CAMBRIDGE INTERNATIONAL AS & A LEVEL BUSINESS: TEACHER’S RESOURCE

c
Learners’ answers should include development of any two of:
• These policies should ensure that CS recruits from the widest possible range of potential
employees. Therefore, the best workers can be recruited.
• People who come from different backgrounds can add new experiences, talent and skills to the
workforce. Diversity creates more innovative business outputs. By contributing different ideas,
a diverse team can generate more creative solutions to problems.
• When a business introduces people into teams with different social, geographical and cultural
backgrounds, it gets a new knowledge base for potential new markets.
d Negotiating pay and conditions is easier and less likely to result in conflict. CS introduced flexible
working with the support of trade union officials. This change helps CS control costs and remain
competitive. Cooperation resulted in improvements being made to employee welfare and this
helped improve morale, which should lead to an increase in productivity. A culture of cooperation
between management and the trade union was significant in ensuring that the dismissal of the
three workers did not result in industrial action.
Evaluation could include the view that well-motivated employees and good cooperation between
the union and management will provide a good foundation for business success in a competitive
confectionery industry.

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 CAMBRIDGE INTERNATIONAL AS & A LEVEL BUSINESS: TEACHER’S RESOURCE

Exam-style questions and sample answers have been written by the authors. In examinations, the way marks are awarded may
be different.

Coursebook answers
Most of the answers are in ‘outline’ form indicating the appropriate points and skills that learners need
to include in their answers. They provide the necessary guidance to allow learners to develop and extend
the points for a fuller answer that contains the relevant skills. In many instances, there may be other valid
approaches to answering the question.

Chapter 11
Business in context
Learners’ discussion might include:
• People’s needs: income; friendship; satisfaction; achievement.
• Different needs: cultural differences; differences in living standards between countries; level of
unemployment differences between countries.
• Recognition: learners’ own answers.

Activities
Activity 11.1
1 Learners’ answers will vary, e.g. sense of belonging; social needs; achievement and involvement, which
helps satisfy esteem needs.
2 Learners’ answers will vary, e.g.:
• Low labour turnover, which helps to create customer loyalty.
• Lower recruitment and selection costs so the business is more competitive as a result, which is
important in this market.
• Better customer service, which is important in a fresh food store where customers expect rapid and
efficient service.

Activity 11.2
1 Maria’s esteem needs appear to be met as she feels appreciated by the firms she works for.
Asif’s social needs are met through the group of friends he works with. Esteem needs are not met as he
does not feel appreciated.
Imran is keen to find a more permanent job. This indicates that his safety needs have not been met.
Therefore, he is on the physical needs level of the hierarchy.
2 Herzberg’s two-factor theory identifies two sets of factors related to motivation. Firstly, hygiene factors
have the potential to cause dissatisfaction and are therefore related to labour turnover. However,
hygiene factors do not motivate employees; these factors include job security, wages and conditions
at work. Motivators are those factors that motivate the individual and these relate to responsibility,
opportunities for promotion and achievement.

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Currently many hygiene factors are present for Asif in the shop. He has a good relationship with his
colleagues and is pleased with his pay. To motivate Asif, a manager could:
• Increase his level of responsibility (e.g. give him the task of arranging the shop displays).
• Provide training to enhance his skill level. Training would also prepare Asif for the possibility of
promotion, another motivator according to Herzberg.
• Job enrichment. This involves making a job more challenging or rewarding. This could involve
the shop providing Asif with a range of roles and activities within his job (e.g. mentoring newer
workers or being involved in induction training).
• Empowerment. This could include giving Asif the right to take decisions that affect his working
life (e.g. making decisions over how and when work is done).
• Job rotation could be used to give more variety to Asif’s work. However, switching between a
variety of boring tasks does not necessarily make the job more interesting than performing one
boring task.
• Offering a clear career path so there are opportunities for promotion. Asif would like
responsibility for deciding what stock should be sold. He would need to gain experience and might
need training before he could be given such a role.

Activity 11.3
1 Herzberg’s motivators include sense of achievement, recognition, responsibility, promotion
opportunity, interesting work. These link to the comments regarding need for feedback, control over
work and job enrichment.
Vroom believed individuals have different goals, the value of the goal to the individual affects
motivation, people act to achieve their goals if they believe they’ll succeed. This links to the view that
people want leaders to provide clear expectations, structure and appropriate rewards if expectations
are met.
McClelland identified three types of motivational need found in workers and managers:
• Achievement motivation – feedback is needed and job advancement is important. This links to the
view that people want the opportunity for growth and development.
• Authority motivation – the desire to control others and to be influential. This links to the desire to
be given responsibility.
• Affiliation motivation – the need to be liked and held in high regard. This links to teamworking
and recognition for achievement.
2 To improve motivation of teachers, a principal could ensure that there is the following:
• A clear career path identified in the organisational structure (e.g. head of department, head of
faculty, vice principal, principal).
• Involvement in decision-making through consultation and staff meetings.
• Teamwork in departments.
• Freedom to deliver course content without interference from management.
• Professional development training.
• An appraisal system in place.
In evaluation, it could be suggested that these ‘motivators’ might not be sufficient, on their own, to
improve teacher motivations. It is also necessary to have good working conditions and pay to retain
teachers in the long term.

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Activity 11.4
1 Commission-based – % paid on sales. Appropriate for sales staff as reward is directly related to their
sales performance.
Performance-related pay (PRP) – lump sum for achieving a target. Motivates managers to meet targets,
involves coordinating resources effectively, increases overall efficiency.
2 Shop workers – hourly rate: number of hours per week will vary; fair system, the more hours worked,
the more hours paid. Relatively junior members of staff are likely to be motivated by money. Plus
commission – % commission on each sale made, encourages good customer service, increases sales.
However, pushy salespeople may annoy customers.
Shop managers – salary: expected to work additional hours at no extra pay if necessary to complete
the job. Plus profit-sharing scheme – meets esteem needs (Maslow), strives to achieve business
objectives, rewards for position.

Activity 11.5
1 Learners’ answers will vary, e.g.:
• Supply of suitably experienced and qualified recruits will be very different for these two jobs.
• There is a need to attract the right type of recruit for the management post so the financial and
non-financial benefits must be competitive.
• Other driving vacancies may offer similar pay and benefits to those offered in this advert.
2 Financial rewards offer the job holder the ability to satisfy physical needs; esteem; recognition for
important work. Financial rewards are necessary for employee motivation; Maslow and Herzberg
(hygiene factors).
Evaluation could include an assessment of whether financial rewards will be sufficient to motivate
people to do these two jobs well, but not according to Herzberg. In addition, some evaluation is
possible about whether ‘motivators’ are sufficient and how these could be incorporated into both of
these jobs to increase the chances of motivation.

Activity 11.6
Learners’ own answers.

Activity 11.7
1 Learners’ answers will vary, e.g. Maslow: physical needs – high salaries; safety/security needs – working
for a large, stable and growing business; social needs – opportunities for group work and meeting
colleagues in non-work situations; esteem needs – being consulted and participation.
2 Yes: employees are a major factor determining competitiveness, e.g. Google and the importance of
creativity and original ideas to keep the business at the forefront of online search engines.
No: in some businesses, the work might be fully automated or very unskilled so the type and skills of
employees are less important than other factors such as availability of the latest equipment.
Overall evaluation is needed, perhaps contrasting different types of businesses.

Exam-style questions
Short answer questions
1 The internal and external factors that stimulate the desire in workers to be continually interested in and
committed to doing a job well.
2 Responsibility and communication, e.g. management consultation and teamwork are more important
for motivation than changes in working conditions and financial rewards.
3 Needs determine actions; meeting needs leads to motivation and motivated workers have
high productivity.

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4 Loss of job security (e.g. a firm reducing the size of workforce).

5 Learners’ answers will vary, e.g. physical needs, where income is sufficient to meet basic needs (e.g.
food, housing, looking after family); esteem needs, including appraisal, recognition, job title, office.
6 Hygiene factors – based around the job, these factors do not motivate but if withdrawn lead to
dissatisfaction (e.g. company policy, pay). Motivators – based around the work, these factors do
motivate (e.g. achievement, responsibility).
7 Movement may make someone do a job but will not create a sense of want or pride. Motivation will
make a worker want to do a job and want to do it well.
8 Learners’ answers will vary, e.g. complete units of work – contribution identified and further challenge
offered; direct feedback on performance – awareness of progress; challenging tasks – gaining status
and recognition.
9 Achievement – workers need realistic and challenging goals; achieving these leads to a sense of
accomplishment; it is a common characteristic in business people, important to motivation.
10 Content theories focus on the inner needs of individuals as a source of motivation. Process theories
focus on how and why people choose behaviours to meet needs.
11 Learners’ answers will vary, e.g. basic needs – sufficient to meet essential needs; safety needs – ensured
regular and predictable payments; esteem needs – tends to be paid to managers.
12 Benefit: acts as a motivator as it can encourage hard work and loyalty because the success of the
business leads to higher profit bonuses for employees.
13 Job rotation: workers gain greater variety by switching between same-level jobs. Job enrichment: in
contrast, when workers gain a greater sense of achievement by completing more challenging jobs and
using a full range of skills.
14 Social needs are more easily met by working in teams, which helps to encourage a group spirit
amongst workers.
15 Autocratic managers will not encourage participation or teamwork, so emphasis will be on pay and
possibly threats of removing job security if work is not done to a certain standard.
16 The measurement of performance is always a major difficulty with performance-related pay. Learners
should discuss whether teachers should only be paid on results and how results should be measured for
teachers who do not teach exam classes.
17 Customers of a high-quality clothing shop will expect polite and well-informed sales staff who have
been well trained. Low motivation will mean the customer experience is poor and customer loyalty is
likely to be low, damaging brand image.
18 Learners’ answers will vary, e.g. close supervision – automated production lines; specialism – small
tasks carried out repetitively in mass production; piece rate – highly competitive, increased productivity
resulting in lower unit costs.
19 Piece work can encourage hasty and careless work, which means passing on faults to the next person
on the production line, leading to low quality.
20 Learners’ answers will vary, e.g. sharing ideas and expertise, leading to improvements to the product or
process; meeting social needs and overcoming monotony at work, leading to greater productivity.
21 A pension scheme linked to length of service which will encourage experienced senior managers not
to leave.
22 Learners’ answers will vary, e.g. ideas from employees on how to cut down on wastage; workers aware
of busy times so can help plan food production in advance.
23 Pay based on sales per employee, which can encourage better attention to customers and their needs.
Employee can also upsell (e.g. adding on the sale of accessories, warranties), therefore commission is
also appropriate for motivation.

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Essay questions
1 a
Herzberg’s two-factor theory. Employees are motivated by motivating factors (e.g. achievement
and recognition) but not by hygiene factors (e.g. company policy and salary). However, if the
hygiene factors are removed, it would lead to dissatisfaction.
Job enrichment is a major change that managers can introduce to improve employee motivation.
Learners should explain how the three elements of job enrichment can raise motivation levels.
b Learners’ answers will vary, e.g. Taylor. Selecting the right people for the job is still very important
even in automated manufacturing (e.g. software engineers); observing and recording employee
performance might not be possible, as automated production lines make measuring output of any
one worker very difficult; establishing the best method for doing a job to increase productivity is
still important to save time and avoid wastage of resources; piece-rate pay system is not widely
used in manufacturing as it can be divisive and individual output is difficult to measure.
Evaluation could consider that, perhaps, no single motivational theorist can provide all of the
answers to HR problems. Many of Taylor’s views have become less applicable in manufacturing as
the expectations of employees have changed.
2 a Learners’ answers will vary, e.g. high levels of productivity help to reduce costs and increase
competitiveness, which is important as there are many computer manufacturers; computer
designers might be key employees to the business so it is important to encourage them to stay with
the business to reduce labour turnover; technological change is rapid in computer manufacturing
so motivated R&D workers are important.
b Learners’ answers will vary, e.g.:
• Learners should explain Maslow’s hierarchy of needs.
• The statement is a Taylorist view of motivation. Taylor (scientific management) believed
that people work only for money. He suggested that piece-rate pay systems were effective in
motivating workers to work more productively.
• Money provides the means for workers to achieve other goals, e.g. money confers status on
employees; provides the means to satisfy material desires.
• Good rates of pay will attract recruits and help prevent dissatisfaction, reducing labour turnover.
• However, most motivational theories, although acknowledging the important role of pay,
suggest that there are other factors that lead to effort. If a car manufacturer wishes to
motivate staff and reduce unit costs of production, non-financial methods of motivation
should be used.
• The human relations approach. Mayo stressed the importance of teamwork and of managers
taking an interest in workers.
• Herzberg’s two-factor theory identified ‘motivators’, such as achievement and recognition,
which motivate workers. He advocated job enrichment to motivate workers.
Evaluation may recognise that, whilst pay remains very important, most theorists and many chief
executives accept that pay is not a sufficient condition to motivate workers.
3 a Financial rewards have a monetary value (e.g. bonus payment and profit share).
Non-financial rewards are non-quantifiable and therefore more difficult to measure (e.g. praise and
self-esteem).
Financial rewards (e.g. bonuses for good service or customer recommendations). Workers are
likely to be young, still looking to be motivated at the lower level of Maslow (basic needs). Non-
financial rewards might be recognition of good work (e.g. certificates of achievement to show good
service and used on CVs); opportunities for progression (e.g. shift leader).
b Learners’ answers will vary, e.g.:
• Taylor. Piece-rate pay may work, but the problem is how to measure output.
• Herzberg. Ensure hygiene factors are adequate but then offer job enrichment, though this will
be more difficult with part-time employees.

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•Mayo. Focus on social needs and teamwork, but this may not be possible in a fast-food
business where quick service is required and one waiter serves each customer at a time.
Overall evaluation could be based on a balance of arguments either between the views of
motivational theorists or between financial and non-financial factors.

Data response questions

1 Telemarketing
a i Quality is not put at risk through working too fast.
ii Payment to a salesperson for each sale made.
b Hygiene factors such as an adequate wage and working conditions are not present, leading to
dissatisfaction, labour turnover and absenteeism. There is also an absence of motivating factors
such as teamwork, as telephonists work at individual workstations.
Lower-order needs are not being suitably addressed. The basic pay is low and therefore
physiological needs are not being met. There is no security of income, as wages depend on the
value of sales being made. There is no opportunity for teamwork, so belonging needs are not
being met. Employees may feel that they are not trusted, as all calls are recorded and monitored by
supervisors, so esteem needs are undermined.
c Herzberg defines job enrichment as ‘giving people the opportunity to use their ability’. Call centres
often have very strict guidelines on exactly how each product should be sold, which reduces the
opportunity for employees to use their ability.
Learners’ answers will vary, e.g.: to provide job enrichment, workers should be given a complete
unit of work rather than a repetitive element of work. At Telemarketing, what is a complete unit
of work? Perhaps telephonists, having discussed a financial product with a client, could have
complete responsibility for preparing the necessary paperwork and following up the sale.
Job enrichment usually involves a reduction in direct supervision as workers take more
responsibility for their own work. At Telemarketing, all of the calls are recorded and monitored
by supervisors, which increases the pressure on employees and does not create an atmosphere of
trust. By reducing supervision, Telemarketing will demonstrate confidence in its employees and this
will increase their level of responsibility. However, given that the selling of financial products may be
heavily regulated, it may be necessary to record conversations to ensure that products are not missold.
Job enrichment would allow telephonists some degree of decision-making authority (e.g. the
opportunity to decide when breaks are taken).
d Learners should evaluate at least two pay methods and apply them to this business. Learners’
answers will vary, e.g. profit sharing:
Advantages: It encourages employees to work collectively and cooperatively in order to increase
profit; it links rewards to the success of the business; by linking the pay of employees to the
profitability of the business, it ensures that employees and employer have the same interest, which
should motivate them to work together.
Disadvantages: Individuals who do not contribute still receive a share of the profit; it reduces
the profit available for investment or for shareholders. In telemarketing, many workers might be
temporary and part-time employees, who might prefer immediate financial rewards rather than
waiting until profit is calculated at the end of each year.
Overall evaluation with justification is required on the most suitable pay methods within this business.
2 Technoloc
a i It helps to satisfy social needs.
ii The annual amount of money paid to workers as monthly payments.
b Lower labour turnover. Only two people had left the business during a 12-month period.
This reduces recruitment and training costs.
Long-term loyalty. The associates were willing to accept the need for difficult changes due to the
recession, including a salary cut and voluntary redundancies.

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 CAMBRIDGE INTERNATIONAL AS & A LEVEL BUSINESS: TEACHER’S RESOURCE

c
Learners’ answers will vary, e.g. any two of:
• The business has a record of discussing changes to production with the teams that are
affected. Associates were involved and consulted in drawing up the proposals. In fact, a group
of associates was appointed to look into how the workforce could adapt to the fall in demand;
thus it was the workers themselves who made the recommendations. Genuine consultation
increases the chances of workers accepting the outcome, as they have contributed to the
decision reached. If associates feel that management has listened sympathetically to their
views they are more likely to accept changes.
• The business was open about the situation it faced and communicated effectively with
associates well in advance of any change. The fall in sales was given to the workers at one of
the regular team briefings.
• The business was prepared to offer a generous redundancy package and promised to rehire
workers if there was an upturn in trading conditions.
• Technoloc has treated its workers fairly in the past; it has always rewarded and recognised
outstanding work. This approach has increased worker loyalty to the firm.
d Learners’ answers will vary. An evaluation of at least two issues is needed, followed by an overall
judgement, e.g.:
Technoloc methods:
• Production is organised on a team-based system.
• All major decisions concerning production are discussed by management with the teams.
• Employees contributed to the plan to cut costs.
• Teams have responsibility for assembling a significant part of the product.
• Workers are rewarded and recognised for outstanding work or contributing ideas.
• Supervisors assist production rather than observing or giving instructions.
• There is no clear management–worker divide.
• There are regular team briefings.
Links to motivational theory:
• Teamwork is an important element of Mayo’s theory of motivation.
• Mayo also emphasised involvement in decision-making.
• This should give a greater sense of achievement, a motivator in Herzberg’s two-factor theory.
• Herzberg identified recognition of effort as a motivator.
• This gives greater responsibility to, and demonstrates trust in, production workers. These are
motivators in the two-factor theory.
• This gives greater status to production workers and helps meet workers’ esteem needs.
• Mayo identified the need for clear communication.

3 Harvard Bicycles
a i Security of pay level.
ii Pay per unit produced.
b i Total labour cost/output: (800 × 4)/120 = $26.67
ii  Workers paid insufficient attention to quality, resulting in poor-quality products, customer
dissatisfaction and a loss of sales.
c Benefit: improvements in motivation as employees are working in teams (Mayo). This may improve
productivity and reduce unit costs.
Limitation: the workers are not used to working collaboratively and there may be conflicts within
the team between dominant personalities.

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d
Focus on non-financial incentives is supported by motivational theorists such as Herzberg, Mayo
and Maslow. The changes introduced by Min-Chul should improve production:
• Utilising the knowledge of employees to solve production problems will give workers
responsibility and develop their skills. These are motivating factors according to Herzberg.
Quality circles will lead to improvements in the production process and therefore reduce costs.
• As a salary is paid to production line workers, they will be able to focus more on quality rather
than volume of output. Improvements in quality will lead to customer satisfaction.
• Labour turnover will be lower due to increased job satisfaction.
• Management costs may be reduced as fewer supervisory staff are needed.
Overall judgement/evaluation might include: Taylor emphasises financial rewards and strict
supervision as the best way to motivate and manage workers. The changes introduced represent a
significant shift in culture. It may take time for workers to get used to this change and to deliver
the expected benefits. Much will depend on how the teams are introduced and whether workers are
given appropriate training.

8 Cambridge International AS & A Level Business – Stimpson & Farquharson © Cambridge University Press 2021
 CAMBRIDGE INTERNATIONAL AS & A LEVEL BUSINESS: TEACHER’S RESOURCE

Exam-style questions and sample answers have been written by the authors. In examinations, the way marks are awarded may
be different.

Coursebook answers
Most of the answers are in ‘outline’ form indicating the appropriate points and skills that learners need
to include in their answers. They provide the necessary guidance to allow learners to develop and extend
the points for a fuller answer that contains the relevant skills. In many instances, there may be other valid
approaches to answering the question.

Chapter 12
Business in context
Learners’ discussion might include:
• Functions of management: planning for the future direction of the business; setting objectives to be
achieved; organising resources to achieve objectives; motivating human resources in the business;
communication with employees, suppliers and customers; reviewing performance of the business.
• Impact of a good CEO: inspires managers and employees to achieve goals; sets the culture of the
organisation; anticipates change in the market. However, external factors may result in business failure
despite having a good CEO.

Activities
Activity 12.1
1 Rebecca fulfilled five management functions. Learners should give examples from the case study and
explain the management function in each case:
• Setting objectives and planning.
• Directing and motivating staff.
• Measuring performance against targets and taking action over underperformance.
• Organising resources to meet objectives.
• Coordinating activities.
2 Consequences for the store of ineffective management include:
• Lack of coordination of activities, e.g. the electronic exercise bicycle being stocked by two
departments. This would waste scarce sales space.
• Lack of direction for staff, e.g. Rebecca has ensured that all managers are prepared to deliver the
store’s end-of-season sale. Without this, the store’s organisational goals will not be met.
• Failure to plan for the future, e.g. it is crucial that Rebecca is able to plan strategies for achieving
the targets set by senior executives. It is also important that she is able to ensure that senior
executives set realistic goals for the store.
• Poorly motivated staff. This would affect the quality of customer service and consequently reduce
sales. Demotivated staff would be more likely to fail to meet targets set.

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