About People in business in O Level Business Studies
People in business is one of the 3 main topics in our O Level Business Studies (Cambridge (CAIE) 7115) question bank, and about 20% of its real questions come from it. Tayyari Karo has 18 real questions on this topic from 2021 to 2026, from Paper 1, Paper 2. By difficulty: 15 hard, 3 medium.
Work through the questions below, then open the explanation for each one. Redo the ones you missed a few days later.
Try 6 real questions
These are real past-paper questions. Think of your answer first, then open the explanation.
May/June 2024 · Paper 2 · People in business
EP is a business.
(a) Explain two drawbacks for EP of having a tall organisational structure. [8]
(b) Consider the following two ways EP could use to increase added value. Which way should EP use? Justify your answer: Increasing prices; Reducing raw material costs. [12]
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(a) Any two of: communication is slow as messages pass through many layers; managers may become disconnected from workers; high management costs; decision-making is slow; risk of distortion of messages.
(b) Increasing prices raises added value per unit but may reduce demand. Reducing raw material costs increases added value without raising prices and protects sales, but may lower quality. Candidate must choose one and justify.
Case-study (EP) insert not provided; answers based on syllabus knowledge.
May/June 2024 · Paper 2 · People in business
EP.
(a) Explain two advantages and two disadvantages of using external recruitment to find EP's new manager. [8]
(b) Consider the following three ways EP could use to increase the sales of its products. Which would be the best way for EP to use? Justify your answer: Advertising using social media; Emailing special offers to existing customers; Setting up a website. [12]
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(a) Advantages: wider pool of applicants; brings new skills and ideas. Disadvantages: more expensive than internal; new manager may not fit the culture; takes longer.
(b) Social media: reaches many potential new customers. Emailing existing customers: cheap and likely to be effective as they already buy. Website: gives a permanent shopfront but needs traffic. Candidate must choose the best and justify.
Case-study (EP) insert not provided; answers based on syllabus knowledge.
May/June 2023 · Paper 2 · People in business
VP is a business with restaurants.
(a) Explain four barriers to communication for a business. [8]
(b) Consider the following two ways VP can purchase its inventory. Which way should it use? Justify your answer: Head Office purchases the inventory for all the restaurants; Restaurant Managers purchase their own inventory from local suppliers. [12]
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(a) Any four of: use of jargon; messages lost / distorted; poor choice of communication medium; differences in language / culture; status / hierarchy preventing openness; noise; information overload.
(b) Head Office buying gives central control, bulk discounts and consistency but may be less responsive. Local manager buying is more flexible and fresh but may cost more and vary in quality. Candidate must choose one and justify.
Case-study (VP) insert not provided; answers based on syllabus knowledge.
May/June 2023 · Paper 2 · People in business
VP's Restaurant Managers can delegate tasks to Assistant Managers.
(a) Explain two advantages and two disadvantages of VP's Restaurant Managers delegating tasks to their Assistant Managers. [8]
(b) Using Appendix 2 and other information, consider the two countries VP could choose to locate its new restaurants. Which country should VP choose? Justify your answer. [12]
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(a) Advantages: develops assistants' skills; frees manager's time for other work. Disadvantages: loss of some control; assistants may make mistakes if not trained.
(b) Requires Appendix 2 data on the two countries (e.g. costs, market size, risks). Candidate must compare and recommend a country with justification.
Appendix 2 data from the case-study insert not provided; (b) requires those figures.
Oct/Nov 2023 · Paper 2 · People in business
PH is considering its employees joining trade unions and expanding abroad. (a) Explain two benefits of PH's employees becoming members of a trade union. (b) Consider three possible benefits for PH of becoming a multinational company. Which benefit is likely to be the most important? Justify your answer.
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(a) [8, 4 each] Any two from: stronger collective bargaining for pay; protection against unfair treatment; representation in disputes; improved health and safety; training opportunities. (b) [12] Benefits: access to new/ larger markets; lower costs (cheaper labour/ materials); avoids trade barriers; spreads risk. Award up to 12 for a justified choice of the most important benefit with comparison.
Oct/Nov 2021 · Paper 2 · People in business
SSM employs production workers. (a) Explain four ways SSM could increase the motivation of its production workers. (b) Consider how SSM could benefit from the following three economies of scale. Which economy of scale is likely to have the greatest effect on SSM? Justify your answer. Purchasing; Financial; Managerial.
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(a) [8, 2 each] Any four from: financial rewards/ profit sharing; job enrichment/ empowerment; training; praise/ recognition; better working conditions; promotion opportunities; involve in decision-making; team working. (b) [12] Purchasing: bulk buying lowers cost per unit. Financial: easier/ cheaper to borrow large sums. Managerial: can employ specialist managers improving efficiency. Award up to 12 for a justified choice with comparison of all three.
