CAIE A-Level Business AS 1.4 Business Objectives Questions

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Knowledge of a private sector business including:

- Profit maximisation or satisficing

- Growth

- Increased market share/market leader

- Survival

- CSR

- Maximising revenue

- Customer satisfaction

- New product development/innovation

- Diversify into new markets

- Increasing shareholder value

Do not reward features of private sector businesses that are not related to the objectives

Accept all valid responses.

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

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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

2 marks for ${ }^{\kappa}$

2 marks for $\Delta^{\mathrm{s} 80}$

2 marks for ${ }^{\triangle \mathrm{N}}$

6 marks for ${ }^{\text {EVAL }}$

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Responses may include:

AO1 Knowledge and understanding - 2 marks for developed knowledge and understanding L2 ∘ 1 mark for limited knowledge and understanding L1 □

- objectives

- public sector

- environmental objective

- energy supplier

- utility e.g. gas, electricity, oil, solar energy, wind power

- pollution e.g. air, noise, chemical

AO3 Analysis - 2 marks for developed analysis L2 \# 1 mark for limited analysis L1 №

- objectives may vary in the public sector. Usually equitable provision of merit goods/services

- objectives of a public sector business are unlikely to be driven by competition or profit so prices can be kept lower

- there is opportunity cost of spending money on each area of provision e.g. education, defence, healthcare

- energy supply is important in all countries and to businesses and consumers, so demand is high

- a public sector business is funded by the government and is likely to have a national supply network, making it easier to meet the high demand

6(b)

- there is the potential for exploitation of the environment e.g. China and coal

- public sector may have to meet national/international objectives regarding pollution, renewable fuels, sustainability

- the government has many demands on its funding and therefore the service given by a public sector energy supplier could be less efficient e.g. power cuts

AO4 Evaluation - 6 marks for EVAL

A judgment/conclusion is made as to whether the most important objective of a public sector energy supplier is the environmental objective.

These judgements/conclusions may be made at any point in the essay, not only in a concluding section.

- there are different sources of energy e.g. some countries are fossil fuel dependent whilst others have the ability to develop new methods e.g. wind, water, solar

- how wealthy is the country to develop these sources using the public sector?

- does the public sector see energy supply as its most important priority?

- is the private sector more likely to thrive where customers are influenced by environmental aspects rather than cost of energy?

- how easy is it for the public sector to provide an energy supply at an affordable price e.g. if price of fuel rises, will the government have to subsidise the cost to the consumer to maintain standard of living?

- should the most important objective be providing energy to all parts of the country regardless of the opportunity cost?

Accept all valid responses.