The aim of this scheme of work is to provide teachers with a comprehensive guide to the learning outcomes expected during the course, suggested teachingand student activities and resources available.
Contents:a) Statement of prior knowledgeb) List of general resourcesc) Breakdown of syllabus into unitsd) Suggested time allocatione) Suggested teaching order: i) with 1 teacher; ii) with 2 teachersf) AS/A level teaching
a) Statement of prior knowledgeThe AS/A level syllabus for Business Studies and this scheme of work have been prepared on the assumption that students have gained no prior qualificationin Business Studies, such as IGCSE Business Studies.This will not be the case in all centres, where all or nearly all students may have a prior qualification. Teachers should be able to adjust the level at which theyintroduce each new topic to students if they have already passed a lower level examination.The assumption that students do not have prior qualifications does not mean that they have no prior knowledge about business activity. They are allconsumers and observers of business activity. They will have been exposed to advertising and other promotional activities. Many of them may have gainedwork experience as part time workers. These experiences can be very useful in a class context when discussing, for example, the usefulness of advertising orthe different methods of workforce payment. Teachers are encouraged to allow students to refer to their own knowledge about business as much as possible.However, the key point is that this syllabus and this scheme of work are produced assuming that no prior knowledge actually exists.
C.I.E. Endorsed textbook: ‘AS and A level Business Studies’. Peter Stimpson. Pub. C.U.P. ISBN 0521003679This is suitable as a student textbook and teacher reference book.Other suitable reference texts:‘AS and A level Business Studies’. Barratt and Mottershead. Pub. Longman. ISBN 0582405475‘An Integrated Approach to Business Studies’. Jewell. (4
th Edition).Pub. Longman. ISBN 0582404524
These are suitable as teacher reference books.A complete resource list can be found on the CIE website: http://www.cie.org.ukCD Rom: IGCSE Business Studies ISBN 0719572673. For revision of basic topics (including hundreds of multiple choice questions) and for introductory casestudies.Websites: These are referred to throughout the scheme of work. The most comprehensive ones for student notes and revision notes are: www.bized.ac.uk ;www.revision-notes.co.uk ; www.learn.co.uk. and www.tutor2u.netVideos: TV Choice, PO Box 597, Bromley BR2 OYB; U.K.BBC Video Workpacks containing video, worksheets, model answers and “powerpoint” presentations. Contact the organization distributing these at:www.holdsworth-associates.co.ukThe scheme of work does not make specific reference to the videos from these two organizations due to the relatively high cost of them. It would beinappropriate for this scheme of work to suggest that school should or could afford them. Many of the videos are very effective – especially the BBC ones. Tryto obtain a catalogue and check the contents and price details.
c) Syllabus Units:The syllabus is already divided into sections and these will be referred to as units throughout this scheme of work.Unit 1 - Business and the EnvironmentUnit 2 - People in OrganisationsUnit 3 - MarketingUnit 4 - Operations ManagementUnit 5 - Business FinanceUnit 6 - Business AccountingUnit 7 - Information for Decision Making
d) Time allocationsAs the time devoted to each A level subject varies so much between Centres it is not possible to recommend a specific number of hours teaching time foreach Unit. However, the following table gives a recommendation for dividing the total time allocation available between the Units:
Unit Proportion of total teaching time available (%)
1 15
2 15
3 15
4 15
5 5
6 20
7 5
Revision and mock examinations 10
Specific time allocations between each topic within a Unit cannot be recommended for the same reason as given above. Clearly, some topics require muchmore teaching time than others. The scheme of work does highlight the major themes in each Unit and these should be given prominence in the teachingprogramme. The relative importance of other topics can be assessed by teachers referring to standard textbooks for details of the amount of detail that has tobe covered.
e) A suggested teaching order: i) With 1 teacherIt is not the intention of this scheme of work to prescribe an order in which the Units must be taught. Experienced teachers will have established theirpreferred order of teaching based on what they have found “works best” with their own students. Different teachers have different opinions about the bestorder of teaching through the syllabus. The order that follows can easily be amended and adapted to meet local conditions, the prior knowledge of studentsand the preferences of teachers. You will notice that the suggested order is very close to the order of Units in the syllabus – the main change being thesuggestion that Marketing is covered as the second unit and not the third unit as numbered in the syllabus.
1 - Business and the Environment This is usually taught first and with good reason. Without a clear understandingof the context in which business operates and the external forces thatconstrain business decisions, students may find it difficult to apply and inter-relate other syllabus material.
3 - Marketing It helps to make this the first functional area of business to be studied.Students often have more prior knowledge about marketing, as consumersthemselves, than other syllabus topics. It is useful to emphasise the allembracing nature of modern marketing decisions.
2 - People in Organisations This can usefully be taught before Operations Management. If students canunderstand the central importance of ‘people management’ to businesssuccess then this helps in understanding the impact of many OperationsManagement decisions too.
4 - Operations Management This links in with People in Organisations in many areas
5 - Business Finance The concepts introduced in this Unit will assist with understanding some ofUnit 6 material.
6 - Business Accounting Follows on quite naturally from Unit 5.
7 - Information for Decision Making Much of this material is likely to have been covered in previous units. Forexample, the methods of presenting data could have been taught whenconsidering market research. The evaluation of some of the decision makingtechniques requires an understanding of much of the rest of the syllabus.
ii) With 2 teachersIn some Centres it is quite common for 2 teachers to divide the teaching of each group. Here is a suggested teaching order with 2 teachers:
Teacher 1 Teacher 2
Unit 1 Unit 3
Unit 2 Unit 5
Unit 4 Unit 6
Unit 7
f) AS/A level teachingPractice differs between Centres. The two options are:
i.) Teach both AS and additional A level material together as students take both sets of examination papers in one session (either June or November).ii.) Teach AS first and students take AS examinations in one session. Then teach additional A level material to prepare students for this examination in the
following session.
The scheme of work allows for either option. Additional A level learning outcomes, activities and resources follow directly on from AS but in italics. This allowsteachers to teach these different areas together or to separate them and teach all AS topics first and then return to additional A level topics.It is important for all teachers to note the different assessment objectives of the AS examinations compared to the A level Paper 3 (see syllabus). Much moreemphasis is given, on Paper 3, to the skills of analysis and evaluation. In contrast, the main skills examined at AS level are knowledge and application.These differences should be reflected in the teaching of the AS material compared to the A level material. It is advised that many more opportunities are givento A level students to discuss and evaluate issues, business problems and possible solutions than might be the case for AS level. The Scheme of Work doesmake many references to how these opportunities might be added to the teaching of the A level subject material.
g) Suggested teaching and student activitiesThis Scheme of Work contains details of many possible teaching activities that can be used in class. Emphasis is also given to student activities as BusinessStudies is often most effectively taught by encouraging students to undertake assignments that promote active learning. Traditional teaching certainly has avery important place in a Business Studies course but it can lead to rather passive learning experiences. The more often students are asked to think forthemselves and undertake their own research – possibly reporting back to the rest of the group – the richer their learning experience is likely to be. It will alsohelp to reinforce the ‘real world’ nature of the subject – a key aspect of Business Studies that makes it so rewarding to teach and study.
h) Online resourcesThe Scheme of Work also contains many references to non printed learning and revision resources. As with most IT based materials these may be subject tochange and adaptation from when the scheme of work was written and it is suggested that teachers check their current validity before setting assignmentsbased on them. The growth of online resource provision opens up many opportunities for detailed research into business performance and activities. Theseresources can be used to extend students experiences beyond those of their local/regional area as well as providing useful data for so many topics on theBusiness Studies course.
Recommended prior knowledge: None – but some students may have covered similar material at IGCSE. Also, students may have acquired someoutline knowledge of business through observation and discussion.
The unit in context: This unit provides important background concepts for other Units and introduces the external constraints operating on businessdecisions.
Outline: This unit introduces the different classifications of business activity and allows for observation and analysis by students of local businessoperations. The unit gives teachers an excellent opportunity to introduce students to an assignment based approach to learning based on a detailedstudy of local businesses. The importance of the external environment in which businesses operate needs to be illustrated by reference to currentissues and events. Student involvement needs to be encouraged by expecting regular reading of relevant sections in newspapers to keep abreast ofevents that influence business activity.
Learning Outcomes Suggested Teaching and StudentActivities
Resources Online Resources
a) The need for and nature of business activity
i.) students shouldunderstand thedifferent levels ofactivity: primary,secondary, tertiary
� list examples of well known businesses
� discuss what they do and why they areimportant to the local/national economy
� classify them into 3 sectors
� undertake a detailed study of localbusinesses and the main sectors ofbusiness activity. Students couldconcentrate on one local business eachand attempt to discover information thatcould be of use throughout Unit 1 e.g.number of employees, sector ofindustry, whether they import or exportetc.
� this session could be based on groupwork. A group member could explainthe reasons for the group’sclassifications to the rest of the class
� the reasons behind activities being ineither the private or public sector shouldbe discussed
� Stimpson Chapter 1 p7
� handouts or class notes
iii.) students should beable to understand themain features of thelegal structures ofbusinesses. Theyshould be able tojudge the suitability ofeach type of structure
� teach differences
� ask for local examples
� discuss advantages and disadvantagesin groups – presentations to class withfindings
� discuss what type of legal structure theywould recommend for differentbusinesses
� answers to textbook exercises could bediscussed in groups and then findingspresented to class
� Stimpson Chapter 1 pp 7-15
� Jewell Chapter 1
� Barratt and MottersheadChapter 3
� activities from Stimpson:‘Clarks’; ‘Shah’s garage’;‘Harry’; Joint ventures.
� Barratt and Mottershead:‘Pop-it and Sons’
� OHT sheets needed forpresentations
� handouts or class notes
� IGCSE CDRom Multiplechoice questions on BusinessActivity
i.) students should beable to distinguishbetween the freemarket and othersystems
� different types of economic systems –examples from around the world
� possible advantages and disadvantages
� Stimpson Chapter 2 pp21-24
� revision and case studyquestions pp 18-20
ii.) privatisation –candidates should beable to discuss thearguments for andagainst this policy
� class discussion on claimedadvantages and disadvantages ofprivatisation
� this issue could be discussed in termsof a local public service – what wouldbe the impact on prices, jobs, efficiencyetc. if it was privatised? As with all Alevel material the emphasis should beon evaluating the impact of this policy
� Stimpson activities:‘Pakistan/SAA’ p 17
� Stimpson Chapter 1 pp16-17
� Jewell pp157-158
� handouts or class notes
iii.) students should beaware of the natureand scope ofmultinationalbusinesses
� list multinationals in ownlocality/country. This could have beenpart of the original student assignmentinto local business activity. Discusspossible reasons for location in owncountry
� ask students to cut out newspaperarticles (use internet too) for details ofrecent multinational investment in owncountry – or closure of suchfactories/offices.
� discuss claimed advantages anddisadvantages for the “host” country –based as far as possible on localexamples
� check opportunities for visits tomultinational company facilities in thearea
� Stimpson Chapter 2 pp27-28
� revision questions p31
� Stimpson activities on SouthAfrica and Malaysia (pp27 &31)
� class debate on the pros andcons of such investment inown country – need tonominate main speakers
i.) students should knowthe main ways ofmeasuring businesssize
� use local business data on output,employment, sales data for businesses
� students need to identify that size canbe measured in different ways – withdifferent results
� use internet sites of businesses orpublished accounts to establishnumbers of employees, value of salesand capital employed
� Stimpson Chapter 3 pp34-36
� Stimpson activity p35
� class notes to reinforce mainmeans of comparing businesssize – their advantages anddisadvantages
� 9707/1 Nov 2002 Q1
Ask students to refer to fourbusiness websites and obtaindetails about number ofemployees, sales, capitalemployed. If computer facilitiesare available this will make anexcellent introduction to companywebsites
ii.) students should beable to explain thesignificance of smallbusinesses
� use local examples to examine theimpact of them
� talk from local small-business owner onthe advantages and disadvantages ofbeing a small business
� Stimpson Chapter 3 pp36-37
� The speaker will need to becarefully briefed about whatissues are to be covered in thetalk and students encouragedto ask relevant questions
iii.) students should beable to distinguish themain types of andreasons for integrationof businesses. Theyshould be able todiscuss the effects ofthese on the firm,customers andworkers. They shouldbe able to recognizethat integration oftenfails to achieve aims
� teach differences
� use own country and other examples
� discuss advantages and drawbacks ofeach method of growth/integration
� discuss the problems of integration –lack of synergy, poor control andcoordination of integrated business
� discussion could be based around ownschool or college – the advantages anddisadvantages of merging with anotherlocal school. Evaluating possible impacton costs, jobs, choice, culture of theschools – from the viewpoint of differentstakeholders
� Stimpson Chapter 3 pp38-43
� revision questions p 43
� Stimpson activities pp40-41 and44
� Barratt and Mottershead casestudy ‘Fords’ p 56
www.northern-foods.co.ukoutlines the way in which thebusiness has expanded byacquisition
iv.) students shouldunderstand the reasonswhy the state intervenes toassist and constrainbusiness activity
� use newspaper articles to illustrate examplesof state intervention e.g. subsidies, taxes ongoods, planning controls
� students need to see the potential for bothpositive and negative impact on business
� Stimpson Chapter 2 pp22-30
� Jewell pp157-163
� class debate on ‘Stateintervention – is it good orbad for business in ourcountry’
� class notes reinforcing mainpoints
� 9707/1 Nov 2002 Q3
� 9707/1 Nov 2001 Q2
d) Business strategy
i.) students shouldunderstand the importanceof objectives for successfulbusiness activity. Theyshould recognise that notall businesses will havethe same objectives e.g.differences betweenprivate and public sectors
� contrast likely objectives of private and publicsector enterprises
� contrast likely objectives of firms of differentsizes and types of ownership
� ask students to find out the stated aims andobjectives of their school/college. Why aresuch objectives thought to be necessary?What strategies are used by the school toachieve them? Are they being achieved?
� Stimpson Chapter 4 pp46-53
� revision questions p66
� Jewell pp26-34
� Stimpson activities“Morrisons” p50; “Iceland”p53 and “STS” p52
� class notes
� 9707/1 Nov 2002 Q5(b)
Most major companiesweb sites will refer toCorporate objectives – trywww.cadbury.co.uk
ii.) students shouldunderstand the potentialconflict between businessobjectives and betweenbusiness and the state
iii.) candidate should know theconcept of Managementby Objectives – itspotential advantages andlimitations
� simple examples of possible conflict e.g.between long term business growth and shortterm profits
� objectives of state and business may conflicttoo e.g. cutting jobs to save costs will conflictwith state’s aim of full employment
� use the hierarchy of objectives to explain howtargets can be set at each level of anorganization. Could be applied to the schoolor college
iv.) students should beable to understandthe significance ofexternal economic,ethical, social,technological andpressures onbusiness activities.They should showan awareness ofhow firms mightrespond to suchpressures withchanges in businessstrategy
� explain what is meant by business strategyand how it can be affected by externalfactors – no firm operates in isolation fromits environment. This is a key concept of thisUnit of the syllabus
� use local and national examples e.g. takenfrom newspaper articles, to illustrate theseconstraints and how business strategymight be changed as a result
� encourage evaluation of changes instrategy e.g. relocation abroad due toappreciating exchange rate of domesticcurrency has major problems associatedwith it
� students should be encouraged to keep afile of articles relating to external constraints– posters could be prepared for class wallwith these
� students could use local business websitesto survey how many sell directly by using e-commerce – discuss the consequences ofthis of this change in marketing resultingfrom technological change
� discuss the possible impact on differentbusinesses of tax changes; interest ratechanges; exchange rate changes; ethicaland social pressures, legal changes
� with ethical and social issues it is importantthat students are able to discuss the shortand long term effects of accepting an ethicalpolicy e.g. may increase costs in the shortrun but may raise profits (due to positivepublicity) in the long run
� Stimpson activities suchas: Tobago City (p80);Weak Yen (p86); SafariParks (p95); Malaysianeconomy (p99) andCorporate socialresponsibility (p120)
� students need materialsto keep files of articlesand to make posters
� class notes andphotocopies of articles forstudent reference.
� 9707/1 Nov 2002 Q3
� 9707/1 June 2002 Q5
� 9707/2 Nov 2002 Q1(d)
� 9707/3 June 2003 Q2
The Times 100 Case Studies – manyof which are concerned with externalconstraints and business strategies:www.tt100.bizPressure groups such as Greenpeacecover social and environmental issuese.g. www.greenpeace.org has asection on the impact of Coca Cola onthe environment.Most major company web sites carrydetails of the environmental andsocial policies: Try www.Shell.com.and www.mcdonalds.comEconomic data is obtainable frommany sources. Try the governmentweb site of your own country e.g.www.statistics.gov.uk ;www.mop.gov.kw (Kuwait)www.boi.go.th/english/business(Thailand)Newspaper articles available fromlocal sources – for world coverage trywww.ft.com
i.) students need to beaware of the mainstakeholder groups,their objectives forbusiness and thepotential conflictsbetween theseobjectives
� use local business examples to leaddiscussion about impact of businessactivity – and those groups that have adirect interest in business activity. Thiscould be based on the impact ondifferent groups of a decision by a multi-national to invest in or close down a sitein your area
� students should be encouraged toidentify objectives of these groups –and how they might conflict. Can thisconflict be resolved? For example, willsatisfying stakeholder objectives alsolead to higher profits in the long run?
� opportunity for role-playing exercisebased on a decision made by a localfirm – students to play rolesrepresenting different stakeholdergroups
� class notes to reinforce thedifferent reactions of differentstakeholder groups tobusiness decisions.
� 9707/2 June 2001 Q1(d)
� 9707/1 Nov 2002 Q5
Try Trade Union web sitese.g. www.tuc.org.uk.www.tgwu.org.uk.Consumers groups andenvironmental groups websites too e.g. www.which.netThe impact on competitorsand consumers of businessactivity (especially if it isregarded as “unfair”) isdiscussed on www.oft.gov.uk- the web site for the UKOffice of Fair Trading
f) Corporate culture and strategy
i.) students shouldunderstand the impactof corporate culture onbusiness strategy andbusiness behaviour
� this could be examined whendiscussing different business objectives– and why they differ
� this could be dealt with in the sectionabove on social and ethical constraintson business.
� Stimpson p54
� Barratt and Mottershead p71
� class notes
Try local business web sitesfor details of company policyand culture. Trywww.northern-foods.co.uk ;www.bodyshop.comand the web site of the BodyShop founder, giving detailsof her philosophy of businessbehaviour:www.anitaroddick.com
Recommended Prior knowledge: It is assumed that Unit 1 has already been covered but that the students have no prior academic knowledge of themarketing function in business. As consumers, of course, they have all had exposure to product ranges, promotion offers, advertising and havedoubtless made price comparisons and these experiences can be brought in to class discussions.
The Unit in Context: The Unit provides coverage of one of the key business functions. It explains the central role of marketing in successfulbusinesses but also examines the need for integration of marketing planning with other business functions. Students are encouraged to use owncountry examples to illustrate marketing concepts and marketing practice. Student based activities can be extensively used in this Unit. For example,conducting market research, analysing pricing levels and promotion strategies and comparing marketing mixes for different products/businesses.
Outline: After examining the meaning and role of marketing, the Unit covers the main methods of market research, product portfolio analysis and thedevelopment of appropriate marketing strategies.
Learning Outcomes Suggested Teaching and StudentActivities
Resources Online Resources
a) The nature and definition of the market and the role of marketing
Students should be able to:
i.) define marketing andunderstand the key importanceof it to business activity.Students should be able todistinguish between productled and market led businesses
ii.) understand the relationshipbetween marketing and otherbusiness functions e.g.marketing decisions have animpact on operationsmanagement, finance andpeople decisions too
� encourage students to suggest theirown definition of marketing – discussthese and then propose the ‘correct’one. Marketing is more than just ‘selling’
� give notes on market led and productled businesses (market and productorientation)
� ask for suggestions of both. Discuss thedangers of product led – and thepotential costs of market led
� students to investigate a recentpromotion campaign for a well knownproduct – they should examine whyother departments of the business hadto be involved before this was launched
� Stimpson: Chapter 7.Activities on Tinycomputers; Nike trainers;Furniture Metallica andRevision question on P.139
� Barratt and Mottershead:Chapter 11 and Daewoocase study on P. 115
� Jewell: Chapter 14
www.marketingteacher.com
is well suited for this wholeUnit. It contains Powerpointpresentations, quizzes andexercises for use in theclassroom.
www.tt100.biz is useful fore-learning exercises, casestudy downloads and – atthe end of the unit – forrevision notes.
iii.) understand that the marketthat a business operates inmay be analysed in severalways: size, growth, marketshares, different segments,number and sizes ofcompetitors
iv.) explain the difference betweenniche and mass marketing –and the relative advantagesand disadvantages of eachstrategy
� students to investigate using localsources or web sites, local/national dataon certain markets to analyse overallsize, growth rates, market share.Discuss which markets are mostcompetitive e.g. most number ofcompetitors
� give definitions of niche and massmarketing. Students to suggestexamples – class discussion onbenefits/limitations of each strategy
v.) analyse the purpose of marketsegmentation, the ways inwhich it might be achieved andits appropriateness in differentcircumstances
vi.) understand the purpose ofmarketing planning – thedetailed report on themarketing objectives,marketing strategy andmarketing budget of thebusiness
� segmentation can be effectively taughtby means of examples e.g. clock andwatch market and the many segmentsthat exist. How could a manufacturersegment this market and what might thebenefits be? Students should be able todiscuss this type of question
i.) understand the purpose androle of market research
ii.) explain the distinction betweenprimary (field) and secondary(desk) methods of informationgathering
iii.) evaluate the appropriatenessof different market researchmethods in different situations
iv.) understand the main methodsof sampling from a givenpopulation
� the important methods of market research needto be explained and notes given
� market research is often best taught byencouraging students to do some! Primaryresearch surveys should be encouraged – thesecould be school/college based if student safetyis an issue. This type of assignment will givestudents the opportunity to judge theeffectiveness of different research methods. Thedata gathered could then be presented usingthe most appropriate types of presentation
� secondary research should also be undertakento give an awareness of the scope of what isavailable
� students could be asked to investigate a tasksuch as ‘Which soft drinks are most popular atschool and why?’ This would require bothsecondary data regarding the main products inthe market, market share, prices etc. as well asprimary research by means of a sample ofstudents using interview/questionnaire
� students should be encouraged to explain themethods used and evaluate them
� Barratt and MottersheadChapter 12 and Kellog’s casestudy P 129
� Jewell Chapter 15
� local libraries usually providedetails of population figuresfor the region – andage/occupation distribution
� 9707/3 June 2003 Q3
� 9707/1 June 2002 Q6
� 9707/2 Nov 2001 Q(c)
� 9707/3 June 2002 Q(c)
Research into softdrinks could start withwww.coca-cola.comand www.pepsi.comMarket researchagencies providespecialist (andexpensive!) data onmany markets. Try thewebsite of one of thelargest www.mori.comand you will discoverbrief extracts fromrecent reports. Theseare changed frequentlybut recent materialincluded the finding that96% of car buyers ratecar safety as one of themost important criteriain their choice.
v.) evaluate the cost effectivenessand accuracy of marketresearch – descriptivetreatment only
vi.) examine the uses of salesforecasting and be able toundertake simple forecastingusing extrapolation (graphical)and time series analysis(moving average)
vii.) evaluate the limitations ofsales forecasting techniques
� explain why even the most extensive researchcan lead to misleading results
� take an example of a fast changing industry – issales forecasting possible? How useful is itlikely to be?
� show both the graphical extrapolation andmoving average methods.
� worked examples of both
� Stimpson PP 153-156.Activity: Sodhi P156
c) Demand concepts
Students should be able to:
i.) understand the maindeterminants of demand for aproduct – and how these cancause shifts in demand
ii.) calculate price elasticity ofdemand and understand thebusiness significance of theresults. For example, theimpact on revenue of achange in price depends onPED
� introduce the normal demand curve and itsinverse relationship with price
� class discussion on non-price demand factors –and shifts in demand curve
� introduce elasticity as a concept – show howslope of demand curve will influence demandchanges following price changes
� explain price elasticity formula
� simple worked examples
� explain what the numerical results and thenegative sign mean (no need to explain positivePED)
� explain how numerical PED result can influenceprice decisions
� Stimpson: Chapter 10.Activities: Daily Times andCoffee prices
� Barratt and MottersheadChapter 18 and Häagen Dazscase study p215
� Jewell Chapter 9 p119-123
� 9707/2 Nov 2002 Q(b)
� 9707/2 June 2003 Q(b)
iii.) calculate income elasticity ofdemand and promotional(advertising spending)elasticity of demand. Thesignificance of the resultsshould be understood. For
� extend elasticity concept to income andadvertising spending changes
� simple worked examples
� analysis of results – how do they assistmanagement decision making? E.g. should firms
example, an economicrecession will reduce demandfor income elastic products
iv.) evaluate the usefulness of theconcept of elasticity tobusiness. For example, itsusefulness might be limited byinadequate data and constantchanges in other factors
making income elastic luxury goods introducecheaper versions during a recession?
� students should be encouraged to evaluate theconcept – it is based on other factors remainingunchanged, for example
d) Product portfolio analysis
Students should be able to:
i.) classify products e.g.consumer/producer goods
ii.) understand the concept of theproduct life cycle and the mainstages
iii.) use the PLC to analyseappropriate changes inmarketing strategy at differentstages. Understand theimportance of a balancedproduct portfolio and the needfor research and developmentinto new products
iv.) evaluate the usefulness of theproduct life cycle
� explain the difference and ask for actualexamples
� student groups to make suggestions forproducts that have a long ‘life’ and a short ‘life’.Examples of recently launched products andthose just taken off the market
� use examples to introduce the product life cycle– show diagram on OHT and explain the mainstages
� explain the link between sales and cash flowduring a product’s life
� ask for suggestions of firms with well balancedportfolios – and those with too many ‘maturing’or ‘declining’ products
� take a well known consumer product. Askgroups of students to suggest how price, placeand promotion decisions could be affected bydifferent stages of life cycle
� debate usefulness of the life cycle concept –notes essential
� Stimpson: Chapter 9.Activities: Body Shop; Dyson;Nestle. Revision question P173. Extended work for Alevel P172-173 and ‘Cashcow’ activity
� Barratt and MottersheadChapter 16 and case studyon p192 for A level concepts.
� Jewell Chapter 18
� 9707/1 Nov 2002 Q(b)
� 9707/1 June 2002 Q6
Try the site of a majormultinational with alarge product rangesuch aswww.unilever.com toexperience acomprehensive productportfolio. How many ofthese products are soldin your own country?Are the brand namesthe same? Why doesthe firm introduce somany new products?
v.) understand the main stages inresearch and development
vi.) evaluate the likely effectiveness research and developmentexpenditure on productdevelopment
vii.) use the Boston Matrix toanalyse the current position ofproducts within a firm’sportfolio
ix.) evaluate the usefulness of theBoston matrix
viii.) understand the process ofvalue analysis – detailedstudy of each aspect of aproduct to assess cost againstvalue
� explain the nature of R and D. Why do firmsspend money on this?
� does R and D spending guarantee successfor a firm? – class debate based onstudents research into the main R and Dspenders either in own country orinternationally
� introduce Boston Matrix and use actualbusiness example to classify products
� debate the usefulness of it – notes essential
� explain and evaluate value analysis byusing a simple product and identifying thekey features of it that could be analysedcost effectively
www.dyson.com explainsthe importance ofResearch andDevelopment andexamines how newproducts are developedfrom research findings.Try www.bpamoco.comand www.celltech.co.ukas well.
e) Marketing mix and marketing strategy
Students should be able to:
i.) define the marketing mix
ii.) understand the importance ofthe product in the mix (links inwith product portfolio analysis)
iii.) understand the importance ofprice within the mix
iv.) explain different pricingstrategies and methodsincluding: skimming,penetration, cost plus, marketbased, price discrimination.Evaluate the appropriatenessof each to different businesssituations
� this is a key part of the Unit. Encouragestudent based investigations into differentbusiness’ pricing/promotion strategies.Encourage feedback on findings to rest ofthe group
� introduce the marketing mix
� use examples of well known businessesand products to demonstrate how the 4 P’slink with each other
� the importance of product – consumers willrarely buy a faulty or poorly designedproduct twice
� price – explain why this is important in themix. Remind students of the downwardsloping demand curve – but negative
� Stimpson Chapter 10 andactivities: PC price war, Dellcomputers; Hartwood Hats
� Barratt and MottersheadChapters 17,19, and 20. Casestudies on Pages 205, 228, 245
� IGCSE CD Rom class activityon the marketing mix plusworksheets – good for anintroductory exercise
� 9707/1 Nov 2002 Q7(b)
Best to use a case studyapproach e.g. by referringto the Times 100 andselecting one of thesebased on marketing.These are changed eachyear but recent effectiveexamples include:Seventh editionAustralian HighCommission (tourismsegmentation) andNestles (marketing aproduct). Eighth edition:United Biscuits (productrelaunch of Phileas Foggsnacks) and Kellogs
v.) understand the importance ofdistribution channels (place) tothe mix
vi.) explain the different channels.Evaluate the appropriatenessof each to different businesssituations
vii.) understand the importance ofpromotion (includingpackaging) to the mix
viii.) explain different promotionalstrategies e.g. above andbelow the line. Evaluate theirappropriateness to differentbusiness situations
phsychological impact of prices set too lowis important too
� explain, with examples, different pricingtechniques and strategies. Students couldbe given examples of products and asked tosuggest and evaluate a pricing method foreach one
� the importance of distribution channels isoften overlooked – explain the options andrefer to how the Internet is having an impacton ‘place’ or distribution decisions. Howmany students have used Internet to buyproducts?
� ask groups to bring in examples ofadvertisements, PR articles andpromotional offers. Classify into above andbelow the line
� discuss how much firms should spend onadvertising. Introduce the idea of themarketing budget. Try to obtain details ofhow much local advertising might cost e.g.local papers, posters, local radio etc.Discuss how firms might assess whetherpromotion is successful or not
� group work on launching a new consumerproduct. Group presentations (OHP,powerpoint, posters etc.) on the suggestedmarketing mix – whole class to discuss howeffective it might be
� how might the mix be changed when sellingto other countries – pan-world strategy ornew strategy for each market?
� 9707/1 June 2003 Q6
� 9707/2 Nov 2001 Q(d)
� 9707/3 Nov 2002 Q(e)
� 9707/2 June 2003 Q(d)
� 9707/1 June 2001 Q4
� 9707/1 Nov 2001 Q5
Winders (Internet basedmarketing of a newbrand). www.tt100.biz
Try the web sites of thesecompanies too:www.kellogs.co.uk
ix.) understand the importance ofmarketing strategy beingbased on objectives
x.) understand the importance ofan integrated marketingstrategy/mix. The mainelements of the mix should beconsistent with each otherand integrated with otherdepartments
� examine how the marketing mix isdependent on the corporate/marketingobjectives e.g. sales growth/ high marketshare will require different marketingstrategy to an objective that is aiming toestablish exclusive image
� discuss the need for integration betweenthe 4 P’s and between marketing and otherbusiness departments
Recommended prior knowledge: It is assumed that Units on Business and the Environment and Marketing have been taught but that students have noprior academic knowledge of the “People in Organisations” subject material. However, they will all have experienced examples of both good and poorcommunication, they are likely to be aware of the organisational structure of their own school/college and they will undoubtedly have some views on whatmotivates them! Therefore, it will be possible to engage them in discussion about many areas of the part of the syllabus based on their own experiences oropinions. No detailed knowledge of Employment Acts/Laws is required and students may use local references in their answers e.g. to employment protectionand equal opportunity etc.
The Unit in context: This Unit introduces the “human” factor into the consideration of what makes for successful business operations. The impact ofbusiness decisions on the workforce is a key consideration for any student of Business Studies.
Outline: The Unit provides coverage of human motivation theories and how these may apply in the business world. Different approaches to financial and non-financial motivation are considered in detail. Organisational structure is examined and students need to be able to discuss different types. Extension work atA level includes the importance of communication to effective management and motivation of staff.
a) The need for and nature of organisational structure
Students should be able to:
i.) recognise different approachesto organisational structure. Beaware of why organisations needa formal structure. They need tobe able to draw and understanda simple hierarchical structurediagram and identify chain ofcommand, levels of hierarchy,spans of control. They need tobe able to criticize this style oforganisation structure and thencompare it with a matrix structure
� use the school/college as a startingpoint. Ask students to draw whatthey believe to be the formalstructure – and then compare it withthe actual one!
� discuss issues in class such as theadvantages and disadvantages of a“tall” structure (many levels) and a“short” structure which is likely tohave wide spans of control
� use any work experience thatstudents have had to help illustratethese points
� Stimpson: Chapter 16.Activities on Penang Cars,Majestic cinemas, MalaysianAirlines and Mitsubishimotors. Revision questionsp267
� Barratt and Mottershead:Unit 48 and Mr.Patel’s casestudy on p549
� Jewell: Chapter 3 and essayquestions p45 (some of theseare difficult but could bediscussed in class)
Two of the most useful sites for thewhole Unit are likely to be:
www.hrmguide.net This contains freearticles and features on HumanResource management and HumanResource research.
www.osl-ltd.co.uk Click on “freeresources” and refer to the casestudies and questions available.These are updated but recent caseStudies include:
No. 6 – Sham Shui Ferry Co. ‘Thetypical Chinese business’
ii.) explain and discuss authority,responsibility and delegation
� class notes needed � 9707/1 June 2002 Q2 No. 8 Nam Fong Airlines ‘The art ofcommunication’.
No. 12 First Atlantic Bank ‘Trainingand development’.
iii.) explain and discussaccountability, centralisation,decentralisation, line and staffmanagers
� again some of these issues can bediscussed within the context of theschool/college. The advantages anddisadvantages of centralizationcould be assessed by referring tolarge MNC’s operating in thecountry
� class notes needed
b) Motivation, leadership and management
Students should be able to:
i.) understand why a motivatedworkforce is important – what arethe likely consequences of apoorly motivated staff?
ii.) use Maslow’s hierarchy toexaplain human needs
iii.) explain and discuss the mainfindings of certain motivationaltheorists – Taylor, Mayo,Herzberg, McGregor
iv.) discuss the usefulness of thesetheories to HRM
� ask for definitions of “motivatedstudents” – discuss if this is thesame as motivated workers(essentially, yes!)
� group work – ask for 2 lists, one ofbenefits from well motivated staffand one of business costs resultingfrom poorly motivated staff
� introduce Maslow’s hierarchy with ataught lesson. Explain how theseneeds could be satisfied at work.Students should be able to relatethese levels to their own experienceat school/college or in workexperience that they haveundertaken
� Stimpson: Chapters 13,14,15and activities such as: B andK; Technoloc; Quality circles,Telemarketing and RevisionExercises on pages 232,244and 255.
� Barratt and MottersheadUnits 49,50 and 52. CaseStudies on 561 and 572
� Jewell: Chapters 42 and 45.Essay questions on p522
� visiting speakers could be auseful resource for manyaspects of the « People »Unit – even the Headteacher/Principal!
www.tt100.biz (Edition 8) has a casestudy on a construction firm TaylorWoodrow entitled “Involvingemployees in meeting corporateobjectives”.
v.) explain the main forms offinancial motivation and discusstheir likely effectiveness andappropriateness in differentcontexts
vi.) explain the main forms of non-financial motivation e.g. jobenrichment, teambuilding etc.,and discuss their likelyeffectiveness andappropriateness in differentcontexts
vii.) understand the importance ofleadership in business and thequalities of a good leader.Explain the different styles ofleadership – autocratic,democratic and laissez-faire anddiscuss the likely effectiveness ofthese styles
viii.) understand the main functions ofmanagers
� introduce the other motivationaltheorists – notes need to be givenon these. Was Taylor right? Debatebetween two groups on whetherpay “moves or motivates” staff
� explain the main staff paymentsystems and their suitability indifferent situations. Debate “Shouldteachers be paid on the basis of Alevel results”!
� non-financial motivation – explainand discuss the important issues ofjob enrichment. How might this beachieved? Is it more difficult insome business situations thanothers?
� leadership styles – discuss theleadership style at school. Is thissuitable? When might other stylesbe more appropriate? Notes needto be given on these styles
� brief discussion of thework/functions of managers.
� 9707/1 Nov 2001 Q6
� 9707/1 Nov 2002 Q6
� 9707/3 June 2003 Q(a)
� 9707/3 June 2003 Q(b)
ix.) appropriateness of leadershipstyle in different circumstances
� students should be encouraged tosuggest and discuss differentsituations in which differentleadership styles would beappropriate
ii.) understand the importance ofeffective communications, thepurpose of communication andthe methods of transmittingmessages
iii.) analyse the likely barriers toeffective communication anddiscuss how they might beovercome
iv.) recognise the differencesbetween one/two way;vertical/horizontal and formalinformal networks
� discuss why communication isnecessary. Give business examplesof how poor communication can leadto real problems
� define communication and thecommunication diagram withfeedback
� use examples of communicationmethods at school – which media areused? Are they appropriate? Whichothers might be better and why?Students should be encouraged todiscuss the suitability of differentmedia in different circumstances.Notes on media and suitability
� why does communication sometimesfail? Notes on barriers – and how theymight be overcome
� explain why communication might bemore difficult in larger businesses
� try sending a verbal message thoughthe group – which communication netwould be best? Does the messagebecome distorted?
� communication direction and oneway/two way
� Stimpson: Chapter 17 andactivities such as Palm Nutoils and Matsushita. Revisionquestion on page 278
� Barratt and Mottershead: Unit51
� Jewell: pp46-55.
� 9707/1 June 2001 Q3 (notethat this is now an extensiontopic.)
i.) understand the purpose andfunctions of the HR department
ii.) recognise that HR strategy caneither be to control staff or todevelop them – and that the styleused will determine paymentsystems used and methods ofmotivation adopted
iii.) understand the importance ofmanagement/labour relations.Why people might join tradeunions and the role of tradeunions
� discuss why people need to be“managed”. Explain the role of HRdepartment e.g. workforce planning,recruitment, training, appraisal, jobevaluation
� HR can either be used to control staff(“hard” HRM) or used to develop staffas suggested by Herzberg (“soft”HRM). Probably depends onleadership style and corporate culture
� explain the role of trade unions – userecent newspaper articles if TU’s existin own country. Should managersencourage union membership?Students should be able to discussadvantages and disadvantages
� use role play of dispute between TUand employer e.g. pay or discipline ofstaff. Ask group to discuss the issuesinvolved
� Stimpson: Chapters 18 and19. Activities such as:Cameron Sweets, SelectCollege, GNER, Kenyanbreweries and revisionexercises on page 307
� Barratt and Mottershead:pages 531-532
� Jewell: Chapter 44
� 9707/1 June 2003 Q3
www.tt100.biz (Edition 8) has aCase study on training : ‘Audi:investing in people’.
Same web site as above but thistime a case study on trade unions:UNISON: Trade Unions dealing withchange.
Try any trade union web site e.g.www.tgwu.org.uk orwww.tuc.org.uk. This site has agreat deal of information on UKemployees employment rights andcurrent employment issues.www.ilo.org. is the site of theInternational Labour Organisation
iv.) evaluate the role of trade unionsincluding single union deals andno strike deals
v.) analyse methods of disputesettlement; reasons for labourlegislation and the advantages ofcollective bargaining
vi.) analyse and evaluate themethods and usefulness of jobevaluation
vii.) analyse potential health andsafety problems in the workplaceand evaluate the need forlegislation
viii.) evaluate different trainingmethods and the importance oftraining for a flexible workforce.Understand why some firms donot spend much on training staffe.g. fear of losing them to otheremployers
� discuss the impact on business ofsingle unions/no strike deals
� impact of employment legislation onbusiness and employee/employerrelations – use local countryexamples.
� discuss whether firms should beconcerned about health and safety –should they just do the absolute legalminimum? How does the school meethealth and safety laws?
� explain reasons for training, methodsand why some firms do not train
� students could try a job evaluationexercise on three different jobs withinthe school. advantages anddisadvantages of this technique
Recommended prior knowledge: None – but some students may have covered some of these topics at IGCSE. The issues and concepts are introducedassuming that there is no prior knowledge.
The unit in context: This Unit introduces production related issues. The impact that decisions made in other departments have on Operations needs to bemade clear e.g. a marketing campaign may well require an increase in output. Similarly, the effect that Operations Management decisions can have on otherfunctional areas must be stressed e.g. the use of computer operated machinery and the impact on human resources and training needs.
Outline: The Unit covers the main areas of Operations decision making such as location, production methods, costing methods and stock managementsystems. There is some numerical work but the more complex examples are only covered in the additional work for A level.
i.) understand that production isabout converting inputs tooutputs and adding value inthe process
ii.) recognise that local labourmarket conditions may act asa constraint on productiondecisions
iii.) understand the concept ofproductivity and how thisaffects unit costs.
iv.) understand the importance ofthe location decision for newand existing businesses
v.) evaluate the relativeimportance of certain factorsin influencing the locationdecision.
� a well organized factory visitwould be an ideal starting point.There is also a case to be madefor arranging this towards the endof this Unit when students havegained a good understanding ofthe theories involved. Two visitsallowing comparisons betweenjob/batch and flow productionwould be ideal.
� contact with local firms and shopsto discover reasons for location inthe area. Case study exercisecould be drawn up with twodifferent locations for onebusiness and groups asked toargue for one location or another.
� class notes or photocopiednotes needed.
� Stimpson: Chapters 20 and22 and activities on Westlifejeans, Motorola, Germanefficiency.
� Barratt and Mottershead:Units 23 and 24 and casestudy on page 282
� Jewell: Chapter 35
� 9707/1 Nov 2002 Q7
� use the general websites referred toin the introduction for details of notesand activities in the OperationsManagement area.
� for location try government web sitesto investigate incentives available forbusinesses to locate in a country e.g.www.investinspain.org ;www.economy.gov.eg ; andwww.saudinf.com .
� contact employment agencies todiscover local labour marketconditions. Are there shortages oflabour that could be restrictinggrowth of local firms?
� simple numerical examples oflabour productivity and impact onunit costs should help to drivehome these points.
� students own work experiencemight be useful to allowdiscussion of the nature ofproduction.
vi.) analyse the productionprocess from Research andDevelopment through to thefinal product.
vii.) analyse the differencesbetween capital and labourintensity and justify theappropriateness of each indifferent circumstances
� refer back to Research andDevelopment section in Marketing.Why does Research andDevelopment sometimes fail?Students need to be able toevaluate whether Research andDevelopment spending is alwaysbeneficial.
� ask for examples of differentindustries – service industriesoften labour intensive – studentsshould be able to explain why.
� www.Ford.com gives details of theFord Motor Company’s use ofinnovation
i.) understand how work studymight be introduced and thepossible benefits of it
ii.) recognise the differentmethods of production e.g.job,batch,flow
iii.) understand the concept ofcapacity utilization andcalculate it from given data.
iv.) define and recognize differentclassifications of costs andunderstand the need foraccurate cost data
v.) understand the concept ofbreak-even and calculate itusing formula and construct asimple break even chart
� this section of the Unit containskey issues and will take up a gooddeal of time
� simple exercise in class of timingstudents performing a task – andtrying to suggest an improvedmethod of doing it.
� explain the 3 main types ofproduction but also refer to recenttrends in cell production and masscustomisation. A simpleproduction game in class candemonstrate the essentialdifferences between theproduction methods.
� numerical examples of capacityutilisation – and the implicationsto a business of operating at fulland less than full capacity (use theschool as an example).
� cost classifications need to beexplained carefully – studentsshould be able to come up withown examples (again taken fromschool?)
� Stimpson: Chapter 20,21 andstart of 22. Activities onSunburst bakeries, Cessnaaircraft, Windcheater, Heathelectronics, Onyx garages,Bureau office supplies,,Cosmic cases, MidtownHotel. Try revision exercisesat end of these chapters too.
� Barratt and Mottershead:Units 27 and 42. case studieson pages 317 and 489.
� Jewell: Chapters 33 and 38and exercises at end ofthese.
� 9707/2 Nov 2001 Q2(a) andQ2(c)
� 9707/3 June 2002 Q(d)
� 9707/1 Nov 2001 Q6
� 9707/2 June 2003 Q2(b)
� 9707/1 June 2002 Q7
� IGCSE CD-Rom for productionactivities.
� the break even topic at www.osl-ltd.co.uk might be useful or try thegeneral web sites referred to in theIntroduction.
vi.) scale of Operation � discuss how less than full capacitycan cause problems for thebusiness and evaluate ways ofdealing with this problem.
vii.) understand the principles ofeffective stock managementand be able to describemethods of stockmanagement such as JIT
� explain the idea of break even andits importance. Simple charts –students need to be able to drawup and amend these withadditional information. Give asmany examples as possible wheredifferent charts can be drawn onthe basis of two decision options.Students should be able toanalyse charts to help makedecision. The advantages anddisadvantages of this techniquemust be explained and noted.
� discussion on costs and benefitsof high stock levels for differenttypes of businesses
viii.) Evaluate the appropriatenessOF production methods indifferent situations
ix.) evaluate ways of increasing afirm’s capacity utilisation
x.) understand costing methodsand do calculations based onthese.
xi.) evaluate absorption andcontribution costing.
� use knowledge of productionmethods to evaluateappropriateness in differentproduction situations.
i.) understand the causes andsignificance of economies anddiseconomies of scale
ii.) understand the principles oflean production and whygreater productive efficiency isso important.
iii.) suggest ways in which leanproduction might beimplemented.
� after defining and explainingstudents should be able to think ofexamples taken from, say,retailing or the school. Importantnot to overlook diseconomies –what happens when schoolbecome too large?
� lean production – this could havebeen experienced in the factoryvisit. Notes on what the principlemeans and how it might beachieved in practice. Theimportance of competitiveness intoday’s world needs to bestressed. Link in with Peoplesection as changes in Ops Manstrategies will always have“people” effects.
� Stimpson: Chapter 22 and 23.Activities include Bookworm,Nassau Textiles, Sportswize,Nissan, Haisho and Kaizen.
� Barratt and Mottershead:Units 28 and 30 and casestudies on pages 327 and348.
i.) explain the main methods ofquality control and explain theimportance of quality to abusiness.
� ask for definitions of “quality” – why doesit not always mean the “best possible”.
� how would students like to have thequality of their work checked – by controlmethods or self checking?! Discussproblems of poor quality.
� Stimpson: Ch.24 andactivities on TrinidadTractors, CaribSugar, Defectsat Wheelers.
� Baratt and Mottershead: Unit29 and case study page 336
� Jewell: Ch. 37 and essayquestions on page 441(mainly for class discussion).
� 9707/1 Nov 2001 Q3
� www.piqc.com.pk is the website for the Pakistan Institute ofQuality Management. Itcontains details of courses thatit runs and case studies ofquality management inbusiness are available if you e-mail them.
ii.) analyse and evaluatecontinuous improvement,Total Quality Management,quality assurance standardsand benchmarking.
� the modern approaches to quality canbe tied in with HRM – empowerment andcell production are often linked to TQM.
� factory visit would be helpful for thissection.
� discuss how the school might“benchmark” its performance against thebest in the sector.
e) Production planning
Students should be able to:
i.) understand the need forplanning of time andresources in the productionprocess
ii.) draw and interpret simplenetwork diagrams (CriticalPath Analysis)
iii.) calculate and interpret activityfloat times.
� ask students to list the activities involvedin a simple task e.g. making a cup ofcoffee. Draw up these activities into asimple network
� move on to more complex examplesexamining the uses of the technique e.g.identifying critical path, non criticalactivities and allocating resources moreefficiently.
� explain how EST and LFT are obtainedand explain float times. Calculations ofthese are essential (simple only)
� Stimpson: Chapter 24 andactivities on pages383,385,387.
� Barratt and Mottershead: Unit31 and case study on p 360(Note: Gantt charts arecovered in this book but arenot required on this syllabus)
� Jewell: Unit 40 and exercisesate end of chapter.
Recommended prior knowledge: None – but some students may have covered similar material at IGCSE.
The unit in context: This unit deals with the need for business finance and the main sources of it. Finance is central to business activity and the ability toraise capital from appropriate sources at different stages of a firm’s development and growth is one of the key determinants of a successful business.Although the material covered is very different from previous units there is a constant requirement to refer to the other functional areas of business and stressthe role that adequate finance plays in successful marketing, operations management and so on. There are clear links between Business Finance and Unit 6,Business Accounting.
Outline: This is quite a short unit but the concepts it contains are very important to understanding the importance of finance and the need to raise it fromappropriate sources. The significance of liquidity to a firm’s survival and growth needs to be made clear. The importance difference between profit and cashneeds to be emphasized from the outset. The three parts of this unit comprise: The need for business finance, sources of finance and money and capitalmarket institutions.
i.) analyse the need for financeduring start up and growthstages of a business.
ii.) understand the differencesbetween revenue and capitalexpenditure – and that eachrequire different sources offinance.
iii.) analyse the meaning andimportance of working capitaland the factors that determinethe amount of working capitalrequired by a business
� business finance can be effectivelytaught through the means ofsimulated businesses “created” bythe students. The Young Enterprisescheme is excellent. Starting up andoperating a simple trading business –even just making and selling cakes –can drive home the need for bothfixed and working capital. This couldthen be extended into Unit 6 with thekeeping of simple accounts for thebusiness. Encourage students to“learn by doing” in this Unit and thenext Unit, in particular.
� Stimpson Chapter 25.Exercises such asDirectphone, Domino’s and“Going exclusive with ice-cream” plus share issueexercises on Easyjet andFibernet. Revision questionsP406.
� Barratt and Mottershead :Chapter 40 (Case Studies atend of chapter useful butrequire accounting knowledgenot yet covered).
The teaching of this Unit and Unit 6 willbe aided greatly by referring to actualcompany accounts. These will beavailable from companies’ own sites.Investigate accounts of twobusinesses to identify finance sourcesused – particularly a high geared and alow geared company. Trywww.carol.co.uk andwww.londonstockexchange.com. Useyour own Government sites toinvestigate financial support forbusinesses.
� revenue and capital spending –discuss by asking for as manyexamples as possible from studentsusing the school/college as anexample.
� small groups of students creatinglarge posters of the working capitalcycle for a business of their choice
� Jewell: Chapter 29. Beselective about end of chapterquestions – some requiredetailed accountingknowledge.
� 9707/1 Nov 2001 Q 3
� 9707/1 June 2003 Q4
iv.) understand the significance ofthe difference betweenrevenue and capitalexpenditure
v.) analyse and evaluate ways ofmanaging working capital – thecontrol of working capital
� at A level the significance of thedistinction between revenue andcapital spending can be madeeffectively after dealing with profitand loss accounts and balancesheets in Unit 6 – these two types ofspending have different effects onthe final accounts.
b) Sources of capital
Students should be able to:
i.) understand the main sources /types of short and long termbusiness finance, both internaland external
ii.) analyse the advantages anddisadvantages of these .
� a well planned visit and talk from abank manager/official can workeffectively especially if linked to casestudies or simulations. If “YoungEnterprise” type businesses are setup then ask the bank manager tojudge the business plan and decidewhether to lend or not to eachbusiness
� large posters of sources of finance,short/long term and internal/externalcan be kept in class and act as auseful revision source.
� as above plus 9707/2 June2001 Q2c; 9707/3 Nov 2002Qc;
� try leading banks for details oftheir interest rates tobusinesses and financialservices to industry.
Use bank web sites to discoverfinancial options for industry e.g.www.natwest.co.uk andwww.barclays.co.uk. Use own countrynewspapers for articles on businessesraising finance e.g.www.brecorder.com (Pakistan);www.buenosariesherald.com(Argentina); www.bangkokpost.com(Thailand); www.lexpress-net.com(Mauritius).
iii.) evaluate these sources offinance and makerecommendations of suitablefinance to meet particularbusiness requirements
iv.) analyse and discuss thefactors that influence thefinance decision
� past paper 3 case studies can beused as business scenarios.Students can be asked to suggestthe most suitable sources of financefor each business, assuming it isplanning to expand
c) Money and Capital market institutions
Students should be able to:
i.) understand the functions ofbanks and specialist lendinginstitutions.
ii.) understand the functions of theStock Exchange
� newspapers can provide usefulsource material – articles on financeand institutions as well as adverts forbanks and specialist lendingagencies. Students need to questionwhy there is such a range ofinstitutions and their functions.
� as above Try bank sites pluswww.londonstockexchange.com andhttp://www.worldbank.org
iii.) analyse the role of the WorldBank and InternationalMonetary Fund as sources offinance especially indeveloping economies
� simple treatment only required – noneed to go into great detail onstructural adjustment programmesetc. Students could do own researchon internet.
Recommended prior knowledge: None concerning accounting but it is assumed that students will have already covered Unit 5. Students who are alsofollowing Accounting AS/A level may have an advantage in certain sections of this unit. However, this will not be great as the Business Studies coursefocuses not on accounting concepts and double entry bookkeeping problems but on the analysis and use of accounting information to assist managers inmaking business decisions. A level students should be encouraged to question the possible reasons why published accounts might not provide a complete orentirely accurate measure of company performance.
The unit in context: This unit provides important coverage of how accounting information – mainly in the form of final business accounts – can be of use tomanagers in controlling a business and in decision making for the future. Using accounts to assess the performance of the business can lead to importantdecisions which may well impact on the other functional areas of business such as marketing and operations management.
Outline: The unit does not focus on bookkeeping but on the final accounts of businesses – mainly limited companies. No specific questions will be set on soletrader or partnership accounts. The unit gives considerable weight to the interpretation and analysis of these final accounts. In addition, there are sectionsthat cover cash flow forecasting, budgeting and investment appraisal.
Learning Outcomes Suggested Teaching and StudentActivities
Resources Online Resources
a) The need for business accounts
Students should be able to:
i.) understand the maininternal and external usersof accounting information
ii.) analyse the uses to whichthis accounting data mightbe put by different users
iii.) understand the maindifferences betweenfinancial and managementaccounting
� start at the end! By using copies of plcpublished accounts, students can get areal feel for the depth of informationavailable and can usually suggest whomight find it useful and why. Avoidsetting challenging tasks at an earlystage, though.
� ask “why would these publishedaccounts be of little use to managersof the business?” This leads todiscussion of management accounting.
� if a student business was set up in Unit5 use this opportunity for students topresent simple accounts for theenterprise.
b) The foundations of accounting (not a core item)
Students should be able to:
i.) understand the significanceof the main accountingconcepts and conventions(no complex or numericalquestions will be set onthese)
� keep this simple – straightforwardexamples of how each concept appliesand why. Only use the simplest ofnumerical examples – examinationquestions will not test these areasnumerically.
� Stimpson Chapter 26
� Barratt and MottersheadChapter 33
c) What the published accounts contain
Students will be expected to:
ii.) understand the purposes andstructure of profit and lossaccounts and balance sheets
iii.) understand the main assetand liability categories onbalance sheets
iv.) understand the layout andmain headings of simpleprofit and loss accounts
v.) understand the purpose ofdepreciation provisions onaccounts and calculatedepreciation using thestraight line method
� if published accounts have not yet beenused then they should now beintroduced. Careful (simple) explanationsof the main accounts will be needed toavoid “information overload” especiallyfor non-numerate students.
� show students the main section of thesetwo main accounts – they may differslightly from company to company soteachers should make sure they canexplain the link between the textbookexamples and the published accounts, ifthese exist.
� depreciation best taught by referring toschool/college fixed assets. Ask studentsto discuss what would happen to theaccounts if these were not “depreciated”.
� Stimpson Chapter 27 and allthe activities and exercises itcontains.
� Barratt and MottersheadChapters 35 and 36 andmini case studies on PP400and 413
� Jewell Chapters 24 and 25
� 9707/2 Nov 2001 Q2 a andb.
� 9707/1 Nov 2002 Q4a)
� 9707/1 Nov 2001 Q7
� 9707/1 June 2002 Q4
Use published accounts fromcompanies’ own web sites.
http://web.utk.edu/_jwachowi/wacho-world.html This is a superb site forlinking to financial information,spreadsheets, OHP’s and links to mostsites dealing with finance and accounting(US).
vi.) make simple amendments toexisting balance sheets andprofit and loss accounts
� no substitute for working through simpleexamples of accounts and how they areamended resulting from simpletransactions such as purchase of stocks,
vii.) draw up simple balancesheets and profit and lossaccounts from given data
viii.) understand the purpose ofcash flow statements and themain contents
ix.) calculate depreciationprovisions using thediminishing balance method
x.) understand the differencesbetween the two depreciationmethods and evaluate thesetwo methods.
xi.) understand what goodwill is,how it arises and how it isdealt with in publishedaccounts
xii.) understand that valuation ofstocks may be adjusted bynet realizable value.
depreciation etc.
� give simple structure to cash flowstatement and discuss what it shows andhow users would find it useful.
� go back to previous depreciationexamples and work through usingdiminishing balance method – askstudents to note differences to annualdepreciation charge and net book value.Students should be able to discusswhen firms would use one method ratherthan the other.
� simple examples of both goodwill andnet realizable value – can refer back toaccounting concepts and conventions.
d) Analysis of published accounts
Students should be able to:
i.) recall the main profitabilityand liquidity ratios
ii.) calculate these from givendata
iii.) analyse / evaluate results ofthese ratios and evaluateways in which they might beimproved for a givenbusiness.
� it must be made clear to students thatthere is no “right” or “wrong” result forratio calculations. Interpreting resultscarefully is almost more important thanaccurate calculation. Results must beassessed in terms of past results, resultsof other businesses, current externalenvironment and the objectives of thebusiness.
� Stimpson Chapter 28 andexercises “How is mybusiness doing?”, ICI, HabibManufacturing and BurtonPaper . Revision questionsP442
� Barratt and MottersheadChapter 38. Mini case studyon P 445.
Use published accounts – makecomparisons between businesses in thesame industry e.g. supermarkets orpharmaceutical companies such as:
SmithKline Beecham which makes itsAnnual Report available in “TheCompany” section. Financial highlightshave been clearly represented using barcharts and financial ratios look atprofitability, gearing and dividend pershare - www.sb.com and compare withGlaxoWellcome at
iv.) recall financial efficiency,gearing and investor ratios
v.) analyse / evaluate results ofthese ratios and evaluateways in which they might beimproved for a givenbusiness
vi.) analyse businessperformance by using trendanalysis and inter firmcomparisons.
vii.) evaluate the usefulness ofratio analysis
� ratio formulae need to be noted down bystudents and the meaning of each resultmade clear.
� practice at calculations is essential – butso is careful interpretation of results andsuggestions for “remedial” action ifneeded.
� encourage students to make linksbetween ratios e.g. how can gross profitmargin be increasing yet net profitmargin falling?
� the usefulness of ratio analysis shouldnot be overstated and students shouldbe able to judge the significance of it indifferent situations. Encouragediscussion on why ratios do not providea “complete picture” of a firmsoperations/performance.
� Jewell Chapter 27 and endof chapter exercises.
� 9707/3 June 2002 Qb
� 9707/2 Nov 2001 Q2b.
www.glaxowellcome.co.uk
Published accounts of UK listedcompanies may be ordered fromhttp://ft.ar.wilink.com
e) Investment appraisal
Students should be able to:
i.) understand the meaning ofinvestment appraisal and theneed to forecast cash flows.
ii.) recognise the difficultiesinvolved in forecasting futurecash flows
iii.) calculate payback period andunderstand/analyse results
iv.) calculate average rate ofreturn andunderstand/analyse results
� investment must not be confused with“savings” – it is spending money forfuture returns. The basic idea of profit iseasy for students to grasp. Speed ofreturn (or payback) needs to beexplained carefully with the help ofsimple examples. Choose two projectswith different cash flows – one withhigher ARR and the other with quickerpayback. Debate with students which isthe “better” project. This is a useful wayof introducing the need for discounting(NPV and IRR).
� Stimpson Chapter 29 and allactivities within the chapterplus “Investing to staycompetitive”. Revisionquestions Page 455.
� Barratt and MottersheadChapter 39 and mini casestudy P 456
� Jewell Chapter 30 and endof chapter exercises.
� 9707/2 June 2003 Q2c
� 9707/3 Nov 2002 Qb.
Use examples from the general businessstudies sites given at the start of thesecheme of work e.g. www.bized.ac.uk.
v.) understand the qualitativefactors that could influenceinvestment decisions
.
� use actual examples of recentinvestment decisions to discuss theother factors – non financial – that couldhave influenced the final decision.
� 9707/2 June 2002 Q1c.
� 9707/2 June 2001 Q1c.
vi.) understand the concept ofdiscounting future cash flows
vii.) calculate net present valueand understand/analyseresults
viii.) identify internal rate of returnfrom a net present valuegraph andunderstand/analyse results.
� allow students to gain practice at usingdiscount factors to calculate NPV. Do notspend too long on IRR – a simpleunderstanding is sufficient.
f) Managing cash flows
Students should be able to:
i.) understand the importance ofcash flow to a business – andwhy it is not the same asprofit
ii.) understand the purpose andconstruction of cash flowforecasts
iii.) understand how cash flowmight be improved for abusiness
iv.) evaluate ways of improvingthe cash flow of a business.
� cash flow is something all studentsshould have experience of! Stress theimportance of cash/liquidity for businesssurvival. Give simple examples toexplain the difference between aprofitable transaction and one that leadsto a positive cash flow.
� let students gain experience ofconstructing and amending simple cashflow forecasts. Ask them to debate theusefulness of these (useful to whom andhow useful?)
� ask for suggestions as to how forecastnegative cash flows might be reversedand discuss the possible drawbacks toall of these option in different situations..
� Stimpson Chapter 30 andactivities “Tourist Trinkets”and “Setting up in business”.Revision questions P 467.
� Barratt and MottersheadChapter 34 and mini casestudy P 390
� Jewell Chapter 28
� 9707/2 Nov 2002 Q1b
� 9707/3 June 2002 Qb
� 9707/3 June 2003 Qc
Use general business studies web sites.IGCSE CD Rom.
i.) understand the purpose ofbudgets and theadvantages of budgeting
ii.) analyse variances frombudget in terms of adverseand favourable (notprice/volume analysis).
� stress the difference betweenbudgets and forecasts. Whyshould budgets be establishedand what purposes do they have?Use college/school examples ofcost/profit centers that could havebudgets set for them. What wouldbe the benefits of staff beinginvolved in setting these budgets?
� reviewing performance – simplevariance analysis should be usedto identify the major reasons whyactual performance differs fromplanned.
Recommended prior knowledge: It is assumed that this is the last unit to be studied and students will then benefit from having understood the issuesinvolved in the collection of marketing and other data.
The unit in context: Decision making is the key to successful business operations. It would be inappropriate to consider all decision making techniques atthe end of the course so several important topics in this unit have already been considered earlier in the specification such as critical path analysis (Unit 3 ofthe Scheme of Work) and investment appraisal (Unit 6). Other material in this unit could also be taught within the schemes for other units e.g. presentation ofinformation would fit in well after the section on market research (Unit 2 of the Scheme of Work).
Outline: Business managers make many tactical and strategic decisions. This unit covers the information needed to take effective decisions and thetechniques that can be adopted to improve the quality of decisions.
Learning Outcomes Suggested Teaching and StudentActivities
Resources Online Resources
a) Sources and reliability of information
Students should be able to:
i.) make references to the mainnational and internationalsources of information.
ii.) understand the likely limitationsand possible unreliability of suchinformation sources.
� this could be taught at the same timeas market research data sources (SeeUnit 2 of the scheme of Work)
� the limitations of national andinternational sources of data e.g.economic data, are those that relate toall secondary data.
� stress that using such data as a basisfor business decision making ispotentially risky and businesses shouldalso plan for other eventualities.
� Stimpson Chapter 31pp474/475
� Barratt and MottersheadChapter 12
� Jewell Chapter 15
Refer back to market research sitesin Unit 2 of the Scheme of Work.
b) Collection of information
Students should be able to makereference to the techniques of marketresearch referred to in Unit 2 of theScheme of Work
i.) interpret and construct the mainforms of numerical datapresentation
ii.) evaluate the effectiveness ofeach of these methods of datapresentation
� best introduced by using examples ofpublished statistical data anddiscussing how it has been presented– and whether these are the mostappropriate ways. Students will gainfrom some experience in using thesetechniques but do not spend too longon this. Perhaps, if a class project hasbeen undertaken on starting a smallbusiness then the market researchdata collected for this could bepresented in a variety of suitable ways.
� Stimpson Chapter 8 andChapter 31.
� Barratt and MottersheadChapter 13
� Jewell Chapter 5
Use newspaper articles that containstatistical data to show how it should(or perhaps should not) bepresented. The Financial Times website, www.ft.com is very useful buttry own country papers too.
d) Data analysis and evaluation
Students should be able to:
i.) calculate the mean, mode andmedian from ungroupedfrequency distributions
ii.) calculate the mean from groupedfrequency distributions
iii.) analyse and evaluate the use ofthese measures of centraltendency in given situations.
� straightforward calculations will berequired here – and, just asimportantly, the results should beanalysed and interpreted from abusiness viewpoint. Stress theusefulness or possible limitations ofthese measures of average.
� Stimpson Chapter 31 andActivity on p479. Revisionquestions p488.
� Barratt and MottersheadChapter 14 and mini casestudy p157.
� Jewell Chapter 5
Use general business studies websites for examples and exercises.
Cost benefit analysis could beconsidered descriptively by studyingany major investment e.g. a publicsector investment in roads orairports, and analyzing the widerconsequences. Use newspaper sitesor Government sites for information.
iv.) construct simple decision trees.
v.) calculate expected values fromdecision trees
vi.) evaluate this technique
� keep decision trees simple – sometexts go into too much detail for thisspecification. Students should be ableto construct a tree from data given.
vii.) understand the purpose of costbenefits analysis and undertakesimple cost benefit analysis fromgiven data
viii.) use linear programming(blending) model to answersimple resource allocationproblems.
ix.) evaluate both cost benefitanalysis and linear programming(blending) techniques.
� the importance of combiningprobability and economicoutcomes/payoffs is crucial.
� spend some time on evaluating thistechnique – students should notaccept the results it gives as being a100% guideline for business decisions.
� introduce cost-benefit analysis bylooking at a major (possibly publicsector) investment project. Discuss thedistinctions between private andexternal costs and benefits.
� simple blending exercises todemonstrate how the technique can beused to help identify the optimum useof limited resources.
� as always, students should be able tojudge and weigh up the usefulness ofboth cost benefit analysis and theblending technique.
