Higher Business Management

Essay Questions

Business in Contemporary Society

Additional Assistance
2005
A local entrepreneur decides to set up a business.
1 a Identify 4 organisations which offer advice to someone setting up in business. 4

SQP2006
A US based computer manufacturer is to receive a grant of £75 million from the
Scottish Executive to create a call centre.
2 a ii Explain the support (non-financial) offered by the following organisations: 2
- Banks
- Local Enterprise Companies (LECs)

Franchising
2006
3 c Explain the advantages of franchising for a franchiser. 3

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Essay Questions

Integration, Mergers & De-mergers

2004
Nestle and Cadbury have attempted to take over an American chocolate firm.
5 a i This takeover is an example of horizontal integration. Identify and describe 2 4
alternative methods of growth.

2005
Many companies selling branded goods (eg Levi and Pepsi-Cola) are moving into
new markets such as China.
3 c Levi and Pepsi-Cola's move into a new market is an example of growth. 6
Describe other methods of growth.

2007
1 c i Discuss the ways in which divestment and demerger can assist the growth of an 4
organisation.
1 c ii Describe other methods of growth. 5

2008
1 a Describe how both horizontal and vertical integration could allow an 5
organisation to become even larger and more profitable.

2009
5 b i Describe 3 different methods of growth. 3

SQP
3 c How should a firm which is planning the take-over of another react to the 5
discovery that its proposed target is carrying an excessively large volume of
stock?

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Essay Questions

Legislation
2009
5 a Explain how the following legislation could impact on an organisation: 6
- Freedom of Information Act 2003
- National Minimum Wage Regulations 1999
- Employment Rights Act 1996

Objectives
2000
4 c Compare the objectives of a public limited company with those of a charity. 6

2005
Mobile phone operators have been criticised for overcharging customers and may
be forced by legislation to reduce their prices.
5 b i Identify 2 objectives of firms operating in in a highly competitive market such 2
as the mobile phone industry.

2006
3 a i Discuss the objectives of a plc compared to those of a public sector 5
organisation.
A large department store is finding it difficult to maintain profits. A hostile
takeover has been proposed by one of its competitors. Shareholders have been
offered the opportunity to sell their shares.
4 d ii Explain the reasons why a competitor might wish to take over a firm which is 4
not making a great deal of profit.

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Essay Questions

Outsourcing
2003
5 b Coca-Cola has chosen to outsource part of its bottling process. 8
Describe the advantages and disadvantages of outsourcing for an
organisation.

2005
2 b An organisation may choose to "downsize" and "outsource". Describe the 7
meaning of these terms and the consequences for an organisation.

2006
5 d Many organisations choose to outsource their catering service. Describe the 8
advantages and disadvantages of outsourcing.

SQP2006
3 d The toy manufacturer decides to outsource part of its production process to 7
China.
Explain the advantages and disadvantages of doing so to the organisation
and its employees.

Patterns of Employment
2001
2 a How has the pattern of employment in the UK changed in the last 20 years? 5

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Essay Questions

PESTEC
2000
4 d Describe 3 example of socio-cultural trends which could affect the operations 6
of a bank.

2001
The changing pattern of employment is an example of an external influence on an
organisation.
2 b i Describe how any other external influence could affect: 5
- the human resource management of the firm
- the goods and services being offered to consumers

2003
1 c Pressure from Greenpeace contributed to Shell's decision not to sink an oil 4
platform in the North Sea.
Discuss what makes some pressure groups more effective than others
Cadbury Schweppes made a decision to move into the Eastern European market
and set up a factory in Poland.
3 a Discuss how the following factors might affect an organisations decision to … 8
- Political
- Economic
- Social
- Technical

2006
5 a ii Legislation is one example of a political external influence. Describe 3 other 3
examples of external influence on organisations.

2008
3 c i Identify and explain 3 economic factors that can affect the profitability of a 6
business.
3 c ii Describe 4 other external influences that can affect the success or failure of a 4
business.

2009
2 c Explain how external factors may affect an organisation. 6

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Essay Questions

Public Sector Organisations

2007
Public Sector Organisations are owned and controlled by Central Government.
2 b i Describe 2 strategic objectives of a public sector organisation. 2
2 b ii Identify 2 sources of funding for a public sector organisation. 2

Sources of Finance
2000
1 a Suggest 3 different methods by which a public limited company could raise 9
funds to buy a new factory site. Give one advantage and one disadvantage
for each method.

2007
1 d Describe how organisations such as The Prince's Trust, banks and Local 4
Enterprise Agencies could provide assistance to a new business.

2008
1 b Describe methods a limited company could use to finance a successful 4
takeover.

2009
5 b ii Describe and justify 3 sources of finance that could be used to expand a 6
business.

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Essay Questions

Stakeholders
2000
4 a Identify 5 different stakeholders of a bank and describe how the interests of 10
these stakeholders might differ.

2003
1 a Describe how a local Council may be influenced by its different stakeholders. 8

2005
4 b i Shareholders are one of the company's stakeholders. Explain why 4
shareholders are interested in an organisation's financial information.
4 b ii Describe how 5 other stakeholders could influence an organisation. 5

2006
3 b ii Describe one interest each of the following stakeholders has in an 3
organisation's information.
- Inland Revenue
- Employees
- Creditors
A large department store is finding it difficult to maintain profits. A hostile
takeover has been proposed by one of its competitors. Shareholders have been
offered the opportunity to sell their shares.
4 d i Describe the ways in which shareholders influence organisations. 3

SQP2006
Improving efficiency is one possible example of an organisation's objectives.
4 c ii Explain possible conflicting reactions of both employees and shareholders to 4
the following objectives:
- Growth
- Increased profitability

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Essay Questions

Decision Making
(De)Centralised
2006
4 c Local managers are "empowered" to make decisions. 6
Describe the advantages and disadvantages of decentralised decision making.

Decision Making Model

2001
2 c How could a SWOT analysis help the decision making process in an 6
organisation?

2002
4 b ii How could an organisation find out whether a decision taken was the right 3
one?

2004
Nestle and Cadbury have attempted to take over an American chocolate firm.
5 c Organisations may choose to assess their strengths, weaknesses, opportunities 5
and threats before making important decisions.
Describe the costs and benefits of using a SWOT analysis in decision making.

2005
4 d ii State how a Director would know that a decision taken was effective. 3

2008
5 c Describe how a manager could evaluate the effectiveness of a decision. 4

SQP2006
4 d Describe the means by which a manager could check that the decisions taken 4
to set objectives were effective.
Gathering information is important prior to making decisions.
5 b Describe the costs and benefits of using a structured decision making model. 6

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Essay Questions

ICT & Decision Making

2007
4 b Describe ways of using ICT to help decision making. 6

Role of Managers
2000
5 a i Identify the role of the Manager in a branch of a major high street retail 5
business.
5 a ii How does his/her role contribute to the overall success of the organisation? 5

2003
1 d Describe the role of managers in achieving the objectives of an organisation. 8

Structured Decision Making Models

2000
2 a i Describe how employees in a large manufacturing company might be involved 7
in the decision making process.
2 a ii Analyse the benefits of this involvement for both the employee and the 8
employer.

2005
4 d i Describe the advantages and disadvantages to an organisation of using a 6
structured decision-making model.

2006
A local restaurant which has a capacity to hold 50 customers finds it frequently
has fewer than 5 customers. The problems have been identified as poor quality
and overpriced food.
1 a Describe the benefits of using a decision making model in order to solve 5
problems.

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Essay Questions

Types of Decisions
2000
4 b Identify a strategic objective of a bank and describe 2 tactical decisions which 3
could be made by the management to help to achieve the objective.

2002
4 d Discuss the factors which might affect the quality of a decision. 5

2003
Cadbury Schweppes made a decision to move into the Eastern European market
and set up a factory in Poland.
3 b Moving to Poland is an example of a strategic decision. Suggest the tactical 6
and operational decisions required to achieve this.

2004
The airline has found that some journeys are not making a profit and Head office
has decided to stop operating these routes, at least in the short term.
1 b i What type of decision does this represent? Justify your choice. 2
1 b ii Describe the advantages and disadvantages of decentralised decision making. 6
A company may have the strategic objective to increase its market share by
10% in 2004.
4 d i Describe the internal and external factors which may prevent the achievement 6
of this objective.
4 d ii How might an organisation judge whether the decisions taken to achieve any 3
of its objectives have been the correct ones?

2005
4 c Give one example each of a strategic, tactical and operational decision taken 3
by an organisation.

2006
3 a ii Describe, using examples, the 3 types of decisions taken by organisations in 6
order to achieve their objectives.

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Essay Questions

2007
Managers try to make effective decisions.
4 a Describe internal constraints that can make decision making difficult. 6

5 c Distinguish between a strategic and tactical decision and give an example of 6

each.

2009
3 e Justify why strategic decisions are made by senior managers. 3

Types of Information
2009
1 b Distinguish between the terms quantitative and qualitative information. 2

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Essay Questions

Finance
Budgets
2000
1 b The Managing Director of a public limited company, on looking at his cash 8
budget, is concerned to see that the firm is facing a deficit of £10,000 next
month because a plan exists for the cash purchase of a new machine.
Identify and justify 4 possible decisions the Managing Director could make to
avoid this potential deficit.

2003
4 c A Cash Budget (Cash Flow Forecast) is an accounting statement that the 7
entrepreneur would prepare before implementing his idea. Describe its
contents and how it would be used.

Cash Flow
2004
1 c i Identify and describe the factors which might result in a profitable firm facing 6
cash flow problems.
1 c ii How might an organisation resolve these problems? 6

2005
Mobile phone operators have been criticised for overcharging customers and may
be forced by legislation to reduce their prices.
5 d Profitable firms may fail due to poor cash flow. 8
Identify 4 sources of cash flow problems and suggest one solution for each
source you have identified.

2008
3 b Describe 4 causes of cash flow problems. 4

SQP
5 a What is the purpose of preparing a cash flow forecast? 3
5 b Identify the main methods of improving cash flow. 7

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Essay Questions

Financial Info
2009
3 a Describe the problems that can occur when using only accounting information 4
to analyse performance.

Financial Terms
2007
3 a Distinguish between the following financial terms: 6
- Gross Profit and Net Profit
- Fixed Assets and Current Assets
- Debentures and Shares

Limitations of Ratios
2002
2 d Identify the problems with accounting information which might hinder decision 4
making.

2007
Firms use ratios to analyse their Annual Accounts.
5 d ii Explain the limitations of ratio analysis. 3

SQP2006
A toy manufacturer on looking at his final accounts is satisfied to find that he has
made a net profit.
3 a ii Explain the difficulties of depending on financial information alone to assess 3
the success of a business.

Objectives
2006
3 b i Discuss the importance of Annual Accounts in showing whether or not an 6
organisation has achieved its objectives.

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Essay Questions

Purpose of Ratios
2000
1 c Discuss the strengths and weaknesses of using ratio analysis to judge the 5
performance of a business.

2002
The interpretation of financial information can enable managers to make more
informed decisions.
2 a A manager might use ratios to identify problems of: 9
- liquidity
- profitability
- efficiency
Describe what these ratios would show about the organisation's performance.
Your answer should refer to the relevant ratios.
2 b Give examples of decisions which could be made as a reaction to poor 5
performance identified by these ratios.
The following are examples of issues which might be identified by an organisation
as the cause of a cash flow problem:
- an unexpected breakdown of machinery
- a rise in inflation
- a change in legislation requiring a product to be modified to make it comply
with new Health and Safety Regulations
2 c i Describe the effects each issue will have on cash flow. 3
2 c ii What actions should the management take after a problem has been 4
identified?

2007
Firms use ratios to analyse their Annual Accounts.
5 d i Describe the reasons for using ratios to analyse performance. 2

2009
3 b Describe the actions an organisations could take to improve the following 6
ratios:
- Net Profit Percentage
- Current Ratio

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Essay Questions

SQP
5 c Discuss the advantages and disadvantages of using ratio analysis as a means 15
of assessing company performance. Give examples.

SQP2006
A toy manufacturer on looking at his final accounts is satisfied to find that he has
made a net profit.
3 a i Describe the reasons why a manufacturer might be advised to use the 6
following ratios:
- Net Profit Ratio
- Gross Profit Ratio
- Current Ratio

Sources of Finance
2004
Large football clubs and major sporting events such as F1 motor racing depend
heavily on sponsorship as a means of funding.
2 a Describe 3 alternative sources of finance for a large football club, eg 6
Manchester United plc. Justify your choices.

SQP2006
A US based computer manufacturer is to receive a grant of £75 million from the
Scottish Executive to create a call centre.
2 a i Describe 3 other sources of finance available to a public limited company 3
trying to solve the problem of a lack of development finance.

Users of Information
2008
3 a Describe how stakeholders could make use of financial information provided 7
by an organisation.

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Essay Questions

Human Resources
Collective Bargaining
2007
2 c Employee Representative Groups (eg Trade Unions) use the power of 3
collective bargaining for the benefit of their members. Describe 3
advantages of collective bargaining.

Employee Relations
2001
3 c What measures might an organisation introduce to develop good working 6
relationships with employees and trade unions?

2006
5 b Describe the role of each of the following in supporting employees and 6
employers when disputes occur in the workplace.
- Trade Unions
- ACAS

Equal Opportunities
2001
3 b Some employees may feel that their employer is discriminating against them 9
because all people doing the same job are not receiving the same pay.
Explain the steps employees can take to have the situation remedied.

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Essay Questions

Industrial Action
2005
Employees may choose to take industrial action when they cannot agree on
certain issues with their employer.
2 d i Describe 2 forms of industrial action and an affect each action could have on 4
an organisation.

2008
2 a Employees may undertake industrial action in an attempt to force employers 4
to meet their demands.
Describe the types of industrial action that employees could take.
2 b Explain the possible effects that prolonged industrial action could have on an 5
organisation.

2009
1 c The introduction of new technology may cause unrest in the workplace. 4
Describe 4 forms of industrial action.

Legislation
2001
3 a Describe the constraints legislation may impose on an organisation. 10

2003
4 b Describe how employment legislation and EU directives might affect the 10
running of the new Leisure Club

2006
5 a i Employment legislation exists to protect workers. 3
Describe the purpose of the:
- Health and Safety at Work Act 1974
- Race Relations Act 1976
- Equal Pay Act 1970

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Essay Questions

Patterns of Employment
2005
Some organisations are changing their working practices, for example,
introducing flexible working and homeworking.
2 a Describe the possible benefits of these changes to working practices for: 4
- the employee
- the employer

Procedures
2005
Employees may choose to take industrial action when they cannot agree on
certain issues with their employer.
2 d ii Describe the contents and purpose of a written disciplinary procedure. 2

2006
A local restaurant which has a capacity to hold 50 customers finds it frequently
has fewer than 5 customers. The problems have been identified as poor quality
and overpriced food.
1 d Discuss the value of an appraisal system. 4

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Essay Questions

Recruitment
2005
1 d Describe and explain the purpose of the following when recruiting new staff: 6
- Job Description
- Person Specification
- Reference

2006
A local restaurant which has a capacity to hold 50 customers finds it frequently
has fewer than 5 customers. The problems have been identified as poor quality
and overpriced food.
1 c Describe a selection process which may be used to ensure the best applicants 5
are appointed to work in the restaurant.

2009
2 d i Describe the recruitment process that may be used by a Human Resource 5
Department.

SQP2006
2 c Setting up the call centre will create hundreds of jobs. 7
Describe a suitable recruitment and selection process the manufacturer might
use.

Staff Motivation
2009
2 d ii Discuss methods that an organisation could use to ensure their staff stay 4
motivated.

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Essay Questions

Types of Training and Development

2002
Launching a new product or service may require the organisation's existing staff
to undergo training.
3 d i Identify the objectives of such a training programme for the existing staff of 5
an organisation.
3 d ii How does this type of training differ from an Induction Training Programme. 5

2007
Various forms of testing are now being used by organisations to ensure the best
candidates are selected for a job vacancy.
2 d Discuss the different types of testing that an organisation could use to select 6
the best candidate.

2008
4 e Explain the role of testing in the selection of new staff. 4

2009
4 b i Describe the different forms of training that an organisation could use. 6
4 b ii Describe the costs of staff training. 4

SQP2006
Organisations frequently make changes to their working practices.
2 b i Describe and justify 2 types of training employees in new skills. 6

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Essay Questions

Information and ICT

Characteristics of Information
2003
An entrepreneur is considering opening a new Leisure Club in his local town.
4 a i Identify and describe 2 sources of information which would be of use to him 4
when considering this venture.
4 a ii For each source of information, analyse its value and reliability. 4

2004
When choosing a summer holiday, consumers depend largely on information
obtained from brochures, television programmes and the Internet.
4 a Discuss the reliability and value of the information which is available to 8
holiday consumers.

2008
4 d i High quality and reliable information is essential is a manager is to make 4
effective decisions.
Describe the characteristics of high quality, reliable information.

SQP
4 a Explain clearly the meaning of the term information, and describe the main 8
types of information which may be available to a firm.
4 b How would you assess the value of the types of information that you have 10
described in 4 (a)?

SQP2006
Gathering information is important prior to making decisions.
5 a Discuss the value of secondary information in decision making. 4

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Essay Questions

Data Protection Legislation

2000
3 b Describe the legislation which exists to protect individuals from misuse of 6
information stored about them on computers. Your answer should include the
measures an individual can take to find out what is actually stored about them
and what they can do to have incorrect information altered.

2003
2 d Customers using the Internet provide organisations with personal information 5
(such as Date of Birth and Address). Describe how an organisation could use
this information to their advantage.

2006
2 b ii Describe legislation which protects consumers from misuse of information held 6
about them.

2008
4 d ii The Data Protection Act 1998 is the legislation which covers information stored 5
on computers about individuals. Describe the main features of the Data
Protection Act

E-Commerce
2009
1 a It is becoming more popular to purchase products online. Explain the 4
advantages to an organisation of selling products over the Internet.

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Essay Questions

ICT in Business
2005
1 b i Explain how ICT (Information Communications Technology) could support an 5
organisation in the areas of:
- marketing
- human resources
- finance
1 b ii Outline factors which might restrict the use of technology. 4

2006
2 c Discuss the effects of introducing new technology on organisations. 8

SQP2006
Organisations frequently make changes to their working practices.
2 b ii Other than the need for training, discuss the effects on a workforce of 4
introducing new ICT.

4 a Describe how developments in ICT have improved the following functional 6

areas of business:
- Finance
- Marketing
4 b i Identify 2 problems which may result when an organisation uses the internet as 2
its main communication method.
4 b ii Describe the measures which can be taken to resolve ICT problems. 4

Primary Information
2007
1 a Organisations continually try to obtain primary information about the market 8
in which they operate.
Describe the advantages and disadvantages of 3 types of field research an
organisation could use to obtain primary information.

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Essay Questions

Telecommunications Technology
2000
3 a Discuss how the Scottish Tourist Board could make use of the Internet to 9
"market" Scotland.

2001
1 a How can the use of information communication technology (ICT) support 10
market research?
1 c The use of email is increasing worldwide. Although it has many advantages 5
there are also disadvantages. Explain the drawbacks to an organisation of
using this form of communication.

2002
5 d Multinational companies depend on effective communication. Using examples, 8
discuss how technology is being used to improve global communication.

2003
MP3 is a technical format which allows music to be downloaded from the
Internet. This means users can obtain music without visiting High Street stores. In
addition to this, many consumers are now choosing to purchase CDs on the
Internet.
2 a Discuss the benefits of selling CDs, DVDs, videos and books on the Internet for: 6
- the supplier
- the customer
Cadbury Schweppes made a decision to move into the Eastern European market
and set up a factory in Poland.

Communication is essential for a company like Cadbury Schweppes which has

branches all over the world.
3 c i Describe the advances in technology which have made the decision to move to 6
other countries easier.
3 c ii Discuss the factors which might restrict an organisations use of modern 5
technology.

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Essay Questions

2008
2 d ICT is used to help Head Office communication effectively with branches in 6
remote areas of the country.
Explain how modern technology can be used to communicate effectively within
an organisation.

SQP
4 c Why has the application of information technology become so important to 7
business success?

Types of Information
2004
When choosing a summer holiday, consumers depend largely on information
obtained from brochures, television programmes and the Internet.
4 b Describe 2 suitable types of information required by someone selecting a 4
holiday. Justify your choices.

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Essay Questions

Internal Organisations
(De)Centralised
2001
The large burger chains have branches in most of our large towns. They operate
within a centralised organisation structure.
5 a Describe the features of: 10
- a centralised structure
- a decentralised structure

2005
2 c i Describe the advantages and disadvantages of a centralised organisation 6
structure.

Changes in Structure
2001
2 d An organisation may choose to structure its activities by function. Describe 3 9
alternative structures which may be used, making reference to the type of
organisation for which each may be appropriate.

2009
4 a Discuss the effects of widening the span of control. 7

SQP
"If it isn't broken, don't mend it." This view is sometimes common to both
employer and employee.
3 a What are the reasons for change in an organisation? 12
3 b Why can change lead to potential problems within an organisation? What 13
impact can change have in an organisation?
Give examples to illustrate your answers.

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Essay Questions

Corporate Culture
2004
3 d i Explain the term "corporate culture". 1
3 d ii What advantages might a "corporate culture" bring to an organisation and its 4
employees?

2007
2 e Describe the benefits to an organisation of having a strong corporate culture. 3

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Essay Questions

Formal & Informal Structures/Grouping

2000
5 b A major high street retailer may decide to delayer. Explain what this means 8
and describe the effects of this process on such an organisation.
Diagrams will be useful in illustrating your answer.

2002
A large retail group decides to divide into two companies - one company
concentrating on the retail of cosmetics, toiletries, toys, CDs and the other
company on electrical goods and DIY.
4 a How could demerging affect different stakeholders? 8
4 b i What type of decision does this demerger represent? Justify your answer. 2

2004
2 c Why would a company choose to restructure its organisation by delayering. 7
Describe, using diagrams, what is meant by the term "delayering" and the
effects it can have on an organisation.

2005
2 c ii Explain what is meant by a "matrix structure". 2

2008
2 c i Distinguish between delayering and downsizing. 3
2 c ii Explain the benefits to an organisation of using outsourcing. 4

5 d Describe the advantages and disadvantages of a wide span of control. 5

SQP
Traditionally organised structures have been hierarchical in nature, with various
layers of management. Modern management theory suggests that the number of
layers should be reduced.
1 a Discuss the possible advantages and disadvantages of delayering. 10
1 b How does delayering affect the role and responsibilities of management in an 15
organisation?
Diagrams may be useful in illustrating your answers.

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Essay Questions

SQP2006
1 b Explain the role of a Human Resources manager when an organisation decides 5
to alter its structure.

2 d The US manufacturer may choose to organise its operations by territory. 3

Justify this method of organisational grouping,
Improving efficiency is one possible example of an organisation's objectives.
4 c i Discuss to the extent to which flattening an organisational structure might help 5
a firm achieve this objective.

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Essay Questions

Grouping
2004
British Airways has chosen to group its business activities by customer (business
and private travellers).
1 a Describe the advantages and disadvantages of this type of grouping. 0

2005
Many companies selling branded goods (eg Levi and Pepsi-Cola) are moving into
new markets such as China.
3 b i Companies operating in different geographical areas may choose to group 2
their activities by territory. Describe an advantage and a disadvantage of
doing so.
3 b ii Discuss 2 other types of activity grouping. 4

2006
5 c One method of grouping staff and work within an organisation structure is by 5
product/service. Describe the advantages and disadvantages of
product/service grouping.

2007
Organisations group their activities in a number of different ways.
2 a Distinguish between the following 3 types of organisational groupings: 9
- Product/Service Grouping
- Customer Grouping
- Technological Grouping

2008
Many organisations group their activities by function.
1 e Discuss other methods an organisation could use to group their activities. 8

2009
2 a Most organisations group their activities by function. Describe the advantages 5
and disadvantages of functional grouping.

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Essay Questions

Legislation
2007
3 b i Describe the main features of the following legislation: 5
- Health and Safety at Work Act 1974
- Data Protection Act 1984
- Computer Misuse Act 1990
3 b ii Explain the impact of The Freedom of Information Act 2002 on an 2
organisation.

Outsourcing
2009
2 b Discuss the effects of outsourcing on an organisation. 5

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Essay Questions

Marketing
Branding
2005
Many companies selling branded goods (eg Levi and Pepsi-Cola) are moving into
new markets such as China.
3 a Describe the benefits of holding a brand name. 4

2006
3 d Describe the advantages and disadvantages of branding for an organisation. 4

2009
3 c Discuss the effects on an organisation of branding their products. 6

Channels of Distribution
2002
5 a Discuss the factors which must be considered when deciding on the most 7
effective channel of distribution.

2004
3 c A manufacturer may choose to supply to customers directly. Discuss the 8
advantages and disadvantages of doing this compared with supplying to:
(i) retailers
(ii) wholesalers
for both the manufacturer and the customer.

2007
3 d Discuss different forms of direct selling available to organisations. 8

SQP2006
3 c The toy manufacturer chooses a retailer to distribute the products to the 6
consumer.
Discuss the advantages and disadvantages of including a retailer as part of a
channel of distribution.

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Essay Questions

Financing a New Product

2002
Following the success of their bagless vacuum cleaner, Dyson launched an
innovative washing machine onto the market.
3 c Additional finance may be necessary to launch a new product. Identify 2 4
suitable sources of finance. Justify your choice.

ICT in Business
2006
2 b i Customers provide organisations with personal information. Explain the ways 4
in which organisations can use this to their advantage.

Market Research - Sampling

2004
A sports goods manufacturer is considering introducing a new range of trainers.
2 d ii Describe the difference between random and quota sampling. 2
2 d iii the manufacturer chose quota sampling rather than random sampling when 1
conducting the research. Justify the choice of quota sampling.

2007
1 b Explain the various means of sampling that could be used to obtain a cross 4
section of views when carrying out market research.

2009
1 d Describe 4 methods of field research. 8

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Essay Questions

Market Research - Techniques

2000
3 c Describe and justify the research method you would employ to find out if 10
visitors to Edinburgh Castle were satisfied with their experience. Your answer
should refer to the reliability of the information you have gathered.

2001
1 a How can the use of information communication technology (ICT) support 10
market research?
1 b Carrying out market research does not necessarily guarantee success in the 10
market.
Why might information gathered by an organisation be of little use to them?

2004
A sports goods manufacturer is considering introducing a new range of trainers.
2 d i Describe and justify 3 methods of field research which would tell them whether 6
or not this proposal is viable.

SQP2006
Gathering information is important prior to making decisions.
5 c Justify the use of each of the following field research techniques in gathering 8
primary information:
- Persona interview
- Internet survey
- Observation
- Telephone survey

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Essay Questions

Market Segmentation
2003
Coca-Cola manufacturers products for different sections of the market eg Diet
Coke.
5 a i Identify 2 ways in which an organisation may segment its market. 2
5 a ii What are the advantages of using market segmentation? 6

2008
4 b Explain the advantages to an organisation of using market segmentation. 4

2009
5 d Many organisations segment their market by gender eg male or female. 6
Describe 6 other methods that an organisation could use to segment their
market.

SQP2006
Market segmentation is used by car manufacturers.
1 d i Identify 2 means by which an organisation can segment its market. 2
1 d ii Explain the benefits of market segmentation to a firm and its customers. 4

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Essay Questions

Marketing Mix
2002
1 d Discuss the factors which would contribute towards a good product mix for an 5
organisation.

4 c Describe the difficulties which might exist for a firm deciding to alter its 7
product or service.

2003
2 b Changes in technology mean that new products are frequently launched onto 10
the market. Describe the types of strategies an organisation might use when
pricing a new product.
2 c What non-pricing measures could suppliers take to encourage customers to use 4
the internet as a means to purchase products?

2004
Large football clubs and major sporting events such as F1 motor racing depend
heavily on sponsorship as a means of funding.
2 b Why would a company choose to use sponsorship as a means of promotion? 3
Nestle and Cadbury have attempted to take over an American chocolate firm.
5 b ii How can an organisation such as Nestle ensure each product remains 4
competitive?

2005
Mobile phone operators have been criticised for overcharging customers and may
be forced by legislation to reduce their prices.
5 a Describe 4 factors which allow organisations to remain successful whole 4
charging customers high prices.
5 b ii Describe pricing strategies which could be used to achieve these objectives. 4
5 c i Explain why organisations choose to spend large sums of money on marketing. 5
5 c ii Other than altering prices, describe 2 methods of promotion which are used 2
by organisations.

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Essay Questions

2007
3 c Manufacturers use short term promotional measures to boost sales of products 4
or services to retailers (into the pipeline promotions). Identify and describe 2
of these measures.

5 b Product endorsement is when firms pay famous people to promote their 5

product or service. Describe the advantages and disadvantages of product
endorsement.

2008
1 c Explain why firms use loss leaders as a pricing tactic. 3

3 d Discuss the advantages and disadvantages to an organisation such as Asda of 4

selling own brand products.

4 c Explain the purpose of the Advertising Standards Authority. 2

SQP2006
Car manufacturers frequently alter their product designs bringing out new
models. One reason for this might be to extend the product life cycle.
1 c ii Other than extending the product life cycle, explain the reasons why an 4
organisation alters it product design.

Marketing Our Product

2000
3 a Discuss how the Scottish Tourist Board could make use of the Internet to 9
"market" Scotland.

5 c Describe and justify the promotional techniques which might be used by major 7
high street retailers to make customers aware of their products.

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Essay Questions

Methods of Promotion
2004
When choosing a summer holiday, consumers depend largely on information
obtained from brochures, television programmes and the Internet.
4 c Identify and describe 2 appropriate methods of promotion for summer 4
holidays.

SQP2006
3 b The manufacturer's Cash Budget shows the highest income will be earned in 3
the period leading up to Christmas.
Describe 3 promotional techniques which an organisation might use to boost
sales in quieter periods.

New Product Development

2005
4 a Describe the importance of Research and Development to an organisation. 4

2008
4 a Organisations spend vast sums of money developing new products. 6
Describe the stages that that place before a new product is launched onto the
market.

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Essay Questions

Product Life Cycle

2002
1 c Toy manufacturers produce updated versions in order to extend their product 8
life cycle. Identify and describe 4 other means of extending the life of a
product.
Following the success of their bagless vacuum cleaner, Dyson launched an
innovative washing machine onto the market.
3 a Explain the stages which take place before a new product ever reaches the 8
market.
3 b Why do firms spend vast sums of money on product innovation. 3

2009
3 d Some organisations still sell their original product a number of years after it 6
was first launched.
Explain how extension strategies can prolong the life of a product.

SQP2006
Car manufacturers frequently alter their product designs bringing out new
models. One reason for this might be to extend the product life cycle.
1 c i Describe 2 other methods of extending the product life cycle. 4

Product Portfolio
2004
Nestle and Cadbury have attempted to take over an American chocolate firm.
5 b i Nestle is an example of a firm which has an extensive "product portfolio". 8
Define this term and discuss the benefits it offers to an organisation. A
diagram should be used to support your answer.

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Essay Questions

Public Relations
2001
4 c Errors do sometimes occur in manufacturing eg a supermarket is unhappy 5
about the quality of one batch of lasagne which has been distributed
throughout the UK.
Explain the role of the Public Relations Officer in dealing with this.

2003
1 b Oil companies such as BP and Shell see creating a good reputation as an 5
important objective.
Describe the role of the Public Relations Officer in achieving such an objective.

2008
1 d Describe the methods available to a Public Relations department to improve 5
the image of an organisation.

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Essay Questions

Operations
Channels of Distribution
2006
2 a Describe the factors affecting an organisation's choice of channel of 7
distribution.

Choice of Supplier
2004
3 a Discuss the factors to be considered when a large secondary school is 6
selecting a new supplier for its uniform.

2006
A local restaurant which has a capacity to hold 50 customers finds it frequently
has fewer than 5 customers. The problems have been identified as poor quality
and overpriced food.
1 b i Explain the factors which are important in selecting an appropriate supplier of 5
raw materials for the restaurant.

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Essay Questions

Production Methods
2001
4 d Describe the main factors which have to be taken into account by an 5
organisation when choosing a method of production.

2002
5 c A furniture manufacturer chooses to use the job method of production. 6
Describe the advantages and disadvantages of this method over flow
production for the furniture manufacturer.

2004
3 b i Describe the production method you think the manufacturer would most likely 2
use for the production of these uniforms. Justify your choice.
3 b ii What are the advantages and disadvantages of the method you have chosen? 4

2007
4 d i Describe and justify the use of the following methods of production: 4
- job
- flow

2008
2 e Describe 3 types of production. 3

2009
4 c i Describe 3 types of production available to organisations. 3
4 c ii Explain the factors that would affect the choice of production method used. 5

SQP2006
1 a Most car manufacturers use a capital intensive process. 6
Compare the benefits of a capital intensive process to one which is labour
intensive
Companies take measures to ensure their products are of a high quality.
5 d i Describe the factors affecting an organisation's choice of production method. 5

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Essay Questions

Quality Control
2001
The British Standards Institute (BSI) Kite mark is an indication of product quality.
4 a i Name 2 other Quality Standards. 2
4 a ii Describe the benefits of a Quality Standard to both an organisation and its 3
customers.

4 b What steps can be taken in the manufacturing process to ensure a quality 10

product is produced at all times?

2005
Many companies selling branded goods (eg Levi and Pepsi-Cola) are moving into
new markets such as China.
3 d Explain some of the measures companies take to ensure their products are of 9
a high quality.

2006
A local restaurant which has a capacity to hold 50 customers finds it frequently
has fewer than 5 customers. The problems have been identified as poor quality
and overpriced food.
1 b ii Describe other means by which quality food and service can be guaranteed 6
at all times.

2007
For firms to survive in the market place they must provide quality products and
services.
5 a Explain measures organisations can take to ensure they produce a quality 9
product or service.

2008
5 a i Describe how the introduction of Quality Management (formerly TQM) 5
techniques could ensure a quality product or service.
5 a ii Explain how the Human Resources Department can help to ensure that a 4
quality product or service is produced.

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Essay Questions

2009
5 c Describe the advantages and disadvantages of gaining approval from the 4
British Standards Institution (BSI).

SQP2006
Companies take measures to ensure their products are of a high quality.
5 d ii Explain how one of the following measures can ensure a high quality product 2
is achieved.
- Benchmarking
- Quality control

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Essay Questions

Stock Control
2002
At Christmas time, toy retailers often face the problem of not being able to obtain
stocks of the most popular toys (PlayStation 2, Buzz Lightyear).
1 a Suggest reasons why this situation occurs. 4
1 b Describe the stages involved in setting an appropriate stock level for a 8
retailer.

2003
5 c Effective stock control is important to achieve efficient production. 9
Describe the just-in-time system and its advantages and disadvantages for an
organisation such as Coca-Cola.

2006
Zara, a Spanish fashion store, keep their stock levels low and restock every 2-3
weeks.
4 a Describe the risks to an organisation running with low stock levels. 4
4 b i Describe what is meant by the term "just-in-time stock control" and explain its 4
advantages.
4 b ii Discuss the factors which must be taken into account when setting a stock 4
reorder level.

2007
4 c Discuss the advantages and disadvantages of a centralised stock control 6
system.

2008
5 b i Describe the JIT stock control system. 2
5 b ii Describe the advantages and disadvantages of using such a system. 5

2009
1 e i Draw a diagram to illustrate how you would manage stock control effectively 3
(your diagram should be labelled correctly).
1 e ii Describe different stages involved in setting an appropriate stock level. 4

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Essay Questions

SQP
2 a What is involved in the efficient management of stocks? (Marks will be 12
awarded for the use of appropriate diagrams.)
2 b What are the advantages and disadvantages of the just-in-time system of 8
supply and production?

Transportation
2002
5 b Manufacturers have to transport goods to retailers. 4
Describe the external factors which might result in transport difficulties.

2007
4 d ii Justify the choice of the following methods of transporting goods: 3
- road
- rail
- air

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