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INTERNATIONAL GCSE
BUSINESS
PAPER 1 INFLUENCES OF OPERATIONS AND HUMAN RESOURCES ON
BUSINESS ACTIVITY

Specimen 2017 Morning Time allowed: 2 hours

Materials
For this paper you must have:
For Examiner’s Use
• a calculator, which you are expected to use where appropriate.
Question Mark
Instructions 1
• Use black ink or black ballpoint pen. 2
• Fill in the boxes at the top of the page. 3
• Answer all questions. 4
• You must answer the questions in the spaces provided. Do not write 5
outside the box around each page or on blank pages.
6
• All working must be shown.
7
• Do all rough work in this book. Cross through any work you do not
8
want to be marked.
9
Information 10
• The marks for questions are shown in brackets. 11
• The maximum mark for this paper is 90.
TOTAL

Advice
• You may use a bilingual dictionary.
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Section A

Answer all questions in the spaces provided.

Only one answer per question is allowed.

For each answer completely fill in the circle alongside the appropriate answer.

CORRECT METHOD WRONG METHODS

If you want to change your answer you must cross out your original answer as shown.

If you wish to return to an answer previously crossed out, ring the answer you now wish to
select as shown.

0 1 Which one of the following is a factor of production?

[1 mark]

A Competition

B Labour

C Profit

D Stakeholder

0 2 Which one of the following is a method of external growth?

[1 mark]

A Building an extension to the factory

B Merging with another business

C Opening a new branch in another location

D Selling via the internet

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0 3 Which one of the following is likely to happen when a business improves its
customer service?
[1 mark]

An increase in the number of complaints made by

A
customers
An increase in the number of employees leaving the
B
business
C An increase in the size of profits made by competitors

D An increase in the volume of the business’s sales

0 4 Which one of the following is a likely benefit of internal recruitment?

[1 mark]

A It will give a wider choice of candidates

B It will increase the skill level within the business

C It will motivate existing workers

D More training will be needed

0 5 Which one of these business activities operates in the secondary sector?

[1 mark]

A Extracting oil from underground

B Helping people with their finances

C Manufacturing clothing

D Selling food at a restaurant

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0 6 State two benefits of on-the-job training.

[2 marks]

Benefit 1

Benefit 2

0 7 Identify and explain one reason why communication can sometimes be difficult
between people who work in a business with a tall organisational structure.
[2 marks]

0 8 Identify and explain one benefit to a sole trader of becoming a partnership.

[2 marks]
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0 9 Customers at Sami’s Restaurant have complained that the quality of the food is
poor. A result of this is the number of meals sold has been falling. This has
made the business less profitable.

Identify and explain two methods that Sami’s restaurant could use to improve
the quality of the food that it sells.
[4 marks]

Method 1

Method 2

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Section B

Answer all questions in the spaces provided.

1 0 Item A
Toyota

Toyota is a car manufacturer that started in Japan. It is one of the most

successful car manufacturers, and it employs over 300 000 people throughout
the world. The cars are known for being of high quality. Toyota has a good
reputation that has helped them grow into one of the largest companies in the
world. The company’s revenues exceed US$200 billion each year. Toyota has
factories in more than 25 different countries.

Toyota is a leader in car manufacturing. Its methods are based on the Toyota
Production System (TPS). The TPS involves continuous improvement, an
emphasis on respect and teamwork, and a focus on reducing waste within the
business.

In 2014 Toyota found out there might have been a fault in the safety airbags in
up to 7 million of its cars. Toyota had to get back many cars that had already
been sold to customers, so that it could repair the faults. The customers did
not have to pay for the repairs.

1 0 . 1 Table 1 shows Toyota’s total car sales in the United States of America (USA).

Table 1

Total car sales in

Year
the USA
2013 2 236 042

2014 2 373 771

Use the information in Table 1 to calculate the percentage increase in sales

between 2013 and 2014.

Give your answer correct to 2 decimal places and show your calculations.
[2 marks]
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1 0 . 2 Identify and explain two benefits to Toyota of producing high-quality cars.

[4 marks]

Benefit 1

Benefit 2

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1 0 . 3 Identify and explain two possible effects on Toyota of having to repair faulty
cars.
[4 marks]

Effect 1

Effect 2
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Item B
Toyota

In recent years there have been growing worldwide concerns about the
environment. The car industry can have many negative effects on the
environment. The car production process can harm the environment and when
cars are driven they cause air pollution and traffic congestion. More people
now want to buy cars that do not harm the environment as much.

Hybrid cars are a new form of technology. Hybrid cars are partly powered by
electricity and they are often more fuel efficient, less noisy and produce less
pollution. More companies are starting to invest in hybrid technology.
However, it can be expensive to buy the equipment needed to make new
hybrid cars. Like most car manufacturers, Toyota uses flow production to
make their cars.

Toyota is the world market leader in sales of hybrid cars. In 1997, the Toyota
Prius was the first car to go on general sale as a hybrid. Toyota has gained a
reputation for making cars that do not harm the environment.

The company is going to open up more factories to make these hybrid cars.
Hybrid cars are more expensive than petrol cars and Toyota’s competitors are
aware of this. The hybrid car market is a potentially profitable one but it is still
an uncertain market.

Toyota is considering making hybrid cars at its research and development

facility in China as well as in India, Mexico and the USA. This is likely to have
a major effect on the communities where the new factories are to be located.

Hybrid cars = cars that are powered by both electricity and petrol.

1 0 . 4 Toyota is considering opening new factories to make their hybrid cars. This will
affect the local communities where the factories are located.

Explain ways in which local communities may be affected by the opening of

new Toyota factories.
[6 marks]

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Extra space

1 0 . 5 Analyse how Toyota could be affected by people becoming more concerned

about the environment.
[6 marks]
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1 0 . 6 Analyse why Toyota chooses to use flow production to make its cars.
[6 marks]

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1 0 . 7 Toyota is thinking about increasing the number of hybrid cars that it makes.
This would mean that it would make fewer cars with just petrol engines.

Recommend whether Toyota should move towards making more hybrid cars or
continue to specialise in making cars with just petrol engines.

Use the information in Items A and B to give reasons for your

recommendation.
[12 marks]

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Extra space

40
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ANSWER IN THE SPACES PROVIDED

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Section C

Answer all questions in the spaces provided.

1 1
Item C

LEECO is a company based in Singapore. It sells and installs video

equipment that allows businesses to talk to each other anywhere in the
world. Many businesses use this technology to hold business meetings
without people having to travel large distances.

Figure 1 shows the organisational structure of LEECO.

Figure 1

LEECO is owned by Lee, who started the business 7 years ago. Although
Lee is in charge of the business, he relies on his three managers for support
and ideas. All three managers have been with the business since it began.
They have regular meetings where they discuss possible improvements to
the business and consider the views of the other employees.

Lee believes that the reasons why LEECO is successful are that they have
good relationships with their customers and they provide excellent customer
service. Lee trains the employees so they have the technical skills to install
the equipment correctly. Lee gives his employees some of the profits that the
company makes. He believes that this stops them from wanting to leave the
company to work for somebody else.

LEECO’s sales have increased steadily over the last 5 years. As LEECO has
grown, it has found it harder to maintain the quality of customer service.
Recently they have found that some customers are unhappy with the service
they received from LEECO. Lee thinks it might help if he recruits an
additional manager to take some workload off the other managers.
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1 1 . 1 With reference to Figure 1, what is meant by span of control?

[2 marks]

1 1 . 2 Identify and explain two ways LEECO motivates its employees.

[4 marks]

Question 11 continues on the next page

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1 1 . 3 Analyse how poor customer service might affect LEECO.

[6 marks]

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1 1 . 4 Table 2 shows LEECO’s total revenue and total cost for the years 2015 and
2016.

Table 2

Total Revenue Total Cost

Year US$ million Profit US$ million
US$ million
2015 2.3 0.8 1.5

2016 2.4 1.1

Use the information in Table 2 to calculate the change in profit between 2015
and 2016. You will need to calculate the profit in 2016 to help you do this.

Show your calculations.

[2 marks]

1 1 . 5 Explain one way the change in profit you calculated in question 11.4 might
affect LEECO.
[3 marks]

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1 1 . 6 Analyse the benefits of LEECO using internal recruitment to recruit their new
manager.
[6 marks]

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Item D

Lee believes that LEECO needs to increase in size in order to make more
profit. His employees have said that the amount of work they have to do is too
great. This could stop the business from expanding and being able to look
after the existing customers well. One of the managers said that if they could
buy their equipment in bulk, it would be cheaper.

Recently, Lee was asked by a young entrepreneur if she could franchise the
LEECO brand to start her own business. She would pay a fee to LEECO and
she would also give LEECO part of any of her profits. One of the managers
believes that this would allow LEECO to take more orders, and pass them on
to the new franchisee. Lee is worried that the young entrepreneur wants to run
the franchise in a different way and this could spoil the reputation of LEECO.

Lee knows that there is a similar business operating in Singapore called

E-Conference. He has heard that the owner would be willing to sell the
business. Lee has researched the possibility of getting a bank loan to buy
E-Conference. This would let LEECO grow very quickly and would allow them
to take many more orders.

1 1 . 7 Lee is thinking about two different ways to expand LEECO.

• Sell a franchise to the young entrepreneur

• Buying E-Conference

Using the information in Items C and D, recommend which of the two options
would be better for expanding LEECO.

Give reasons for your recommendation.

[12 marks]

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END OF QUESTIONS 35

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