Level 1 Business Studies externals
1.1 ~ internal features (AS 90837)
Coverage as indicated in Curriculum Guide, and fleshed out
Types of business
Business funding options
Entrepreneurship
Business aims and
objectives
Communication
Rights and responsibilities
of employers and
employees
Market research
Types of production1
 Nature, organisation, financing of sole traders, partnerships
and companies
 Unlimited/limited liability and other advantages/
disadvantages
 Capital and revenue expenditure
 Internal and external finance
 Characteristics of entrepreneurs: risk-takers, organisers of
resources, innovators, people who think outside the square
 Innovation: developing new or improved
products/services, developing new marketing methods,
 Risk and reward
 Making a profit, ensuring business survival, expanding the
business
 Additional objective for some businesses is promoting
community concerns by, e.g. providing jobs, supporting
local causes, being environmentally responsible
 Articulating goals via vision, mission statement
http://www.ibbusinessandmanagement.com/13organisational-objectives.html
 Need for effective communication
 Methods of communication and their advantages/
disadvantages
 Barriers to effective communication
 Employment Relations Act 2000, Human Relations Act 1993
 Rights and obligations of employers
 Rights and obligations of employees
 Benefits to employees, employers, business, economy of
effective employment relationships
 Resolving employment problems
 At startup – is there a market for the business idea? What is
the state of the competition?
 Ongoing – marketing strategies are driven by continuing
research on the state of the market
 Quantitative and qualitative data
 Primary and secondary research
 Production process: inputs, manufacturing, outputs
1
Students need a good understanding of when each production method would be used and why the method
would be suitable for production/manufacture
S McVeigh, Team Solutions
1
Financial and records
statements2
Business success
Maori concepts
(comprehensive
explanations in Curriculum
Guide
 Job production, batch production, mass production
 Productivity; methods of improving productivity
http://www.ibbusinessandmanagement.com/51-productionmethods.html
 Need for record keeping: to monitor past progress and
plan for future periods
 Accounting cycle: source documents, journals, ledgers, trial
balance, financial reports
 Purpose and components of income statement, balance
sheet
http://www.ibbusinessandmanagement.com/35-financialaccounts.html
 Measuring success; reward for the entrepreneur
 Creating/growing employment
 Enhancing quality of life
 Wealth creation
 Tikanga - custom, obligations
 Putake – origin or reason for being
 Turanga - The positioning/anchor of the business
 Kaitiakitanga – Guardianship of natural resources
 Rangatiratanga - Exercise of leadership, authority,
guardianship and ownership rights
Although this standard focuses on Internal Features, external factors that impact on the
success of the business may be examined.
Exam Coverage
Business concepts, terms and concepts need to be understood, explained in detail and integrated
into resource information and the example/s of the local business/es studied in-depth. For
Excellence students need to use a range of examples and understand the consequences of actions
and choices made by the small business owner/s. Students need to link the features to the
successful operation and (financial) performance of the small business/es. They need to understand
why business performance is important and make recommendations that will enhance business
performance.
Types of business
2011
 Define a partnership
 Explain two advantages of a partnership over a sole
trader
 Sole traders and partnerships have unlimited liability;
define unlimited liability
2
Students do not need to be able to prepare statements or calculate ratios; the emphasis is on understanding
the difference between trading/income statement and balance sheet, and the meaning of key terms such as gross
profit. However, their understanding will be enhanced if they have some experience of preparing basic statements.
S McVeigh, Team Solutions
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
Business funding options
Entrepreneurship and
business objectives
Fully explain an advantage and a disadvantage to …
business of becoming a registered company rather than a
partnership; include a description of how the ownership
of … would change if it became a registered company; a
full explanation of one advantage of a registered
company; a full explanation of one disadvantage of a
registered company
2012 (part of Q1)
 Discuss the impact of … leaving their present employment
and setting up a partnership; describe the term
partnership; fully explain two advantages for … of setting
up as a partnership; fully explain two negative impacts on
… of leaving their present jobs and setting up a
partnership
2010
 Describe the different purposes of short-term and longterm finance
 Describe the business term bank loan
 State one disadvantage of using a bank loan as a source
of finance
 Explain two factors a business should consider before
using an external source of finance
 A small business is planning on expanding and is seeking
finance. Using the example of a small business you have
studied, discuss one suitable source of finance [from a list
of 7 options given]; describe the source of finance and
give one example relevant to the named business; explain
why this source of finance would be suitable for the
business; explain why it would be better for the named
business than one other source of finance listed above
2012 (part of Q1)
 Describe the difference between internal and external
funding
 Explain why … might choose long-term finance instead of
short-term finance for their new business
 Identify one piece of information that a bank may require
before they would be prepared to offer … finance
2010
 Identify two characteristics of an entrepreneur
 Explain one reason why people start up their own
businesses
 State two disadvantages of starting up your own business
 Discuss one key factor that you believe has contributed to
the success of a named business you have studied;
describe the key factor and provide one example relevant
to the business or its owner; explain how this factor has
S McVeigh, Team Solutions
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Communication
Rights and responsibilities of
employers and employees
contributed to the success of the business; explain why
this factor has been more important for the success of
the business than one other factor listed above [five
factors listed]
2011
 Describe the role of the entrepreneur in business
 Identify two entrepreneurial skills and, using examples,
explain why … may need to show these when starting her
business
 Outline two reasons why businesses need to have clear
aims and objectives
 Discuss the impacts of one possible aim or objective that
… could set for her first year in business; include a
description of a possible aim or objective; a full
explanation of how … can achieve this aim or objective; a
full explanation of the impacts that achieving this will
have on the business
2011
 Describe what is meant by communication
 A manager must communicate with workers about a need
to change the hours they work, and suppliers about
ordering stock. For each point, identify a suitable method
of communication, and explain why it is suitable
 Outline two reasons why it is important for businesses to
have effective lines of communication
 Discuss one barrier to communication that may exist for a
business. You should answer this question by referring to
a small business you have studied in depth. State the
name of the business and the good/service/s it sells or
provides. In your answer include a clearly identified
barrier to communication, a full explanation of how this
barrier to communication may affect the business
negatively, an alternative method of communication and
a full explanation of how this may solve the
communication problem
2010
 Identify two responsibilities the employer has that relate
to the local workers
 Explain how … would benefit from carrying out one of the
responsibilities you identified above
 Other than punctuality, state one responsibility that …
could expect its workers to meet
 Discuss one issue that might arise for the business due to
… failing to meet her responsibility to turn up on time;
outline an issue that might arise and provide an example
relevant to the business; explain a possible impact of that
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Market research
Types of production
Financial records/statements
issue on …; explain how … or the manager could resolve
the issue
2012
 Define the term employee rights
 Describe one responsibility that employees of … would be
required to meet, and explain why this is important for
the business
 Describe one advantage of being a responsible employee
 Discuss one statutory right … future employees can
expect. Select a statutory right [from a range of four
given]. Describe the statutory right you have chosen; fully
explain two advantages to … of ensuring that the
statutory rights of their employees are maintained;
explain two disadvantages for their employees if … do not
observe the statutory rights.
2012
 Describe the purpose of market research
 There are two types of data that can be collected –
qualitative and quantitative. Explain what qualitative data
is and provide an example
 Describe what closed-ended questions are and give an
example
 Discuss which method of market research would be more
suitable for … Explain the difference between primary and
secondary research by giving an example of each; Fully
explain why primary or secondary market research is
more suitable for …; Fully explain one disadvantage of the
method you have selected
2010
 Define the business term job production.
 Explain the key difference between batch production and
flow production, using suitable examples
 State the method of production that the business would
use to produce the labels needed for a special event.
 Discuss the method of production that would be the most
suitable for … when making their popular jam; state
whether job, batch or flow production would be the most
suitable method to use; give one example of how …
would use that method; explain two advantages of this
and two disadvantages of the other two methods
2011
 Describe the purpose of an income statement
 Explain two possible problems with … business that an
income statement might reveal
 Describe the meaning of the terms gross profit and net
profit as used in an income statement
S McVeigh, Team Solutions
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
Fully explain a financial issue, identified in the balance
sheet for the business, which the accountant may wish to
discuss with …; include a clearly identified issue; a full
explanation of why this issue is a problem for the
business; a full explanation of a solution to the problem
and the consequences of the solution
Business success
Maori concepts
1.2 ~ external factors (AS 90838)
Coverage as indicated in Curriculum Guide, and fleshed out
Stakeholders
Environmental
sustainability
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Citizenship
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Legal influences
Economic influences
Environmental influences
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Competition and the local

marketplace

Business opportunities from 
global connections
Internal: owners, managers, workers
External: suppliers, lenders, government
Conflict of stakeholders’ objectives
Responsibility for environmental sustainability – how this
may conflict with business goals
Specific actions such as waste reduction, energy efficiency,
recycling
Direct and social costs and benefits
Businesses as corporate citizens – expectations of the role
of small business in the development and well being of
society
Business in community: providing employment, supporting
community organisations, working with local government
Employment Relations Act 2000
Consumer Guarantees Act 1993
Fair Trading Act 1986
Health & Safety in Employment Act 1992
Privacy Act 1993
Resource Management Act 1991
Employment levels
Wage rates
Interest rates
The business cycle: growth, boom, recession
Factors affecting the physical environment, e.g. weather
patterns, local government regulations
Influences of district or regional councils over land use –
zoning, resource consent
Price and non-price competition
Minimising production costs
International trade – importing/exporting goods/services
between countries
S McVeigh, Team Solutions
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Maori concepts
(comprehensive
explanations in Curriculum
Guide
 Opportunities from increased international trade
 Threats from increased international trade
 Barriers to free trade ~ different legal systems, language/
cultural differences
 Tikanga - custom, obligations
 Putake – origin or reason for being
 Turanga - the positioning/anchor of the business
 Kaitiakitanga – guardianship of natural resources
 Rangatiratanga - exercise of leadership, authority,
guardianship and ownership rights
External factors need to be explained using relevant examples and linked to issues they
present for the business. Students are expected to explain relevant solutions for the small
business. For Excellence students need to understand fully the impact(s) of external factors
on small businesses and integrate these into relevant examples. Excellence students must
also provide explanations of consequences for the business’s performance or status.
External factors need to be explained across different areas of the business in the context of
the small business studied in-depth. Students need to demonstrate detailed understanding
of the external factors and will need to have studied each one in considerable detail and
depth during the year to perform at the Excellence level in the examination. Students
should be exposed to relevant Māori concepts and be able to incorporate these into their
explanations.
Summary of external factors:
 STEEPLE (society, technology, economic, environmental, political, legal, ethical factors) ~
this is an acronym to assist students to remember the factors
 PESTLE (political, economic, environmental social, technological, legal, environmental) ~
gives ranking as stable political environment is necessary for business to flourish
Exam Coverage
Stakeholders
Environmental sustainability
2011
 Identify two external stakeholders of … who might be
negatively affected by a decision to change … product line
 Explain, by providing examples, how the two stakeholders
identified in part a could be negatively affected
 Identify one internal stakeholder of …
 Discuss a situation where two stakeholders of … have
conflicting objectives; include a description of the two
stakeholders and their objectives; a full explanation of
why their objectives may conflict; a full explanation of
how … could minimise the conflict
2010
 Define the business term environmental sustainability
and give one example relevant to …
 Explain two effects that the fishing permit will have on
S McVeigh, Team Solutions
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Citizenship
Legal influences
the operations of …
 State one possible negative impact of the fishing permit
on customers of …;
 Discuss a positive outcome for … of operating in an
environmental sustainable manner; outline one positive
outcome for … of operating in an environmentally
sustainable manner; explain how this positive outcome
would affect … in the longer term; explain why customers
might choose to use … charter service rather than that of
a competing firm whose operations are less
environmentally sustainable
2012
 Describe why environmental sustainability is important
for all businesses
 Explain one cost to society of businesses not operating in
an environmentally sustainable manner
 Identify one regulation that local or central government
could impose to ensure businesses operate in an
environmentally sustainable manner
 Discuss the benefits to … of becoming more
environmentally sustainable; identify one action … may
have taken, or can take, to become more environmentally
sustainable; fully explain two possible positive
consequences for … of becoming more environmentally
sustainable; fully explain two possible negative
consequences for … of becoming more environmentally
sustainable
2010
 Define the business term citizenship and give one other
example of good citizenship that … might practise
 Explain two reasons why businesses have a responsibility
to demonstrate good citizenship
 State one benefit of demonstrating good citizenship for …
 Discuss the possible effects of … policy of donating tips to
the local children’s hospital on the business; describe one
reaction that staff might have to the policy; explain one
possible positive effect of the policy on the reputation of
…; explain why the policy might result in negative
publicity if it was mentioned on advertising material
2011
 Identify the Act of Parliament that covers the type of
incident referred to in the scenario.
 Explain the consumer’s legal entitlements under the Act
you named and how they relate to this particular case
 Describe two remedies that could be used to rectify the
situation referred to in the scenario above
S McVeigh, Team Solutions
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
Economic influences
Referring to …, fully discuss one other law that has been
created to protect consumers; include a description of
one other law that has been created to protect
consumers; an explanation, using examples, of how this
law may be applied to …; a full explanation of the possible
consequences for the hair salon of not complying with
this law
2012
 Identify one objective of the Privacy Act 1993
 Explain one benefit of the PA for the employees of …
 Describe the term compliance costs and provide an
example
 Discuss the issues relating to the PA that … has to
consider when dealing with online customers; identify
one privacy issue … needs to consider with regard to its
online customers; explain one consequence for … of not
complying with the PA; fully explain two advantages for …
of complying with all aspects of the PA
2010
 Define the business term recession
 State one effect of a recession on small businesses
 Explain why an owner of a small business is likely to
invest more in the business when the economy is coming
out of a recession
 Discuss the impact that increasing consumer confidence
might have on a named small business you have studied;
define the term consumer confidence and give one
example relevant to the business; explain one direct
impact that increasing consumer confidence might have
on the business; explain how increasing consumer
confidence could have a flow-on effect on employment
for the business
2011
 Identify Stage X and Stage Z on the business cycle
diagram below
 Explain what would be occurring in the economy at Stage
Z and what the likely consequences would be for
individual businesses
 Describe what is meant by a slump or a recession when
referring to the economy
 Identify a business you have studied. Using this, discuss
one way the government may control its business activity;
include a description of one government control that
would be applicable to the named business; an
explanation, using examples, of what impact this
government-imposed control might have on the named
S McVeigh, Team Solutions
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Environmental influences
Competition and the local
marketplace
business; a full explanation of the possible effects on the
community if this control was not put in place
2011
 Identify two impacts on the environment that might arise
from a business using hazardous chemicals
 Explain one benefit to and one cost to … of complying
with laws that are designed to protect the environment
 See kaitiakitanga below
 Discuss the issue of the waste leaking from … factory;
include an identification of the type of pollution this issue
is creating; an explanation, using examples, of how this
issue could impact on the neighbours using the creek; a
full explanation of how … could minimise the impact on
the neighbours bordering the creek and the advantages
of using such a solution
2010
 Outline one reason why similar businesses might freely
choose to be located in the same area
 Explain how the grouping of similar businesses together
would increase local competition for those businesses
 Describe the benefits of local competition for customers
 Discuss how a loss of market share to a local competitor
would affect a small business you have studied; define
the business term market share and give one example
relevant to your named business; explain the immediate
effect the loss of market share would have on that
business; explain one possible long-term effect the loss of
market share could have on the named business if it did
not respond effectively
2012
 Define the term local business competition
 Explain the importance of customer service when
operating in a competitive market
 Describe one action, other than customer service, that …
could take to show that it is different from, and possibly
better than, other merino wool producers
 Discuss, with reference to a small business you have
studied, how an analysis of the competition of that
business could help it to improve its position in the
market; describe one method the business has used, or
may use, to analyse the competition; identify information
from the analysis and explain how it may assist the
business to improve its position in the market; fully
explain two actions the business has taken, or may take,
in response to the information, to become more locally
competitive
S McVeigh, Team Solutions
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Business opportunities from
global connections
Maori concepts
2012
 Define the term international business
 Explain how the internet can provide opportunities for NZ
businesses
 Identify one security issue that may be faced by … and
other NZ businesses operating online
 Discuss the consequences for … of becoming an exporter;
identify one change … should have made when it became
an exporter; fully explain two possible positive
consequences for … of becoming an exporter; fully
explain two possible negative consequences, apart from
security issues, for … of becoming an exporter
 Tikanga – custom, obligations
 Putake – origin or reason for being
 Turanga – the positioning/anchor of the business
 Kaitiakitanga – guardianship of natural resources
2011 part of Q1
Describe the Maori business concept of kaitiakitanga in
regard to the environment
 Rangatiratanga – exercise of leadership, authority,
guardianship and ownership rights
1.3 ~ operational problems (AS 90836)
Coverage as indicated in Curriculum Guide, and fleshed out
Recruitment
Communications
Cash Flow
Workplace incidents
 Employment problems related to hiring and training of staff
- poor candidate selection, cultural misalignment
 Performance management systems
 Consequences – personal grievances, dismissal
 Solutions – induction, retraining, mediation
 Importance of effective communication for control,
decision-making, positive relationships
 Internal and external communications
 Causes and consequences of breakdown in
communications
 Importance of cash flow; consequences of liquidity
problems
 Inflows/outflows, the operating cycle
 Causes of cash flow problems – low sales, slow payers,
credit tightening, bad debts, excessive spending
 Solutions
 Production failure
S McVeigh, Team Solutions
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Marketplace changes
Acts of God
Production issues
Maori concepts
(comprehensive
explanations in Curriculum
Guide
 Accidents, health & safety issues
 Consequences – financial loss, increase in insurance
premiums
 New competitor entering marketplace
 Bad publicity
 Floods, power outage, earthquakes, tsunamis, storms,
epidemics
 Preparation and training
 Insurance
 Supply chain issues
 Machinery failure
 Planning as a means of preventing problems
 Consequences of disruption to production
 Tikanga - custom, obligations
 Putake – origin or reason for being
 Turanga - The positioning/anchor of the business
 Kaitiakitanga – Guardianship of natural resources
 Rangatiratanga - Exercise of leadership, authority,
guardianship and ownership rights
Exam Coverage
Staffing
2010
 Define the business term export
 Give two reasons why … might want to export cheeses
overseas
 Discuss why the planned introduction of the new
machinery created a staff morale problem at … even
before it arrived; describe the staff morale problem;
explain why this staff morale problem has occurred when
it need not have
 Discuss the best solution for the owners of … that would
address this staff morale problem; identify at least two
appropriate solutions; choose the best solution and
explain how it would address the problem; explain why it
would be a better solution that one other solution
2012
 Use the resource material and your business knowledge
to explain recruitment issues; define the term
recruitment of employees
 Explain one negative consequence of a staff shortage for
…
 Describe one possible cause of … recruitment issues
 Discuss possible solutions for … which would deal with
S McVeigh, Team Solutions
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Communications
Cash flow
the recruitment issue; describe one appropriate shortterm solution; explain two advantages of this solution;
fully explain two long-term measures that … could
implement to avoid similar recruitment issues in the
future
2010
 Define the business term brand image
 Give two reasons why … might have changed its brand
image
 Discuss the cause of the branding problem that … faces;
identify the factor, issue or situation that led to the
branding problem; explain how it caused the branding
problem
 Discuss the solution for … that would best resolve the
branding problem you wrote about above; identify at
least two appropriate solutions; choose the best solution
and explain how it would resolve the branding problem;
explain why it would be a better solution than one other
solution
2011
 Use the information in the resource and your business
knowledge to fully explain the communication issues
caused by the restructuring
 Describe the difference between one-way and two-way
communication
 Fully explain, using examples, the importance of effective
communication in the restructuring of the business
 Describe one reaction employees might have to the
restructuring
 Discuss the best way for … to improve communications
and deal with the issue referred to above; describe two
appropriate solutions; choose the better solution and
explain how it would deal with the issue; fully explain why
it would be a better solution than the other solution
2012
 Use the resource material and your business knowledge
to fully explain the cash flow issues; describe one reason
for … completing a cash flow forecast
 Explain why managing cash flow is vital for the success of
any business
 Outline one reason why actual cash flow may differ from
forecasted cash flow
 Discuss the best way for … to deal with its cash flow
issues; describe one appropriate short-term solution;
explain two advantages of this solution; fully explain two
long-term solutions that … should consider in order to
S McVeigh, Team Solutions
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avoid cash flow problems in the future
Workplace incidents
Marketplace changes
Production issues
Act of God
2011
 Define what a market is in a business context
 Fully explain how … could be negatively impacted by new
competition
 Identify one potential benefit to the customers of … of
having a new competitor
 Discuss the best solution for … which would deal with the
issue of the new competitor; describe two appropriate
solutions; choose the better solution and explain how it
would deal with the issue; fully explain why it would be a
better solution than the other solution
2010
 Define the business term manager
 Describe one aspect of the business that … the manager
would be responsible for
 Discuss how the refusal of some staff to communicate
with … could contribute to a production problem for …;
describe a possible production problem; explain how the
refusal of those staff to communicate with … would result
in that particular production problem
 Discuss the best solution for … that would reduce the
likelihood of such production problems occurring; identify
at least two appropriate solutions; choose the best
solution and explain how it would reduce the likelihood of
such production problems occurring; explain why it would
be a better solution than one other solution
2011
 Use the information in the resource material and your
business knowledge to fully explain the production issues;
describe the type of production method … would be using
 Fully explain the implications for … of not being able to
use their machinery and equipment for an extended
period of time
 Describe a benefit for … if … were not able to use their
machinery or equipment for an extended period of time
 Discuss how … could best resolve the production problem
of the run-down machinery and equipment; describe two
appropriate solutions; choose the better short-term
solution and explain the advantages of this; fully explain
why this solution might not be the better solution in the
long-term; explain the next steps … would need to
consider
2012
 Use the resource material and your business knowledge
S McVeigh, Team Solutions
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to fully explain the issues caused by the flood; outline an
immediate issue the flood (and act of God) has created
for …
Explain the difference between an act of God and criminal
damage
Identify one other type of act of God that … should
prepare for
Discuss the best solution for … which would deal with the
issue of the damaged stock and machinery in the drying
room; describe two appropriate solutions; choose the
better solution and explain how it would deal with the
issue; fully explain why it would be a better solution than
the other one, by explaining a short-term and a long-term
consequence of the solution
The examination for this standard is based on a resource case study. Students need to have
studied a range of different businesses so they are able to relate their business knowledge to
the specific business in the case study. They need to have classroom opportunities to
transfer knowledge about one business to another. Students must be able to provide
alternative solutions to operational problems. They must then be able to
promote/recommend the best solution and explain why it is the best solution for the
performance/success/effective operations of the business and for the business owner/s.
Students need to develop good interpretation skills. The ability to extract from resource
material the key issues for the business and incorporate them effectively into their answers
will be the key to success in this standard.
S McVeigh, Team Solutions
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