BUSINESS STUDIES 0450/01 F3 MID YEAR Paper 1 Short Answer and Data Response 2 hours 30 mins INSTRUCTIONS ● Answer all questions. ● Use a black or dark blue pen. You may use an HB pencil for any diagrams or graphs. ● Write your name, centre number and candidate number in the boxes at the top of the page. ● Write your answer to each question in the space provided. ● Do not use an erasable pen or correction fluid. ● Do not write on any bar codes. ● You may use a calculator. INFORMATION ● The total mark for this paper is 108. ● The number of marks for each question or part question is shown in brackets [ ] 1.ReBag is a social enterprise. ReBag employs 30 people in four small towns in different parts of the country. They work from home and make a range of bags from pieces of old fabric (cloth). Asha started the business three years ago using micro-finance. Last year ReBag’s revenue was $700. Asha said: ‘Our external stakeholders want ReBag to employ people in five more towns. Getting a bank loan to expand the business will be a problem. What will I do about management? How will I inform workers about possible expansion?’ (a) Define ‘social enterprise’. ................................................................................................................................................... .............................................................................................................................................. [2] (b) Identify two functions of management. Function 1: ................................................................................................................................ ................................................................................................................................................... Function 2: ................................................................................................................................ .............................................................................................................................................. [2] (c) Identify four external stakeholder groups. Stakeholder group 1: ................................................................................................................ ................................................................................................................................................... Stakeholder group 2: ................................................................................................................ ................................................................................................................................................... Stakeholder group 3: ................................................................................................................ ................................................................................................................................................... Stakeholder group 4: ................................................................................................................ .............................................................................................................................................. [4] (d) Explain two possible reasons why it might be difficult for ReBag to get a bank loan. Reason 1: ................................................................................................................................. ................................................................................................................................................... Explanation: .............................................................................................................................. ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... Reason 2: ................................................................................................................................. ................................................................................................................................................... Explanation: .............................................................................................................................. ................................................................................................................................................... ................................................................................................................................................... .............................................................................................................................................. [6] (e) Explain two possible methods of internal communication that a small business could use to inform workers about a possible expansion. Justify which method should be chosen. ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... [8] 2. BKH is a large public limited company. It has 2 000 employees across 18 locations. BKH sells a range of insurance products including house and car insurance. BKH’s shareholders want the business to increase profit. The Managing Director knows increasing profit can conflict with the objectives of other stakeholder groups. She said: ‘Private sector businesses have different objectives to public sector organisations.’ BKH is also planning to expand by taking over another insurance company. (a) Define ‘public sector’. ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... [2] (b) Define ‘profit’. ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... [2] (c) Identify four ways to measure the size of a business. Way 1: ............................................................................................................................... ........................................................................................................................................... Way 2: ............................................................................................................................... ........................................................................................................................................... Way 3: ............................................................................................................................... ........................................................................................................................................... Way 4: ............................................................................................................................... ........................................................................................................................................... [4] Explain one way each stakeholder’s objectives might conflict with BKH’s objective to increase profit. (d) Customers objective: ........................................................................................................ ........................................................................................................................................... How this objective might conflict: ...................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... Employees objective: ........................................................................................................ ........................................................................................................................................... How this objective might conflict: ...................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... [6] Do you think economies of scale are the most important reason for taking over another business? Justify your answer. (e) ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... [8] 3. DNG provides electricity to 16 million customers. It is a limited company which means DNG’s shareholders benefit from limited liability. DNG is planning to stop using coal to produce its electricity.Pressure groups had an influence on this decision. The Managing Director knows there will be an opportunity cost to making this change. She is considering the best way to communicate this important information to DNG’s 6500 employees. (a) Define ‘opportunity cost’. ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... [2] (b) Identify two limitations of using the number of employees to measure the size of a business. Limitation 1: ...................................................................................................................... ........................................................................................................................................... Limitation 2: ...................................................................................................................... ........................................................................................................................................... [2] (c) Outline how having limited liability might benefit DNG’s shareholders. ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... [4] (d) Explain two ways a pressure group might influence DNG’s decisions. Way 1: ............................................................................................................................... ........................................................................................................................................... Explanation: ...................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... Way 2: ............................................................................................................................... ........................................................................................................................................... Explanation: ...................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... [6] (e)Explain two methods of internal communication a large business could use to share important information with its employees. Justify which method should be used. ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... [8] 4. DZD is a large parcel delivery business. Many of its employees work part-time. DZD’s directors are planning to expand the business and have to decide on a suitable source of finance for 20 new vehicles. DZD will also recruit 60 new employees. The Human Resources Director is preparing a job description for the new employees. She is considering using Maslow’s hierarchy of needs to increase the motivation of DZD’s employees. (a) Define ‘job description’. ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... [2] (b) Identify two levels from Maslow’s hierarchy of needs. 1: ....................................................................................................................................... ........................................................................................................................................... 2: ....................................................................................................................................... ........................................................................................................................................... [2] (c) Outline two factors DZD should consider when deciding which applicants to recruit. Factor 1: ........................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... Factor 2: ........................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... [4] Explain two sources of finance DZD might use for the new vehicles. Source of finance 1: .......................................................................................................... ........................................................................................................................................... Explanation: ...................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... Source of finance 2: .......................................................................................................... ........................................................................................................................................... Explanation: ...................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... [6] (e) Do you think a service business should only employ part-time workers? Justify your answer. ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... [6] Gloria is a sole trader. Her business provides house-cleaning services. Gloria uses telephone calls to communicate with her 4 employees. She wants to expand the business by offering a repair service. Gloria plans to carry out some market research. She has been told producing a business plan can help to reduce risk. Gloria would also like to reduce her workload and is considering taking on a business partner. (a) Identify two ways a business plan can help a business to reduce risk. Way 1: ............................................................................................................................... ........................................................................................................................................... Way 2: ............................................................................................................................... ........................................................................................................................................... [2] (b) Identify two possible reasons why a business might want to expand. Reason 1: ......................................................................................................................... ........................................................................................................................................... Reason 2: ......................................................................................................................... ........................................................................................................................................... [2] Outline one advantage and one disadvantage to Gloria of using telephone calls as a method of communication with her employees. (c) Advantage: ....................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... Disadvantage: ................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... [4 (5)DBR is a mining business. It is a large public limited company which operates in the primary sector.DBR has 8 diamond mines and has 3000 employees. Specialisation is important. DBR has grown quickly over the past 5 years. The Managing Director is worried about possible diseconomies of scale as the business continues to grow. In 2022 DBR’s profit was $600 million. (a) Identify two benefits to a business of specialisation. Benefit 1: .......................................................................................................................... ........................................................................................................................................... Benefit 2: .......................................................................................................................... ........................................................................................................................................... [2] (b) Identify two ways a business can grow. Way 1: ............................................................................................................................... ........................................................................................................................................... Way 2: ............................................................................................................................... ........................................................................................................................................... [2] (e) Outline one possible advantage and one possible disadvantage of DBR being a public limited company. Advantage: ....................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... Disadvantage: ................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... [4 (d) Explain two diseconomies of scale DBR might experience. Diseconomy of scale 1: .................................................................................................... ........................................................................................................................................... Explanation: ...................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... Diseconomy of scale 2: .................................................................................................... ........................................................................................................................................... Explanation: ...................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... [6] (e)Explain two ways the size of a primary sector business can be measured. Which do you think is the best way? Justify your answer. ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... 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