10 Mark Questions

1
Things you could talk about:

Candidates are not required to discuss the tasks within the functional areas or the role of these areas. It may be
answered from the angle of for example the marketing department not working with the finance department. An
alternative approach is to write about the consequences to each functional area if that
area does not operate efficiently
Consequences could include:
lack of communication
repetition of tasks / tasks not completed by any department
lack of co-ordination
lack of motivation
loss of customers if customer service is inefficient
poor cash flow
recruitment issues
Level 3 (7-10 marks)
Candidate makes reasoned judgements and presents appropriate conclusions about the likely consequences to the
business if the functional areas do not operate efficiently. To gain 10 marks, the candidate needs to evaluate which is
the most important consequence.
Note: If candidate only analyses, with no appropriate conclusions, a maximum of 8 marks can be awarded.

Example answer:
Name of business: Debenhams
I visited my local Debenhams and found that it has many different functional areas behind the scenes running the
store. If the buying department does not operate efficiently then there will not be enough clothes on the shop floor for
people to buy (L1). This will mean that Debenhams will lose customers and
money (L2). The human resources department needs to work with all other departments to make sure that there are
enough employees in each department (L1). If this did not happen then departments could be short staffed (L1) and if
customer service was not good enough the business may lose customers (L2).
Everyone needs training so that they do not lose the store money by doing something wrong (L2). This is up to the
training department to get right. If the functional areas do not operate efficiently, then the business will lose customers
and money because there are a lot of other shops people can go to on the high street (L3). The most important
consequence is that it will lose customers, this is because if it loses customers it is also likely to lose money as well
(L3).
2

Candidates may consider each factor in turn and explain how it relates to their business. An example could be
included to back up their arguments saying whether or not that factor was successful in the business they have
studied.
Candidate makes reasoned judgements and presents appropriate conclusions about how a good working relationship
has been developed in the business.
For 10 marks the candidate needs to evaluate which has been the most successful and why other factors were less
successful.

Exemplar answer:
A good working relationship can be established between employee and employer through a series of weekly meetings
(L1) where staff have the opportunity to talk through with management any issues or problems they face on a day-to-
day basis (L2). Management also ensures that it fully briefs all employees on new developments and changes to
working practices (L1) so employees are aware of what is going to happen in the future (L2). The employees feel that
the regular meetings are more beneficial in creating a
good working relationship (L3), whilst the employers think that good communication is more effective (L3). In the long
term, both approaches will lead to improved motivation, improved productivity and the profitability of the business (L3).
In Harmony Concepts the working environment is not modern (L1). There is no air conditioning and all of the desks
are squashed together, this does not help develop a good working relationship (L2). I think that the meetings are the
most successful factor in Harmony Concepts as everyone feels that they are important to the business (L3).

3

The question does not require candidates to write at length about the changes to the business practices. They need to
be included to set the answer in context. The question is saying if the business had not made these changes what
could have happened to it.
There need to be realistic consequences. Possible consequences could include:
loss of customers
loss of profits
decrease in sales
having to make staff redundant
loss of reputation
loss of market share
business of not having made changes to its existing practices.
For 10 marks, the candidate needs to evaluate which is the most important consequence.

4

Candidate makes reasoned judgements and presents appropriate conclusions about how the business can be seen to
be operating in an ethical manner.
For 10 marks, the most important factor must be evaluated and the reasons why the other factors were less
important explained.
Candidate shows ability to present relevant material in a well planned and logical sequence. Material is clearly
structured using appropriate industry terminology confidently and accurately. Sentences, consistently relevant, are
well structured in a way which directly answers the question. There will be few, if any, errors of grammar, punctuation
and spelling.
Context required ethical factors that relate specifically to the business.

Name of business: The Body Shop
Community trade is like fair trade (L1) where the producers are looked after and paid a fair wage for their goods (L1.)
This helps less developed countries to earn more money. The Body Shop has a number of ethical policies and values
and these are used in all areas of the business. The products that it sells are not tested on animals (L2) it includes this
on its advertising so that customers are aware of this and can make ethical decisions when buying beauty products
(L2). As well as this. The BodyShop is involved in campaigns to promote ethical issues such as protecting our planet
and supporting community trade (L2). This will attract more customers who feel the same way (L2). The Body Shop
also looks after its employees well. It pays them a reasonable wage, and sees them as a valuable asset to the
business (L2).
These factors show that the business is ethical because these are extra things that it does not have to do (L3). The
products it sells are also value for money, you do not have to be rich to afford Body Shops (L3). It does these things
because it believes they are the right things to do for the world and not just to make more money (L3). I think that the
most important factor is not testing on animals because this is what
Body Shop says in all of its advertising, so it makes money by being ethical (L3)J U 9
marks.

5

The context is upgrading / getting new ICT and a business they have studied. It is not about current ICT provision.
Candidate makes reasoned judgements and presents appropriate conclusions about the benefits and drawbacks to
the business of upgrading its current ICT equipment.
For 10 marks, there must be a justified judgement saying whether the benefits outweigh the drawbacks or the
drawbacks outweigh the benefits.
and spelling.
Context is upgrading / getting new ICT and a business they have studied. It is not about current ICT provision.

Name of business: ABC Corner Shop
This business has recently installed a new stock monitoring system which allows it to see at a click what it has in the
shop, the value of the stock and what it needs to order (L2). This has meant that the owner no longer needs physically
to count the stock and make calculations (L2) which saves time (L3). It does not over order stock (L2) so that there is
less wastage (L3).The owner can also see the stock in all of his shops (L2). The equipment was very expensive (L2)
which meant that the owner could not make other improvements to his shops (L3). In conclusion, the new stock
monitoring system gives the owner more time to focus on other aspects of business practice (L3) and, hopefully, it will
enable the business to expand/become more profitable (L3). On balance, I think the money spent on this ICT
equipment was
worthwhile because, in the long run, the corner shop will be able to save time and money when the system works
effectively (J U 9 marks).

Candidate makes reasoned judgements and presents appropriate conclusions the consequences to the business of
not listening to its stakeholder groups.
For 10 marks, candidate needs to evaluate what could happen if the business did not listen and whether this
is a risk worth taking.
and spelling.
Context specific stakeholder groups for named business.

Name of business: Tesco
Tesco has many different stakeholder groups and they will all want different things. The employees will want job
security and a good working environment and good pay if Tesco does not give this, then employees will not be happy
(L2) and might leave (L2). It is not good for a business to have a lot of staff leaving because it has to keep training
new ones and this can cost a lot of money (L3). The shareholders will want to big dividend rather than have all the
profits put back in to the business (L2). If they do not get a big dividend they might sell their shares (L2) this could
make Tesco look bad and people lose confidence in the business (L2). The local community will want jobs from Tesco
but not a lot of noise or litter around their area. If the local community complains, Tesco must listen (L1) because they
are also its customers (L2) and if they are not happy they will stop buying from Tesco and the business will suffer with
less sales and profits (L3). Tesco needs to listen to the different stakeholder groups because if they are not happy
with Tesco they can act and Tesco could get bad publicity or lose money (L3). It is a lot easier for Tesco to
listen to its stakeholders because then they will be happy with Tesco and will continue to shop there (L3 J U 9 marks).
6

SOF is secondary and tertiary sector selling to public and businesses
Increase in consumer spending lead to increase in sales of office furniture to the public
Decrease in consumer spending lead to decrease in sales of office furniture to the public
May have little change to sales to businesses
New competitors means SOF has to compete on price or other factors (explains other factors)
As selling abroad new competitor in this area may not have much impact
Huge impact on local trade
Decides which has greater impact (can argue either one) and justifies choice.
Candidate makes reasoned judgements and presents appropriate conclusions about the consequences of changes in
the external environment to SOF.
10 marks makes decision and fully justified and both changes analysed.
For 10 marks, there needs to be some ranking of the changes. Evaluating which change will have the greater impact
on the business and why.
7

Exemplar answer:
Changes in the external environment could have a big impact on SOF. They currently make and sell office furniture to
the public and to businesses so if either group has more or less money available there will be a change in the amount
of furniture ordered (L2). If the level of consumer spending goes down then people
may decide to keep their existing office furniture for a few years longer as it is a luxury to keep changing it, this will
lead to a decrease in the amount of furniture sold by SOF (L2). More people are working from home and they may
have more money to spend and so may want to set up a good office at home and so
there may be an increase in the amount of furniture ordered (L2).
We dont know about SOFs competitors but if there are more businesses doing the same thing in the area then SOF
may see a decrease in sales (L2). They may have to change their prices or improve their quality so as not to lose out
to these competitors (L3). ( +) I think the biggest impact will come from a new competitor entering the market
because SOF sell most of its furniture to businesses rather than consumers so a change in the level of consumer
spending would have less of an impact (L3). If the business market decreased then the success of SOF could be at
risk (L3)

Developing new furniture designs is costly, may not be successful, lose focus on core business.
Organising workers leads to motivation or demotivation, training issues, cost implications, loss of
production/efficiency. Increased specialisation.
Advantages and disadvantages of profit sharing to workers and Leo
Analysis of all 3 ways and decision about which will have the biggest impact.
Candidate makes reasoned judgements and presents appropriate conclusions about the possible impact on SOF of
operating in an enterprising way.
For 10 marks, there needs to be some ranking of the ways. Evaluating which way will have the greatest impact on the
business and explaining why the other two have been rejected.

Exemplar answer:
If Leo developed new furniture designs then he is taking a risk because he does not know if his customers will like the
furniture (L2). He needs to do some research first to see how many of his customers would like these designs. If there
is a big demand then he could see an increase in sales and profits (L3).
The workers are used to the way they work now (L2) so if you changed it they might not work as fast and might not
understand why the changes have been made (L2) so this might not have a positive impact.(TV)
If you give the workers a share of the profits then they are likely to work harder to gain more money (L2) they will have
an interest in the business. This should mean that profits will increase (L3). I think that giving the workers a share of
the profits will have the biggest impact on SOF as the workers will be motivated and they will care about what they do
(L3). If the way they are organised is changed this might have the opposite effect so I wouldnt recommend it (L3).
Changing the designs might also demotivate the workers because they have to learn a new design to make (L3).

8

Changes in interest rate will affect mortgage and loan payments for SOF and customers, encourage or discourage
purchase of office furniture, savings.
Changes in inflation lead to change in price of office furniture charged to customer and change in price of goods
bought by SOF, leads to change in sales.
Changes in exchange rates, affect business if buy from abroad, overseas sales. Text 4 says thinking of not selling
abroad candidate could use this information to help answer.
Changes in taxation, income tax, VAT (do not penalise candidate who uses incorrect rate of VAT).
Analysis of all factors and applying to SOF Level 3 (7-10 marks)
Candidate makes reasoned judgements and presents appropriate conclusions about which factor will have the biggest
impact on Leo.
and spelling.
For 10 marks, the factor which will have the biggest impact must be evaluated and the reasons why the other factors
would have less impact need explaining.

Exemplar answer:
When the interest rate goes up people and businesses have less money to spend (L1) as it is more expensive to
borrow money so there may be a decrease in sales of furniture (L2). This could also be because office furniture is a
luxury item (L2). If inflation is high then the cost of everything is going up and seems more expensive (L1) this would
be the same for office furniture so people might think it was too expensive and not buy it (L2). As Leo does not sell
abroad now exchange rates should not have such a big impact (L3) unless he gets his raw materials from abroad and
then any changes in exchange rate would affect the cost of the raw materials (L2). If taxation goes up then people will
have less disposable income and so buy less furniture (L2). All of these factors will affect Leo but some more than
others. Out of these
factors I think the one with the biggest impact will be interest rates because office furniture is not cheap and customers
will probably have to take out a loan to pay for it.
Therefore if the interest rate goes up it will be more expensive to take out a loan so Leo will see a decrease in demand
for his office furniture (L3).

9

Advantages and disadvantages of partnership, sole trader and private limited company.
Apply to family situation and size of business.
Risk factor in agricultural business
Need for limited liability?
Candidate can write that partnership is best or change to private limited company or should have had one
brother set up as sole trader and other as manager/employee.

Quality of written communication is embedded into the level descriptors. Please see page 4 for details.
Candidate makes reasoned judgements and presents appropriate conclusions about which is the best form of
ownership for Gorse Hill Farm.
10 marks makes decision and fully justified and all three types of ownership analysed. Evaluating which form of
ownership will have be the best for GHF and why.
Max 8 marks if candidate makes a decision based on analysis of their chosen form of ownership with no analysis of
rejected one(s).
Exemplar response:
Within a partnership the partners have unlimited liability, meaning they are responsible for all the debts of the business
(L1). This is the same if it was a sole trader (L1). A private limited company would have limited liability, so this would
be an advantage for Gorse Hill Farm as each familys debts would be limited to the amount they had invested (L2). If
only one of the brothers had wanted to own the farm, then he could have been a sole trader but if there is more than
one owner as in this example, then it could not have been a sole trader (L2). If the brothers wanted to keep their
accounts secret, then a partnership would be a better idea as with a private limited company the public can have
access to your accounts (L3). The brothers might not need a large amount of money as they are already set up so
they do not need lots of shareholders (L3). I think that setting up as a partnership was the best idea because it kept
the business in the family and it was not complicated to set up as a private limited company would have been (L3).
10

Even though small business all functional areas will still exist but not necessarily as separate departments.
Importance of operating together getting the job done, avoiding repetition.
Staff morale / motivation.
Profits for owners.
Meaning of efficient operation in relation to a farm apply to what the farm does.
efficient operation Gorse Hill Farm if the functional areas do not operate together
10 marks fully justified, evaluating which consequence will have the greatest impact on the business.
Exemplar response:
Although it is a small business, Gorse Hill Farm and shop still has all of the functional areas and all of the tasks need
to be done otherwise the farm will not be successful (L2). If the human resources person does not speak to everyone
else then he/she might not know when someone has left and would not recruit a replacement (L2) so the farm might
be short staffed (L3). Any staff need to be paid, so human resources has to talk to finance to make sure they are paid
or else the staff might not be happy and may leave (L2) , meaning the brothers have more work to do (L3). Everyone
has to make sure all of the animals are healthy and report to one of the brothers if they think the vet needs calling or
else a cow, for example, might be ill (L2). Farmers do not always have a lot of staff, but still have a lot of different jobs
to do. They need to make sure that all of the different functional areas are completed properly so that the farm is
successful and the animals do not suffer (L3).

Explain meaning of behaving in an ethical manner.
Possible consequences of not behaving in an ethical manner:
Loss of customers
Loss of profit
Poor reputation
11

Competitors increase their market share
Likelihood of these happening to named business
Consequence can be what the business has to do to rectify the situation eg: inspections, monitoring,
advertising.

business of not behaving in an ethical manner.
10 marks fully justified, evaluating which consequence will have the greatest impact on the business.
Exemplar response:
Name of business: The Body Shop
Businesses which do not behave in an ethical manner cannot expect to have a strong customer base (L1) as people
today are very aware of issues such as the effect on the environment of producing goods, child labour, etc (L1). The
Body Shop has a number of ethical policies, and values. If the Body Shop does not follow these values and policies it
risks losing customers (L2) as it would no longer have a good reputation (L2)and consequently business profits would
reduce (L3) because the business, at the moment, is seen to be environmentally friendly and unwilling to test on
animals. This could also lead to cash flow problems (L2) and the business may no longer be able to pay its bills (L2).
The Body Shop may then have to close some or all of its shops (L3), making staff redundant (L3) and eventually it
may have to cease trading (L3).

12

Loss of customers
Loss of market share
New competitors in market
Loss or profit
Being left behind
Employees unhappy
Customers unhappy
Possible changes to business practices.
Level 3 (7-10 marks):
Candidate makes reasoned judgements and presents appropriate conclusions about the consequences to the
business of not making changes to its existing business practices.
9 marks makes decision/judgement based on previous analysis. Needs to have correctly analysed the
consequence they have chosen.
10 marks makes decision and fully justified and at least 2 consequences analysed.

Exemplar Answer:
Luxury Cottages
The tourism sector is a very competitive one and in order to stay ahead of the competition Luxury Cottages needs to
make changes to its existing business practices (L1). Luxury Cottages could think about introducing new destinations
for its cottages, by having holidays further away than Wales. This would increase the target market and attract new
customers to Luxury Cottages (L2). It they didnt do this then they will be competing with the same businesses trying
to attract the same customers who want a week away in Wales (L2).
Doing this might cost the business a lot of money and in order to raise this money it may have to become a public
limited company (L1). This would mean new investors could help the business. If they didnt try to attract new
investors by going public Luxury Cottages might not be able to afford to expand their destinations (L2).
Customers are looking for something different when deciding on a holiday and I think that LC need to think of
something to stand out from the competition (L2). If they didnt do this then LC would have to compete on price (L2).
The most important factor is to stand out from the competition as there are many different places that people can book
their holiday (L2), if LC did not change their business practices in the ways I have suggested they might find it harder
to compete with the bigger businesses like Thomas Cook (L3).

13

May go through each bullet in question and analyse the effect
Shareholders wanting extra dividend and not receiving it may mean they will sell their shares
Charities may create negative publicity if do not get extra money
Employees may be unhappy and threaten industrial action
Reasons why important to listen to stakeholder groups
Which group is the most important and why
Which group is the least important and why.
Candidate makes reasoned judgements and presents appropriate conclusions about ignoring which group will have
the biggest impact on JR Tours Ltd.
10 marks makes decision and fully justified and analysed.
For 10 marks, there needs to be some ranking of the groups. Evaluating ignoring which group will have the greater
impact on the business and why.
Exemplar Answer:
There are many different stakeholder groups in a business all have a different interest in what the business does (L1).
The shareholders are the owners of
JR Tours Ltd so if they do not get what they want then they could take their money out of JR Tours Ltd and the
business might have problems finding new owners (L2). The charity is important to the new image of JR Tours Ltd as
being a caring travel agency (L2). If they upset the charity then maybe the charity would tell the newspapers and this
would reflect badly on JR Tours Ltd.
JR Tours Ltd does not know how much extra custom it might get as a result of being ethical and so ignoring the
charity could mean it will lose this extra business resulting in a loss of money and reputation (L3).
Without employees JR Tours Ltd cannot operate. If the employees are not happy then they could go on strike or not
work very hard (L2) this would mean that customers would not be happy and would go to another travel agency to
book their holiday (L3).
Out of these three groups I think that it is most important to listen to the needs of the employees it might not cost JR
Tours Ltd a lot of money to make the changes they want (L3). As it is a service business it will quickly lose customers
and get a bad reputation if the employees do not look after the customers well. (L3).

Decrease in unemployment more people going on holiday, harder to fill any job vacancies
Increase in interest rates mortgages gone up, people less willing to buy holidays on credit as have to pay
more
Increase in inflation price of holiday gone up and also everything else people buy, if wages not increased
then holiday will seem more expensive.
Candidate makes reasoned judgements and presents appropriate conclusions.
9 marks makes decision/judgement based on previous analysis. Needs to have correctly analysed the economic
factor they have chosen.
14

Exemplar Answer:
The economic factors which will affect any business are interest rates, inflation, unemployment and exchange rates.
Holidays are seen as a luxury so if customers dont have much money then they might decide not to go on holiday
(L2).
If the interest rate goes up so borrowing becomes more expensive people might be less likely to book a holiday early
and pay for it on their credit card. JR Tours Ltd could offer a discount for paying early so people are encouraged to
book their holiday (L2).
If there is inflation then the price of holidays should go up (L1), JR Tours Ltd could set a date and say prices wont go
up until after that date this might encourage people to book with JR Tours Ltd and not a competitor (L3) so that they
are not losing customers I think the most important thing that they can do is offer cheaper prices if you book early so
that JR Tours Ltd has the money and can be making some interest on it themselves and also they know that some of
the holidays are booked (L3).

15

Stay as they are not risky but limited opportunities
Take on more partners more finance, more ideas but decision making slows down and may be
out voted
Become an Ltd gain limited liability, more finance, could lose control.
There is no correct answer candidates can select any option to gain top marks.

Candidate makes reasoned judgements and presents appropriate conclusions about which option is the best way to
expand.
It is the advantages and disadvantages of the options to Amita and Yi which need to be analysed.
There needs to be some ranking of the options - evaluating which option will have the greater impact
on the business and why.

Exemplar Answer:
The business is currently a partnership so Amita and Yi both have unlimited liability (L2). This means that they would
have to sell their personal assets if the business went into debt. If they took option 1 this disadvantage would still
remain (L2). Option 1 is low risk as they are not doing anything different (L2) but
it might be difficult for them to expand (CONTEXT) as they wont have any additional finance. If they know people who
want to join their business then they could take on additional partners, these would have unlimited liability as well (L2).
This would bring money into the business but these new partners might want a say in running the business and it
might not be what Amita and Yi want (L2), this could lead to arguments (L3). As a private limited company, the owners
Orion Designs have the benefits of limited liability so they can only lose the amount of money that they invested in the
company (L2). So the owners of the business would have more security (L2). If Orion Designs want to expand and
have new ranges then they will need
more money (CONTEXT) if they become Ltd they could raise the money they need by having shareholders (L2). This
would be an advantage to Orion Designs. At the moment all profits go to Amita and Yi, (L2)if they were to become a
private limited company they could receive less profits themselves as they would have to pay dividends to all
shareholders (L3). At the moment there are only two partners, Amita and Yi so they will be limited to the amount of
money they can invest (L2) but they can make all of the decisions themselves (L2). If it were to become Ltd then the
other shareholders would be able to make decisions and Amita and Yi would lose some control of their business (L2)
There are legal formalities involved in becoming a Ltd
which would take time and cost money (L2).
In order to secure the future of the business and expand I recommend that Orion Designs takes option 2 and stays as
a partnership but invites other partners to invest in the business. This way they get the advantages of more capital in
the business but do not have to spend a lot of time and money becoming an Ltd (L3).

16

Advantages and disadvantages of option 1 if not up to standard dont have to accept it, no need to
invest in ICT, other business is specialist
Advantages and disadvantages of option 2 cost of ICT, training or recruit employees already trained,
breakdowns, not enough use being made of machines, could lease out machines, more income. Either option is
correct as long as it is justified.

Candidate makes reasoned judgements and presents appropriate conclusions about which option would be the best
for Orion Designs.
10 marks the best option must be evaluated and the reason why other option is not the best needs explaining.

Exemplar Answer:
At the moment Amita and Yi spend a lot of money getting another business to put the designs onto the computer
(CONTEXT) they have to work closely with this other business to make sure everything is as they want it but they
dont have to spend money on ICT equipment (L2). If Amita and Yi were to do this themselves and go with option 2
they would have to spend a lot of money buying the ICT, they would have to recruit people to run this side of the
business for them and this would also cost money (L2). They could offer their machines to other business to use and
this could bring in some money (L2) but they would want priority over the use of the machines if they are trying to
expand (CONTEXT). They would not be benefitting from this investment in technology is they could not use the
machines when they wanted to (L2).
If something goes wrong with a design when they are paying the other business to do it as in option 1, they just say
we dont want it and dont pay until it is perfect (L2) they cant do this if they owned the machines as every one made
would cost them money even if the quality was not up to standard so OD would be losing money (L3).
It is probably very specialised work to run these computers and it might be difficult to find someone to do it (L2) this
would leave Amita and Yi with a big bill for the machines but they are not being used fully as Amita and Yi dont know
how to use them so wasting money (L3).
Overall I think they should stay as they are with option 1 as there are more risks involved in taking on option 2 (L3).

17

If go to China then have to make production staff redundant is this fair?
Will the products be up to the standard of the UK supplied mugs and plates?
Is this year a one off and so demand will decrease next year?
Is there enough time to get production moved before the major events?
Should they think twice about taking on such contracts?
Not ethical to make this move?
Candidate can answer either yes they should go to China or no they should not and still reach the top levels.

Candidate makes reasoned judgements and presents appropriate conclusions about which option would be the best
for Orion Designs.
10 marks the best way to transfer their designs must be evaluated and the reason(s) why the other way is not the
best when expanding need to be explained. and both options analysed.

Exemplar Answer:
Orion Designs has got big orders for this years major events so wants to earn as much money as they can if they buy
mugs in the UK they might not be able to buy them as cheap as in China (CONTEXT) (L2) so they might be losing
some of their profit by buying in the UK (L2). They wont know about the quality
of the mugs or the conditions in the factory (L2), the workers may not be looked after as well as they would in the UK
(L2). Amita and Yi have to decide whether this is important to them. I think it is important as it is not ethical to sell
goods that have not been made in factories with good conditions are the workers (L3).
It would not be ethical to make their production staff redundant (CONTEXT).
It would not be illegal (L2) but if they have worked hard with Amita and Yi to build up the business it does not seem
ethical to just get rid of them when they want to earn a bit more money (L3).
If the mugs are souvenirs then the customers wont think about where they are made so it wont matter to the
customers whether or not Orion Designs has acted in an ethical manner (L2).
I think that they should consider acting in an ethical manner and keeping the business as it is. When people are losing
their jobs and businesses are closing down Orion Designs wont want any bad publicity if they are to blame for this
(L3).

18

Candidates are not required to discuss the tasks within the functional areas or the role of these areas. The
candidate may answer from the angle of, for example, the marketing department not working with the finance
department. Some candidates may write about the consequences to each functional area if that area does not operate
efficiently apply the same level descriptors.
Consequences could include:
lack of communication
repetition of tasks/tasks not completed by any department
lack of co-ordination
lack of motivation
loss of customers if customer service is inefficient
poor cash flow
recruitment issues
importance of operating efficiently getting the job done, avoiding repetition
profits/losses for owners/shareholders
meaning of efficient operation in relation to the business studied apply to what that business does.
19

Context showing understanding of the activities within functional areas in their chosen business, valid
references to the activities of the business.
Level 3 (710 marks)
Candidate makes reasoned judgements and presents appropriate conclusions about the likely consequences to their
named business if the functional areas do not operate efficiently.
10 marks makes decision and fully justified. Give reasons why other consequence(s) will not have as big an impact.
Max 8 marks if candidate makes a decision based on analysis of their chosen consequence with no analysis of
rejected one(s).
Analysis is of the consequence and not the functional areas.

Exemplar Answer:
Name of business: Debenhams
Activity of business: High street retailer
I visited my local Debenhams and found that it has many different functional areas behind the scenes running the
store. If the buying department does not operate efficiently then there will not be enough clothes on the shop floor for
people to buy (L1). This will mean that Debenhams will lose customers and money (L2). The human resources
department needs to work with all other departments to make sure that there are enough employees in each
department (L1). If this did not happen then departments could be short staffed (L1) and if customer service was not
good enough the business may lose customers (L2).
Everyone needs training so that they do not lose the store money by doing something wrong (L2). This is up to the
training department to get right. If the functional areas do not operate efficiently, then the business will lose customers
and money because there are a lot of other shops people can go to on the high street (L3). The most important
consequence is that it will lose customers, this is because if it loses customers it is also likely to lose money as well
(L3).

buying different sized lorries costs money, need to do research to see if demand
buying refrigerated lorries costly and entering a new market research
need for new ICT to take bookings over Internet?
training costs, set up costs
cost benefit analysis of each option
decision which way would offer most benefits.
Level 3 (710 marks)
Candidate makes reasoned judgements and presents appropriate conclusions about which option would offer the
most benefits to MDT Ltd. Candidate may analyse the costs of an option, saying there are no benefits.
10 marks makes decision and fully justified (explaining why they have rejected the other options) the benefits of all
three options analysed. Evaluating which option would give MD T Ltd the most benefits.
Max 8 marks if candidate makes a decision based on analysis of the benefits of their chosen option with no
analysis of rejected one(s).

20

Exemplar Answer:
Operating in an enterprising way can mean more profit as you get more customers (L1). If MDT Ltd buys the
refrigerated lorries then it is taking a risk because it does not know if its customers will need these lorries (L2). This
might mean that to make a profit MDT Ltd has to advertise to try to get new customers (L3). MDT Ltd needs to do
some research first to see how many of its customers would use these lorries. If there is a big demand then it could
see an increase in sales and profits (L2).
MDT Ltd employees might be motivated to work harder (L1) as they have new things to get involved in (L2). Running
Internet bookings should increase the number of bookings MDT Ltd can take (L2) as the customer does not have to
wait for someone to answer the phone and this should increase profits (L3).
It will cost MDT Ltd a lot of money to buy different sized lorries (L1) and if it has not done enough research then it
might not need these lorries as customers do not want to use them (L2). They could end up parked in the depot which
would be wasting money for MDT Ltd (L3).
If the Internet means that customers are happy with the service then MDT Ltd should gain a good reputation (L2)
which will bring in more customers (L3). This would therefore have the biggest impact on MDT Ltd (L3).

employees want to keep their jobs, do not like change, change of role
shareholders want dividends, not all of the profits ploughed back into the business
employers/managers want to make sure their jobs are safe and that the owners are listening to their
needs.
Customers need to be asked if they want what MDT Ltd is proposing
Local community peace and quiet but also jobs
Pressure groups/trade unions campaign to stop lorries, protect employees rights
Government extra tax from profits, make sure MDT Ltd works within the law
Conflict between Malcolm and other shareholders.

Level 3 (710 marks)
Candidate makes reasoned judgements and presents appropriate conclusions about the consequences to MDT Ltd of
not listening to its stakeholder groups.

10 marks makes decision about which consequence will have the biggest impact on MDT Ltd and fully justified. The
consequences must be ranged why other(s) do not have as big an impact.

Exemplar Answer:
MDT Ltd has many different stakeholder groups and they will all want different things. The employees will want job
security and a good working environment and good pay. If MDT Ltd does not give this, then employees wont be
happy and might leave (L2).
When MDT Ltd is trying to expand, it is not good to have a lot of staff leaving because it has to keep training new ones
and this can cost a lot of money (L3). The business needs continuity. The shareholders will want to receive a big
dividend rather than have all the profits put into the expansion. If the shareholders no longer get a big dividend they
might sell their shares (L2). This could make MDT Ltd look bad and people lose confidence in the business (L2).
The local community will want jobs from MDT Ltd but not a lot of noise or pollution from a lot more lorries. If the local
community complains, MDT Ltd must listen because a pressure group could be established which may generate bad
publicity for MDT Ltd (L2). If MDT Ltd does not listen to its customers it might expand the business in a way that the
customers dont want or need (L2) and this could end up losing MDT Ltd more money (L3).

10 Mark Questions

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