Table of Contents
IGCSE Business Studies Homework Answers #
Note: These answers are written in simple, clear English suitable for IGCSE level students.
SECTION A #
1. Rachel’s Chocolate Business #
(a) Define ‘sole trader’. [2]
A sole trader is a business that belongs to one person only. This person runs the business by themselves and keeps all the money the business makes. They also have to pay for any problems or debts the business has.
(b) Identify two ways a government can support business start-ups. [2]
Way 1: The government can give money to new businesses or lend money with low interest to help them start.
Way 2: The government can teach new business owners important skills and give them advice about how to run a business.
Way 2: The government can teach new business owners important skills and give them advice about how to run a business.
(c) Outline two ways Rachel could increase sales of her best-selling product. [4]
Way 1: Rachel can make her chocolate bars cheaper than other companies. When things cost less money, more people will buy them.
Way 2: Rachel can advertise more on social media and in newspapers. When more people know about her chocolate, more people will want to buy it.
Way 2: Rachel can advertise more on social media and in newspapers. When more people know about her chocolate, more people will want to buy it.
2. SEP Social Enterprise and Hotel Business #
(a) Identify two services provided by businesses in the tertiary sector. [2]
Service 1: Banks – they help people save money and give loans
Service 2: Schools – they teach students different subjects
Service 2: Schools – they teach students different subjects
(b) Identify two objectives a social enterprise might have. [2]
Objective 1: To help solve problems in society like helping poor people or people who cannot find jobs
Objective 2: To make enough money to keep the business running while also helping people
Objective 2: To make enough money to keep the business running while also helping people
(c) Identify two motivators from Herzberg’s theory of motivation. [2]
Motivator 1: Achievement – when workers feel happy because they finished their work well
Motivator 2: Recognition – when the boss says thank you and shows that the worker did a good job
Motivator 2: Recognition – when the boss says thank you and shows that the worker did a good job
(d) Identify two features of a short hierarchical structure. [2]
Feature 1: Few levels of management between the top boss and the workers
Feature 2: Wide span of control – each manager supervises many employees
Feature 2: Wide span of control – each manager supervises many employees
(e) Explain two ways a business can increase added value. Which is likely to be the best way for a business to use? Justify your answer. [6]
Way 1: Make better quality products
A business can make better quality products which they can charge more money for because customers will like the better quality items.
Way 2: Give better customer service
A business can help customers better with things like fast delivery and friendly staff. Customers will pay more money when they get good service.
Best method: Make better quality products
Making better quality products is the best way because customers can see and feel that the products are better. This means they will keep buying from the business again and again.
A business can make better quality products which they can charge more money for because customers will like the better quality items.
Way 2: Give better customer service
A business can help customers better with things like fast delivery and friendly staff. Customers will pay more money when they get good service.
Best method: Make better quality products
Making better quality products is the best way because customers can see and feel that the products are better. This means they will keep buying from the business again and again.
3. HLC Private Limited Company and RSL Paint Manufacturing #
(a) Calculate labour productivity. Show your working. [2]
Labour Productivity = Total Output ÷ Number of Employees
Labour Productivity = 400,000 units ÷ 80 employees
Labour Productivity = 5,000 units per employee per week
(b) Outline two reasons why it is important for HLC to have business objectives. [4]
Reason 1: Objectives give clear direction to managers and employees. Everyone knows what the business is trying to achieve and can work towards the same goals.
Reason 2: Objectives help measure business performance. The company can compare actual results with their targets to see if they are successful.
Reason 2: Objectives help measure business performance. The company can compare actual results with their targets to see if they are successful.
(c) Explain two reasons why high quality might be important for HLC. [6]
Reason 1: Customer satisfaction
High quality chocolate tastes better and meets customer expectations. Happy customers will buy again and recommend the product to friends, leading to repeat sales.
Reason 2: Higher prices and profits
High quality products allow HLC to charge premium prices. Customers pay more for chocolate they know will taste good, increasing profit margins.
High quality chocolate tastes better and meets customer expectations. Happy customers will buy again and recommend the product to friends, leading to repeat sales.
Reason 2: Higher prices and profits
High quality products allow HLC to charge premium prices. Customers pay more for chocolate they know will taste good, increasing profit margins.
(d) Identify two reasons why people work. [2]
Reason 1: To earn money to pay for basic needs like food, housing, and clothing
Reason 2: To feel satisfied and achieve personal goals through their career
Reason 2: To feel satisfied and achieve personal goals through their career
(e) Explain two leadership styles RSL’s managers might use. [4]
Leadership Style 1: Democratic
The manager asks employees for their opinions before making decisions. Workers feel valued and can contribute good ideas.
Leadership Style 2: Autocratic
The manager makes all decisions without asking employees. This is useful for quick decisions but workers might not like being told what to do.
The manager asks employees for their opinions before making decisions. Workers feel valued and can contribute good ideas.
Leadership Style 2: Autocratic
The manager makes all decisions without asking employees. This is useful for quick decisions but workers might not like being told what to do.
SECTION B #
4. Private Limited Company Analysis #
(a) Explain two advantages and two disadvantages of being a private limited company. [8]
Advantage 1: Limited Liability
The shareholders (owners) of a private limited company only risk losing the money they invested in the business. If the company goes bankrupt or owes money, the shareholders’ personal belongings like their house or car cannot be taken to pay the company’s debts. This protection encourages people to invest in businesses.
The shareholders (owners) of a private limited company only risk losing the money they invested in the business. If the company goes bankrupt or owes money, the shareholders’ personal belongings like their house or car cannot be taken to pay the company’s debts. This protection encourages people to invest in businesses.
Advantage 2: Easier to Raise Money
A private limited company can sell shares to family, friends, or other investors to raise money for the business. This gives them more ways to get funding compared to a sole trader who can only use their own money or bank loans. Having more money helps the business grow faster.
A private limited company can sell shares to family, friends, or other investors to raise money for the business. This gives them more ways to get funding compared to a sole trader who can only use their own money or bank loans. Having more money helps the business grow faster.
Disadvantage 1: More Paperwork and Legal Requirements
Private limited companies must follow many rules and complete lots of official paperwork. They need to file annual accounts, hold meetings with shareholders, and follow company law. This takes time and costs money, which can be difficult for small businesses.
Private limited companies must follow many rules and complete lots of official paperwork. They need to file annual accounts, hold meetings with shareholders, and follow company law. This takes time and costs money, which can be difficult for small businesses.
Disadvantage 2: Loss of Control
When the business sells shares to other people, the original owner has to share control of the company with the new shareholders. These shareholders can vote on important decisions, and the original owner might not always get their way. This means less freedom to run the business exactly how they want.
When the business sells shares to other people, the original owner has to share control of the company with the new shareholders. These shareholders can vote on important decisions, and the original owner might not always get their way. This means less freedom to run the business exactly how they want.
(b) Consider the advantages and disadvantages of the following two methods a company could use to motivate its employees. Which method should it use? Justify your answer. [12]
Employee of the Month
Advantages:
• Low cost method – only requires a certificate, small prize, or recognition
• Creates healthy competition among employees, encouraging them to work harder
• Publicly recognizes good work, making the winner feel valued and appreciated
• Easy to organize and doesn’t require major changes to job roles
• Low cost method – only requires a certificate, small prize, or recognition
• Creates healthy competition among employees, encouraging them to work harder
• Publicly recognizes good work, making the winner feel valued and appreciated
• Easy to organize and doesn’t require major changes to job roles
Disadvantages:
• Only one person wins each month, which might demotivate others who worked hard but didn’t win
• Can create jealousy and unhealthy competition between workers
• The motivation effect might be short-term and wear off quickly
• Might not be fair if the same people keep winning
Job Enrichment• Only one person wins each month, which might demotivate others who worked hard but didn’t win
• Can create jealousy and unhealthy competition between workers
• The motivation effect might be short-term and wear off quickly
• Might not be fair if the same people keep winning
Advantages:
• Gives employees more interesting and challenging work, reducing boredom
• Helps workers learn new skills and develop their careers
• Can motivate all employees, not just one person
• Creates long-term motivation by making jobs more satisfying
• Employees feel more trusted and responsible for their work
• Gives employees more interesting and challenging work, reducing boredom
• Helps workers learn new skills and develop their careers
• Can motivate all employees, not just one person
• Creates long-term motivation by making jobs more satisfying
• Employees feel more trusted and responsible for their work
Disadvantages:
• Costs money to provide training for new responsibilities
• Some employees might feel stressed by extra responsibilities
• Takes time to plan and implement properly
• Not all employees might want more challenging work
• Costs money to provide training for new responsibilities
• Some employees might feel stressed by extra responsibilities
• Takes time to plan and implement properly
• Not all employees might want more challenging work
Recommendation: Job Enrichment
Job enrichment is the better method because it motivates all employees, not just one winner per month. It creates long-term motivation by making work more interesting and helps employees develop skills.
Although it costs more for training, job enrichment leads to higher productivity and keeps good employees from leaving. The company could use job enrichment as the main method and occasionally add employee of the month awards for extra recognition.
Job enrichment is the better method because it motivates all employees, not just one winner per month. It creates long-term motivation by making work more interesting and helps employees develop skills.
Although it costs more for training, job enrichment leads to higher productivity and keeps good employees from leaving. The company could use job enrichment as the main method and occasionally add employee of the month awards for extra recognition.
