Mark Scheme

Section A: 1. C; 2. C; 3. C; 4. B. (4) 5. A stakeholder is any individual or group with an interest in / affected by a business (1); example (owners, employees, customers, suppliers, government, local community) (1). (2) 6. Any two: near the market/customers; near labour; near raw materials; transport links; cost of premises; competitors; e-commerce. (2) 7. Quality control = inspecting products at the end of production (1); quality assurance = building quality in at every stage (1). (2) 8. Identifies a benefit (e.g. higher productivity, better quality, higher motivation, fewer errors) (1); explained (1); developed/linked to the business (1). (3) 9. Internal (any two): retained profit, selling assets, owner's savings (2). External (any two): loan, overdraft, share capital, crowdfunding, trade credit, leasing, grant (2). (4) 10. Advantage stated (limited liability / easier to raise finance through shares / separate legal identity) (1); explained (1); applied to the change from sole trader (1). (3)

11 (a) Advantage of job production: products are customised/high quality / can charge a higher price (2). Disadvantage: slow / labour-intensive / high unit cost (2). (4) 11 (b) Analysis (6): batch production lets Aisha make several kayaks at once → faster output → meet rising demand; lower unit costs through some economies of scale; but still some variety between batches. Reward developed chains of reasoning. (L3 5–6 sustained analysis; L2 3–4 some analysis; L1 1–2 statements.) (6) 12 (a) Internal = filling a vacancy from existing staff (1); external = hiring from outside the business (1). (2) 12 (b) Recommendation with justification (9): arguments for internal (cheaper, quicker, motivating, knows the staff) vs external (new skills/ideas, wider pool, needed as the business is small with few staff to promote). A supported judgement is required. (L4 7–9 justified recommendation; L3 5–6 balanced analysis; L2 3–4 some application; L1 1–2 limited.) (9) 13. Analysis (6): quality assurance builds quality in at each stage → fewer faulty kayaks/returns → protects reputation as the business grows → supports the premium price. (L3 5–6; L2 3–4; L1 1–2.) (6) 14. Two stakeholders identified (e.g. employees, customers, suppliers, local community) (1+1); each effect explained and applied to expansion (3+3). (8)

15 (a) Many layers of management / long chain of command (2). (b) Reduced motivation: employees feel distant from decisions / little responsibility / slow communication (1) → demotivated (1) → developed (1). (5) 16. Analysis (6): motivated staff → higher productivity, better quality, lower absenteeism, lower staff turnover → lower recruitment costs. (L3 5–6; L2 3–4; L1 1–2.) (6) 17. Recommendation (9): financial (pay, bonus) vs non-financial (job rotation, enrichment, responsibility, praise); justified judgement applied to a manufacturer with 120 staff. (Levels as Q12b.) (9) 18. Evaluate (15): benefits of a flatter structure (wider spans of control, faster communication, more responsibility/motivation, lower management costs) vs drawbacks (managers overstretched, fewer promotion levels, disruption of change); alternative ways to raise productivity (motivation, training, technology). A justified conclusion is required.

• Level 4 (13–15): Sustained evaluation of both sides with a well-justified conclusion, applied to Bright Sparks.
• Level 3 (9–12): Good analysis of advantages and disadvantages, conclusion present.
• Level 2 (5–8): Some analysis, limited application.
• Level 1 (1–4): Basic statements.

Sample Answers with Examiner Commentary

Question 18 — Sample Answers

Grade 9 (top of Higher) answer "Moving to a flatter structure could improve productivity at Bright Sparks. With fewer layers, the spans of control widen and employees are given more responsibility, which can be a powerful non-financial motivator — motivated staff tend to work harder and produce better quality, raising productivity. Communication also becomes faster because messages pass through fewer layers, so problems on the production line are solved more quickly. It also cuts management salary costs.

However, there are risks. With wider spans of control, the remaining managers may be overstretched and unable to supervise 120 staff effectively, which could actually reduce quality and productivity. There are also fewer promotion opportunities, which might demotivate ambitious workers, and the change itself could be disruptive and unsettling in the short term.

A flatter structure is only one option. Bright Sparks could instead invest in training or new technology, or improve motivation directly through job enrichment. In my judgement, a flatter structure could help, but only if it is combined with proper support and training for the managers who take on wider spans of control. On its own it is not guaranteed to raise productivity, so I would recommend it as part of a wider plan rather than the single solution." Mark: 14/15. Examiner commentary: This is sustained, two-sided evaluation that is firmly applied to Bright Sparks (120 staff, the production line). It considers realistic drawbacks (overstretched managers) and alternatives, and reaches a genuinely justified, conditional conclusion — the hallmark of Level 4.

Grade 6 (solid pass) answer "A flatter structure would help because there are fewer managers so communication is faster and workers have more responsibility which motivates them, so productivity goes up. But the managers might have too many people to look after. Overall I think a flatter structure is a good idea because it saves money on managers' wages." Mark: 8/15. Examiner commentary: There is clear analysis of one advantage (communication/motivation) and one drawback (overstretched managers), with a conclusion. To reach Level 3/4 it needed more development, application to the specific business and consideration of alternatives such as training or technology before concluding.

Grade 3 (near miss) answer "They should have a flat structure because tall structures are bad and have too many bosses. Workers don't like lots of bosses. This will make more products." Mark: 3/15. Examiner commentary: Shows awareness that tall structures have many layers, but the reasoning is assertion rather than analysis ("tall structures are bad"). There is no balanced argument, no application to Bright Sparks and no justified conclusion. To improve, explain how the change affects productivity and weigh both sides.

Question 16 — Sample Answers

Grade 9 answer "If Bright Sparks improves motivation, employees are likely to work harder and more carefully, raising both the quantity and quality of components produced — directly increasing productivity. Motivated staff also take fewer days off (lower absenteeism) and are less likely to leave, so staff turnover falls. This saves the firm money on recruiting and training replacements, and means experienced workers are retained, which further supports quality and output." Mark: 6/6. Examiner commentary: Two developed chains of analysis (productivity/quality and absenteeism/turnover → cost savings), clearly linked to a manufacturer. Full marks.

Grade 6 answer "Motivated workers work harder so they make more products. They are also happier so they don't leave as much, which is good for the business." Mark: 4/6. Examiner commentary: Two correct points (productivity and staff turnover) but the chains are short. Developing why lower turnover benefits the firm (saved recruitment/training costs) would have reached the top band.