Past Paper Questions

1. Past Paper Questions Higher and Intermediate 2 Business Management

2. Bics - sTAKEHOLDERS • HIGHER • 2006 3b(i) • Describe one interest each of the following has in an organisation’s information • Inland Revenue • Employees • Creditors (3)

3. Types of Organisations • HIGHER • 2010 Q2e • Many companies are now classed as multinationals. Explain the advantages and disadvantages of operating as a multinational. (5) • 2011 Q3c • Explain advantages and disadvantages of becoming a public limited company. (5) • 2008 Q1b • Describe methods a limited company could use to finance a successful takeover. (4)

4. Solutions – 2010 Q2e

5. Model Answer: 2010 Q2e • One advantage of being a multinational is that you may be given a grant to locate in a country, the grant will not have to be paid back and so improves the finances of the company. Another advantage is that the organisation may become larger, this will mean that there is less chance of it being taken over. Another advantage is that they can increase sales which will lead to an increase in profits. One disadvantage is that legislation may be different in other countries which might lead them to change their product. Another disadvantage is that there might be cultural differences which will mean companies will have to adapt how they operate their business.

6. SOLUTIONS 2011 q3C

7. SOLUTIONS - 2008 q1B

8. Franchising • HIGHER • 2010 Q3e • Discuss the effects of becoming part of a franchise. (5)

9. Solutions – 2010 Q3e

10. BICS - objectives • HIGHER • 2006 3a(i) • Discuss the objectives of a PLC compared to those of a Public Sector organisation. • (5) • INTERMEDIATE 2 • SP Q5d • Secondary schools aim to provide the local community with a good quality service. Identify 2 other possible aims for secondary school.(2) • 2006 Q5a • Karen has recently qualified as a dancing instructor. She is about to set up her own business, as a sole trader, giving dancing lessons. • Identify 2 aims Karen is likely to have for her business.(2)

11. Bics - sTAKEHOLDERS • HIGHER • 2003 (1a) • Describe how a local council may be influenced by its stakeholders? (8) • INTERMEDIATE 2 • SP Q1b (EQ) • Marks and Spencer has numerous stakeholders. Identify 4 stakeholders and outline how each of them can influence the business. (8)

12. BICS – Stakeholder (solutions) • HIGHER • 1 (a) Describe how a Local Council may be influenced by its different stakeholders.(8) • Taxpayers/Customers/Local Community: Vote for local Council; Pay taxes/entrance fees; Persuasion through protest meetings, letters to Press, etc. • Management: Make decisions as to how to carry out policies (may be set by Central Government); Responsible for employing staff. • Employees: Through Trade Unions - negotiation, strike, work to rule, etc; Involvement in committees and working parties. • Wage demands may influence Council spending or level of taxation; Council's effectiveness is affected by the standard of employee's work. • Government: Sets overall objectives; Provides some funding; Controls spending; Sets legislation. • Lenders: Are they willing to lend; The rate of interest charged may be an additional cost on a budget. • Suppliers: Changing prices of supplies; Credit terms/discounts available. • MINIMUM 2 STAKEHOLDERS – max 7 if only 1

13. BICS – Stakeholder (solutions) • INTERMEDIATE 2 • (b) Marks and Spencer has numerous stakeholders. Identify 4 stakeholders and • outline how each of them can influence the business. (8) • Owners/shareholders—may withdraw their investment, make decisions that • influence the business. • Employees—could alter their rate of work (positively/negatively), take • industrial action. • Government—may introduce laws which affect Marks and Spencer. • Customers—may stop buying products, may recommend the business to • friends. • Suppliers—may refuse to supply the business, may increase their prices, • may alter the firm’s credit terms. • Bank—may authorise/refuse a loan.

14. BiCS – Sources of finance • HIGHER • 2000 Q1a (EQ) • Describe and justify 3 sources of finance for an organisation (6)

15. BICS – Finance (solutions) • HIGHER

16. BICS – stakeholders (solutions) • INTERMEDIATE 2 • (c) (i) Identify 3 stakeholders of a sports centre and describe their interests. • Stakeholders - Interest • Members - Using facilities of sports centre. • Various coaches - Teaching members and also receiving money for this. • Administrative staff - Job satisfaction. • Owners - To have a successful business, satisfied members and a happy workforce. • (ii)Explain how each stakeholder could influence decision making in a sports centre. • Members - They could complain about the facilities on offer; they could go elsewhere. • Coaches - They could increase their fees for coaching. • Administrative Staff - They could refuse to work overtime. • Owners - They could increase membership subscription or [decide to close the centre].

17. BICS - Growth • HIGHER • 2008 Q1a • Describe how both horizontal and vertical integration could allow an organisation to become even larger and more profitable (5) • 2007 Q1c(i) • Discuss the ways in which divestment and demerger can assist the growth of an organisation (4) • INTERMEDIATE 2 • 2008 Q2e (EQ) • Identify and describe 3 methods of growth. (6)

18. BICS – Finance (solutions) • HIGHER

19. BICS – GROWTH (solutions) • HIGHER • (c) (i) Discuss the ways in which divestment and demerger can assist the growth of an organisation. • CAN ALL BE POSITIVE • • Divestment allows an organisation to sell off minor areas of their business and concentrate on the core activities of the organisation. • • The areas sold off are often the less profitable areas. • • This increases funds available for growth in the core activities. • • The actual funds from the sale can be used to expand the core activities. • • De-merger allows an organisation to split into two separate organisations to raise cash for investment. • • The organisation can then concentrate on its core activities. • • Cost cutting should make it more efficient and therefore able to expand.

20. BICS – stakeholders (solutions) • INTERMEDIATE 2 • (e) Identify and describe 3 methods of growth. • Horizontal integration • This occurs when two organisations that operate at the same stage of production merge into one. Reasons for this may include a desire to dominate the market, a desire to become stronger and more resistant to future takeover. • Vertical integration • This occurs when firms at different stages of production in the same industry decide to merge. Reasons for this may be to become more efficient. It may also allow an organisation to become more profitable. • Diversification • This occurs when organisations operating in different markets merge. Advantages of diversification are that it allows for growth and development, it spreads the risks in case one area of the business fails, it allows for new knowledge and experience to be gained. • Merger This occurs when two businesses agree to join forces and act as one business. • Takeover This occurs when a business buys over another business. • Franchise • An agreement that allows one business (the franchisee) to use other business’s name and sell the other business’s products or services, for a fee. Products more widely available nation or worldwide – extends the market.