CAIE IGCSE Business Studies 4.2 technology and production
Use this technology-production page to explain benefits, costs and output effects when a business introduces new technology.
- Syllabus
- 2027–2029
- Course
- Business 0264
Exam points
- Explain factors before introducing technology, such as cost, training and employee effects.
- Apply technology benefits to output, customer service, communication or product quality.
- Justify machinery versus recruiting employees when a small business needs higher output.
Covered syllabus points
4.2. Technology and production of goods and services question 1
[Maximum number: 6]
WMH is a business which operates in the secondary sector. It makes furniture including tables and chairs. WMH's employees are all members of a trade union. The Managing Director knows the business is likely to remain small. She is considering introducing new technology into WMH's factory. She also knows it is important for a manufacturing business to choose a suitable location for a factory.
Explain two possible effects of WMH introducing new technology.
Effect 1:
Explanation:
Effect 2:
Explanation:
Award 1 mark for identification of each relevant effect (max 2).
Award 1 mark for each relevant reference to this business (max 2).
Award 1 mark for each relevant explanation (max 2).
Points might include:
Positive effects:
- Improve quality / less waste / fewer mistakes [k] leading to a better reputation [an] for its furniture [app]
- Increases productivity / efficiency / quicker production [k] leading to lower (average) costs [an] for this small business [app]
- Improved communication [k] leading to fewer mistakes / better efficiency [an] in the factory [app]
- Can design new products [k] which may increase sales / access new markets [an]
- Greater job satisfaction/motivation [k] reducing absenteeism/lowering labour turnover [an]
- Employees may gain new skills [k] leading to higher pay/chances of promotion [an]
- Reduces time/costs to design new products [k]
- Increase output [k]
- Safer workplace [k]
To use words from the stem as application, the reference must be appropriate (i.e. make sense) in relation to the point being made.
The following words are likely to be appropriate for this question:
- Furniture or related words such as tables/chairs
- Trade union
- Factory
- Small business
- Secondary sector/manufacturing
- Location is important
Other appropriate examples can be credited.
Some points can be [k] or [an] but do not award the same point twice.
Some analysis can be used for more than one point, but only award once.
1(d)
Negative effects:
- Purchasing new equipment / expensive to buy/set up [k] increasing cash outflows/debt [an]
- Need to train workers [k] which can increase costs [an]
- If technology is rapidly changing it will need to change often to remain competitive [k] which will increase costs [an]
- Some employees may lose their jobs/made redundant [k]
- May demotivate employees [k]
Other appropriate responses should be credited.
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