Cambridge International AS & A Level

BUSINESS 9609/23
Paper 2 Business Concepts 2 May/June 2023
MARK SCHEME
Maximum Mark: 60

Published

This mark scheme is published as an aid to teachers and candidates, to indicate the requirements of the
examination. It shows the basis on which Examiners were instructed to award marks. It does not indicate the
details of the discussions that took place at an Examiners’ meeting before marking began, which would have
considered the acceptability of alternative answers.

Mark schemes should be read in conjunction with the question paper and the Principal Examiner Report for
Teachers.

Cambridge International will not enter into discussions about these mark schemes.

Cambridge International is publishing the mark schemes for the May/June 2023 series for most
Cambridge IGCSE, Cambridge International A and AS Level and Cambridge Pre-U components, and some
Cambridge O Level components.

This document consists of 34 printed pages.

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Generic Marking Principles

These general marking principles must be applied by all examiners when marking candidate answers. They should be applied alongside the
specific content of the mark scheme or generic level descriptors for a question. Each question paper and mark scheme will also comply with these
marking principles.

GENERIC MARKING PRINCIPLE 1:

Marks must be awarded in line with:

 the specific content of the mark scheme or the generic level descriptors for the question
 the specific skills defined in the mark scheme or in the generic level descriptors for the question
 the standard of response required by a candidate as exemplified by the standardisation scripts.

GENERIC MARKING PRINCIPLE 2:

Marks awarded are always whole marks (not half marks, or other fractions).

GENERIC MARKING PRINCIPLE 3:

Marks must be awarded positively:

 marks are awarded for correct/valid answers, as defined in the mark scheme. However, credit is given for valid answers which go beyond
the scope of the syllabus and mark scheme, referring to your Team Leader as appropriate
 marks are awarded when candidates clearly demonstrate what they know and can do
 marks are not deducted for errors
 marks are not deducted for omissions
 answers should only be judged on the quality of spelling, punctuation and grammar when these features are specifically assessed by the
question as indicated by the mark scheme. The meaning, however, should be unambiguous.

GENERIC MARKING PRINCIPLE 4:

Rules must be applied consistently, e.g. in situations where candidates have not followed instructions or in the application of generic level
descriptors.

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GENERIC MARKING PRINCIPLE 5:

Marks should be awarded using the full range of marks defined in the mark scheme for the question (however; the use of the full mark range may
be limited according to the quality of the candidate responses seen).

GENERIC MARKING PRINCIPLE 6:

Marks awarded are based solely on the requirements as defined in the mark scheme. Marks should not be awarded with grade thresholds or
grade descriptors in mind.

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Social Science-Specific Marking Principles
(for point-based marking)

1 Components using point-based marking:

 Point marking is often used to reward knowledge, understanding and application of skills. We give credit where the candidate’s answer
shows relevant knowledge, understanding and application of skills in answering the question. We do not give credit where the answer
shows confusion.

From this it follows that we:

a DO credit answers which are worded differently from the mark scheme if they clearly convey the same meaning (unless the mark
scheme requires a specific term)
b DO credit alternative answers/examples which are not written in the mark scheme if they are correct
c DO credit answers where candidates give more than one correct answer in one prompt/numbered/scaffolded space where extended
writing is required rather than list-type answers. For example, questions that require n reasons (e.g. State two reasons …).
d DO NOT credit answers simply for using a ‘key term’ unless that is all that is required. (Check for evidence it is understood and not used
wrongly.)
e DO NOT credit answers which are obviously self-contradicting or trying to cover all possibilities
f DO NOT give further credit for what is effectively repetition of a correct point already credited unless the language itself is being tested.
This applies equally to ‘mirror statements’ (i.e. polluted/not polluted).
g DO NOT require spellings to be correct, unless this is part of the test. However, spellings of syllabus terms must allow for clear and
unambiguous separation from other syllabus terms with which they may be confused (e.g. Corrasion/Corrosion).

2 Presentation of mark scheme:

 Slashes (/) or the word ‘or’ separate alternative ways of making the same point.
 Semi colons (;) bullet points (•) or figures in brackets (1) separate different points.
 Content in the answer column in brackets is for examiner information/context to clarify the marking but is not required to earn the mark
(except Accounting syllabuses where they indicate negative numbers).

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3 Calculation questions:
 The mark scheme will show the steps in the most likely correct method(s), the mark for each step, the correct answer(s) and the mark
for each answer.
 If working/explanation is considered essential for full credit, this will be indicated in the question paper and in the mark scheme. In all
other instances, the correct answer to a calculation should be given full credit, even if no supporting working is shown.
 Where the candidate uses a valid method which is not covered by the mark scheme, award equivalent marks for reaching equivalent
stages.
 Where an answer makes use of a candidate’s own incorrect figure from previous working, the ‘own figure rule’ applies: full marks will be
given if a correct and complete method is used. Further guidance will be included in the mark scheme where necessary and any
exceptions to this general principle will be noted.

4 Annotation:
 For point marking, ticks can be used to indicate correct answers and crosses can be used to indicate wrong answers. There is no direct
relationship between ticks and marks. Ticks have no defined meaning for levels of response marking.
 For levels of response marking, the level awarded should be annotated on the script.
 Other annotations will be used by examiners as agreed during standardisation, and the meaning will be understood by all examiners
who marked that paper.

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Guidance on using levels-based marking

Marking of work should be positive, rewarding achievement where possible, but clearly differentiating across the whole range of marks,
where appropriate.

The examiner should look at the work and then make a judgement about which level statement is the best fit. In practice, work does not always
match one level statement precisely so a judgement may need to be made between two or more level statements.

Once a best-fit level statement has been identified, use the following guidance to decide on a specific mark:

 If the candidate’s work convincingly meets the level statement, award the highest mark.
 If the candidate’s work adequately meets the level statement, award the most appropriate mark in the middle of the range.
 If the candidate’s work just meets the level statement, award the lowest mark.
 L1, L2 etc. must be clearly annotated on the response at the point where the level is achieved.

Assessment objectives

AO1 Knowledge and understanding

Demonstrate knowledge and understanding of business concepts, terms and theories.

AO2 Application
Apply knowledge and understanding of business concepts, terms and theories to problems and issues in a variety of familiar and unfamiliar
business situations and contexts.

AO3 Analysis
Analyse business problems, issues and situations by:
 using appropriate methods and techniques to make sense of qualitative and quantitative business information
 searching for causes, impact and consequences
 distinguishing between factual evidence and opinion or value judgement
 drawing valid inferences and making valid generalisations.

AO4 Evaluation
Evaluate evidence in order to make reasoned judgements, present substantiated conclusions and, where appropriate, make recommendations for
action and implementation.

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Annotations and their Use

Annotation Use

 As an indication of relevant and rewardable content. Better to put these in the body of the answer.

NAQ Used when the answer or parts of the answer are not answering the question asked.

BOD Used when the benefit of the doubt is given in order to reward a response.

TV Used when parts of the answer are considered to be too vague.

K Indicates knowledge and understanding of the concepts and issues relating to the question.

APP Indicates that there is specific application to the context of the question.

AN Indicates where the answer has demonstrated analysis.

EVAL Indicates where the answer has demonstrated evaluation.

REP This indicates where content has been repeated.

SEEN Indicates that content has been recognised but not rewarded.

L1, L2, L3 Indicates where the answer reaches the required standard.

1, 2, 3, 4, 5, 6 Indicates the number of K, APP, AN and EVAL marks awarded.

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Question Answer Marks

1(a)(i) Identify one element of the marketing mix. 1

Indicative content
Identification of an element may include:
 Place
 Price
 Product
 Promotion

Accept all valid responses.

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Question Answer Marks

1(a)(ii) Explain the term consumer market. 3

AO1 Knowledge and understanding AO2 Application

1 mark 2 marks

2 marks
Developed application of one relevant point to a business
context.

1 mark 1 mark
Knowledge of one relevant point is used to answer the Limited application of one relevant point to a business
question. context.

0 marks 0 marks
No creditable response. No creditable response.

Indicative content

AO1 Knowledge and understanding

Knowledge of consumer market may include:
 Somebody who buys goods or services.
 For their own personal use/is the end user/final consumer.

AO2 Application
Limited application
 applies knowledge of consumer market to a product OR business.

Developed application +
 applies knowledge of consumer market to a product AND a business.

Application can be made to FM or any other scenario/context/business/product.

Accept all valid responses.

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Question Answer Marks

1(a)(ii)
Exemplar and annotations Mark Rationale

Sells products directly to consumers rather than 3 An answer which starts with the knowledge and then
businesses FM sells instruments to customers . applies it to FM.

Sell to the final user known as B2C , FM sell 3 Again, knowledge first, followed by application to a
musical instruments to musicians and students who are business scenario (B2C) and to a product (musical
the final users . instruments).

Selling musical instruments to students not to other 3 A different way of answering the question. There is
businesses as musicians and students are the final application of both elements of consumer markets (the
consumers . product and businesses) as well as clear knowledge of
the concept by the end of the response (final
consumers)

Goods sold to end user , not sold to other 2 Clear knowledge. Some application to businesses, but
businesses . not a product.

The buyers are the final consumers . 1 Not a perfect definition, but enough to award the
knowledge mark. No attempt to apply.

Market for consumers to buy something and uses 0 Starts with a tautology. No knowledge of consumer
branding to promote product to wholesalers . market. Too vague.

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Question Answer Marks

1(b)(i) Refer to Table 1.1 and other information. Calculate FM’s labour turnover rate for 2022. 3

Numbers leaving = 4 + 6 + 5 + 3 + 6
= 24 (1)
Total staff = 108
Labour turnover = 24 / 108  100 (1) = 22.2%. Accept 22 (3) OFR
Exemplar

3 marks Correct answer 22.2% allow 22 Working and % do not matter.

Must be three to denote the three marks.

2 marks Two of the following: To award two marks, there must be:
 Correct formula  Two and a
 Correct calculation of numbers left (24) OR
 Correct identification of data 24/108  One , one and one
OR
An incorrect answer with one mistake allowing OFR
for final stage.

1 mark One of the following: To award one mark, there must be:
 Correct formula  One and two
 Correct calculation of numbers left (24)
 Correct identification of data 24/108

0 marks No creditable content. To award zero marks, there must be:

 One

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Question Answer Marks

1(b)(ii) Explain one method of reducing FM’s labour turnover. 3

AO1 Knowledge and understanding AO2 Application

1 mark 2 marks

2 marks
Developed application of one relevant method to a
business context.

1 mark 1 mark
Knowledge of one relevant method is used to answer the Limited application of one relevant method to a business
question. context.

0 marks 0 marks
No creditable response. No creditable response.

Indicative content

Responses may include:

AO1 Knowledge and understanding

Knowledge of a method that may affect reduce labour turnover :
 Financial methods e.g. commission, bonus etc.
 Non-financial methods e.g. training, job enrichment etc.
 Reference to theorists e.g. Taylor, Mayo etc.

AO2 Application
Limited application , applies knowledge to FM once.
Developed application + applies knowledge to FM twice OR applies once to FM AND develops answer to explain a
benefit of the method given.

 Pay a major factor 25% of those leaving did so for higher pay at a competitor
 Opportunities for promotion/job enrichment,5 left because of lack of opportunities and 4 for better jobs in another
industry
 Team working/job-redesign, as 3 unhappy at work
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Question Answer Marks

1(b)(ii) Accept all valid responses.

Exemplar and annotations Mark Rationale

Non-financial methods such as job enrichment , e.g. 3 A non-financial method explained in the specific context
one of the reasons employees left is lack of promotion of FM by using the information in Table 1.1 and
job enrichment would improve their skills and develops answer to explain a benefit of the method.
increase their opportunity of promotion .

Increase employee salary , 6 employees left FM 3 A financial method in this one and there is context
because of higher pay at a competitor if FM from the data in Table 1.1, also how the method given
increase wages employees will be more satisfied is linked to the issue, so two .
and less likely to leave. .

Some workers are unhappy with the work environment 3 Although the appears first, it cannot be awarded
. Group working could be used Group working until the has been found. However, there is obvious
will ensure a good communications environment . , so you can go back and award the .

Training for new processes because employees are 2 Training is a non-financial method . The context of
having difficulties in adapting to the new production new production method linked to this is reasonable ,
method . but only one point of application.

Increase employee salary because the more 1 Knowledge of a method. The rest of the answer is not
workers are paid the more motivated they become . applying it to the context so (Not Answering
Question).

Labour turnover refers to the number of workers 0 Although there is some relevant context, there is no
leaving over the total number of workers 4 people knowledge of a method, so no marks can be awarded.
left for better jobs .

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Question Answer Marks

1(c) Analyse two impacts on FM’s costs if it enters international markets. 8

Level AO1 Knowledge and AO2 Application AO3 Analysis

understanding 2 marks 4 marks
2 marks

2 3–4 marks
Developed analysis
 Developed analysis that
identifies connections between
causes, impacts and/or
consequences of two points.
 Developed analysis that
identifies connections between
causes, impacts and/or
consequences of one point.

1 1–2 marks 1–2 marks 1–2 marks

 Knowledge of two relevant  Application of two relevant Limited analysis
points is used to answer the points to a business context.  Limited analysis that identifies
question.  Application of one relevant connections between causes,
 Knowledge of one relevant point to a business context. impacts and/or consequences
point is used to answer the of two points.
question.  Limited analysis that identifies
connections between causes,
impacts and/or consequences
of one point.

0 0 marks 0 marks 0 marks

No creditable response. No creditable response. No creditable response.

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Question Answer Marks

1(c) Indicative content

Knowledge of impacts on costs (max 2 s), may include:

AO1 Knowledge and understanding

 Increased costs – labour, delivery, capital, documents, marketing, research etc.
 Reduced costs – bulk buying, cheaper labour/land costs in other country.

AO2 Application
Max one for application for the first impact on costs and a second for application for the second impact on costs.
Application of knowledge of an impact on costs to FM (max 2 s), including:

Increased costs might occur, due to:

 The change to mass customisation
 Not a well-known brand in other countries
 After sales customer service improvement as product tailored to customer wants
 Import/export taxes
 Translation of documents into other languages

Reduced costs could come in the long term from:

 Mass customisation
 Increase in market size allowing economies of scale
 Labour/land in another country cheaper than country Z

AO3 Analysis
Limited analysis – candidate shows one link in the chain of analysis.
Developed analysis candidate shows two or more links in the chain of analysis or a two-sided analysis.

 Extra distribution costs – require extra delivery drivers

 High costs in the short term – such as promotion costs
 Lower in the long term – become established in new country allow reduced marketing
 Mass customisation – benefit from economies of scale
 High cost of investment – if take out a loan interest will add to costs.

Accept all valid responses.

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Question Answer Marks

1(c) Exemplar and annotations

AO1 Knowledge AO2 Application AO3 Analysis

There will be an increase in costs . FM will deliver the instruments over a So, FM will need to pay more in
Annotations for the first impact longer distance delivery costs as the delivery driver
should be placed in the left-hand will take a longer time and there will be
margin. higher fuel costs .

It will increase labour costs For example, translation employees Because the firm may not understand
Annotations for the second impact other countries languages and will
should be placed in the right-hand need advertising and documents in the
margin. language of that country .

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Question Answer Marks

1(d) Evaluate the impact on FM’s stakeholders of a change from batch production to mass customisation. 12

Level AO1 Knowledge and AO2 Application AO3 Analysis AO4 Evaluation
understanding 2 marks 2 marks 6 marks
2 marks

3 5–6 marks
Developed evaluation in
context
 A developed
judgement/conclusion
is made in the
business context.
 Developed evaluative
comments which
balance some key
arguments in the
business context.

2 2 marks 2 marks 2 marks 3–4 marks

Developed knowledge of Developed application of Developed analysis Developed evaluation
relevant key term(s) relevant point(s) to the that identifies connections  A developed
and/or factor(s) is used to business context. between causes, impacts judgement/conclusion
answer the question. and/or consequences. is made.
 Developed evaluative
comments which
balance some key
arguments.

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Question Answer Marks

1(d)
Level AO1 Knowledge and AO2 Application AO3 Analysis AO4 Evaluation
understanding 2 marks 2 marks 6 marks
2 marks

1 1 mark 1 mark 1 mark 1–2 marks

Limited knowledge Limited application Limited analysis Limited evaluation
of relevant key term(s) of relevant point(s) to the that identifies connections  A judgement/
and/or factor(s) is used to business context. between causes, impacts conclusion is made
answer the question. and/or consequences. with limited
supporting comment/
evidence.
 An attempt is made to
balance the
arguments.

0 0 marks 0 marks 0 marks 0 marks

No creditable response. No creditable response. No creditable response. No creditable response.

Indicative content

Responses may include:

AO1 Knowledge and understanding

Knowledge of one of the key terms (max 2 s), including:
 Batch production – manufacturing process in which items or products are produced in groups.
 Mass customisation – manufacturing process that combines the flexibility and personalisation of custom-made products
with the low unit costs associated with mass production.
 Stakeholders – A stakeholder is a person/organisation that has an interest in a company and can either affect or be
affected by the business/ examples of stakeholders.

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Question Answer Marks

1(d) AO2 Application

Limited application applies knowledge of batch/customisation/stakeholders of FM once.
Developed application + applies knowledge of batch/customisation/stakeholders of FM twice.

 Shareholders (a limited company)

 Change of working practices/environment
 Change in production methods
 Move into international market
 Increase in the volume of output

AO3 Analysis
Limited analysis – candidate shows one link in the chain of analysis.
Developed analysis – candidate shows two or more links in the chain of analysis.
Analysis marks can be awarded without context.

Employees:
 Change of working practices – employees must learn new skills
 Redundancies could be an issue – arising from the shift to mass customisation
 Short term incomes could reduce – as profits may initially fall
 Shareholders:
 Forego dividends in the short term – due to the costs of the investment
 Long-term gains – from increased profits
 Risk increased – if the expansion fails and profits fall
 Government:
 Potential for more taxes – due to higher profits/output
 Community:
 Employees likely from the local area – if redundancies occur, it will increase unemployment in the community
 Suppliers:
 More business/more profits – but might need different suppliers
 Customers:
 Better choice – tailored to customer wants
 Higher prices – due to increase in costs/quality of the product
 Bank etc.:
 Borrowing for investment – may require a bank loan

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Question Answer Marks

1(d) AO4 Evaluation

Limited evaluation unsupported judgement and/or a weak attempt at evaluative comment.
Developed evaluation supported judgement and/or reasonable evaluative comment.
Developed evaluation in context supported judgement in context and/or reasonable evaluative comment in context.

 Weighing up of risks v reward

 Short term costs v long term costs
 Costs v benefits
 Judgement on stakeholder(s) it will most likely impact
 Judgement on overall impact on a stakeholder(s)

Accept all valid responses.

Exemplar and annotations

A change from batch production to mass customisation will have different impacts on FM’s stakeholders, such as
customers, employees, suppliers, and shareholders .
Shareholders are the owners of FM who invest their money in the company . They may benefit from mass
customisation if it increases the sales and profits of FM by attracting more customers and creating a competitive
advantage . Mass customisation may also increase the value and reputation of FM as a customer-oriented and
innovative company . However, mass customisation may also reduce the returns and dividends for shareholders
if it increases the cost and risk of production for FM . Mass customisation may also require more investment in
research and development, technology, and marketing for FM , which may reduce the cash flow and liquidity for
shareholders and may also result in a decrease their returns.
To conclude, mass customisation can have both positive and negative impacts on FM’s shareholders. Therefore, FM
should carefully weigh the benefits and costs of this change and implement it in a way that maximises the value, profits and
dividends for the shareholders .

AO1 – 2 marks
AO2 – 2 marks
AO3 – 2 marks
AO4 – 6 marks
TOTAL – 12 marks

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Question Answer Marks

2(a)(i) Identify one advantage to a business of using job production. 1

Indicative content

Identification of an advantage may include:

 (High) quality product
 Can customise orders/wants.
 Workers involved in the entire process.

Accept all valid responses.

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Question Answer Marks

2(a)(ii) Explain the term just in time (JIT). 3

AO1 Knowledge and understanding AO2 Application

1 mark 2 marks

2 marks
Developed application of one relevant point to a business
context.

1 mark 1 mark
Knowledge of one relevant point is used to answer the Limited application of one relevant point to a business
question. context.

0 marks 0 marks
No creditable response. No creditable response.

Indicative content

AO1 Knowledge and understanding.

Just-in-time production minimises the time, labour, and materials in a manufacturing process. It does so by only
producing goods as they are needed. The desired outcome is a streamlined production system that maintains a minimal
amount of on-site raw materials, minimal wait times in the production process and small batch sizes.

Knowledge of JIT may include:

 Inventory control system/production system
 Buying inventory occurs when needed for production rather than using buffer stock (production).
 JIT conditions need to be met e.g., reliable suppliers.

AO2 Application
Limited application applies knowledge of JIT to
 An example of inventory OR an example of when it is needed.

Developed application + applies knowledge of JIT to

 An example of inventory AND an example of when it is needed.

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Question Answer Marks

2(a)(ii) Application can be made to GD or any other scenario/context/business.

Accept all valid responses.

Exemplar and annotations Mark Rationale

Order raw materials when needed . For example, a 3 An answer which starts with the knowledge and then
manufacturer requires 1000 pieces of wood to produce applies it to a business context.
a product would order when there is 1000 pieces of
wood left .This could reduce waste and employees
would know that there is not any spare materials so
they can’t make mistakes.

Holding zero buffer inventories . Components for 3 In the context of the business, GD.
making desks will be ordered when GD needs them .
This will reduce storage costs for GD .

Inventory would come just when needed , but the 2 Clear knowledge. Some application but not developed.
company may need expensive IT systems to manage
orders .

Not keeping any inventory, just ordering when needed. 1 A reasonable definition but no application.
.

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Question Answer Marks

2(b)(i) Refer to Table 2.1. Calculate GD’s forecast closing balance in 2025. 3

Indicative content

Responses may include:

Formula/implied formula: closing balance = net cash flow +opening balance (1)

Net cash flow = 9 – 12 (1) = –3 (1)

Closing balance 2020 = –3 + 1 = –2 (3) Accept 2 in brackets in place of – sign OFR

Marks Answer Rationale

3 marks Correct answer Working and $ sign do not matter.

–2 or (2) Must be three to denote the three marks.

2 marks Both of the following: To award two marks, there must be:
 Correct/implied formula (net cash flow +opening  Two and a
balance) OR
 Correct calculation of net cash flow (-3)
 One , one and one
OR
An incorrect answer with one mistake allowing OFR
for final stage.
OR
2 (has not included – sign)

1 mark One of the following: To award one mark, there must be:
 Correct/implied formula (net cash flow + opening  One and two
balance)
 Correct calculation of net cash flow (–3)

0 marks No creditable content. To award zero marks, there must be:

 One

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Question Answer Marks

2(b)(ii) Explain one disadvantage to GD’s employees of it being a co-operative. 3

AO1 Knowledge and understanding AO2 Application

1 mark 2 marks

2 marks
Developed application of one relevant point to a business
context.

1 mark 1 mark
Knowledge of one relevant point is used to answer the Limited application of one relevant point to a business
question. context.

0 marks 0 marks
No creditable response. No creditable response.

Indicative content

AO1 Knowledge and understanding

Knowledge of a disadvantage may include:
 Complex decisions = uncertainty = poor performance
 Workers and worker directors might not have skills for decisions
 Management roles unclear and therefore inefficiencies can occur
 Unpredictable income for employees
 Conflict/disagreements between employees

AO2 Application
Limited application , applies knowledge to GD once.
Developed application + applies knowledge to GD twice.
 Ownership by workers who may be more interested in high profits.
 Low wages compensated by profit share.
 Poor decision making by manager.
 Take decisions on votes not valid arguments.

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Question Answer Marks

2(b)(ii) Accept all valid responses.

Exemplar and annotations Mark Rationale

They may have limited capital as need $2m to open 3 A disadvantage using the context of opening a retail
their own retail shop , as the members (employees) shop and that members accept low wages.
accept low salaries and the investment may mean a
lower share of profits for each of them.

They may face conflicts among members, as all have a 3 Conflict is reasonable and two references to the
vote, due to differences in opinions , interests or case study for 2 s.
planning, especially regarding the plan to open their
own retail shop or the management style of Steve
.

Part of the income employees earn comes from profit- 2 As there is knowledge of a disadvantage so can go
share. This may mean that the employees could back and award the APP.
face lower income if sales fall or costs rise.

They may lack secrecy as the affairs of the co- 1 Lack of secrecy a reasonable disadvantage, but the
operative are open to all members and sometimes rest is not specifically related to GD.
to the public, which may expose them to competition.

They may have inefficient management as Steve, 0 Although there is some relevant context, there is no
the Managing Director, spends too much time trying to knowledge of a disadvantage specific to a co-op
make people happy rather than solving problems and (inefficient management could be in any business
responds to opinions rather than setting long-term structure), so no marks can be awarded.
plans.

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Question Answer Marks

2(c) Analyse two sources of finance GD could use to open its new shop. 8

Level AO1 Knowledge and AO2 Application AO3 Analysis

understanding 2 marks 4 marks
2 marks

2 3–4 marks
Developed analysis
 Developed analysis that
identifies connections between
causes, impacts and/or
consequences of two points.
 Developed analysis that
identifies connections between
causes, impacts and/or
consequences of one point.

1 1–2 marks 1–2 marks 1–2 marks

 Knowledge of two relevant  Application of two relevant Limited analysis
points is used to answer the points to a business context.  Limited analysis that identifies
question.  Application of one relevant connections between causes,
 Knowledge of one relevant point to a business context. impacts and/or consequences
point is used to answer the of two points.
question.  Limited analysis that identifies
connections between causes,
impacts and/or consequences
of one point.

0 0 marks 0 marks 0 marks

No creditable response. No creditable response. No creditable response.

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Question Answer Marks

2(c) Indicative content

Knowledge of sources of finance (max 2 s), may include:

AO1 Knowledge and understanding.

 Bank loan
 Open own shop so mortgage
 Owners’ capital
 Sale of unused assets
 Venture capital
can be awarded for knowledge of any source of finance.

AO2 Application
Max one for application for the first source and another for application for the second source
Application of knowledge of a source of finance for GD (max 2 s), including:
 $2m needed
 Retained profits not known but could make useful contribution if available
 Few current assets (JIT) so not suitable to convert into cash
 No loan payments shown so no debts
 Employees are the owners, low paid
 Cash balance reducing

AO3 Analysis
Limited analysis – candidate shows one link in the chain of analysis.
Developed analysis candidate shows two or more links in the chain of analysis or a two-sided analysis.

Analysis of sources of finance may include:

 Long term loan may be suitable – but would banks lend to a co-operative?
 Unlikely to be any unused assets – even if there were it may not be enough for such a large sum.
 Owners/employees/members may not agree with the plan – so may not be willing to contribute more
 Effect on liquidity – interest payments will increase cash outflow.
and can be awarded for analysis of any source of finance.

Accept all valid responses.

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Question Answer Marks

2(c) Exemplar and annotations

AO1 Knowledge AO2 Application AO3 Analysis

Exemplar of an advantage Retained profit Employees would receive This option would allow GD
Annotations for the first less through profit-sharing at to use its own money
source should be placed the end of the year . without increasing its debt
in the left-hand margin. or giving up any
ownership. However, it
would also mean that the
employees would receive
less profit-sharing at the end
of the year, which could
affect their motivation and
satisfaction.

Exemplar of a disadvantage Venture capital Might be attractive to an This option would not
Annotations for the investor as have 5 years of require GD to repay or pay
second source should be rapid growth with a forecast interest on the money
placed in the of higher demand for desks received but may come with
right-hand margin. . some conditions or
expectations from the
investors . This could limit
GD’s autonomy or flexibility
in running the business or
pursuing its social or
environmental mission. It
could also create a
dependency on external
funding, which may not be
sustainable or reliable in the
long term.

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Question Answer Marks

2(d) Evaluate whether Steve’s management style will contribute to GD’s future success. 12

Level AO1 Knowledge and AO2 Application AO3 Analysis AO4 Evaluation
understanding 2 marks 2 marks 6 marks
2 marks

3 5–6 marks
Developed evaluation in
context
 A developed
judgement/conclusion
is made in the
business context.
 Developed evaluative
comments which
balance some key
arguments in the
business context.

2 2 marks 2 marks 2 marks 3–4 marks

Developed knowledge of Developed application of Developed analysis Developed evaluation
relevant key term(s) relevant point(s) to the that identifies connections  A developed
and/or factor(s) is used to business context. between causes, impacts judgement/conclusion
answer the question. and/or consequences. is made.
 Developed evaluative
comments which
balance some key
arguments.

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Question Answer Marks

2(d)
Level AO1 Knowledge and AO2 Application AO3 Analysis AO4 Evaluation
understanding 2 marks 2 marks 6 marks
2 marks

1 1 mark 1 mark 1 mark 1–2 marks

Limited knowledge Limited application Limited analysis Limited evaluation
of relevant key term(s) of relevant point(s) to the that identifies connections  A judgement/
and/or factor(s) is used to business context. between causes, impacts conclusion is made
answer the question. and/or consequences. with limited
supporting comment/
evidence.
 An attempt is made to
balance the
arguments.

0 0 marks 0 marks 0 marks 0 marks

No creditable response. No creditable response. No creditable response. No creditable response.

Indicative content

AO1 Knowledge and understanding

Knowledge of management styles (max 2 s), including:
 Democratic – The manager shares the decision-making power and authority with their employees. The manager
encourages and facilitates collaboration and teamwork among the employees and allows them to have a say in how
they work.
 Laissez-faire – The manager gives their employees complete freedom and autonomy to make their own decisions
and manage their own work. The manager provides minimal guidance and supervision and trusts the employees to
perform well.
 Autocratic – The manager dictates exactly what they require their subordinates to do and how they should do it.
Sets targets. The manager has all the power and authority and does not tolerate any deviation or feedback from the
employees.
 Paternalistic – The manager acts like a parent or a guardian to their employees, providing them with guidance,
support, and protection. The manager has all the power and authority, but also cares about the welfare and
personal development of the employees.
 Functions of management – Planning, organising, directing, controlling.
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Question Answer Marks

2(d) AO2 Application

Limited application applies knowledge of management styles to GD once.
Developed application + applies knowledge of management styles to GD twice.

 There are suggestions that Steve is too democratic/laissez faire or may be described as paternalistic as wants people
to be happy.
 Theory Y manager
 Managers need to make effective decisions and be responsive, but employees don’t think that Steve makes effective
decisions.
 Steve does not see threats to the business.
 Steve does not make-long term plans.
 Steve does not consider the merits of an argument but relies on votes of members.
 Rapid growth in sales and profits over the past 5 years but negative cash flow recently
 Evidence of planning as aim to open own retail shop.
 Motivated employees as Steve concerned about their welfare/demotivated as evidenced by concerns about Steve’s
style.

AO3 Analysis
Limited analysis – candidate shows one link in the chain of analysis.
Developed analysis – candidate shows two or more links in the chain of analysis.

 Builds good relationships – particularly as owners are the employees.

 Some workers may feel that the Steve has the right approach – so feel secure as a result of this; for example, they
have a vote and key role in decision making.
 Suitable for GD’s highly skilled and motivated staff – but could lead to power struggles.
 There is a lack of strategy for the future of the business – so there is a risk to the security and stability of GD.
 If threats are not being monitored – then GD is at risk and could fail.
 Motivated workers – greater productivity
 Lack of long-term planning – less potential for future growth
 Plans to open retail shop – evidence of planning.

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Question Answer Marks

2(d) AO4 Evaluation

Limited evaluation – unsupported judgement and/or a weak attempt at evaluative comment
Developed evaluation – supported judgement and/or reasonable evaluative comment
Developed evaluation in context - supported judgement in context and/or reasonable evaluative comment in context.

An evaluation is likely to come from candidates making a judgment and justification on the effectiveness of Steve’s
management style e.g. It may be suggested that the Steve need to be more ‘hands on’ and autocratic, due to the change
from batch production to mass customisation. Is this suitable for a co-operative? It may result in conflict which reduces
productivity, output and sales.
 Any changes that might need to be made to make it more effective.
 Suitability of management styles for a co-operative
 In relation to the change in production process
 Judgement on most likely effects on success

Accept all valid responses.

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Question Answer Marks

2(d) Exemplar and annotations

Steve’s management style seems to be a democratic one , which is a type of participative management style . This
means that he values the input and opinions of his employees and tries to involve them in decision-making and
problem-solving. He also tends to be flexible, adaptable, and responsive to feedback which might suit a co-operative
organisation .
Some of the advantages of this management style are that it can increase employee engagement, motivation, creativity,
and satisfaction . It can also foster a positive work culture, where employees feel respected and valued . It can also
lead to better decisions, as more perspectives and ideas are considered .
However, some of the disadvantages of this management style are that it can be time-consuming, inefficient, and confusing
. It can also create conflicts among employees, or between employees and managers. It can also make it difficult to
implement changes or deal with crises, as there may be too much debate or uncertainty . It can also undermine the
authority and credibility of the manager, if they appear indecisive, weak, or dependent on others .
Therefore, Steve’s management style may not contribute to GD’s future success, unless he can balance it with other styles
when needed. For example, he may need to adopt a more authoritative or persuasive style when he needs to set clear
goals, communicate expectations, or motivate employees to achieve results . He may also need to adopt a
more transformational or visionary style when he needs to inspire employees with a shared vision, foster innovation, or
cope with change. He may also need to adopt a more coaching style when he needs to develop the skills and potential of
his employees.
In conclusion, Steve’s management style has its strengths and weaknesses, but it may not be enough to ensure GD’s
future success. He should be able to adapt his style according to the situation, the goals, and the people involved .

AO1 – 2 marks
AO2 – 2 marks
AO3 – 2 marks
AO4 – 6 marks
TOTAL – 12 marks

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