UFP PAPER 2 Series 2

80 Marks

2 Hours

Section 1- 15 MCQ questions, worth 15 mark in total.

Section 2- a mixture of small and medium size questions assessing student’s numeracy, description
and analysis skills, worth 40 marks in total. (Smallest question should be 3 marks, biggest question
should be 6 marks).

Section 3- case study with a 9 mark ‘analyses’ and 16 mark ‘to what extent’ questions, worth 25
marks in total.

Paper 1= unit 2 (Managers, Leadership), unit 4 (Operational Performance) and unit 6 (Human
resources).

Section 1- 15 MCQ questions, worth 15 mark in total.

1. To be an effective leader a person must above all be:

A Feared

B Inspiring

C Authoritarian

D Democratic

2. Which of the following tasks is not a traditional role of a manager?

A Planning

B Controlling

C Delegating authority

D Delegating responsibility

3. Which of the following management styles involves delegating complex tasks to skilled
employees. Such action is thought to encourage and increase employee motivation.

A Paternalistic

B Autocratic

C Democratic

D Laissez-faire
4. What does scientific decision-making imply?

A A systematic approach to decision-making

B An intuitive approach to decision-making

C A trial and error approach to decision-making

D A psychological approach to decision-making

5. “The cost of the forgone alternative” describes which one of the following costs?

A Opportunity cost

B Stepped cost

C Variable cost

D Fixed cost

6. Which one of the following factors will have an internal influence on operational objectives?

A The quality of its workforce

B The quality of local education

C The level of sales revenue income

D The degree of market competition

7. If it takes 200 workers 400 hours to produce 4,000 units of output, what is the labour productivity
per hour?

A 2 units per hour

B 10 units per hour

C 20 units per hour

D 40 units per hour

8. What is the average, or unit, cost of production if a business produces 50,000 units incurring a
total cost of £500,000?

A £0.02

B £0.10

C £5.00

D £10.00
9. If a business produces 405,000 units of output when working at 10% below its maximum capacity,
how many units of output can it produce when working at full capacity?

A 364,500 units

B 405,000 units

C 445,500 units

D 450,000 units

10. The now somewhat outdated term “Just-in-Time” phrase relating to the business environment,
originated from the Toyota Production System in the early 1950s. To what does this term specifically
refer?

A A budgetary system

B A production system

C A general philosophy

D A stock control system

11. Which one of the following is an internal influence on the Human Resource objectives of a
business?

A Competitors’ policies on new product research, development and production

B Its own policies on new product research, development and production

C Global developments in technology

D Global economic growth

12. Which of the following leadership styles best suits a “hard” Human Resource Management
approach?

A Autocratic

B Democratic

C Laissez faire

D Paternalistic

13. Which of the following would not be a main consideration of a “soft” approach to Human
Resource Management?

A Providing a vehicle for employee input to management decision-making

B Encouraging both employers and employees to share common goals

C Showing a concern for employees’ higher needs

D Putting employees needs before the needs of the business

14 When present with the five job characteristics of Hackman and Oldham's model of job
design (Autonomy, Feedback, Task identity, Task significance and Task variety), how many
“psychological states” will these lead to?

A One

B Two

C Three

D Four

15 “The number of subordinates a line manager has direct authority over and responsibility
for”. What is this quotation referring to?

A Span of control

B Delegation

C Chain of Command

D Decentralisation

Section 2- a mixture of small and medium size questions assessing student’s numeracy, description
and analysis skills, worth 40 marks in total. (Smallest question should be 3 marks, biggest question
should be 6 marks).

16. Number One Fashion Ltd is considering launching a new clothing brand (option 1) or increasing
the amount of promotion for their current clothing brand (option 2). Using the decision tree below,
calculate the expected value for option 1 and option 2.

0.2 £200,000
1
0.8 £45,000

0.6 £75,000
2
 0.2 £200,000 £40,000 (200,000 x 0.2)
1
0.8 £45,000 £36,000 (45,000 x 0.8)
£76,000

0.6 £75,000 £45,000 (75,000 x 0.6)

2
0.4 £60,000 £24,000 (60,000 x 0.4)
£69,000

EV option 1 £76,000
EV option 2 £69,000

17. First Call PLC, a UK based insurance company, outsourced their customer call centre to India 2
years ago. Their call centre workforce started at 400 staff and has increased by 15% this year. The
table below shows the number of employees who have left the call centre at First Call over the last
two years.

60

50
Number of employees who leave in a

40

30
year

20

10

0
Last year This year

Calculate the labour turnover this year and last year.

Labour turnover last year Labour turnover this year

Total employees 400 Total employees (400 x 1.15) 460
Employees that left = 25 Employees that left = 51
(25/400) x 100 = 6% (rounded) (51/460) x 100 = 11% (rounded)
18. Last year, the Car Spa cleaned and valeted 1,680 cars. The Car Spa is renowned for their
attention to detail and last year labour productivity was 210 cars per employee. The business is
looking to increase their workforce by 25% and is keen to maintain the same level of labour
productivity per employee to ensure the current high standards remain. Calculate how many
employees worked at the Car Spa last year and how many cars will be cleaned and valeted this year
(based on the 25% increase in the workforce).

Last year’s employees = 1,680 / 210 = 8 employees

Number of cars cleaned/ valeted this year = (8 x 1.25) x 210 = 2,100 cars

19. Explain one crucial factor that would distinguish a leader from a manager in a business
environment. (4 Marks)

Suggested answer content:

A manager is someone who administers and supervises resources under their control. A leader is a
unique visionary individual inspirational person who, by personal charisma, can lead, influence,
inspire and motivate work colleagues.

ONE point from:

• A sense of intuition

• The ability to inspire

• The ability to motivate

• A charismatic personality

• The ability to be a visionary

• The ability to do what is right as opposed to doing the right thing

20. With the increase in companies analysing data and making decision based on data and sciences
some argue this takes away from intuitive decision making.

Analyse one instance where intuitive decision-making would have an advantage over scientific
decision-making. [5 marks]

Suggested answer content:

Intuitive decision-making is “gut instinct”, “sixth-sense” decision-making which combines the

decision-maker’s common sense with their conscious awareness of the issue in question and the
possible outcome and consequences of their decision. In technical terms it is a “non-sequential
information-processing mode.”
Scientific decision-making is more rational and involves the systematic and logical processing of
inputted facts and figures to find the best solution to an identified problem. The logical and
systematic process involves identifying the problem, analysing it, developing a set of possible
solution to solve the problem, choose the best solution for the given situation, implement and apply
the chosen solution, review the consequences through feedback and, if necessary, revisit the
problem and repeat the process.

ONE point from:

• In a fast-moving, evolving market environment

• Where there is no, little or ambiguous data and information available

• When an immediate response is essential to match competitors’ actions

21. Explain one way that the use of modern technology would improve a business’s operational
efficiency.

Suggested answer content:

In today’s business environment, modern technology in fact refers to available and affordable
computing knowledge and equipment resources. For example, internet trading, touch-screen
technology, industrial robots, automated telephone menus etc.

ONE point from:

• By reducing its costs

• By improving it flexibility

• By increasing its production efficiency

• By improving the quality of its product and service

22. A Small fast food chain based in the UK has recently been having issues with customer feedback
from its customers.

Explain one way that a Small fast food chain could improve the quality of its product or service.

Suggested answer content:

Quality is subjective to individual consumer opinion. If “it does exactly what it says on the tin”, than
customers consider it to be of excellent quality, but if it doesn’t then on a sliding scale to be rubbish.

ONE point from:

• By the introduction of modern technology

• By embarking on a process of quality assurance

• By developing an effective system of quality control

• By investing heavily in product research and development

23. Analyse one disadvantage to a business selling electronic goods of recruiting internally rather
than externally. ( 5 Marks)

Suggested answer content:

Internal recruitment is filling a job vacancy from a trawl of the existing workforce. The vacancy is
only advertised within the organisation using internal notice, staff magazine or staff meeting.

ONE point from:

• It doesn’t bring in new blood with fresh ideas into a business

• It doesn’t encourage a culture of positive change within a business

• It could cause friction within the business and de-motivate those employees who were not
appointed

• Recruiting an existing employee to a vacant post will require that their post be filled and
hence generate another recruitment process posing the same dilemmas for the business
 Section 3: 25 Marks long answer questions

Houses Online Ltd

There are two main ways of advertising a house for sale.

 Traditional estate agents who use their shops to advertise properties. This is relatively expensive: the average fee
is around £4000.
 Websites that advertise properties for sale online. This is much cheaper than traditional estate agents.

Amil Shah’s business (Houses Online Ltd) combines the two approaches above to advertise houses. Amil uses a
website to advertise properties which is supported by a network of retailers, such as convenience stores. His
business has agreements with retailers nationwide to advertise local properties for sale in their shop windows. Amil
has, therefore, avoided the cost of operating a chain of shops.

Reviewing the 2008 trading figures, Amil was pleased with sales growth since the business started, but disappointed
with its profitability.

Amil’s business receives revenue from two sources.

 Fees for advertising houses (£99 to £350 according to the level of service chosen – slightly higher than online
rivals).
 The sale of advertising space to other businesses on the Houses Online Ltd’s website. Amil wants to increase
income from this source, but has insufficient time to manage it.

The business’s costs have risen quickly as the company has grown. Amil has appointed mainly part-time sales
representatives throughout the UK to negotiate deals with local retailers for advertising properties in their shop
windows. The sales representatives are paid a low, hourly wage rate and a large bonus for each deal agreed with
retailers. Uncertainty about levels of earnings may have contributed to a high level of labour turnover amongst sales
representatives.

Houses Online Ltd also has two full-time office staff and an IT specialist. Amil has not appointed a supervisor or a
manager but has delegated some authority for day-to-day decisions to employees. Amil works very long hours,
meeting with his sales representatives individually, providing regular on-the-job training, developing employees’
confidence and their sense of empowerment. He recognises that an effective workforce is important for the future
performance of the business.
Table 2: Budgeted and Actual Revenue and Costs for Houses Online Ltd, 2008

Budget £ Actual £

Revenue:

Fees from advertising houses 191 000 200 250

Revenue from advertising space 36 000 25 000

Total Revenue 227 000 225 250

Costs:

Wages and salaries 124 750 143 250

24. Analyse three possible consequences for Houses Online Ltd of the high level of labour turnover
of sales representatives. (9 Marks)

9 mark analytical questions: AO1 = 3, AO2 = 3 and AO3 = 3

Level The student will typically demonstrate: Marks

A good response overall that focuses on many of the demands

of the question.
Provides an answer to the question set that:
3  demonstrates a good knowledge and understanding of issues in 7–9
the question
 demonstrates analysis which is well-developed and is applied
effectively to the context.

A reasonable response overall that focuses on some of the

demands of the question.
Provides an answer to the question set that:
2  demonstrates a reasonable knowledge and understanding of 4–6
issues in the question
 demonstrates analysis which is developed and is applied to the
context.

A limited response overall with little focus on the demands of the

question.
Provides an answer to the question set that:
1  demonstrates a limited knowledge and understanding of issues in 1–3
the question
 demonstrates analysis with little development and with mainly
descriptive application to the context.

Relevant answers might include the following:

 the business will incur the costs of recruiting new sales representatives
adding further to its costs
 Amil’s programme of training will be wasteful to a significant extent
 the process of recruitment and selection is likely to add further to Amil’s
already heavy workload
  the process may bring in new ideas and help to expand the business further
 this is likely to make it more difficult for Amil to pursue his process of
delegation and empowerment
 this might make the process of developing relationships with retailers
(to advertise properties in their shop windows) more difficult.

25. To what extent is the way that Amil manages his workforce effective?' [16 marks]

16 mark evaluative questions: AO1 = 4, AO2 = 2, AO3 = 4 and AO4 = 6-*#]

The student will typically demonstrate: Marks

 An excellent response overall that is fully focused on the
demands of the question.
provides an answer to the question set that:
 demonstrates a depth and range of knowledge and understanding
that is precise and well selected in relation to issues in the
4 question 13–16
 demonstrates analysis throughout which is well developed, is
applied effectively to the context and considers a balanced range
of the issues in the question
 makes judgements or provides solutions which are built effectively
on analysis, show balance and have a clear focus on the question
as a whole throughout.

A good response overall that focuses on many of the demands

of the question.
provides an answer to the question set that:
 demonstrates a depth and range of knowledge and
3 9–12
understanding of issues in the question
 demonstrates analysis that is well-developed, applied effectively
to the context and considers a range of issues in the question
 makes judgements or provides solutions which are built on
analysis, show balance and address the question as a whole.

A reasonable response overall that focuses on some of the

demands of the question.
provides an answer to the question set that:
 demonstrates a limited knowledge and understanding of a range
of issues in the question or a good knowledge and understanding
2 of relatively few issues in the question 5–8
 demonstrate analysis which is developed, applied to the context
and considers some of the issues in the question
 makes judgements or provides solutions which are built on
analysis, but lack balance and are not fully focused on the
question as a whole.

A limited response overall with little focus on the demands of the

question.
provides an answer to the question set that:
 demonstrates a limited range and depth of knowledge and
1 understanding of issues in the question 1–4
 demonstrate analysis with little development, mainly descriptive
application to the context and considers a limited number of
issues in the question
 Makes judgments or proposes solutions which have limited links
to analysis or limited focused on the question as a whole.

Relevant answers might include

the following: Amil’s strengths:
 Amil is providing ongoing on-the-job training attempting to improve the
employees’ skills and confidence
 he does offer representatives bonuses which may help to increase the
number of ‘sales’ they achieve
 Amil has delegated ‘some’ authority to his employees which might act as a
motivator. It seems he is keen to empower them
 fees for selling homes are ahead of Amil’s budget – this could be a good sign
for the future and reflect on an effective workforce.

Amil’s weaknesses:
 there has been a high labour turnover in the past amongst sales
representatives and there appears no reason why this will not continue
 Amil has a very wide span of control making it difficult for him to guide the workforce
 Amil is overworked – the structure of the organisation is possibly too flat – a
supervisor or a manager is needed
 wage and salary costs have risen faster than Amil forecast – this may be
evidence that the workforce is not as effective as he had hoped.

Issues for evaluation may include the following:

 this business is growing rapidly and changes will be essential if it is to prove
effective
 it may depend upon the quality of employees that Amil appoints or promotes.