakeholders of Kiddie-Winks Ltd. [2 marks] Answers can include: shareholders/owners children children s parents nearby residents employees suppliers government. Award 1 mark for each stakeholder listed. 1 (b) Explain two methods that Kiddie-Winks Ltd might use to retain its temporary staff. [4 marks] Allow any suitable motivational method whether financial or non-financial. Specimen answers: offer higher wages (1) this will make it less attractive to go to a competing business (1) open all the year around (1) which would make the work permanent so employees don t have to look for a new job at the end of the season (1) give fringe benefits (1) such as free tickets. This would make the workers feel they are appreciated more (1) give loyalty bonus (1) at the end of the season to increase attraction of staying until the end (1). Do not allow inappropriate incentives/methods, eg give company car. One mark for identifying a suitable method plus one mark for offering some explanation. Apply twice. NB There is no need to demonstrate context to Kiddie-Winks. 4 of 15

1 (c) Explain two disadvantages to Kiddie-Winks Ltd of reducing the number of supervisors it has. [6 marks] Possible answers: less able to monitor individual employees/increases span of control reduces promotion incentive to employees makes communication down hierarchy more difficult cost of redundancy payments increases the work load of remaining supervisors quality of service may go down discourages employee retention. 2 Explains disadvantage in context of Kiddie-Winks Ltd. 3 2 AO2 1 Identifies possible disadvantage of reducing number of supervisors. 0 No valid response. 0 1 AO1 Specimen answers: Reducing the number of supervisors would increase the span of control (1). This means the remaining supervisors would have to look after more people (no context L1 1 mark). This would demotivate the temporary employees because they might be hoping to become a supervisor (1). More staff would want to leave as a result (context but explanation not strong so L1, 1 marks). This would make supervising the employees more difficult because each supervisor would have more to look after (1). There are many new employees joining all the time so they will need closer supervision making it harder for them to settle into the business (context L2 with good explanation, 3 marks). NB Context need only be seen in one of the two responses to allow both to access L2. 5 of 15

1 (d) Shareholders want to increase Kiddie-Winks Ltd s profits. They are considering two options: investing in rides to attract teenagers becoming more price competitive. Recommend to Kiddie-Winks Ltd s managers which of these two options you believe would be better at increasing profits. Use Item A to support your recommendation. [9 marks] Possible areas for discussion include: will lowering prices cause revenue and profits to rise or fall? whether young adults would want to come to Kiddie-Winks Ltd even with new rides the investment in new rides would need to be funded might be too risky to get finance reliance on weather is there already too much competition to become profitable? 3 2 Analyses issues relating to given options in context of Kiddie-Winks Ltd. Explains issues relating to given options in context of Kiddie-Winks Ltd. 4 3 AO3 2 AO2 1 States relevant points. 1 0 No valid response. 0 AO1 6 of 15

Notes: AO3 also assesses students quality of written communication. When deciding on the AO3 level to be awarded, consider the degree to which the student orders and communicates his/her ideas. In addition, and separately, award marks for evaluation using the grid below. Offers judgement plus clear justification. Ideas are communicated using a logical structure, with some appropriate use of technical terms. There are occasional errors in accepted conventions of written communication. E2 E1 Offers judgement plus limited justification. Ideas are communicated with some structure evident with occasional use of technical terms. There are noticeable errors in accepted conventions of written communication. 5 3 2 1 AO3 and Quality of Written Communication Example of E1 evaluation: I believe that the best option is to lower prices. I chose this because I think teenagers wouldn t want to go to a theme park that was full of little kids rides (E1 limited support for choice). Example of E2 evaluation: I would go for investing in new more scary rides. This way you will get a new market of customers (young people) (E1). This group will have more money to spend than families on a budget so prices can be higher than they are now (E2). The young children will see the larger rides and want to come back even after the age of 10 when they would normally stop going to Kiddie-Winks so you are widening the target market (E2). NB Answer can be regarded as being in context providing it addresses the options given in the question. 7 of 15

2 Total for this question: 21 marks 2 (a) Explain what is meant by cost-plus pricing. [2 marks] Identifies that an extra amount is added to production cost - 1 mark. 1 mark for an additional point, such as: a numerical illustration ensures a profit is made add a % to costs mark up 2 (b) Explain two benefits SS Ltd might receive by being a larger business. [4 marks] Possible advantages may include: discounts on bulk purchase of materials find it easier to raise funds from banks etc cost effective - now worth buying specialist tools managerial economies increased market share higher profile/can compete better. One mark for identifying a suitable method plus one mark for providing some explanation. Apply twice. NB There is no need to demonstrate context to SS Ltd. 8 of 15

2 (c) Explain one advantage and one disadvantage to SS Ltd of introducing employee appraisals. [6 marks] Possible answers Advantages: could help motivate employees/identify achievements allows managers to identify training needs can link to performance pay. Disadvantages: could be demotivating wastes time that could be used in producing sailboards could demotivate if subsequent performance targets are unrealistic. 2 Explains advantage/ disadvantage of appraisals in context of SS Ltd. 3 2 AO2 1 Identifies possible advantage/disadvantage of appraisals. 1 0 No valid response. 0 AO1 Apply twice NB Do not reward responses where students believe appraisals are when managers praise employees. If motivate (advantage) and demotivate (disadvantage) are used the explanations should be sufficiently different (and not just reverse arguments) to gain separate marks. 9 of 15

2 (d) SS Ltd needs to improve the quality of its products. Two methods have been suggested to achieve this improvement: having a stricter management style allowing employees to check the quality of their own work. Advise SS Ltd which of these two options you believe would be better. Use Item B to support your answer. Possible areas for discussion: Stricter management style employees are used to a more relaxed style how would they respond? may demoralise further. TQM: work has become boring might help motivate employees by adding responsibility low skills workers would they be able to adapt to this approach? [9 marks] 3 Analyses method(s) of improving quality in context of SS Ltd. 4 3 AO3 2 Explains method(s) in the context of SS Ltd 2 AO2 1 States relevant point(s). 1 0 No valid response. 0 AO1 10 of 15

In addition, and separately, award marks for evaluation using the grid below. Note: AO3 also assesses students quality of written communication. When deciding on the AO3 level to be awarded, consider the degree to which the student orders and communicates his/her ideas. Offers judgement plus clear justification. E2 Ideas are communicated using a logical structure, with some appropriate use of technical terms. There are occasional errors in accepted conventions of written communication. Offers judgement plus limited justification. 5 3 AO3 and Quality of Written Communication E1 Ideas are communicated with some structure evident with occasional use of technical terms. There are noticeable errors in accepted conventions of written communication. 2 1 Students are evaluating which method of improving the quality of the sailboards is better for SS Ltd. They should make a choice as to which is best with clear justification to support their answer. However, a clear judgement recommending a combination of methods or an alternative, eg job rotation may also be rewarded. In the latter case there must be clear support for this recommendation in order to access Level E2 as well as some discussion on why the stated options are unsuitable. Example of E2 evaluation The managers at SS Ltd should change their management style to become stricter. When the business was small it probably helped to have a relaxed approach to management (E1) because the people who worked there were likely to be more enthusiastic and reliable. The laid back environment would make it more enjoyable to work there. But SS has grown a lot in recent years which means more employees who might not have the same interest and commitment to SS (E2). The business has changed as it has grown and it needs a stricter approach to management otherwise employees will try to get away with what they can especially as the work is boring (E2). NB Answer can be regarded as being in context providing it addresses the options given in the question. 11 of 15

3 Total for this question: 18 marks 3 (a) Explain what is meant by a statement of financial position (a balance sheet). [2 marks] Shows the net worth of a business A list of assets and liabilities NB It is not used to show the profits of the business or its cash flow. Mentions both assets and liabilities (or alternative wording, eg owns and owes) States long term and current (or alternative wording) Shows worth (capital etc) of the business Offers example(s) as explanation Snapshot/at a point in time 1 mark 1 mark 1 mark 1 mark 1 mark Max 2 marks. 3 (b) (i) Calculate BMR plc s current ratio at the end of 2016. Show your workings. [3 marks] Correct answer: 0.6 3 marks Correct answer (regardless of working inc 0.6:1) 3 marks 15/25 shown but rest incorrect/absent 1 mark Ratio 15:25 given 1 mark Gives correct answer in alternative form, eg 60% 0.6m 3:5 2 marks If alternative form (eg 0.6m) is given in the Current ratio line of booklet, but 0.6 is shown in the working, award 3 marks. 12 of 15

3 (b) (ii) Explain how BMR plc might be affected by the change in its current ratio between 2015 and 2016. [4 marks] Answers can include: Difficulty in paying short term debt Makes BMR less attractive to investor Might deter suppliers/other creditors 2 Explains effect(s) of change in current ratio in context of BMR 4 3 AO2 1 Limited explanation of effects of change in current ratio despite being in context or explanation lacking context of BMR plc. 2 1 AO1 0 No valid response. 0 NB To access L2, the student s answer must have context and either: develop a single point, or have some explanation of two or more valid effects. NB OFR applies. If current ratio calculation >1.25 (ie liquidity has improved) assess the answer in the light of the figure given. Examples L1 responses BMR will not have enough money to pay its debts (L1, 1 mark). This means BMR will have to take out an overdraft to pay its short term debts because it won t have enough current assets (L1, 2 marks). L2 responses It will cause a problem for BMR because they will not have enough assets to pay off their liabilities. This is caused because BMR don t get paid for a long time after they start a job. (L2 3 marks) BMR will find it difficult to pay their short-term debtors so they will have to find another way by getting an overdraft or selling off unwanted assets such as diggers that they no longer need (L2, 4 marks). 13 of 15

3 (c) BMR plc has said that it wants to be known as an ethical business and one thing it has done is to set an environmental objective. Explain whether you believe that this is a sensible thing for BMR plc to do. Use Item C to support your answer. [9 marks] Note: Students could interpret the question in one of two ways: whether it is sensible to have an environmental objective to help it become an ethical business whether it should become an ethical business. Both are acceptable and should be rewarded. Possible areas for discussion: might help it secure more business additional costs of operating ethically, eg above H&S requirements may avoid public disapproval of pollution caused by its operations very nature of business makes it polluting might be difficult to achieve objective other costs, eg employee training. 3 2 Analyses having an environmental objective in context of BMR plc. Explains having an environmental objective in context of BMR plc. 4 3 AO3 2 AO2 1 Identifies possible effects of having an environmental objective. 0 No valid response. 0 1 AO1 14 of 15

Notes: AO3 also assesses students quality of written communication. When deciding on the AO3 level to be awarded, consider the degree to which the student orders and communicates his/her ideas. In addition, and separately, award marks for evaluation using the grid below. Offers judgement plus clear justification. E2 Ideas are communicated using a logical structure, with some appropriate use of technical terms. There are occasional errors in accepted conventions of written communication. Offers judgement plus limited justification. 5 3 AO3 and Quality of Written Communication E1 Ideas are communicated with some structure evident with occasional use of technical terms. There are noticeable errors in accepted conventions of written communication. 2 1 Example of E2 evaluation: I believe that it is not a sensible idea for BMR to introduce an environment objective. It may look good to have one and if its competitors do not have one it may give it a competitive advantage. Operating in an environmentally friendly way, however, will increase the costs of the business (E2). The business will have to have stricter control on any mess that is caused when knocking buildings down. It would have to pay for screens to keep it safe and less polluting which would cost money, BMR is not in a position to spend even more money before it is paid for the job as it already has a liquidity problem (E2). NB Answer can be regarded as being in context providing it addresses the choice given in the question. 15 of 15