IGCSE Business Studies 2.2.4—Why reducing the size of the workforce may be necessary Topic Practice

SRB is a bank which provides loans to business customers. SRB plans to make 100 managers' jobs redundant from its 80 branches. This would remove one level of hierarchy. This is part of its plan to save $\$ 1 \mathrm{~m}$ in costs over the next 2 years. The Managing Director said: 'SRB is working with the trade union about this plan. SRB will make more use of delegation.The bank has to respond to increased competition from online banks. SRB could either advertise more or develop new products and services.'

Explain two factors SRB should consider when deciding which managers to make redundant.

Factor 1:
Explanation:
Factor 2:
Explanation:

BEI is a multinational company. It manufactures aeroplanes. Quality assurance is important. BEI has 5000 employees. BEl's directors have announced plans to reduce the size of its workforce (downsize). The Human Resources Director is considering which employees to make redundant. Information about employee A can be found in Table 1.1.

Table 1.1

Information about employee A
-Worked at BEI for 1 year
-Worked at another manufacturing business for 12 years
- Able to use most of the machines at BEI
- Often late for work
- Popular with other employees
- Left school with 2 IGCSEs

Using Appendix 2 and other information, consider the three employees that LB could make redundant. Which employee should LB choose? Justify your answer.
- Reeta
- Amy

Naga:

Reeta:

Amy:

Recommendation:
(b) Using Appendix 2 and other information, consider the three employees that LB could make dundant. Which employee should LB choose? Justify your answer.

\section*{- Naga \\ Naga}

Reeta
Amy
Am
Recommendation:
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L "
DO
Naga:

Kala always wanted to be an entrepreneur. She used to work for a business which downsized its workforce 5 years ago. She then decided to start up CHL. She produced a business plan which helped her obtain finance. Kala now designs customised sports clothes for women. Kala sells these products directly to customers using e-commerce. She has a loyal customer base of 25-40 year olds. However, Kala is worried about increased competition in this niche market. One idea she has is to target different market segments.

Identify two reasons why a business might downsize its workforce.

Reason 1:
Reason 2:

DBG is a construction company. It builds hospitals, roads and schools. DBG has 2000 employees. Managers use a democratic leadership style. They know effective internal communication is important. DBG plans to change its organisational structure. This will lead to some employees being made redundant. The Managing Director has to decide how changes in government spending might affect business activity.

State four factors a business should consider when deciding which employees to make redundant.

Factor 1:

Factor 2:

Factor 3:

Factor 4:

ALB is a large bank. It has 300 branches and 5000 employees. ALB provides a range of financial services to its business customers. As it operates in a competitive market, ALB aims to maintain customer loyalty. Last year ALB's profit decreased to $\$ 3000 \mathrm{~m}$. The Managing Director is analysing ways to reduce ALB's costs. She also has to decide how new legal controls over employment issues might affect the business. The Government plans to improve protection of employees by changing laws on the minimum wage and health and safety.

Outline two possible ways ALB can try to reduce its costs.

Way 1:
Way 2: