CAIE Business AS 1.4.2 Changing objectives and ethics

[Maximum number: 8]

Direct News (DN)

Shila and Lucy own and manage DN, an online publishing business. DN produces a daily online local newspaper called QNews. Readers pay a subscription to access QNews. DN's mission statement is: 'to be a daily community newspaper for local people, about local people'.

DN recently tested a monthly online magazine aimed at the 18-30 age group called QLine. DN's plan is to stop publishing QNews and produce only QLine. Secondary market research suggests QLine will be popular with national businesses wanting to promote their products.

Shila is aware that revenue from online newspapers is decreasing. However, she has found national market research data about online monthly magazines (see Table 2.1).

Table 2.1 National revenue for online monthly magazines

Shila thinks that before the business decides to produce QLine, more market research data will be needed. Shila and Lucy will have to decide on new objectives for DN.

To ensure a quality product that meets customer expectations, Lucy thinks it is important to have careful management of the supply chain, from content creation to customer delivery.

Analyse two reasons why Shila and Lucy will have to change DN's objectives.

Figure for Answer to Question CAIE A-Level Business AS 1.4.2 Objectives and Decisions Questions question 1 — CAIE A-Level Business AS

Indicative content

AO1 Knowledge and understanding - Knowledge of two reasons (max $2{ }^{\boxtimes} \mathrm{s}$ ), may include:

- Market conditions

- Importance of objectives

- Relationship between mission statement, aims, objectives and strategy

- SMART objectives

- How change influences objectives

- Relationship of objectives to budget planning

2(c)

No further marks can be gained without knowledge and understanding.

AO2 Application - Application of knowledge of a reason for DN to change its objectives (max $2{ }^{\text {№ }} \mathrm{s}$ ), including:

Max one ${ }^{\mathrm{App}}$ for application for the first reason and another ${ }^{\mathrm{Ap} \#}$ for application for the second reason

- Employees concerned about the change.

- Mission statement change

- National revenue data

- Not all employees have the right skills

- Change from daily news reporting to magazine aimed at a young age group

- Impact on local community

AO3 Analysis

Limited analysis - candidate shows one link in the chain of analysis.

Developed analysis - candidate shows two or more links in the chain of analysis or a two-sided analysis.

- Change essential for competition and survival - otherwise firms may make losses / go out of business.

- Communicates the direction of the firm to employees - important as a change impacts employees working practices.

- Will need to change objectives if want growth - as market conditions change.

- Costs of change v benefits

Accept all valid responses.

Exemplars and annotations

CAIE A-Level Business AS 1.4.2 Objectives and Decisions Questions question 1