Edexcel International A Level Business: Managing people and Entrepreneurs and leaders (YBS11) – Practice Questions

These are original questions written for Marlbridge, for revision and practice on this content. They are not reproduced past-paper questions, and they do not replicate the exam’s exact structure, question count or mark tariffs – examination boards hold copyright in their own papers. Use these alongside the official past papers from your board or school.

These questions cover sections 1.3.4 Managing people and 1.3.5 Entrepreneurs and leaders of Unit 1, Marketing and people, in the Pearson Edexcel International Advanced Subsidiary/Advanced Level in Business specification (Issue 1, September 2017). Command words follow the specification’s appendix on command words, and calculators may be used. All businesses and figures are invented. Teaching is in the study guide and the revision notes. More Unit 1 practice is in Marketing and people practice. Links: course hub, printable checklist and free 10-minute diagnostics.

Questions

1. (a) Define the term redundancy. [2] (b) Define the term intrapreneurship. [2]

2. Mirelle Ceramics pays its glaze workers 62p for each finished item, plus a £40 bonus in any week where fewer than 2% of the worker’s items are defective. In one week a worker finishes 1,150 items, of which 18 are defective. Calculate the worker’s pay for the week. [4]

3. Ludworth Logistics recruits a driver externally on a salary of £32,000. It pays £1,850 for advertising, an agency fee of 15% of the salary, and three managers each spend 5 hours interviewing at a cost of £28 an hour. The new driver then spends 40 hours on induction, at a cost of £14.50 an hour. Calculate the total cost of recruiting and inducting the driver. [4]

4. Sandlethorpe Software has separate design, coding and testing departments. It plans to run new products as project teams drawing people from all three departments, so each person has a project manager as well as a department head. Explain one way this matrix structure could improve efficiency. [4]

5. Dunskeld Care Homes employs 120 care staff across four homes; 40 are on zero-hour contracts. The number of residents, and so the hours needed, changes from week to week. Analyse two benefits to Dunskeld of using zero-hour contracts. [6]

6. Mirelle Ceramics raised its piece rate by 8%. Output rose for two months, then fell back. A staff survey found the work repetitive and that workers had no say in how glazes are chosen. Analyse how Herzberg’s theory could explain why the pay rise did not keep motivation high. [6]

7. Sandlethorpe Software has £80,000 to spend. A server upgrade would add £21,000 a year to profit, a training programme £17,500 and a marketing campaign £19,000. It chooses the server upgrade. Explain the opportunity cost of this decision. [4]

8. Ludworth Logistics has 240 warehouse and driving staff. Each supervisor currently has a span of control of 6, so 40 supervisors are needed. The board proposes a span of 12, which needs 20 supervisors paid £38,000 each. Discuss whether Ludworth should move to the flatter structure. [8]

9. Ines Thorndyke founded Sandlethorpe Software six years ago with 9 staff. It now has 85. She still approves every purchase and reviews every code release herself. Three of the five senior developers left this year, while sales grew 22%. She is considering a more democratic style and appointing a managing director. Assess whether she should change her leadership approach. [10]

10. Dunskeld Care Homes (see Question 5) earns an annual profit of £310,000. Staff turnover is 30% a year and each leaver costs £2,800 to replace. The owner started the business to give residents the care she wanted for her own mother. She proposes a £1.50 an hour pay rise for all 120 care staff, each working an average of 1,400 hours a year, which she expects to halve turnover. Evaluate whether she should go ahead. [20]

Answers

1. (a) Redundancy occurs when a worker is let go since the role itself has disappeared [1], not because of the individual’s conduct or performance [1]. (b) Intrapreneurship is innovation by employees inside an existing business [1], acting like entrepreneurs by developing new products, ideas or processes [1]. [4] Examiner insight: a two-mark definition normally needs the term’s key feature plus one clarifying point; saying redundancy is “being sacked” confuses it with dismissal and gains nothing.

2. Pay for items = 1,150 × £0.62 [1] = £713 [1]. Defect rate = 18 ÷ 1,150 × 100 = 1.57% [1], below 2%, so the bonus applies and pay = £713 + £40 = £753 [1]. [4] Examiner insight: show each stage; a final figure with no working leaves nothing to credit if one slip occurs, and the bonus test is a step in itself.

3. Agency fee = 15% × £32,000 = £4,800 [1]. Interview cost = 3 × 5 × £28 = £420 [1]. Induction = 40 × £14.50 = £580 [1]. Total = £1,850 + £4,800 + £420 + £580 = £7,650 [1]. [4] Examiner insight: list each cost separately before adding, so a missed item is visible and the method can still be credited.

4. A matrix structure creates project teams containing the specialists needed [1], so one team can handle design, coding and testing without passing work between departments [1]. This cuts delays and handover errors at Sandlethorpe [1], so products reach market faster and staff are used where they add most value [1]. [4] Examiner insight: “explain” answers gain credit for a developed cause-and-effect link; naming the structure without linking it to Sandlethorpe’s departments stays at a basic level.

5. Any two benefits, each with three steps. Lower labour cost when demand falls [1]: Dunskeld pays only for hours worked [1], so it avoids paying idle staff in weeks with fewer residents, protecting profit [1]. Flexibility to cover peaks [1]: the 40 staff can be called in when resident numbers or needs rise [1], helping maintain staffing levels without permanent hires [1]. Also creditable: lower fixed costs, quick response to absence. [6] Examiner insight: analysis needs a chain from the contract feature to a business outcome; listing “flexible” and “cheap” without the Dunskeld link gains little.

6. Herzberg split factors into hygiene factors and motivators [1]. Pay is a hygiene factor [1], so the piece-rate rise removed some dissatisfaction but did not create lasting motivation [1], which fits output rising for two months then falling [1]. Motivators such as responsibility and achievement were missing [1]: the repetitive work and no say over glazes offer none [1]. [6] Examiner insight: applying the theory to the output pattern in the stem (rise then fall) earns more than reciting the two factor lists.

7. Opportunity cost means the benefit of the best rejected option, which is forgone [1]. The next best option to the server upgrade is the marketing campaign [1], worth £19,000 a year [1]. The upgrade still gives a net gain of £2,000 a year (£21,000 less £19,000) [1]. [4] Examiner insight: the opportunity cost is the single next-best option, not the sum of all rejected ones; giving £36,500 (training plus marketing) would be wrong.

8. For: 20 supervisors instead of 40 saves 20 × £38,000 = £760,000 a year [1]. Messages pass through fewer levels, so decisions are faster [1]. Workers gain more independence, which can motivate skilled staff [1]. Against: each supervisor now oversees twice as many people [1], risking overload and weaker coaching [1], and promotion steps fall [1]. Judgement: it depends on staff skill and how routine the work is [1]; a phased move, tracked for errors and turnover, is likely safer than one step [1]. [8] Examiner insight: “discuss” needs a brief weighing of both sides; the final judgement should depend on something named, here staff skill and routine.

9. Her style is autocratic [1], which suited a small start-up needing fast decisions [1]. At 85 staff, her approval of everything creates a bottleneck in the chain of command [1] and delays decisions [1]. The three leavers suggest skilled staff dislike having no authority [1], a sign of the difficulty of moving from entrepreneur to leader [1]. A democratic style would use developers’ expertise and improve retention [1][1]. But it slows decisions, and she may lose the clear vision that drove growth [1]. Judgement: she should delegate, with a managing director to bring structure, but keep a say on strategy, because the right mix depends on how quickly turnover falls and on whether the new hire fits [1]. [10] Examiner insight: strong answers tie each style point to the stem’s facts, the review of every release and the three senior leavers, and conclude on a stated condition.

10. Costs and savings. Rise = 120 × 1,400 × £1.50 = £252,000 [1]. Current turnover = 36 leavers costing £100,800 [1]. Halving turnover saves 18 × £2,800 = £50,400 [1], so net cost is £201,600 [1] and profit falls from £310,000 to £108,400 [1], about 65% lower [1]. Objectives. Her aims are partly ethical and social, like a social entrepreneur’s [1], so she may accept satisficing rather than profit maximisation [1]. Employee welfare supports care quality [1]. For. Fewer leavers give residents familiar carers and continuity of care [1], which can improve reputation and occupancy [1]. Recruitment and training time falls [1]. Higher pay can be a hygiene fix that stops staff leaving for better pay elsewhere [1]. Against. Profit falls by almost two thirds [1], leaving less for repairs and survival if occupancy dips [1]. The £201,600 has an opportunity cost: it could fund smaller options such as flexible rotas, team working or training [1]. Pay alone may not motivate, so turnover might not halve [1]. Judgement. She should not commit the whole sum yet [1]: pilot a smaller rise with non-financial changes in one home, and track turnover [1]. Her ethical motive, the owner’s income needs and how much occupancy improves decide the outcome [1]. [20] Examiner insight: in a 20-mark evaluation, the figures need to be used to reach the conclusion; a judgement that rests on the calculated fall in profit and names its conditions is better supported than one based on opinion alone.

Where marks are usually lost

• Defining redundancy as dismissal.
• Giving a bare numerical answer with no working.
• Dropping a cost from a recruitment total, or including a rejected option.
• Describing a structure without linking it to the business in the stem.
• Stating that pay motivates without separating hygiene factors from motivators.
• Adding all rejected options together as the opportunity cost.
• Listing pros and cons in “discuss” or “assess” answers without a judgement.
• Judging on opinion, not on the case figures.

Next steps

• Review the revision notes and study guide.
• Check coverage with the printable checklist and the course hub.
• Take the free 10-minute diagnostics.
• Book a free trial class.

Frequently asked questions

What do these managing people practice questions cover? They cover Unit 1 sections 1.3.4 Managing people and 1.3.5 Entrepreneurs and leaders of Pearson Edexcel International A Level Business (YBS11): staffing, recruitment and training, organisational design, motivation, leadership, entrepreneurs, objectives and business choices.

What is the difference between dismissal and redundancy? Dismissal ends a contract because of the worker’s own conduct or performance. Redundancy ends it because the job itself is no longer needed, so defining redundancy as dismissal is a common error.

How do you calculate opportunity cost in a business choice? Opportunity cost is the value of the next best alternative forgone, not the total of every rejected option. Adding all rejected options together is a frequent mistake.

How should you use motivation theory in an answer? Apply the theory to the business in the case, and separate Herzberg’s hygiene factors from motivators rather than simply stating that pay motivates.

Official syllabus

Pearson Edexcel International Advanced Subsidiary/Advanced Level in Business, Specification, Issue 1, September 2017 (Pearson Education Limited); Unit 1: Marketing and people, sections 1.3.4 and 1.3.5.