AQA A-Level Business: Managers, Leadership and Decision Making — Practice Questions (7132)

These are original questions written for Marlbridge, in the style and at the standard of the examination. They are not reproduced past-paper questions — AQA holds copyright in its own papers. Use these alongside the official past papers available through your school or AQA’s own resources.

Related: Topic 2 study guide and revision notes.

Section A

1. Define “opportunity cost.” [2]

2. State the two dimensions used in stakeholder mapping. [2]

3. Distinguish management from leadership. [2]

Section B

4. A fast-growing retail chain must decide quickly whether to expand into a new city, based on limited market data but a manager’s extensive prior experience in similar expansions.

(a) Identify whether scientific or intuitive decision making is more likely to be used here, justifying your answer. [3] (b) Explain one risk of relying on this approach for a decision of this scale. [3]

5. A business is deciding between two leadership styles for managing a team of experienced research scientists working on a long-term project with no urgent deadline.

(a) Recommend a leadership style, justifying your choice using the context given. [4] (b) Explain why an autocratic style would likely be less effective in this specific context. [3]

Section C

6. A manufacturing company is deciding whether to invest in Option A (55% chance of $200,000 profit, 45% chance of $40,000 loss) or Option B (a guaranteed $90,000 profit).

(a) Calculate the expected value of Option A. [3] (b) Using your answer to (a), state which option has the higher expected value, and by how much. [2] (c) Evaluate whether the company should choose the option with the higher expected value. [6]

Worked answers

1. Opportunity cost is the value of the next-best alternative given up by choosing one course of action over another. [2]

2. Power (ability to influence the business) and interest (how much the decision affects the stakeholder). [2]

3. Management is planning, organising and controlling existing operations; leadership is setting direction, inspiring people and driving change. [2]

4. (a) Intuitive decision making is more likely, since the scenario explicitly describes limited market data (reducing the reliability of a scientific approach) alongside a manager with extensive relevant prior experience – exactly the condition under which intuitive decision making is favoured. [3] (b) Relying primarily on one manager’s prior experience risks overlooking factors specific to the new city that differ from previous expansions (e.g. different local competition or demographics), since intuition generalises from past cases that may not transfer perfectly to a new, distinct context. [3]

5. (a) A democratic (or laissez-faire) style is most appropriate: experienced research scientists on a long-term project with no urgent deadline benefit from a style that draws on their expertise and allows time for genuine consultation or autonomous work, since speed is not the binding constraint here and the team’s own expertise is a resource worth actively using rather than overriding. [4] (b) An autocratic style would likely be less effective because it does not draw on the scientists’ own expertise in decision-making, risking both lower-quality decisions (since the leader alone may lack the specialist knowledge the team collectively holds) and reduced motivation among highly skilled staff who are typically more engaged when consulted, especially where there is no time pressure that would otherwise justify a faster, more directive approach. [3]

6. (a) EV(A) = (0.55 x 200,000) + (0.45 x -40,000) = 110,000 - 18,000 = $92,000. [3] (b) Option A has the higher expected value, by $2,000 ($92,000 vs $90,000). [2] (c) A strong evaluation notes that expected value alone does not capture risk appetite: Option A carries a real 45% chance of a $40,000 loss, while Option B is guaranteed. For a company with limited cash reserves or low risk tolerance, the guaranteed $90,000 of Option B may be preferable despite its slightly lower expected value, since a $40,000 loss could have disproportionate consequences beyond what the expected-value calculation captures (e.g. cash-flow strain, reduced ability to fund other projects). Conversely, a company with strong reserves and higher risk tolerance might reasonably prefer Option A’s higher expected value, accepting the downside risk as acceptable given its scale relative to the company’s overall resources. A well-evaluated answer concludes that the “correct” choice depends on the company’s specific risk appetite and financial position, not on expected value in isolation. [6] (Marks for correct EV interpretation, genuine risk-based counter-argument, and a reasoned, context-dependent conclusion.)

A note on command words in this set

“Identify” and “state” (questions 2, 3, 6b) want a concise, direct answer with no justification required – writing an extended paragraph for these wastes time without earning extra marks, since the mark scheme caps credit at the stated fact. “Justify” and “recommend” (questions 4a, 5a) require a clear decision plus reasoning tied specifically to the scenario’s details, not a generic explanation of the concept in the abstract – question 4(a)’s three marks are not available for defining intuitive decision making in general, but for correctly applying it to this scenario’s specific combination of limited data and relevant manager experience. “Evaluate” (question 6c) is the most demanding command word in this set and requires a balanced argument reaching a reasoned, context-dependent conclusion, which is why it alone carries six of the fifteen marks available across Section C.

Why question 6 does not stop at the calculation

Question 6(c) is deliberately worth more marks than the calculation itself (6a-b combined), because the revision notes identify evaluating whether to act on the higher expected value – not just calculating it – as the genuine decision-making skill this sub-topic tests. A response that calculates both expected values correctly but concludes “choose Option A because it’s higher” without weighing risk appetite would score well on 6(a)-(b) but poorly on 6(c), reflecting how AQA’s own mark scheme weights evaluation over calculation in this kind of question.

Official syllabus

AQA A-level Business (7132) specification, subject content, section 3.2 Managers, leadership and decision making – aqa.org.uk – the same source cited by the Topic 2 study guide and revision notes.