Describe the advantages and disadvantages of a wide span of control (5)
Advantages
• Staff are empowered to make their own decisions and to carry out their own tasks
without interference by managers.
• Less managers are required and wages are saved.
• Less levels of communication for decisions to pass through.
• High quality staff should exist.
Disadvantages
• Managers may make snap decisions as they are looking after too many employees.
• Managers time will be at a premium.
• Managers will have less time for planning.
• Subordinates may make decisions they are not trained to make.
2008 4. Distinguish between delayering and downsizing.
• Delayering involves removing a whole level of management to flatten an organisation’s
structure.
• Downsizing involves closing specific areas of the organisation to cut costs.
• Purpose.
• Span of control.
• Communication.
• Efficiency.
• Cost.
• Competitiveness.
2007 5(B)
Product endorsement is when firms pay famous people to promote their product or
service. Describe the advantages and disadvantages of product endorsement. (5)
• Consumers associate products with the personality.
• Gives a good image of the organisation.
• Consumers will purchase products to be seen as the
same as the personality.
• Increases sales if the personality is successful.
• Involves very high costs to pay personalities for their
name/image.
• If personality has a problem then the product can
suffer the negative publicity.
• Organisations need to choose personalities carefully
and ensure they portray the correct image the
organisation wants to use.
Explain the advantages to an organisation of using market segmentation (4)
• Products are developed that suit a particular market segment.
• Allows price differentiation for different market segments.
• The place products are sold at will be appropriate for the particular segment.
• Advertising can be specific for certain segments.
• Promotional offers can be targeted to specific segments.
2008 4(a)
Describe the stages that take place before a new product is launched onto the market. (6)
• Generate the idea through market research.
• Analyse the idea.
• Find the appropriate finance for the new product.
• Decide if product is legal/technically possible/can be produced.
• Produce a prototype.
• Test market.
• Make any required alterations.
• Full scale production.
Advertise the product prior to launch.
2010 3 (C)
Discuss the effects of becoming part of a franchise.
(5)
• Using an established name/brand
• Reduces the risk of failure in the marketplace
• Franchiser will provide training
• Franchiser will advertise nationally
• Business idea is already successful
• Product innovation is shared
• Royalties are paid to the franchiser from profits
• Franchiser can demand exactly how a business operates
• Bad publicity can affect the whole franchise
(Invites the use of positive and negative comments but full marks can be gained by only
positive or negative comments.)