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General Certificate of Education Advanced Level

BUSINESS STUDIES                                                                                                                       9198/1

JUNE 2009 SESSION        3 hours

TIME 3 hours


  • Answer all  questions.
  • Write your answers on the separate paper provided.
  • If you use more than one sheet of paper, fasten the sheets together.


  • The number of marks is given  in brackets
[] at the end of each question or part question.
  • The businesses described in the case study are entirely fictitious.
  • You are advised to spend no longer than 2 hours on Section A.
  • You are reminded of the need for good English and clear presentation in your answers.
  • Calculators may be used.
  • Section A [70 Marks]

    Answer all questions.

    1 What is meant by the term labour turnover? [2]

    2  a) What are the disadvantages of a narrow span of control?  [2]

        b) Explain any two  possible sources of conflict in an organisation.  [4]

    3  a) State any two reasons why decision trees are a useful tool to managers. [2]

        b) The following is an extract from the balance sheet of D & R Ltd

    Intangible Assets3 200
    Current ASstes
    Stock28 000
    Debtors22 000
    Cash6 000
    56 000
    less; current liabilities
    Creditors8 000
    Dividends22 000
    30 000

                i) Using different ratios calculate the liquidity position of the firm. [4]

               ii) Comment on this liquidity position.  [4]

    4 Explain each of the following terms:

               i) Undercapitalisation            [2]

              ii) Overtrading     [2]

             iii) Working capital          [2]

    5 Explain the benefits to an organisation of having a motivated workforce.  [4]

    6 Explain the importance of limited liability to shareholders.  [4]

    7  a) State any three features of public limited companies.    [3]

        b) Giving examples, explain the reasons for public ownership of a company.  [4]

    8 How may macroeconomic policies of government affect business objectives and strategies.. [4]

    9 Describe any three different types of non-probability sampling techniques. [6]

    10 a) What is the difference between desk and field research?  [2]

         b) What can a firm do to extend the life cycle of a product?  [6]

    11    a) Stock normally takes three forms. Which are they?  [3]

           b0 Explain the role of stock control.   [4]

    12  Show the purposes of the following forms of communication:

           a) downward communication,   [2]

           b)  upward communication   [2]

          c) horizontal communication.   [2]

    Section B [30 Marks]

    Read the following Case Study and answer all questions that follow.

    Takkar seats were launched over 10 years ago with an excellent and really innovative product with wide appeal. Over the years, heavy advertising expenditure and product updating have made and kept the brand successful.

    Since the 1990s however, there have been dramatic changes in furniture market. This is illustrated, for example, by the fact that in 1999 there were 4 brands with a turnover of $ 1 000 000 whilst today there are more than 16 brands. Thus new and successful products have emerged to segment the furniture market. Faced with this development Takkar has consistently spent more on advertising chairs than any other product. It has also launched new sofas to appeal to new customer groups wanting something different.

    Through market research the success of chars has been re-assessed and the product launched in 1999 as being simple and comfortable  with an accompanying table. Thus today Takkar seats is re-emerging as a reliable old friend targeted at the same customer. Workers in the production and marketing department have been sent for training in order to acquire the skills that can help Takkar seats survive.

    13  a) What do you understand by market segmentation?   [3]

          b) Explain how the marketing manager for Takkar seats can segment his market.  [7]

    14 “over years heavy advertising expenditure has kept the brand successful.” To what extent does a strong promotion budget guarantee success of the product?     [10]

    15 Evaluate the usefulness of the training programme to be undertaken by Takkar seats.  [10]

    To access more exams go to the A Level Business Studies Exams page.