a-level business studies mark scheme unit 02 - managing a … · 2017. 5. 17. · mark scheme –...

AS Business Studies BUSS2 Managing a Business Mark scheme 2130 June 2016 Version 1.0: Final Mark Scheme

Mark schemes are prepared by the Lead Assessment 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 Assessment 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

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MARK SCHEME – AS BUSINESS STUDIES – BUSS2 – JUNE 2016

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Assessment Objectives The Assessment Objectives represent those qualities which

can be demonstrated in students’ work and which can be measured for the purposes of assessment.

AO1 Demonstrate knowledge and understanding of the specified content

Students give accurate definitions of relevant terms. Students can also gain credit for identifying a point relevant to the question.

AO2 Apply knowledge and understanding to problems and issues arising from both familiar and unfamiliar situations

Students should apply their knowledge to the business context in which the question is set, through recognition of some specific business aspect, the management of the business or the problems or issues faced by the business. Students will not be rewarded for simply dropping the company name or product category into their answer.

AO3 Analyse problems, issues and situations

Students use relevant business theory and select information from a range of sources, using appropriate methods, to analyse business problems and situations. For example, students may be asked to build up an argument that shows understanding of cause and effect.

AO4 Evaluate, distinguish between and assess appropriateness of fact and opinion, and judge information from a variety of sources

Students evaluate evidence to reach reasoned judgements. This can be shown within an answer, through the weighting of an argument or it can also be shown within a conclusion, perhaps by weighing up the strength of the candidate’s own arguments for and against a proposition. Students will not gain credit by the simple use of drilled phrases such as “On the other hand” or “Business operates in an ever-changing environment”.

Quality of Written Communication

The quality of written communication is assessed in all assessment units where students are required to produce extended written material. Students will be assessed according to their ability to: • ensure that text is legible, and that spelling, grammar and

punctuation are accurate, so that meaning is clear. • select and use a form and style of writing appropriate

to purpose and complex subject matter • organise information clearly and coherently, using

specialist vocabulary when appropriate The assessment of the quality of written communication is included in Assessment Objective 4.


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GUIDANCE FOR MARKING

When marking a response it is important to take an overview of the answer at the end. You should read the response as a whole to see how the arguments develop and how effective the skills are within the overall response. Having read the whole response you must make a decision on the overall quality of the different skills demonstrated- is the quality of the application good? What about the analysis of the question? What about the quality of the evaluation of the question? Markers should mark from the top down – is it good? If not, is it reasonable? If not, it is limited? Start with the top level and work downwards rather than the other way around. In making a decision about whether a particular response is good or reasonable, use the following guidelines. APPLICATION Application occurs when a response is in context. For example, it relates to the given scenario or the particular issues and problems facing the business or industry. Application may also be shown through an awareness of real word data or real world cases. Good application means the response is well applied to the context. It should be annotated as Gap. This can be demonstrated in different ways; for example, the response may • Be firmly embedded in the context. The arguments made within a response may, overall,

relate well to the given context recognising key aspects of the situation. This insight into the context may occur in one instance or be a combination of insights that show a good awareness of the specific issues facing the business.

• Combining information effectively. For example, candidates may appreciate the meaning and significance of one aspect of the case in the context of another aspect of the business situation. This combination of factors can show a good insight into the context.

• Manipulating data effectively. For example, candidates may use some numerical data in one part of the case and relate this to another relevant and significant figure elsewhere in the case; by combining these effectively candidates can show a good grasp of the context.

Reasonable application makes some reference to the context in support of the argument(s) but: • is not necessarily well developed or consistent. • does not show much appreciation of the significance of aspects of the context.

It should be annotated as Rap. Weak application is a mainly descriptive reference to the context this would be a limited response and be L1.


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ANALYSIS Analysis occurs when students build arguments that show an understanding of cause and effect. Good analysis should be annotated as Gan . It may occur when: • the answer as a whole has analysed key issues in the question well • one line of argument is well developed. Good analysis is focused on the precise question, it will provide a logical, coherent, multi stage argument overall examining the causes and effects of an event as appropriate and linking the different aspects of the question effectively. It may make use of relevant theory to develop the argument, selecting relevant information and use appropriate methods effectively to build up the links between the stages. Reasonable analysis is shown when there are relevant arguments explained but: • these are less developed • there are less clear chains of argument (for example, stages in the argument may be missing or

unclear or assumed) • these are generic rather than addressing the issues in the question directly. Reasonable analysis may be less complete than “Good” or less directly focused on the specific question. Annotate as Ran. Weak analysis that is basically undeveloped arguments in response to the question is a limited response and be L1. EVALUATION This occurs when a judgement is made. Judgements may occur throughout a response. Good judgement directly answers the specific question set. It: • provides a clear and well supported overall response to the question set • is built on analysis and evidence and is in the context of the given question.

Reasonable judgement may: • be making judgements on relevant arguments but not the question as a whole • address some aspects of the question but not directly answers the specific question set • have some support but is not built on effective analysis • may be rather generic, incomplete or not fully consistent given the arguments made.

Limited evaluation is judgement that is based mainly on assertion or only limited support. The decision on the Quality of Written Communication should be used to adjust a mark within the level selected on the basis of the student’s evaluation. For example, a student may have been awarded the lower mark in E2 for evaluation but the response may be particularly well structured with highly effective use of technical terms. In this case, the mark may be adjusted upward to the maximum for E2. A well written answer without any evaluation can receive one mark for quality of language.


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Award up to 2 marks for candidates demonstrating understanding of labour productivity.

• Labour productivity = output per period/average number of employees • Labour productivity measures the relationship between the amount of labour used in

production and the quantity of outputs produced in a given time period. Number of employees in 2016 = 60/0.75 = 80 (1 mark) Labour productivity in 2016 = [2 624 960 ÷ (60/.75)] (1 mark) = 32 812 meals (1 mark) Labour productivity in 2017 = 3 900 000 ÷ 60 = 65 000 (2 marks) Difference = 65 000 - 32 812 = 32 188 meals (1 mark) OFR can apply in the final element of this calculation Common answers Candidate has expressed change as a percentage = 49.52% = 6 marks Single arithmetic error carried through = 5 marks Calculates both labour productivity figures (32 812, 65 000) but OFR change calculated = 5 marks Calculates labour productivity for both years (32 812, 65 000) but no change calculated = 5 marks Correct calculations but used incorrect year 2015 – 2016 = 1 562 = 5 marks Calculates the change in labour productivity but with no change in employee numbers 2016 = 2 624 960/60 = 43 749, 2017 = 3 900 000 ÷ 60 = 65 000 Difference = 21 251 = 4 marks Calculates labour productivity for 2016 only, 32 812 = 3 marks Calculates labour productivity for 2017 65 000 and change in number of employees 80 = 3 marks States correct formula no calculations = 2 marks Calculates labour productivity for 2017 only, 65 000 = 2 mark Calculates change in number of employees, 80 = 1 mark

1 (a) Calculate the change in CF Ltd’s forecast labour productivity between 2016 and 2017.

[6 marks]


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LEVEL DESCRIPTOR MARKS

L5 Good analysis and Good application 8

L4 Good analysis and Reasonable application

or Reasonable analysis and Good application

7–6

L3

Reasonable analysis and Reasonable application or

Good analysis or

Good application

5–4

L2 Reasonable analysis

or Reasonable application

3

L1 Answer contains relevant knowledge – basic points and/or evidence of understanding of relevant term(s). 2–1

Relevant answers may include the following: • Quality assurance is a system operated by a business to ensure that all products meet certain

quality standards.

Possible lines of application include: • The company produces distinctive food products. • The market in which it trades is competitive. • The company sells large quantities to relatively few customers. • The company has recently started selling its products to two large supermarkets. • The supermarkets have made threats to find alternative suppliers. Good application may be awarded for any of the following: • Combining points to construct a relevant answer to the question such as the market is highly

competitive and is made up of a small number of large customers. • For developing arguments which are consistently in context. Possible lines of analysis: Straightforward explanations of why quality assurance was important to CF Ltd. For example: • Developing a reputation for supplying good quality products is likely to help the company to

achieve level of sales. • In a competitive market it is important to meet customers' requirements to win repeat orders. • Customers may have a requirement that all suppliers operate to certain quality standards.

1 (b) Explain why operating a system of quality assurance might have helped CF Ltd to achieve growth in its sales.

[8 marks]


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Good analysis is shown when the overall answer provides a response to the question set that focuses on the importance of a QA system to achieving high rates of growth. • Developing a logical chain of argument to explain why having a system of QA to ensure that all

products meet consistent standards will assist a business in achieving increasing levels of sales.

• Arguing that meeting quality standards consistently might open up the opportunity of larger orders as the products are sold to larger customers operating more stores.


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8–7

L3


Good analysis or

Good application

6–5



4–3


Relevant answers may include the following: • Teamworking is breaking down production into large units and using groups of employees to

complete these tasks. • Motivation describes the factors within an individual that arouse, maintain or channel behaviour

towards a goal. Possible lines of application include: • The company will be making 20 redundancies as part of the move to teamworking and

robotics. • The company is increasing its expenditure on training to provide the new skills needed. • The company will give its employees a substantial pay rise. • Employees will carry out multi-skilled roles which may offer more variety of tasks. • Employees will be empowered to make own decisions. Good application may be awarded for any of the following: • Manipulating data in support of relevant arguments relating to impact of teamworking on

levels of workforce motivation.

2015 2016 Forecast 2017 Forecast Average pay per employee £22 500 £23 125 £27 800 Training expenditure per employee £300 £450 £750 • Linking relevant points such as the rise in training expenditure and more interesting and

demanding multi-skilled work • For developing arguments which are consistently in context.

1 (c) Do you think that introducing teamworking will lead to a significant improvement in the motivation levels of CF Ltd’s workforce? Justify your view.

[13 marks]


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Possible lines of analysis: Straightforward explanations of the likely effects of implementing teamworking on motivation. For example: • Teamworking will offer the employees more opportunity to make decisions and greater control

over their working lives - i.e. empowerment. • Teamworking will require employees to have an overall range of skills and to avoid repetitive

tasks by carrying out a range of duties making work more interesting. • Teamworking offers more chance of social interaction which may increase involvement and

interest of work. • The move to teamworking may entail redundancies which employees may find threatening. • Introducing teamworking can break up established working groups impacting on social needs. Good analysis is shown when the overall answer provides a response to the question set that focuses on the links between the changes involved in implementing teamworking and the likely impact on motivation. • Developing a logical chain of argument to explain the positive or negative effects of

implementing teamworking on motivation levels. • using relevant motivation theories to support relevant arguments.

Evaluation, you should award marks using the grid below. Note: Evaluation also assesses students’ quality of written communication.


E3 Judgement with well supported justification. Focus is on the extent to which it will improve motivation levels significantly and recognises range of influences.

4

E2

Judgement with reasonable attempt at justification: • considering whether it will improve motivation levels

using negative and positive influences (3 marks) • focusing on either positive or negative impact on

motivation only (2 marks)

3-2

E1 Assertion or judgement which is unsupported. 1 Ideas for evaluation might include: • There are number of factors which can impact positively on motivation including a substantial

pay rise (20% on average) whilst the main negative element is the threat of redundancies. In combination these factors could be expected to have a significant rather than a small impact.

• The key factor that would contribute to motivation in these circumstances is the move to multi-skilled roles (supported by extensive training) which will allow huge improvements in the experience of work (avoiding too many repetitive tasks) and have a significant impact on motivation.

• The positive effect on motivation could be expected in the longer-term once the redundancies have been settled. This will allow the positive factors to influence motivation levels and this should be significant.


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8–7

L3


Good analysis or

Good application

6–5



4–3


Relevant answers may include the following: • Robotics are machines that are used for a range of activities in production, particularly where

repetitive tasks are involved. Possible lines of application include: • This will increase labour productivity as the company is increasing production with fewer

employees. • The company is increasing its capacity by much more than its level of production. • Noting the near doubling in labour productivity rates between 2016 and 2017 - NB: potential for

OFR here. • The rise in production from implementing the plan may cause a decline in the product's quality

as different varieties of vegetables are bought from external suppliers • Using external suppliers may be risky as they may not be flexible or may be late with deliveries. Good application may be awarded for any of the following: • Manipulating data in support of relevant arguments relating to impact of introducing robotics

in terms of effectiveness of operations.

2015 2016 (Forecast) 2017 (Forecast) Capacity utilisation 91% 95% 79% Unit cost (per meal) £1.55 £1.60 £1.46 • Linking relevant points such as the near doubling of productivity in 2017 (OFR) contributing to

the fall in unit costs.

1 (d) Liam believes that his plan will improve the effectiveness of the company’s operations. Do you agree? Justify your view.

[13 marks]


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• For developing arguments which are consistently in context. Possible lines of analysis: Explaining the implications of the implementation of the plan for the company. For example: • The plan requires the use of new suppliers who may bring disadvantages such as inflexibility,

unreliability or high prices. • The use of robots will allow the company's production to increase and help it to meet rising

demand. • The use of robots may affect productivity adversely, at least in the short-term, as employees

will be unfamiliar with them and problems and delays in production may occur.

Good analysis is shown when the overall answer provides a response to the question set that focuses on the impact of the plan on the effectiveness of operations. • If the introduction of robotics increases the company's costs less than its output its unit costs

will decline. This increase in operational efficiency will be important. • Installing robots will expand the company's productive capacity substantially and could result in

substantial amount of spare capacity. This will result in a reduction in the company's operational effectiveness as its capacity utilisation will fall meaning that expensive productive assets are not being used to their full extent. As a consequence unit costs are higher than may be expected.

• The implementation of the plan means that the company is likely to use additional external suppliers

• Using external suppliers may mean that CF Ltd suffers delays in deliveries or that the wrong products/inferior quality products are delivered. This may impact negatively on its ability to meet the needs of the supermarkets who are very demanding customers.



E3 Judgement with well supported justification. Focus is on operations and recognises two aspects exist. 4

E2

Judgement with reasonable attempt at justification: • focusing on either benefits or drawbacks of the

supermarket plan • making judgement in context of wider impact, not

operations.

3-2

E1 Assertion or judgement which is unsupported. 1 Ideas for evaluation might include:


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• Arguably the most important and factors relating to operational effectiveness (unit costs and productivity) are showing a significant improvement, even with a lower level of capacity utilisation

• The negative side of the plan in operational terms relates to the use of external suppliers. CF Ltd may be able to negotiate growing of suitable varieties of vegetables and as it places large (and possibly increasingly large?) orders will have more influence and may be able to overcome problems in this area.

• In the long-term this suggests that if demand continues to grow, the plan will improve the company's operational effectiveness; in the short-term this improvement may be more questionable.


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5

L3


Good analysis or

Good application

4



3

L1 Answer contains relevant knowledge – basic points and/or evidence of understanding of relevant term(s) 2–1

Relevant answers may include the following: • The marketing mix is the combination of elements (price, place, product, promotion) that

influence customers' buying decisions. Possible lines of application entail recognising and using information relating to individual elements of the mix such as: • Demand for the company's products is price inelastic. • The company has its shop located in a wealthy area of London. • Mortimer Ltd's products are individually designed to meet customers' needs precisely. • The company has a strong brand name within its niche.

Good application may be awarded for any of the following: • For bringing together the elements of Mortimer Ltd's marketing mix • For developing arguments which are consistently in context.

2 (a) Explain how the characteristics of Mortimer Ltd’s target market influences the company’s marketing mix.

[6 marks]


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Possible lines of analysis will be arguments showing how the elements of the company's marketing mix are appropriate: • That the company’s place is one which would attract the type of customer it is targeting. • Because its products are designed to meet the needs of its target group of customers. Good analysis is shown when the answer provides a response to the question set that relates the company's overall marketing mix to the target group of customers. • Developing a chain of argument to show how elements of the company's marketing mix fit

together into an integrated whole. • Arguing that any other approach to pricing or promotion would not integrate with the other

elements of the mix that are identified and would deter customers.


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6–5

L3


Good analysis or

Good application

4



3


Possible lines of application will be recognising and using factors in the scenario which affect pricing the decision for the rings: • The company faces inelastic demand for this product as PED is -0.8 • The company sells individually-designed luxury products in a niche market • The company sets high prices for all its products • A price rise may strengthen the company's brand image as a provider of luxury jewellery

Good application may be awarded for any of the following: • Manipulating data in support of arguments such as:

• As PED = -0.8 and increase in price of 10% will only reduce demand by 8% therefore increasing revenue from selling the rings

• Original revenue = £1 500 x 100 = £150 000, new revenue = £1 650 x 92 = £151 800 • For developing arguments which are consistently in context.

2 (b) Analyse the reasons why Kate argued that increasing the price of the platinum rings by 10% would increase the company’s profits.

[7 marks]


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Possible lines of analysis will focus on the possible benefits of increasing the price of these rings: • Increasing price can increase revenue when demand is inelastic as consumers do not respond

significantly to higher prices. • PED is inelastic and so a price rise will have a smaller effect on demand. • The company will be selling fewer rings so its costs should fall.

Good analysis is shown when the overall answer provides a response to the question set explaining why this decision improves financial performance: • The outcome will be higher profits because consumers' buying decisions are not affected

greatly by the price - so a rise in price leads to a relatively small fall in demand and the result is higher revenue as nearly as many rings are sold at a higher price which should lead to higher profits.


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8–7

L3


Good analysis or

Good application

6–5



4–3


Relevant answers may include the following: • A niche market is a relatively small and identifiable segment of a larger market. Possible lines of application will be identifying and using factors from the scenario which relate to the niche market: • The niche luxury market is growing at a faster rate than the wider UK jewellery market • The company's sales fell in 2015 (by £1.9 million). • The market for luxury jewellery grew at 5% in 2012-15 and faster growth is forecast • The mass UK market contains some large competitors such as Goldsmiths which has 8% of

the market. Good application may be awarded for any of the following: • For combining relevant arguments such as the company is suffering falling sales in a market

which grew rapidly during 2010-14. • Manipulating data in support of arguments such as:

• the company's profits from the niche have fallen substantially between 2014 and 2015 from £4.998 million (£28m x 0.1785) to £3.981 million (£24.2 million x 0.1645).

• The company's sales fell by 13.57% in a market that was growing at an average rate of 5%.

• Some products are receiving high profit margins - platinum rings are 50% against an average of 16.4%.

• For developing arguments which are consistently in context.

2 (c) Do you think that Mortimer Ltd should continue to operate in this luxury jewellery niche market or sell its products in the mass UK jewellery market? Justify your decision.

[13 marks]


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Possible lines of analysis: • Niche markets which are growing relatively quickly may attract the attentions of larger

competitors. • Customers in a niche market may be more uniform and easier to understand than those in a

mass market. • The company may lack the resources to compete successfully in the mass market. • The company may not be widely known outside its niche and may struggle to establish a

customer base against larger competitors. Good analysis is shown by candidates having a clear focus on the question such as the following: • A chain of argument such as one showing how the company's strengths relate to the market

niche in which is operating rather than the mass market. • The development of a theme such as considering the forecast success of the niche market and

the potential that this may offer to the company for growth in the future. • A combination of arguments addressing both sides of the question. Evaluation, you should award marks using the grid below. Note: Evaluation also assesses students’ quality of written communication.


E3 Judgement with well supported justification. Focus is whether or not it should move into the wider market - will require comparison.

4

E2

Judgement with reasonable attempt at justification: • arguing both sides of the case (3 marks) • focusing on either positive or negative aspects of

proposed decision only (2 marks)

3-2

E1 Assertion or judgement which is unsupported. 1 Ideas for evaluation might include: • The niche market looks attractive in terms of potential and fits the company's strengths - it

doesn't need to leave, its problems appear internal (especially indecisiveness) and not related to the market. The company should stay in the niche market and focus on higher margin products such as platinum rings.

• Making such a move would damage the company's brand name and lose it many high price sales.

• The wider UK market for jewellery is more price competitive and contains large competitors - Mortimer Ltd would not necessarily fare well here.

• The wider UK market is three times as large and sales are increasing at 2.1% per year offering a tempting target for the company.

• The best approach may be enter the wider using a different brand name to avoid damaging its operations in the luxury market.


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Level Descriptor Marks




8–7

L3


Good analysis or

Good application

6–5



4


Relevant answers may include the following: • Sale and leaseback is the process by which a business sells an asset before leasing it back

from the new owner. • Cash flow is the movement of cash into and out of a business over time.

Possible lines of application include: • This is an expensive area of London in which property rents will be high. • The sale of the shop could raise £9.25 million. • Rents for commercial property in London are increasing. • The company is investing more in its stock. • Its unpaid customer accounts have risen from 9.7% of sales to 19.8%. • It offers favoured customers up to 60 days' trade credit • Its suppliers grant it just 11 days credit in 2015.

Good application may be awarded for any of the following: • Combining relevant points such as reducing purchases of stock to and reducing unpaid

accounts back to 2014 levels would improve cash balance significantly and better than 2014 figure. Renegotiating trade credit offered and received which is increasingly not in the company's favour: 60 days versus 11 days (from 18).

• Manipulating relevant data in support of arguments - its unpaid customer accounts have risen from £2.72 million to £4.79 million (a major part of its cash imbalance)

• For developing arguments which are consistently in context.

2 (d) Do you think the sale and leaseback of the shop the best solution for the company’s cash flow problems? Justify your decision.

[14 marks]


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Possible lines of analysis: • Proposing solutions with limited explanation of why they might be suitable, for example the

asset could be sold for a higher figure later. • The emphasis here may be on why the cash flow position is weak, rather than on solutions

intended to improve it. Good analysis is shown when the overall answer provides a response to the question set that focuses on the strengths and weaknesses of the proposed solutions. • A chain of argument linking the possible causes of the decline in the company's cash position

to the suitability of the proposed solution.

• Combining possible solutions to show how these will address the issues and bring advantages without too many disadvantages.



E3 Judgement with well supported justification. Focus is whether sale and leaseback is the best solution rather than simply a good one - will require comparison.

5-4

E2

Judgement with reasonable attempt at justification: • considering whether the benefits of a solution outweigh

the drawbacks (3 marks) • focusing on either positive or negative aspects of

proposed solutions only (2 marks)

3-2

E1 Assertion or judgement which is unsupported. 1 Ideas for evaluation might include: • Sale and leaseback may provide short-term benefits but at what long-term cost? Rental

charges in London could rise significantly and it is perhaps foolish to sell an asset that is expected to rise in value.

• Why should this have a single solution? A combination of approaches may avoid some of the more adverse consequences.

• Candidates could argue that this weakening cash position is the result of a combination of factors relating to poor decisions on cash management and that in the long-run better management is the answer.

• Data available is only for two years but cash flow problems have existed for 'several' years - makes it more difficult to justify solutions.

ASSESSMENT GRID


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Questions Content Application Analysis Evaluation Total 1 (a) 2 3 5 1 (b) 2 4 3 9 1 (c) 3 2 4 4 13 1 (d) 3 2 4 4 13 Q1 sub-total 10 11 11 8 40 2 (a) 2 2 2 6 2 (b) 3 2 2 7 2 (c) 3 2 4 4 13 2 (d) 3 2 4 5 14 Q2 sub-total 11 8 12 9 40 TOTAL 21 19 23 17 80

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a-level business studies mark scheme unit 02 - managing a … · 2017. 5. 17. · mark scheme –...

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