2.

1 Management and
leadership

Ideas for answers to progress

questions
1 Using the example of a bakery.
u Organising: management might divide the bakery into bread and cakes.
They would organise sufficient ingredients and employees to complete the
work required
u Commanding: make sure that each employee or team knows exactly what
they need to do. Tell them how many loaves and cakes must be produced
each day; what methods must be used
u Co-ordinating: make sure that each team (bread and cakes) is on course
to complete enough items to meet the orders by the time delivery is due.
Make sure that each employee or team knows which items to make.
Prevent all employees making the same item!
u Controlling and monitoring: check that all activities are taking place as
planned and if not then take action to make sure that necessary changes
are made.
2 To ensure that products are being produced at the required speed. That employees
are capable of completing the tasks allocated to them. Employees needing more
training would be identified. Any lack of ability could severely affect the quality
of the product being produced. Methods of production must be checked to make
sure that the most efficient and most productive methods are used.
3 A leader is someone with vision and who inspires others to follow their ideas.
A manager puts the ideas of a leader into practice; they implement the ideas
on a practical level.
4 Answers could include:
u More participation motivates employees
u Two-way communication allows for feedback from which good ideas can
be contributed by employees
u Employees are likely to be more committed to business changes that they
have been involved in discussing.
5 Answers can include: employees do not feel trusted; good ideas from
employees will not be heard due to one-way communication; lack of
motivation of employees who do not feel involved in the business.
6 Highly skilled and self-motivated.

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7 Charismatic, creative and intelligent, has vision and forethought; persuasive;
self-confident.
8
uuTo organise: make sure that there are sufficient employees and materials
and that work is allocated to appropriate departments or employees
uuTo command: tell people what is required by when. Give clear instructions
to appropriate people so that all involved know what is expected of them
uuTo co-ordinate: make sure that there is no duplication of effort; that all
departments will complete their part of a job on time so that the work is
completed by all departments/employees at the correct time
uuTo control and monitor: check that work is progressing as it should and
that all involved are capable of completing their part of the work. Assess
the progress and make any necessary changes to ensure that complete
work at the required standard will be finished by the due date.
9 Theory X is only a perception that managers have of employees rather than
being an actual classification of an employee.

Ideas for answers to case study

questions
All change for Luigi and Anton
1 Luigi has a skill for forward planning and for taking the business in a new
direction. He is creative. It was his idea to open a café originally and now he
has seen a new direction for the business. He perhaps has more ability to see
the “bigger picture” and develop the business.
2 Anton is able to work with Luigi’s plans and put them into action. For
example he was able to find the ingredients that Luigi wanted at as low a cost
as possible. He is also managing the menu with new meal and snack ideas.
He is able to put ideas into practice and manage them on a day-to-day basis.

Ravi and Gwenaelle

1
uuRavi might raise the level of motivation among production workers,
leading to them working harder and meeting deadlines.
uuThe workers might have some product ideas or suggestions about how
production could be improved to help speed up the production process.
uuThe business might be able to deliver all orders on time.
uuRavi could delegate some tasks and concentrate on working on solutions
to more important problems such as meeting deadlines.
2
uuGwenaelle is more likely to have motivated employees than Ravi.
uuBecause the employees feel valued in sales and marketing the labour
turnover might be lower than in the production department.
uuRavi might be spending time monitoring and controlling employees that
could be better spent elsewhere.
2

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 uuEmployees are more likely to approach Gwenaelle than Ravi if they see a
problem in the business.
uuEmployees working for Gwenaelle will feel trusted whereas those working
for Ravi will not. This may affect job satisfaction and therefore output
quality and quantity.

Ideas for answers to exam-style

questions
1 Any three of the following functions can be explained. Answers could be
Fayol’s planning, organising, commanding, co-ordinating or controlling and
monitoring. Or they could be Mintzberg’s interpersonal, informational or
decision-making functions. Each would require a brief explanation of what
would be involved in each role.
2 a Disadvantages could include: not feeling trusted or valued and lacking job
satisfaction. The key to this question is that it is the possible disadvantages
to employees that are required not disadvantages to a business. Brief
explanation of how or why employees would be disadvantaged is required.
b The instruction word here is “discuss” therefore some evaluative comment
is required.
Qualities that could be discussed are: self-confident or having self-belief;
intelligent; creative and charismatic. It should be explained what each
of these characteristics mean and how this might impact on a business’s
activity and its employees.
“Discuss” in a 12-mark part (b) essay question requires evaluation. This
could be that a leader might have excellent ideas about where the business
should aim to be but these might not be the best ideas for the business
at that time or they might be too risky if the country was entering a
period of recession. A judgment could also be made about whether or
not a charismatic leader is always good for a business because they might
be able to persuade people to follow them in a direction that is bad for
the business. Also a strong leader can sometimes be overpowering to
managers who can feel hesitant about putting forward ideas because they
fear that they cannot match the intellect of the leader. In this way good
ideas might be lost.

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2.2 Motivation

Ideas for answers to progress

questions
1 Taylor believed that money motivates. Maslow’s lowest level in his hierarchy
of needs is “basic needs” such as food and shelter, and employees would be
motivated by needing money to satisfy these basic needs.
2 Social needs can allow employees to feel more accepted and to feel part of a
team, which would motivate them to work harder, e.g. teamwork meets social
needs and can lead to increases in productivity.
3 It does not motivate those who are not driven by the need for money; the
pursuit of money in a piece-work system can lead to a fall in quality.
4 Employees could be organised in departmental teams, e.g. fresh produce or
bakery. Teams satisfy social needs and could lead to some healthy competition
and therefore improved performance.
5 He could encourage employees to submit recipes and give recognition to any
that are used in production of meals. He could also tell his employees about
any positive feedback from customers. He could simply tell them that he
appreciates their hard work after a large order has been completed.
6 Motivators are those aspects of work that actually motivate or drive someone
to want to work and to work better. Hygiene factors do not actually motivate
but if not present they can demotivate.
7 Authority needs are met by employees having responsibility for aspects of
the work.
Affiliation needs are met by using teamwork.
Achievement needs are met by the monthly award given to the best team.
8 The success of this is related to the strength of the employee’s desire or need
for the reward. This is known as “valence”.
Employees need to believe that increased effort on their part can actually lead
to a better performance. This is known as “expectancy”.
Finally employees need to feel confident that if they deliver an increased level
of performance they will receive their expected reward. This is known as
“instrumentality”.
9 Can include piece rate; salary, time-based payments; performance-related pay;
commission; profit sharing; financial fringe benefits.
10 Teamwork; promotion opportunities; rewards for achievement or effort;
employee participation, job redesign.

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11 When money is not a motivator, i.e. when high salaries are already earned;
when a business is not financially strong, e.g. during periods of low or no profit.
12 Social needs are met; ideas can be shared and better solutions might be found;
job rotation might be easier; team members become familiar with the work
of their teammates and can possibly take on the work of others in the case
of absence from work; easier for management to communicate with a whole
team or a team leader rather than with each individual.

Ideas for answers to case study

questions
Bags by design
1
uuReflect on the work of Elton Mayo at the Hawthorne plant when working
conditions were changed but output was maintained. This was believed
to have resulted from a sense that management were taking an interest in
their employees and the use of teamwork.
uuHelene and Lara take time to discuss work with their employees. They
have tried to create the feeling that they and their employees all form one
big team. Their attitude to their employees is likely to encourage loyalty
and a desire to make sure that the large order was completed on time in
spite of the poor conditions.
uuThis matches the findings of Mayo with regard to the impact of
managers/owners taking an interest in their employees.

Alhambra Ltd
1
uuSocial needs according to Maslow’s hierarchy of needs might have
been met by the use of quality circles, but Ramone has overlooked the
importance of Herzberg’s hygiene factors.
uuThe change in working patterns might be felt to be disrupting the family
life of employees and therefore causing dissatisfaction.
uuAlso the less effective air-conditioning unit has made the working
conditions less favourable; another factor that causes dissatisfaction. So
Ramone has tried one motivation technique but has failed to be aware of
the factors that can cause dissatisfaction (hygiene factors).

P & A Textiles
1 The same rate of pay might be an issue. New employees who need to learn
the job are paid the same rate as the more experienced employees who are
training them.
A possible lack of recognition of the experience of the established employees
and their ability to train new employees is likely to demotivate them and
could lead to them leaving the business.
Growth can be unsettling. In a smaller business all the employees can get to
know each other and each will be known by the owners. This is not usually
the case when a business grows. In this case the business now has more than
four times as many employees meaning this could be an issue.
2

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2
uuRewards for meeting targets of output and quality.
uuExtra holidays for length of service.
uuRewards for punctuality and attendance.
uuIntroduce team work.
3 Give recognition to the more experienced employees by making them
supervisors or team leaders. This will give them some status and meet their
esteem needs.
They could give higher pay to employees linked to the length of time they
have worked for the business. This should encourage employees to stay with
the business and not to look for work elsewhere.

Ideas for answers to exam-style

questions
1 Only explanation is required. Advantages could include: there is no cost
implication for a business; non-financial motivators can lead to long-term
benefits such as preparing employees for promotion or increased loyalty to the
business; training can give long-term benefits both to the employee and the
business as new skills are acquired; employee participation can bring forward
ideas from employees that might not have been thought of by managers.
2 Disadvantages of financial methods of motivation can include: the cost
incurred, the fear that the motivational benefit is usually only short term;
the financial incentives might be expected in the future and therefore less of
a motivator; the pursuit of financial reward, e.g. piece work might mean that
quality is neglected; the use of commission-based pay might cause employees
to sell items that are not necessarily just what the customer wanted or needed
therefore might lose repeat customers.
3 Context here is “manufacturing”, therefore only ways relevant to
manufacturing should be given. They could include financial incentives,
i.e. piece work; target setting either on a weekly or monthly basis. They
could include non-financial motivators such as team working; employee
participation or the delegation of some supervisory tasks. Explanation
should include how employees are likely to react to the chosen motivators.
Do not forget the “manufacturing” context.
4 Take note of the context, i.e. retail, and the word “discuss” which indicates
that evaluation is required. Identify one or more theorists whose work you
are familiar with. Relate specific elements of those motivational theories to
the question and context. For example, Maslow: retail employees need to be
paid a wage sufficient to allow them to meet their basic needs, in this context
perhaps a basic wage plus commission. A commission only income is also less
likely to meet the security needs of employees because their income is never
certain. This might also lead to lower levels of customer service as employees
aim to make more sales regardless of the needs of customers. A contract of
employment and safe working conditions can be used to satisfy their security
needs. Department teams can be developed in order to satisfy their social
needs. Training and employee awards can satisfy their esteem needs. The
opportunity for further training and promotion can be used to meet the self-
actualisation needs of employees.
3

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 You might want to compare and contrast two theorists, e.g. Maslow and
Taylor. This can lead to good analysis and also give a basis for evaluation.
Evaluation might consist of which method of motivation is most likely to
produce the most highly motivated employees and why. Disadvantages of
various relevant motivational methods can also be used as analysis.
5 Discuss in a 20-mark question requires evaluation, and remember to write in
context, i.e. manufacturing.
Decide which theorists you are including in your answer. Outline which
aspects of those theories you believe are relevant to this question and
context. For example you might outline the work of Taylor and the use of
piece work to encourage higher levels of productivity or you might write
about the use of cell production or quality circles and how these conform to
Maslow’s social needs.
You must focus on the “importance” of any motivational technique and in
context, therefore you could discuss the extent to which productivity might
be increased and also how the quality of the product might be protected and/
or improved. You might include Vroom’s expectancy theory and link this to
production targets that can be given to teams: in this way you are linking
two theories, i.e. Maslow and Vroom (Maslow’s social needs and Vroom’s
expectancy theory). This can be the basis of analysis.
Evaluation might include contrasting the effectiveness of different techniques
in a manufacturing context. For example you might believe that in order to
increase productivity, paying employees per item produced is the best way,
but you would need to mention the possibility of falling quality. You might
conclude that there is no single motivational method that can be employed
because the needs of the business and the employees change over time. For
example, if there was a sudden and temporary increase in demand employees
might need to be motivated by financial means and the benefits of teamwork
or employee participation might be overlooked in the short term due to the
restricted time available to meet demand.

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 Human resource
2.3a management
(HRM)
Ideas for answers to progress
questions
1 Any of the following could be explained:
u Recruitment and selection
u Staff appraisal
u Assessing training needs
u Grievance and disciplinary procedures
u Dismissal of staff if necessary
u Dealing with staff morale and welfare issues
u Workforce planning.
2 Internal recruitments means finding a suitable person from within the
business whereas external recruitment is finding a suitable employee from
outside the business.
3 External recruitment can bring in new ideas from other organisations. The
problem of promoting someone to be in charge of their former colleagues is
avoided; this can be demotivating for those colleagues particularly if one of
them was an unsuccessful applicant for the job.
4 As this is a senior management role a suitable person might be headhunted
from another business. The job might be advertised in an appropriate
publication. The Internet might be used because there are now sites where
experienced professional people post their experience and qualifications, e.g.
LinkedIn. Senior posts are advertised on the Internet if it is expected that
international candidates might apply or in suitable national newspapers. Local
papers are less likely to be appropriate if it is a senior management position.
5 Interview: designed to question the applicant and to note how they respond
including monitoring their body language.
Demonstration: ask them to demonstrate their sales technique and also,
because this is a sales manager post, ask them to demonstrate how they would
deal with a sales person who is not selling any cars (this could be a role play).
6 Follow-up questions can be asked allowing interviewers to probe deeper into
an applicant’s answers. The body language of an applicant can be assessed.
7 Interview should be used to assess the applicant’s manner when dealing with
people:

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 uuThey can be questioned on their approach to various issues that can arise
in a clothing retail store
uuTheir manner of dress can be assessed; their appearance would be
important in such a job
uuRole play or demonstration should be used to assess how they can deal
with different situations that they can face in the post, e.g. employees
demonstrating poor levels of customer care; employees who cannot
sell; motivating employees to improve the overall sales performance
of the shop.
8 Effective recruitment and selection ensures that the best people for the job
will be employed. Failure to do this results in poor performance once in post
and can be potentially costly to the business in terms of reduced performance
or a need to replace the employee. The wrong person in a senior role can have
a negative impact on all of the employees beneath them.
9 Any of the following can be developed:
uuEnsure the implementation of health and safety requirements
uuBe aware of any problems facing employees and offer help and guidance
whether the problem is a work issue or a problem outside of work
uuHelp employees to achieve a sensible work–life balance
uuMake sure that appropriate motivational techniques are being employed.
10 Training specific to the job situation is given; production time is not lost
during training; can be motivating to the employees selected to give the
training on a one-to-one basis.
11 Avoids the slowed output of the experienced employee while training a new
employee. New ideas can be obtained through external training. Materials will
not be wasted while training.
12 Induction training is given to new employees to introduce them to the job
they will be required to do, the rules and regulations of the organisation and
the organisational structure.

Ideas for answers to case study

questions
Helenex expansion
1 Afia. Employment law requires a contract of employment setting out
the details of employment such as pay, position, responsibilities, holiday
entitlement, sick-pay entitlement and duration of the contract. A temporary
contract can be issued stating that the contract will exist for up to 12 months
but not less than nine months. Mr Patel perhaps believes that a contract is not
necessary for employees who are not permanent.
2 If the larger number of employees is only required for the duration of the
large order then at the completion of the order there will be insufficient
work for the 1350 employees. If the work no longer exists then the need for
the employees no longer exists and therefore some employees can have their
contracts terminated. Even a permanent contract can be terminated if the
work for an employee no longer exists.

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Jobs to go at Brevia plc
1 The action is lawful because the existing work is reducing and therefore the
need for employees to carry out that work is reducing. The new employees are
required to have different skills to the current employees due to the nature
of their work being very different to that currently being done. The disposal
of waste into landfill sites is unskilled while the new waste recycling process
requires skilled employees.
2 Brevia could offer training to the existing employee who are to lose their
jobs. This would depend on the level of skill required and the ability of the
employees who face redundancy.

Ideas for answers to exam-style

questions
1 Redundancy is when the business no longer requires a particular job to be done.
2 “Discuss” used in a 20-mark question requires evaluative content. The answer
needs to focus on staff training and development. The answer must focus on
“why” not “how”.
Your response to “why” could include an explanation of being a reaction
to a constantly changing business environment; or due to changes in the
product or service being offered; or because of employees leaving and
needing to be replaced. Another reason could be due to the promotion of
existing employees. “Why” can also be addressed in terms of retaining good
employees, the benefit of training as a motivational tool, or addressing the
individual needs of employees that might have been discovered during staff
appraisal. Staff development might be increasing the level of job satisfaction
of employees and might also be helping them towards achieving self-
actualisation on Maslow’s hierarchy of needs.
An outline of the benefits of staff training would be relevant together with
the need for ongoing staff development perhaps through an expansion of
the role of some employees, i.e. job enlargement or increasing the amount of
responsibility of employees through job enrichment. Job redesign can also be
discussed.
Staff training does not necessarily need to be dealt with separately from staff
development but any differences that are highlighted will demonstrate further
depth of understanding in your answer.
3 “Assess” used in a 20-mark question requires evaluative content. The question
requires a focus on the “selection” process and does not require extensive
explanation of ways in which vacant posts might be advertised. The focus
should also be on “possible problems” and therefore should not be a list of
advantages and disadvantages of selection methods.
Points for discussion might include: recruiting inappropriate staff lacking
either the skills or experience required; recruiting an employee whose
personality does not meet the requirements of the business, e.g. a need to
work as a member of a team; a possible increase in the need for training.
Cost implications can be explored such as the cost of training for employees
lacking the necessary skills or the cost of lower levels of production (in a
manufacturing context) or lower levels of customer care (in a retail context).

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 The disadvantages of specific methods of selection can be discussed.
Analysis and evaluation can be achieved by offering a conclusion based on the
type of selection method used and its appropriateness for different types of
business, e.g. manufacturing or retail business; or between different types of
employees, e.g. production workers or managers.
4 a Key to this answer is the increase in the number of complaints and the
speed with which new employees had to be found due to the sudden
increase in orders. Perhaps more time should have been taken when
selecting new employees. How reliable are recommendations by existing
employees? Is it likely to be biased if they are close friends or relatives?
The existing employee might not actually know how good their friend/
relative would be at producing rope and twine; it is likely that this will
require specific skills. The text does not say if the increase in complaints
were about the products made by the new recruits or by the existing
employees. Neither does it say if the complaints relate to those applicants
who were interviewed and given an aptitude test or to the work of
those who were employed following a recommendation of an employee.
Comment could also be made on the fact that an interview does not
necessarily reveal a person’s ability to perform a particular task but the
aptitude test should, assuming that the test was closely related to the work
required once employed. A job that requires a particular physical task to
be done usually benefits from a related aptitude test being carried out by
all applicants.
b Some training might be appropriate if there are employees who are not
using the best method or who are too slow in their work. Quality circles
could be established to review the processes used and suggest ways for
improvements to be made. Competing teams could be established whose
performance would be assessed based on the quality and quantity of
rope and twine produced. Individual targets or team targets could be
introduced. Quality control systems could be put in place to prevent
lower-quality products reaching customers.

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 Human resource
management:
2.3b further functions
of HRM
Ideas for answers to progress
questions
1 Hard HRM views employees as resources who are there to help to achieve the
business aims. Any training given would be because the business needs them
to acquire the skills/knowledge for the benefit of the business.
Soft HRM sees employees as human beings who have individual needs.
Training might be given to benefit the person rather than just the business.
Employees seeking promotion might be offered training to allow them to
reach their full potential rather than just to meet business objectives.
2 Cost saving because the business only pays employees for the hours they are
actually needed for work; if they are needed for ten hours in a week that is all
the business pays.
3 Employees might prefer part-time contracts to fit in with family
commitments. They might also prefer to work part-time for two different
employers thus having a variety of work in their life.
4 It allows training needs to be identified enabling an employee to gain more
skills/knowledge. It allows a business to identify those employees who might
be suitable for promotion to higher-level posts. It is an opportunity to praise
an employee who has met or exceeded expectations; this can motivate them to
work even harder.
5 Their skill levels can be appraised and any need for further training might be
suggested. They can be appraised in terms of the productivity, their flexibility
and their ability to work as a member of a team.
6 It is the setting of objectives/targets for employees (usually lower and middle
management levels). Objectives are often agreed between the line manager
and the employee but they can also be imposed.
7 The target set might become a maximum to be aimed for, which can result
in a lower level of achievement. Time consuming to meet, discuss and agree
objectives. The dynamic nature of business can cause a change in objectives,
therefore they must be constantly reviewed.
8 Targets can be motivating for employees. Employees know what is expected of
them. Discussion makes employees feel involved in the target setting leading
to more commitment to achieving them.
9 Employees will feel that the business cares about them. The number of
accidents will be reduced leading to a reduction in lost production time. The
possibility of legal action being taken against the business is reduced. The
need to make compensation payments to injured employees is reduced.

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10 The following might be explained. Employees can be protected in terms of
their working hours and the break times. They would have suitable protective
clothing and safe equipment to work with. They could not be dismissed
without reasonable cause. If there is minimum wage legislation then they will
be sure of receiving at least that amount of pay.
11 Answers here should outline specific aspects of labour legislation and be
explained using examples of business types commonly found in your country.
12 Workforce planning means to determine the number of employees required
and the skills that they would be required to have. It is an overview of what
labour and skills are currently employed and what labour and skills will be
required in the future.
13 Workforce planning takes place to ensure that business objectives can be met.
Business objectives must be set before workforce planning so that the number
of employees and the skills they have will be the exactly those required if the
business is to achieve its objectives.
14 Collective bargaining means that the needs or demands of a group of
employees will be discussed rather than negotiating with each individual
employee.
15 Advantages might be that there is a recognised body that can discuss issues
with the management on behalf of the employees. A “recognised” trade union
might have more bargaining power with management.
16 Employers can save time by negotiating with the trade union instead of with
individual employee. The trade union can be useful in pointing out aspects of
employment that need improvement that can prevent legal action being taken
by employees later on.

Ideas for answers to case study

questions
Delicaroma
1 Saving on wage costs. Saving on recruitment costs because they can have
a large workforce available but will only use the employees as and when
required. The need to be available from 7 a.m. until 10 p.m. means that it is
unlikely that the pay rate will be higher for working during evenings. (This
sometimes attracts a higher hourly rate for working “unsocial” hours.)
2 The preferred contract is likely to be a permanent full-time contract. A part-
time contract would be also be more beneficial to employees than the
zero hours contract because they would have some guarantee of their hours
of work and therefore their pay. They could also be more certain of when they
would be required for work, which might leave them free to obtain part-time
work elsewhere.
3 Some security of employment is likely to lead to more motivated employees
who would pay more attention to customer service. If contracts of
employment were given that gave employees more certainty they would be
likely to feel more loyalty to the business and work in its best interests.

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Ideas for answers to exam-style
questions
1 A definition of  “management by objectives” can be given to demonstrate
understanding at the outset. For example, management by objectives is the use
of targets given to departments or individuals that will enable the business to
work towards its overall business objective(s) in a co-ordinated way. Targets
are usually by agreement but can also be imposed.
In the case of Home Design Ltd note that there is some resistance to targets,
therefore perhaps they have been imposed, and a better reaction from
employees is likely to be achieved if targets are arrived at by discussion.
The fear of the employees is natural, therefore the employees need to be
reassured that targets will not be unrealistic and result in poor quality and an
unhappy workforce. Targets give employees something to aim for and they
also know just what is expected of them. They could introduce the targets
alongside an element of performance-related pay for meeting or exceeding
targets while maintaining quality.
To achieve analysis some arguments for and against should be given.
2 Points to discuss include the increase in orders; the introduction of updated
equipment and the recruitment of new employees.
Before recruiting more employees the current workforce should be audited
to discover how many employees with what skills are currently employed.
Employees might have acquired more skills during their time at the business
and they might not all be known to the employer.
An assessment of the future business requirements should be done to make
sure that the correct number of employees with appropriate skills is available.
Some focus should be on the skills required to use the updated equipment.
Does this need new employees or training of existing ones?
A business that fails to undertake workforce planning might be unable to
meet customer demands either in terms of number of products or quality of
products or both.
The failure to meet output targets might be due to employees needing some
additional training.
A global recession and being in a competitive industry means that
productivity needs to be as high as possible while maintaining quality and
controlling costs.

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2.4 Organisation
structure

Ideas for answers to progress

questions
1 Indicates channels of communication; chain of command; potential routes for
promotion; pay grades possibly.
2 Span of control refers to the number of employees who are directly answerable
to the person immediately above them in the organisation structure.
3 Decision-making responsibilities are distributed among several levels of
management.
4 More difficult to monitor employees due to the larger numbers involved.
5 Specialist workers would be employed in each of the departments, which
should make them more effective. Employees would see where their work
and department fits into the overall organisation and what contribution
it makes.
6 Business functions on an organisation chart might be: marketing, finance,
production, sales.
7 Disadvantages:
u Branches in different geographical regions might behave differently and
produce a product or service of varying quality
u The overall business image can be different
u There is a reduced opportunity for a specific brand image to be maintained.
8 Advantages of matrix structure:
u Allows the best employees to work on a project
u Encourages interdepartmental co-operation
u Can increase flexibility within a business.
9 Employees might be answerable to more than one person, which can make it
difficult to prioritise work.
10 More levels in an organisation giving more promotion opportunities;
decision-making burden is spread across more people; easier management of
individuals (fewer in each span of control).
11 Fewer promotion opportunities; possible difficulties in communicating due to
many employees under the immediate control of one person; decision-making
burden increases due to being on fewer people.

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12 Removal of some management layers can reduce costs; can reduce the feeling
of “them and us”; can make communication between higher level and lower
level simpler. A flat structure might be more appropriate for the type of
business and employees.
13 Chain of command is the lines through which any orders should be conveyed.
It shows who is accountable to who and who has authority over whom.
14 A formal structure is outlined by the organisational structure whereas an
informal structure is a result of relationships created within the organisation.
For example, people from different departments might co-operate with
each other to achieve something beneficial to the business, but that line of
communication would not be indicated on the official structure.
15 Fewer employees answering to one person can lead to ease of communication
and control.
16 Wider span of control can make direct communication with individuals more
difficult. More employees to oversee, which can cause some issues to be missed.
17 Authority can be delegated, e.g. authority to undertake a particular task.
Responsibility is the ultimate accountability for the task which cannot be
delegated and remains with the person originally in charge of making sure
that the task is completed. Responsibility cannot be delegated.
18 Delegation is to pass the authority to complete a task down the hierarchy.
Passing a task to someone in a lower level in the hierarchy.
19 Advantages:
uuTime freed up for managers
uuCreates feeling of trust for employees
uuMotivates employees
uuHelps to develop skills and identify potential for promotion.
Disadvantages:
uuTask might not be performed well and responsibility remains with the
manager who delegated the work
uuEmployees might feel they are being used to do the work of their superior
uuManagers might feel a loss of control.
20 Consistency of decisions across departments; faster decision-making;
consistency of business image; smaller chance of departments not following
the key business objectives.

Ideas for answers to case study

questions
Fedilock Ltd
1 The impact could have been negative before Juan was given control of the
new project. He could have undermined confidence in the business among
the other employees. After receiving control of the project Juan’s positive
attitude could have reassured other employees that they should put their best
effort into their work and all would be well. A negative attitude can lower the
morale of employees when discussions take place whereas a positive attitude
can improve their morale and motivation.
2

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Ideas for answers to exam-style
questions
1 Discussion might include the following.
uuConsideration might be given to the benefit of structuring the
organisation geographically and have a distinct hierarchical structure
for country B. Alternatively, if the plan is to locate either domestic
components or car components in country B, the organisation might be
structured according to product.
uuThe number of levels in the hierarchy because a tall structure allows for
closer supervision and also give opportunities for small step promotions
to be given as employees become more experienced.
uuThe ultimate level of responsibility and whether this would be in country
A or country B. Organisation with bases in more than one country
often have ultimate decision-making power remaining with the global
headquarters, meaning that the most senior manager in country B would
report to their line manager who would remain in country A.
uuThe choice of structure might depend on the market for the finished items;
if the end consumer is within country B then a “product organisation
structure” might be chosen because the product can more easily be focused
on meeting the needs of that population. However, the product must still
match the overall business image of the global organisation.
uuThey might consider the skill base in country B and which of the two
ranges of components should be made there. Consideration would
probably be given to the quality of managers in country B and whether
they would need to recruit or relocate managers from country A.
Some judgment needs to be made perhaps relating to the most important
factors to consider.
2 a A feeling that the labour of country B is being exploited if most
management tasks are retained in country A.
Managers/supervisors in country B will not develop their management

skills.
The best solution to any problems might not be found because those in

country B are closest to the problem and more likely to understand any
relevant local issues.
Decision-making might be delayed due to having to be referred to

management in country A.
b Decisions taken by managers in country B might not be consistent with
the image that SE wants for the business.
The business might be taken in a direction that is not desirable for SE as

a whole.
The board of SE need to ensure that there is no duplication of effort.


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2.5 Business
communication

Ideas for answers to progress

questions
1 To pass on instruction to employees; to communicate effectively with
customers; to obtain feedback from customers and employees.
2 Letter, report, noticeboard, email etc.
3 Telephone call; meetings.
4 Fast communication including global communication; cheap once the system
is available; immediate and allowing for faster responses. Videoconferencing
allows for communication between many people without the need to travel.
5 Noise such as machinery can make conversation difficult to hear and
understand. Technical jargon can be misunderstood by some or might be
ignored due not understanding. Too much information can result in some
being overlooked. Too many stages in communication can result in the
message being changed as it progresses.
6 An employee feeling negative might put a negative interpretation on
communication where none was intended. For example, if their manager
suggests they undertake some training, the employee might assume that it is
because they are underperforming whereas the intention might have been to
simply give them an opportunity to gain some additional skills and prepare
them for promotion.
7 There is a permanent record of what was said.
8 When a reprimand needs to be given to an employee. When a possibility of
redundancy is being announced.
9 A wheel network is used when one person is in control and information does
not need to be shared between the others in the “wheel”. Information can be
passed to those who need it when they need it.
In a circle network each person is in contact with two others and it is between
these people that information will be exchanged. If necessary, information will
need to be passed to those not in direct contact.
10 A chain network.
11 For interdepartmental communication. For example, a production manager
might need to communicate directly with finance and marketing prior to
launching a new product.
12 A connected network could be used when a team is brought together to
work on a specific project. Each member of the team would need to be
fully informed at all times and therefore a free exchange of information
would be beneficial.

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13 Formal communication follows the channel of communication laid out in
the organisational structure. Informal communication can occur between
colleagues who talk while having lunch in the canteen or who meet in a
corridor at work. In both instances work-related issues are being discussed.
14 Effective communication means that the correct message is being received,
therefore instruction to employees will be accurate. Communication with
customers will be received and understood. Effective communication uses
the correct medium and reduces the possibility of misinterpretation and
misunderstanding.

Ideas for answers to case study

questions
Tredbo Ltd
This is a typical example of how information can be distorted and cause upset.
uuThere are a few ways to communicate the reality of this situation. The
managers of Tredbo need to give clear and accurate information to their
employees at both factories. The news might not be what the employees
want to hear but it is important that the incorrect information is exposed
as such. It appears that the newspaper had heard of the offer to purchase
the factory in the north but has related the story as being applied to the
southern factory.
uuThe managers can call a staff meeting in each factory and tell employees
the truth behind the story. They can be honest and say that an offer was
received but that it was not going to be accepted. This allows employees to
ask questions after hearing the managers.
uuThey could issue letters to each employee stating the facts of the situation.
This method does not allow for questions to be asked immediately.
uuNoticeboard messages could be posted giving the facts, but again this
removes the opportunity for questions from the employees.

Ideas for answers to exam-style

questions
1 CR needs to communicate in a way that will get an accurate message to all
employees and preferably in a way that makes employees feel involved in the
future of the business.
This might be by calling a staff meeting; this will allow for questions and
further clarification if necessary, but employees do not have written details
that they can read after the meeting.
Use the trade unions as a means of communication although the final
details might not be controlled as the TU representatives would be passing
on information to employees. Again employees do not necessarily have
information in writing.
Use a newsletter or letter given to each employee. This written
communication can be checked for accuracy before being distributed. There is
no opportunity for employees to ask questions.
2

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 Management will not have any idea whether the information has been
received positively or negatively.
Issue a newsletter outlining the proposals and follow this with a staff
meeting so that questions can be asked once the information has been read
and understood.
2 The rumours that are circulating about pay cuts and job losses are likely
to demotivate employees. Some employees might choose to look for work
elsewhere therefore causing the recruitment of new employees; time and
money are involved and some reduction in production might also occur while
new employees are recruited.
A lower level of enthusiasm might result in fewer new ideas coming from
employees.
However, the employees are highly specialised and likely to be intelligent
enough to realise that the rumours might not be true.
Shareholders might hear the rumours and sell shares, which might undermine
confidence in CR in the business world. This could impact on future
investment and could have a negative effect on efficiency if investments were
planned that would have increased it.
3 There does not seem to be a consistent method of recording orders received.
Orders are accepted both by telephone and in writing. There must be a clear
record made of telephone orders that gives the same amount of detail as
written orders.
Different people might be taking details of telephone orders and might not
record all relevant details at the time. Some distortion on the telephone line
might cause some parts of the order to be misheard or misunderstood.
It could be that the quality of handwriting of the employees writing down the
telephone orders was not good, leading to misinterpretation of the message
accounting for the wrong number and colour being delivered to customers.
4 This question requires various methods of communication to be discussed
and a judgment made about the most effective methods that Eduplay could
use to improve the processing of orders.
There is an issue with orders being incorrect and so there could be an
insistence on all orders being written, but this could cause annoyance to some
customers who need to place an urgent order that would be faster by phone
although not better if they receive the wrong number and colour.
Orders could be completed using a website so that consistent details are
recorded and all details are typed, which is clearer. This method could also
speed up the receipt of orders.
Orders could be emailed to Eduplay giving both the sender and the recipient
a written record of the order and the date and time. Internal communication
methods such as progress reports could be made so that it can be seen if the
orders are likely to be completed on time.
A standard form could be used in Eduplay both for written orders sent in
by customers and to record telephone orders. This would ensure the same
information details whichever method of ordering was used.
An important element would be to record the date the order was received so
that orders could be completed in the sequence in which they were placed.
This should reduce the problem of delayed orders.
3

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 If there is a possibility that an order will be completed later than expected,
the customer should be contacted either by telephone, email or letter to
inform them of the delay and the reason for it. This might reduce the level of
dissatisfaction.
5 Implications might include:
uuFailure to complete orders by the due date, which could lead to a loss of
future orders as customers move their orders to competitors
uuOrders not being dealt with in date order resulting in a lack of customer
satisfaction and therefore loss of repeat custom
uuWrong order details passed to production department or possibly orders
being duplicated. This is likely to incur a wastage of resources both in
terms of time and materials
uuIf the orders are incorrect then the materials required to fulfill those orders
might also be inadequate or too many materials might have been ordered
uuLoss of reputation if news of the inefficiency spreads.

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