About O Level Business Studies
O Level Business Studies (Cambridge (CAIE) 7115) is examined in the May/June and Oct/Nov series. Tayyari Karo has real questions from 2021 to 2026 across Paper 1, Paper 2, covering topics such as Enterprise and business ownership, Business and the external environment, Marketing and market research, Operations, Business types and objectives and stakeholders. The fastest way to improve is to work through real questions and read why each answer is right.
Tayyari Karo collects the real Cambridge (CAIE) Business Studies questions in one place, sorted by paper and topic. They are structured questions, each with a full model answer.
Try 4 real questions
These are real past-paper questions. Think of your answer first, then open the explanation.
May/June 2021 · Paper 1 · Business types, objectives and stakeholders
BKH is a large public limited company. It has 2 000 employees across 18 locations. BKH sells a range of insurance products including house and car insurance. BKH's shareholders want the business to increase profit. The Managing Director knows increasing profit can conflict with the objectives of other stakeholder groups. She said: 'Private sector businesses have different objectives to public sector organisations.' BKH is also planning to expand by taking over another insurance company.
(a) Define 'public sector'. [2]
(b) Define 'profit'. [2]
(c) Identify four ways to measure the size of a business. [4]
(d) Explain one way each stakeholder's objectives might conflict with BKH's objective to increase profit (customers and employees). [6]
(e) Do you think economies of scale are the most important reason for taking over another business? Justify your answer. [6]
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(a) Organisations owned and controlled by the government / central or local authorities; they provide services to the public rather than being run mainly for profit.
(b) The reward to business owners for taking risk; total revenue minus total costs (the surplus remaining after all costs are paid).
(c) Any four of: number of employees; value of sales / revenue; value of capital employed; market share; number of outlets / locations; volume of output; profit level.
(d) Customers: objective may be lower prices or higher quality; this conflicts with profit because higher profit may require raising prices or cutting quality. …
The full model answer is in the app.
May/June 2021 · Paper 1 · People, location and sources of finance
Alex started APB as a sole trader business 4 years ago. APB provide printing services for local businesses such as leaflets and brochures. Alex thinks having a good location is important to any business. All APB's 6 employees receive on-the-job training. Alex has a democratic leadership style and uses job rotation to help keep employees motivated. To meet an increase in demand, Alex plans to buy an additional printing machine. This will cost $1 800. Alex has to decide on an appropriate source of finance.
(a) Define 'job rotation'. [2]
(b) State two factors that a service sector business should consider when deciding where to locate. [2]
(c) Outline one advantage and one disadvantage to APB of using on-the-job training. [4]
(d) Explain one advantage and one disadvantage of Alex having a democratic leadership style. [6]
(e) Do you think the amount of money needed is the most important factor for a sole trader to consider when deciding on an appropriate source of finance? Justify your answer. [6]
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(a) Moving employees between different tasks or roles in order to add variety and broaden their experience.
(b) Any two of: proximity to customers; cost of premises / rent; transport links / accessibility; location of competitors; availability of suitable labour; parking / footfall.
(c) Advantage: cheap (no external trainer fees); training is practical and specific to the job. Disadvantage: disrupts normal work / production; trainer's time is lost; employee may pick up bad habits.
(d) Advantage: employees feel involved and motivated; more / better ideas are generated. Disadvantage: decision-making can be slow; unsuitable in an emergency when quick decisions are needed. …
The full model answer is in the app.
May/June 2021 · Paper 1 · Operations (job production) and marketing (niche, pricing)
Economic growth in country X has created many opportunities for new businesses such as TGH. TGH manufacture a range of personalised mobile (cell) phone cases using job production. Quality assurance is important to all 8 employees. TGH operate in a niche market. The Marketing Manager uses e-commerce as TGH's channel of distribution. She is considering ways to build customer relationships.
(a) Define 'economic growth'. [2]
(b) Define 'quality assurance'. [2]
(c) Outline two reasons why building customer relationships might be important to TGH. [4]
(d) Explain one advantage and one disadvantage to TGH of using job production. [6]
(e) Do you think cost-plus is the best pricing method for a new business to use when selling products to a niche market? Justify your answer. [6]
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(a) An increase in the value of goods and services produced by a country over a period of time (a rise in real GDP / national output).
(b) Checking / ensuring quality at every stage of production so that all employees are responsible for the standard of the product, not just inspectors.
(c) Any two of: encourages repeat purchase / customer loyalty; generates good word-of-mouth recommendation; helps the business understand customer needs; can reduce marketing costs over time.
(d) Advantage: products are customised / personalised to each customer; high quality can be achieved. Disadvantage: production is slow; unit costs are high; requires skilled labour.
(e) Accept either view justified. …
The full model answer is in the app.
May/June 2021 · Paper 2 · Sectors of industry
FO is a business that has grown through takeovers.
(a) Explain four reasons for changes in the relative importance of the primary, secondary and tertiary sectors in a country. [8]
(b) Consider the following three problems for FO as it grows through takeovers. Which problem will be the easiest for FO to overcome? Justify your answer: more difficult to control the business; lack of finance; clash of business cultures. [12]
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(a) Any four of: rising incomes lead to greater demand for services; mechanisation / automation reduces labour needed in primary and secondary sectors; globalisation moves manufacturing to lower-cost countries; growth of the service sector (e.g. tourism, finance, retail); improvements in technology reduce manufacturing employment; deindustrialisation as countries develop.
(b) Accept any choice justified. 'Lack of finance' may be easiest because finance can be raised from retained profit, loans or share issues. 'Clash of cultures' can be managed through integration and training but is harder to control. 'More difficult to control' grows with size but can be managed with better systems. …
The full model answer is in the app.
