Potential Marking scheme for June 2024/12

1a. Define the term 'take over'. [2]

• Clear understanding of takeover as an acquisition of control or purchase of controlling stake in

another company. (1 mark)
• Recognition of takeover as a strategic move to gain control over management and operations.
(1mark)

b. Explain one disadvantage of external growth. [3]

• Identification of increased competition as a disadvantage of external growth. (1 mark)

• Application of increased competition to a business context, such as market saturation or pricing
pressure. (2 marks)

2a. Define the term 'job description'. [2]

• Clear understanding of a job description as a document outlining duties, responsibilities,

qualifications, and requirements of a specific job role. (1 mark)
• Recognition of a job description as a tool for both employers and employees to understand job
expectations. (1 mark)

b. Explain one benefit of internal recruitment. [3]

• Identification of increased employee morale and motivation as a benefit of internal recruitment.

(1 mark)
• Application of increased employee morale to a business context, such as improved retention
rates or higher productivity levels. (2 marks)

3a. Define the term 'job production'. [2]

• Understanding job production as a manufacturing method where products are made according
to specific customer orders or specifications. (1 mark)
• Recognition of job production as a process of producing customized or unique products. (1 mark)

b. Explain one benefit of capital intensive operations. [3]

• Identification of increased efficiency as a benefit of capital-intensive operations. (1 mark)

• Application of increased efficiency to a business context, such as higher production output or
cost savings in the long term. (2 marks)

4. Analyse one reason why product differentiation is important for businesses. [5]

• Identification of increased competitiveness as a reason for product differentiation. (1 mark)

• Application of increased competitiveness to a business context, such as standing out in crowded
markets or attracting more customers. (2 marks)
• Analysis of the impact of increased competitiveness, such as higher market share, brand loyalty,
or ability to command premium prices. This could also include discussing the consequences of
not differentiating products, like being overshadowed by competitors or facing price wars. (2
marks)
5a. Analyse two limitations of contribution costing methods. [8]

Knowledge (2 marks)

• Identification of one limitation: Failure to allocate fixed costs accurately.

• Identification of another limitation: Over-simplification of cost behavior.

Application (2 marks)

• Application of the first limitation to a business context: In a manufacturing company, inaccurate

allocation of fixed costs may lead to incorrect pricing decisions, affecting profitability.
• Application of the second limitation to a business context: In a service-oriented business, such as
consulting, where fixed costs are significant, relying solely on contribution costing may result in
misleading profitability analysis and strategic planning.

Analysis (4 marks)

• Analysis of the first limitation: Failure to accurately allocate fixed costs can lead to
underestimation or overestimation of product costs, impacting pricing decisions, profitability
analysis, and resource allocation.
• Analysis of the second limitation: Over-simplification of cost behavior may result in misleading
insights into the true costs of products or services, leading to suboptimal decision-making and
potentially harming the company's competitive position.

ARA – as relevant as.

b. Evaluate whether working capital is the most important finance source for startup of a
furniture manufacturer. [12]

Knowledge (2 marks)

• Understanding of working capital: Explanation of working capital as the difference between

current assets and current liabilities, crucial for daily operations.
• Knowledge of finance sources: Identification of various finance sources such as equity financing,
bank loans, and trade credit available to startups.

Application (2 marks)

• Application of working capital to the business context: For a startup furniture manufacturer,
working capital is essential to cover initial operating expenses, purchase raw materials, and fund
day-to-day operations until revenue from sales is generated.
• Application of other finance sources to the business context: While working capital is important,
other finance sources like equity financing or bank loans may provide the necessary capital for
larger investments such as equipment purchases or facility expansions.

Analysis (2 marks)

• Analysis of working capital importance: Adequate working capital ensures the startup's ability to
meet short-term financial obligations, maintain liquidity, and seize business opportunities.
 Insufficient working capital can lead to cash flow problems, delayed payments to suppliers, and
disruptions in production, hindering the startup's growth and viability.
• Analysis of other finance sources: While working capital is crucial for day-to-day operations,
other finance sources like equity financing or bank loans may provide additional capital for long-
term investments and strategic initiatives, such as expanding product lines or entering new
markets.

Evaluation (6 marks)

• Evaluation of working capital importance: While working capital is undoubtedly important for
the startup of a furniture manufacturer, it may not necessarily be the most important finance
source. Other finance sources like equity financing or bank loans can provide additional capital
for larger investments and growth opportunities. Therefore, while working capital is essential for
covering initial operating expenses and maintaining liquidity, startups should consider a mix of
finance sources to meet their short-term and long-term financial needs effectively.
• Evaluation of other finance sources: While working capital is essential for day-to-day operations,
relying solely on working capital may limit the startup's ability to pursue larger investments or
strategic initiatives. Equity financing, for example, can provide additional capital without
increasing debt levels, while bank loans offer flexibility in terms of repayment terms and interest
rates. Therefore, startups should evaluate the pros and cons of each finance source and choose
the most appropriate mix based on their specific financial needs and growth objectives.

A.R.A. – as relevant as.

6a. Analyse two benefits of low labour turnover to a business. [8]

Knowledge (2 marks)

• Identification of one benefit: Cost savings associated with reduced recruitment and training
expenses.
• Identification of another benefit: Improved productivity and morale among employees.

Application (2 marks)

• Application of the first benefit to a business context: In a retail business, low labour turnover
means fewer resources spent on recruitment, training, and onboarding new staff, leading to cost
savings that can be reinvested in other areas of the business.
• Application of the second benefit to a business context: In a manufacturing company, where
skilled labor is crucial, low turnover rates contribute to a stable workforce, fostering a positive
work environment, higher morale, and increased productivity.

Analysis (4 marks)

• Analysis of the first benefit: Cost savings from reduced turnover can positively impact the
company's bottom line, improving profitability and allowing resources to be allocated towards
growth initiatives or employee development programs.
 • Analysis of the second benefit: A stable workforce with low turnover rates tends to be more
engaged, motivated, and experienced, leading to higher productivity levels, better quality
output, and ultimately, improved customer satisfaction and competitive advantage.

A.R.A. – as relevant as.

b. Worklife balance is the most important HRM factor for employee welfare in a local bus service.
Evaluate this view [12]

Knowledge (2 marks)

• Understanding of work-life balance: Explanation of work-life balance as the equilibrium between

professional responsibilities and personal life, crucial for employee well-being.
• Knowledge of HRM factors: Identification of various HRM factors such as compensation, training,
and job security that contribute to employee welfare.

Application (2 marks)

• Application of work-life balance to the business context: In a local bus service, maintaining work-
life balance is essential to prevent employee burnout, reduce turnover rates, and enhance job
satisfaction, especially considering the demanding nature of shift work and irregular hours in the
transportation industry.
• Application of other HRM factors to the business context: While work-life balance is important,
factors like competitive wages, comprehensive benefits, and opportunities for career
advancement also play significant roles in employee welfare within a local bus service.

Analysis (2 marks)

• Analysis of work-life balance importance: A well-balanced work-life schedule can lead to

improved employee morale, increased productivity, and reduced absenteeism and turnover,
ultimately benefiting the organization's performance and reputation.
• Analysis of other HRM factors: While work-life balance is important, it may not be the sole
determinant of employee welfare. Factors like fair compensation, job security, and supportive
management also contribute significantly to employee satisfaction and retention.

Evaluation (6 marks)

• Evaluation of work-life balance importance: While work-life balance is undoubtedly crucial for
employee welfare in a local bus service, it may not necessarily be the most important HRM
factor. Factors like competitive wages and benefits, job security, and opportunities for
advancement also play significant roles in employee satisfaction and retention. Therefore, while
prioritizing work-life balance is essential, HR managers should adopt a holistic approach to
address all aspects of employee welfare effectively.
• Evaluation of other HRM factors: While work-life balance is often highlighted as a key concern,
it's important not to overlook the impact of other HRM factors on employee welfare.
Competitive wages and benefits, for example, are essential for attracting and retaining talent in a
competitive labor market. Similarly, opportunities for career development and job security can
significantly impact employee motivation and commitment. Therefore, HR managers must
 consider a comprehensive range of factors when designing policies and initiatives to enhance
employee welfare in a local bus service.

A.R.A. – as relevant as.