Edexcel IAL Business Unit 4 Global Business

Knowledge 1, Application 2, Analysis 1
Knowledge
1 mark for correctly explaining a characteristic of a
developed economy e.g.:
Application
Up to 2 marks for contextualised answers, e.g.:
- Other examples of developed economies include US,
UK, New Zealand and Germany (1)
- Australia's services sector comprises 62.7% of GDP
and employs 78.8% of the labour force (1)
Analysis
1 mark for developing the explanation. E.g.:
- The Australian economy has moved away from primary
and secondary production and is now reliant mainly on
the tertiary sector and is therefore a developed
economy (1)


Questio
n

Indicative content

Indicative content guidance
Answers must be credited by using the level descriptors (below) in line
with the general marking guidance. The indicative content below
exemplifies some of the points that candidates may make but this does
not imply that any of these must be included. Other relevant points must
also be credited.
Knowledge, Application, Analysis, Evaluation - indicative
content
- FDI means that capital is being invested in the productive
capacity of the Vietnamese economy
- South Korea invested $7.9bn and Apple is to move production of
AirPods there
- The balance of payments is likely to improve as manufactured
goods such as Apple's AirPods are exported
- Tax revenues should increase enabling greater levels of
government spending

Level

Mark

Level 0

Level 1

1-2

Level 2

3-5

Level 3

6-8


Questio
n

Indicative content

Indicative content guidance
Answers must be credited by using the level descriptors (below) in line
with the general marking guidance. The indicative content below
exemplifies some of the points that candidates may make but this does
not imply that any of these must be included. Other relevant points must
also be credited.
Knowledge, Application, Analysis, Evaluation - indicative
content
- Ease of doing business refers to the number and severity of
barriers a business faces when entering a new market/country. A
high ranking means a business faces fewer barriers
- Such barriers include; dealing with/amount of government
regulations, access to energy sources, tax regimes, employment
law and enforcing contracts
- Choosing a production location in a country with a high Ease of
Doing Business ranking means it is quicker and less costly to set
up and run a business
- This may be important if a business needs to get ahead of
potential rivals or if set-up costs are potentially large
- Although Vietnam is $70{ }^{\text {th }}$, it still has a higher ranking than
neighbouring countries Cambodia ( $144^{\text {th }}$ ) and Laos ( $154^{\text {th }}$ )
- For a business wanting to locate in this area, Vietnam's ranking
may be the determining factor
- However, other factors may be more important such as the cost
and availability of unskilled/skilled labour, access to raw
materials, infrastructure and political stability
- Extract B suggests that Vietnam may need to improve the supply
chain and the skills of its workforce, this may deter potential
investors despite the ease of doing business
- Some businesses such as oil, gas and mining need to locate near
the source regardless of the ease of doing business


Level

Mark

Descriptor

0

A completely inaccurate response.

Level 1

1-2


Isolated elements of knowledge and understanding - recall based.

Weak or no relevant application to business examples.

Generic assertions may be presented.


Level 2

3-4


Elements of knowledge and understanding, which are applied to the business example.

Chains of reasoning are presented, but may be assertions or incomplete.

A generic or superficial assessment is presented.


Level 3

5-8


Accurate and thorough knowledge and understanding, supported throughout by relevant and effective use of the business behaviour/context.

Analytical perspectives are presented, with developed chains of reasoning, showing cause(s) and/or effect(s).

An attempt at an assessment is presented, using quantitative and/or qualitative information, though unlikely to show the significance of competing arguments.


Level 4

9-12


Accurate and thorough knowledge and understanding, supported throughout by relevant and effective use of the business behaviour/context.

A coherent and logical chain of reasoning, showing cause(s) and/or effect(s).

Assessment is balanced, wide ranging and well contextualised, using quantitative and/or qualitative information and shows an awareness of competing arguments/factors, leading to a supported judgement.



Questio
n

Indicative content

1(e)

Quantitative skills assessed
QS9: interpret, apply and analyse information in written, graphical and
numerical forms
Indicative content guidance
Answers must be credited by using the level descriptors (below) in line
with the general marking guidance. The indicative content below
exemplifies some of the points that candidates may make but this does
not imply that any of these must be included. Other relevant points must
also be credited.
Knowledge, Application, Analysis, Evaluation - indicative
content
- Globalisation is the process by which an increasingly free flow of
ideas, people, capital and trade connects economies and
societies and increases integration between them
- Trade liberalisation is the reduction, and sometimes removal, of
trade barriers between countries
- The EU-Vietnam trade agreement is an example of trade
liberalisation and will contribute to increased globalisation
- Such moves make trading easier as there are fewer regulations
and procedures to follow
- It also makes trading cheaper as there are fewer/no tariffs and
delays
- As a result, trade increases, thus strengthening the links and ties
between economies
- Economies become less self-sufficient more specialised and more
reliant on other economies and trade for the goods they do not
produce
- However, trade liberalisation is not the sole driver of
globalisation
- FDI enables MNCs to expand and locate in other economies, this
often brings in new ideas and technologies
- The WTO has been responsible for the encouragement of free
trade and resolving trade disputes
- Expanding free trade areas such as the EU or ASEAN break down
barriers
- Political change such as the opening up of Eastern Europe and
China have speeded the process of globalisation
- Trade liberalisation is important but is just one of the factors
responsible and is dependent on the others


Level

Mark

Descriptor

0

A completely inaccurate response.

Level 1

1-2


Isolated elements of knowledge and understanding - recall based.

Weak or no relevant application to business examples.

Generic assertions may be presented.


Level 2

3-4


Elements of knowledge and understanding, which are applied to the business example.

Chains of reasoning are presented, but may be assertions or incomplete.

A generic or superficial assessment is presented.


Level 3

5-8


Accurate and thorough knowledge and understanding, supported throughout by relevant and effective use of the business behaviour/context.

Analytical perspectives are presented, with developed chains of reasoning, showing cause(s) and/or effect(s).

An attempt at an assessment is presented, using quantitative and/or qualitative information, though unlikely to show the significance of competing arguments.


Level 4

9-12


Accurate and thorough knowledge and understanding, supported throughout by relevant and effective use of the business behaviour/context.

A coherent and logical chain of reasoning, showing cause(s) and/or effect(s).

Assessment is balanced, wide ranging and well contextualised, using quantitative and/or qualitative information and shows an awareness of competing arguments/factors, leading to a supported judgement.



Questio
n

Indicative content

Quantitative skills assessed
QS9: interpret, apply and analyse information in written, graphical and
numerical forms

Indicative content guidance
Answers must be credited by using the level descriptors (below) in line
with the general marking guidance. The indicative content below
exemplifies some of the points that candidates may make but this does
not imply that any of these must be included. Other relevant points must
also be credited.

Knowledge, Application, Analysis, Evaluation – indicative
content
• Globalisation is the process by which an increasingly free flow of
ideas, people, capital and trade connects economies and
societies and increases integration between them
• Trade liberalisation is the reduction, and sometimes removal, of
trade barriers between countries
• The EU-Vietnam trade agreement is an example of trade
liberalisation and will contribute to increased globalisation
• Such moves make trading easier as there are fewer regulations
and procedures to follow
• It also makes trading cheaper as there are fewer/no tariffs and
delays
• As a result, trade increases, thus strengthening the links and ties
between economies
• Economies become less self-sufficient more specialised and more
reliant on other economies and trade for the goods they do not
produce
• In other words, globalisation increases
• However, trade liberalisation is not the sole driver of
globalisation
• FDI enables MNCs to expand and locate in other economies, this
often brings in new ideas and technologies
• The WTO has been responsible for the encouragement of free
trade and resolving trade disputes
• Expanding free trade areas such as the EU or ASEAN break down
barriers
• Political change such as the opening up of Eastern Europe and
China have speeded the process of globalisation
• Trade liberalisation is important but is just one of the factors
responsible and is dependent on the others















Level Mark Descriptor
0 A completely inaccurate response.
Level 1 1–2 Isolated elements of knowledge and understanding – recall
based.
Weak or no relevant application to business examples.
Generic assertions may be presented.
Level 2 3–4 Elements of knowledge and understanding, which are applied to
the business example.
Chains of reasoning are presented, but may be assertions or
incomplete.
A generic or superficial assessment is presented.
Level 3 5–8 Accurate and thorough knowledge and understanding, supported
throughout by relevant and effective use of the business
behaviour/context.
Analytical perspectives are presented, with developed chains of
reasoning, showing cause(s) and/or effect(s).
An attempt at an assessment is presented, using quantitative
and/or qualitative information, though unlikely to show the
significance of competing arguments.
Level 4 9 –12 Accurate and thorough knowledge and understanding, supported
throughout by relevant and effective use of the business
behaviour/context.
A coherent and logical chain of reasoning, showing cause(s)
and/or effect(s).
Assessment is balanced, wide ranging and well contextualised,
using quantitative and/or qualitative information and shows an
awareness of competing arguments/factors, leading to a
supported judgement.

Knowledge 1, Application 2, Analysis 1
Knowledge
1 mark for identifying a disadvantage, e.g.:
Application
Up to 2 marks for contextualised answers, e.g.:
- Over a dozen companies are competing for streaming business (1)
- Netflix has lost 1.2 million subscribers in the first nine
months of 2022 (1)
Analysis
1 mark for developing the disadvantage, e.g.:
- In order to increase sales or prevent loss of existing
customers price may have to be reduced and/or increased spending on promotion. Both reduce profitability (1)

Indicative content guidance
Answers must be credited by using the level descriptors (below) in line with the general marking guidance. The indicative content below exemplifies some of the points that candidates may make but this does not imply that any of these must be included. Other relevant points must also be credited.
Knowledge, Application, Analysis, Evaluation - indicative content
- Outsourcing means moving a business function or department to a specialist external provider which may or may not be overseas
- By reducing costs, profitability can be increased which may enable prices to be reduced and improve competitiveness
- Skilled workers can be found that may not be available at home, this is the case with Australia in Extract B
- Such workers may be specialists and offer a more skilled and efficient service than might be case within the business itself
- By outsourcing some support functions, the business can then
concentrate on its core competences
- Outsourcing can improve speed, flexibility and quality of the product or service
- Modern technology has made it much easier for a business to be run from different countries
- There may be communication problems arising as a result of language or
cultural differences
- It can be difficult to oversee events or guarantee quality of output from a
distance
- A business may risk losing its own identity and corporate culture if it relies too much on others

Level

Mark

Descriptor

0

A completely inaccurate response.

Level 1

1-2

Isolated elements of knowledge and understanding - recall based.
Weak or no relevant application to business examples.
Generic assertions may be presented.

Level 2

3-4

Elements of knowledge and understanding, which are applied to the business example.
Chains of reasoning are presented, but may be assertions or
incomplete.
A generic or superficial assessment is presented.

Level 3

5-8

Accurate and thorough knowledge and understanding, supported throughout by relevant and effective use of the business behaviour/context.
Analytical perspectives are presented, with developed chains of reasoning, showing cause(s) and/or effect(s).
An attempt at an assessment is presented, using quantitative and/or qualitative information, though unlikely to show the significance of
competing arguments.

Level 4

9-12

Accurate and thorough knowledge and understanding, supported throughout by relevant and effective use of the business behaviour/context.
A coherent and logical chain of reasoning, showing cause(s) and/or effect(s).
Assessment is balanced, wide ranging and well contextualised, using quantitative and/or qualitative information and shows an awareness of
competing arguments/factors, leading to a supported judgement.

Question

Assess the importance of the likely return on investment for a business when choosing a production location. (12)

Indicative content

Indicative content guidance
Answers must be credited by using the level descriptors (below) in line with the general marking guidance. The indicative content below exemplifies some of the points that candidates may make but this does not imply that any of these must be included. Other relevant points must also be credited.
Knowledge, Application, Analysis, Evaluation - indicative content
- Return on investment refers to the financial benefits or profits made from an investment, such as setting up a production location in another
country
- This may be important if satisfying investors or shareholders is a priority and may determine the location of production if one country offers a higher return on investment than another
- Extract C looks at Malaysia and reports that the return on investment has increased in 2021
- It has increased from RM0.06 to RM0.13 (from 6% to 13%) which is
more than double
- This may be why FDI in Malaysia increased to RM48.1 billion in 2021 suggesting that for many businesses, particularly those from Singapore, Korea and Japan, where the return on investment is very
important
- Those in extractive industries will locate where there are natural
resources
- Others may want to minimise costs by searching for cheap labour or require a particular kind of skilled labour
- A stable political environment and ease of doing business may be more suited for those businesses looking to set up quickly and with minimum
interference
- Being able to manufacture from within a trade bloc such as the EU may be more important
- These factors may outweigh or override return on investment as a
deciding factor

Level

Mark

Descriptor

0

A completely inaccurate response.

Level 1

1-2

Isolated elements of knowledge and understanding - recall based.
Weak or no relevant application to business examples.
Generic assertions may be presented.

Level 2

3-4

Elements of knowledge and understanding, which are applied to the business example.
Chains of reasoning are presented, but may be assertions or
incomplete.
A generic or superficial assessment is presented.

Level 3

5-8

Accurate and thorough knowledge and understanding, supported throughout by relevant and effective use of the business behaviour/context.
Analytical perspectives are presented, with developed chains of reasoning, showing cause(s) and/or effect(s).
An attempt at an assessment is presented, using quantitative and/or qualitative information, though unlikely to show the significance of
competing arguments.

Level 4

9-12

Accurate and thorough knowledge and understanding, supported throughout by relevant and effective use of the business behaviour/context.
A coherent and logical chain of reasoning, showing cause(s) and/or effect(s).
Assessment is balanced, wide ranging and well contextualised, using quantitative and/or qualitative information and shows an awareness of
competing arguments/factors, leading to a supported judgement.

Question

Evaluate the importance of business ethics for a global business. (20)

Indicative content

Indicative content guidance
Answers must be credited by using the level descriptors (below) in line with the
general marking guidance. The indicative content below exemplifies some of the
points that candidates may make but this does not imply that any of these must
be included. Other relevant points must also be credited.
Knowledge, Application, Analysis, Evaluation - indicative content
- A joint venture is when two or more independent businesses
collaborate on a specific venture
- Differing knowledge, expertise and skills can be shared for mutual
benefit
- Dongfeng is a Chinese business and therefore understands the
language, culture and business environment of that country
- This can save Maxion Wheels a great deal of time and expense as it can
avoid the many pitfalls that may arise for a non-Chinese business
- Dongfeng will already have a supply and distribution network in place,
once again saving time and money
- Skills and expertise can be shared and they may complement each
other gaining synergistic benefits
- In the past China has been resistant to foreign businesses entering its
market without a Chinese partner and a joint venture avoids this
- However, there may be problems with communication and/or a clash of
cultures
- A joint venture partner needs to be reliable and trustworthy, this has
not always been the case with joint ventures in China

Level

Mark

Level 0

Level 1

1-2

Level 2

3-5

Level 3

6-8


Question


Assess the possible impact on the local economy from Maxion Wheels opening a new plant in a location such as Limeira, Brazil.

Indicative content

Indicative content guidance
Answers must be credited by using the level descriptors (below) in line with the
general marking guidance. The indicative content below exemplifies some of the
points that candidates may make but this does not imply that any of these must
be included. Other relevant points must also be credited.
Knowledge, Application, Analysis, Evaluation - indicative content
- Employment will be created in the construction and operation of the
new facilities in Limeira, Brazil
- Local suppliers and businesses may be involved in providing the
materials and services needed
- 500 new jobs will be created by the new plant in Limeira, Brazil when it
opens
- Those employed will gain disposable income and spend much of it
locally
- Spending of this income creates a demand for more goods and services
in the local area, creating more employment and a positive ongoing
effect
- There is likely to be a rise in local living standards and a more
prosperous community
- Technology transfer may take place improving the prospects for local
businesses
- However, wages and working conditions may not be as good as initially
expected
- Technology transfer may not occur if Maxion Wheels just uses cheap
labour for basic production
- Local businesses may not get contracts for supplying goods and
services, they may be brought in from outside
- The environment may suffer if Maxion Wheels does not fully comply
with any environmental regulations
- Such a large production facility may cause congestion to local
infrastructure


Level

Mark

Descriptor

0

A completely inaccurate response.

Level 1

1-2

Isolated elements of knowledge and understanding - recall based.
Weak or no relevant application to business examples.
Generic assertions may be presented.

Level 2

3-4

Elements of knowledge and understanding, which are applied to the
business example.
Chains of reasoning are presented, but may be assertions or
incomplete.
A generic or superficial assessment is presented.

Level 3

5-8

Accurate and thorough knowledge and understanding, supported
throughout by relevant and effective use of the business
behaviour/context.
Analytical perspectives are presented, with developed chains of
reasoning, showing cause(s) and/or effect(s).
An attempt at an assessment is presented, using quantitative and/or
qualitative information, though unlikely to show the significance of
competing arguments.

Level 4

9-12

Accurate and thorough knowledge and understanding, supported
throughout by relevant and effective use of the business
behaviour/context.
A coherent and logical chain of reasoning, showing cause(s) and/or
effect(s).
Assessment is balanced, wide ranging and well contextualised, using
quantitative and/or qualitative information and shows an awareness of
competing arguments/factors, leading to a supported judgement.


Question


Assess the importance of supply chain considerations for a global business such as Maxion Wheels.

Indicative content

Indicative content guidance
Answers must be credited by using the level descriptors (below) in line with the
general marking guidance. The indicative content below exemplifies some of the
points that candidates may make but this does not imply that any of these must
be included. Other relevant points must also be credited.
Knowledge, Application, Analysis, Evaluation - indicative content
- Supply chain considerations refer to the way a business treats and
monitors the labour involved in the production of raw materials,
components and services
- Like many global businesses Maxion Wheels has a code of conduct in
place to govern its relationship with its suppliers, part of which is
shown in Extract E
- This stipulates that Maxion Wheels will only deal with those suppliers
that adhere to its conditions
- Supply chain considerations are important to a global business for
several reasons
- Many global businesses do strive to behave in an altruistic manner
simply because it is considered to be the right thing to do, businesses
such as Patagonia, Starbucks, H&M and Dr Pepper are regularly praised
for their strong ethical commitment to suppliers
- There are also some sound business reasons as well such as improved
quality and reliability
- A supplier's labour force that is treated well with good pay and working
conditions is likely to be happier and more motivated, thus increasing
productivity and potentially lowering input costs and increasing
profitability or enabling lower more competitive prices
- Exploitation of labour and use of child labour is likely to reflect badly on
a global business resulting in adverse publicity and pressure from
consumers which can negatively affect sales
- Recent examples include the fashion chain Boohoo which saw large falls
in its sales and share price following revelations about poor treatment
of workers in its supply chain
- However, just because a business has an ethical supply chain policy it
does not mean it carefully follows it
- Some businesses may face pressure from owners or shareholders to
maximise profits and this may mean sourcing cheaper supplies from
less scrupulous suppliers
- Businesses that are revealed to have problems in the supply chain may
not be too badly affected (if at all) such as Apple and Primark


Level

Mark

Descriptor

0

A completely inaccurate response.

Level 1

1-2

Isolated elements of knowledge and understanding - recall based.
Weak or no relevant application to business examples.
Generic assertions may be presented.

Level 2

3-4

Elements of knowledge and understanding, which are applied to the
business example.
Chains of reasoning are presented, but may be assertions or
incomplete.
A generic or superficial assessment is presented.

Level 3

5-8

Accurate and thorough knowledge and understanding, supported
throughout by relevant and effective use of the business
behaviour/context.
Analytical perspectives are presented, with developed chains of
reasoning, showing cause(s) and/or effect(s).
An attempt at an assessment is presented, using quantitative and/or
qualitative information, though unlikely to show the significance of
competing arguments.

Level 4

9-12

Accurate and thorough knowledge and understanding, supported
throughout by relevant and effective use of the business
behaviour/context.
A coherent and logical chain of reasoning, showing cause(s) and/or
effect(s).
Assessment is balanced, wide ranging and well contextualised, using
quantitative and/or qualitative information and shows an awareness of
competing arguments/factors, leading to a supported judgement.


Question


Evaluate the extent to which the actions of multinational corporations (MNCs) can be controlled.

Indicative content