1.

Name: …………………………………… Grade: 9

2. Subject: Business Studies Topic: Unit 1.1 and 1.2

Read the case study given below and answer the questions based on it:

GHT is a public limited company. It produces steel products including gates and garage doors.
GHT has a flat organisational structure and a short chain of command. GHT has many
stakeholdergroups including 600 employees. The Managing Director is considering introducing
job rotation toimprove employee motivation.

(a) Outline two advantages to GHT of having a short chain of command.

Advantage 1: ....................................................................................................................

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Advantage 2: ....................................................................................................................

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(b) Explain one advantage and one disadvantage to GHT of using job rotation to improve employee
motivation.

Advantage: .......................................................................................................................

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Explanation: ......................................................................................................................

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Disadvantage: ...................................................................................................................

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 Explanation: ......................................................................................................................

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(c) Do you think the shareholders are the most important stakeholder group to the success of a
limited company? Justify your answer.

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........................................................................................................................................... [6]
Quest Mark
ion s
a Outline two advantages to GHT of 4 Note: To use words from the stem as
having a short chainof command. application, the reference must be
appropriate (i.e. make sense) in relationto
the point being made.
Award 1 mark for each relevant advantage.
The following words are likely to be
Award 1 mark for each relevant reference to appropriate for thisquestion:
this business.
Points might include: • Steel / gates / garage doors
• 600 employees
• Communication is quicker / • Public limited company
communication is more accurate / • Flat (organisational structure)
quicker decision-making [k] within the • Job rotation
publiclimited company [app] • Improve employee motivation
• Easier to delegate tasks / more • 22 500 (break-even output)
delegation [k] to its 600employees
• 30 000 (units sold)
[app]
• $100 (price per unit)
• Workers feel more motivated [k]
• Lower costs as fewer • $900 000 (fixed costs)
managers/supervisors needed[k] • $60 (variable cost per unit)

Other appropriate responses should also be

credited.
Other appropriate examples in context can
still be credited.
Only award points about communication
once.
Quest Mark
ion s
b Explain one advantage and one 6 To use words from the stem as
disadvantage to GHT ofusing job application, the referencemust be
rotation to improve employee appropriate (i.e. make sense) in relation
motivation. to the point being made.
Award 1 mark for
The following words are likely to be
identification of each
appropriate for thisquestion:
relevant
advantage/disadvantage
• Steel / gates / garage doors
(max 2).
• 600 employees
Award 1 mark for each relevant • Public limited company
reference made to thisbusiness (max • 22 500 (break-even output)
2). • 30 000 (units sold)
Award 1 mark for each relevant explanation • $100 (price per unit)
(max 2). • $900 000 (fixed costs)
• $60 (variable cost per unit)
Points might include:
Other appropriate examples in context can
Advantage: still be credited.
• (As work more varied) fewer Do not award motivate or demotivate
workers might leave [k]from its employees as statedin the question.
600 employees [app] leading to
lower recruitment costs [an]
• Business has a more flexible /
skilled workforce / multiskilling [k]
leading to higher productivity /
higheroutput [an]
• Easier to cover / replace others when
someone is absent [k] so may be able
to meet an order on time [an]
• Can help business identify where
employees work best[k]
Disadvantage:

• Increased training needed [k]

increasing costs/expenses [an] so
may increase its break-even
output above 22 500 [app]
• Workers may not be familiar with
each task / less specialist in task
/ not good at all tasks [k]
lowering quality / increase waste
/ leads to mistakes [an]
increasing variable cost above
$60 [app]
• Takes time to learn different
 tasks / switch between jobs [k]

Other appropriate responses should

also be credited.

c 6
Do you think the shareholders are the
most important stakeholder group
to the success of a limited
company? Justify your answer.

Award up to 2 marks for identification

of relevant points.

Award up to 2 marks for relevant

development of points.

Award 2 marks for justified decision as

to whether shareholders are the
most important stakeholder group
to the success of a limited
company.
Points might include:
Shareholders/owners
• Provide finance / invest money /
capital in business [k] which can help
the business expand / buy more
equipment [an] so can increase output
[an]
• Influence the aims of the business [k]
• Have the power to vote out the
directors [k]
• They have little / no influence over
day-to-day decisions [k]
c
Other stakeholders can include:

• Customers [k] as they buy the

products [an] and if ignores their
needs the business will lose
sales/revenue [an]
• Directors/managers [k] are
responsible for day-to-day
decision-making [an]
• Employees [k] make the
products [an] so if they
become demotivated quality
may fall [an]
• Suppliers [k] provide
materials/inventory [an]
• Local community [k] provide the
workers [an]
• Government [k] provide the legal
framework in which the business
operates [an]
• Bank [k] provide finance/loans [an]

Other appropriate responses should

also be credited. Justification
might include:
Shareholders are important as they
invest money in the business [k]
which can help the business
expand [an].
However, once the business is
established, they have little / no
influence over day-to-day
decisions. Customers [k] matter
as they buy the products [an].
While shareholders provide
important finance, without
customers even a limited
company cannot generate income
[eval] and without this cannot
cover its costs or make a profit, so
the customer is probably the most
important stakeholder. [eval]