IGCSE Business: Organisation and management (Cambridge 0264) – 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.

This set covers section 2.2 (Organisation and management) of the Cambridge IGCSE Business 0264 syllabus for examination in 2027, 2028 and 2029. Revise first with the study guide and revision notes. See also the course hub, the printable checklist and the free diagnostics.

Money figures are in dollars. All businesses and people are invented.

Questions

1. Identify two functional areas of a business other than operations. [2]

2. Define the term chain of command. [2]

3. Greyling Logistics has the structure below. Each of the three managers has the same pattern as the warehouse manager.

Operations director
 |-- Warehouse manager
 |     |-- Team leader 1 --- 8 staff
 |     |-- Team leader 2 --- 8 staff
 |-- Transport manager        (same pattern)
 |-- Customer service manager (same pattern)

(a) State the span of control of a team leader. [1] (b) State the number of levels of hierarchy. [1] (c) Calculate the total number of employees. [2]

4. Delmora Care Homes has six levels of hierarchy. The owner plans to remove two of them to give a flatter structure.

(a) Explain one advantage to the business of a flatter structure. [2] (b) Explain one disadvantage to managers of a flatter structure. [2]

5. Greyling Logistics is considering flexible working for its office staff.

(a) Explain one benefit to employees of flexible hours. [2] (b) Explain one problem for the business of allowing home working. [2]

6. Oakvane Pharmacy needs 100 hours of counter cover a week. It now employs 3 full-time staff, each working 40 hours at 14 an hour. The owner is considering 2 full-time staff plus 2 part-time staff working 10 hours each, all at 14 an hour.

(a) Calculate the weekly wage bill for the 3 full-time staff. [1] (b) Calculate the weekly wage bill for the new arrangement. [2] (c) Calculate the saving over a 52-week year. [2] (d) Explain one disadvantage to the pharmacy of employing part-time staff. [2]

7. The managers of Tavelmoor Components do the following.

• Ms Pellow sets next year’s sales target and decides which two products to launch.
• Mr Bose holds a weekly meeting so that the design and production teams work to the same launch dates.
• Ms Chaudhry compares each month’s spending with the budget and takes action in departments that have overspent.

(a) Identify the function of management shown in each case. [3] (b) Explain one advantage and one disadvantage to a manager of delegation. [4]

8. (a) Define laissez-faire leadership. [2] (b) Explain one advantage of democratic leadership. [2]

9. Kinvara Studio employs 9 graphic designers, each with at least six years of experience. Mr Faroq, the manager, makes every decision himself and tells designers what to do. Four designers have left in the last 12 months. The studio has just won a contract worth 180,000. It requires a new brand identity for a client within 10 weeks, and the client wants original ideas.

Recommend and justify a leadership style for Mr Faroq to use on this contract. [6]

10. Haskerton Foods plans to replace 6 packers with a packing machine. Each packer earns 19,000 a year. The machine costs 288,000 and adds 11,000 a year in running costs. Each packer who leaves will receive 3,500.

(a) Define the term downsizing. [2] (b) Calculate the net annual saving from the machine. [2] (c) Calculate, in years, how long the net saving takes to cover the machine cost and the payments to the packers. [3] (d) Explain one reason, other than automation, why a business may need to reduce the size of its workforce. [2]

11. Delmora Care Homes is merging the meal services of two homes. The kitchen needs to go from four employees to three, so one must be made redundant. All four do the same kitchen work.

Employee	Years of service	Annual pay	Record and skills
Asif	2	19,000	Good record. Holds food hygiene and first aid certificates. Will work evenings and weekends
Brenda	14	27,500	Head cook. Plans menus and trains new staff. No absences
Chen	9	19,500	Three written warnings for lateness this year. Several absences. Holds food hygiene certificate
Dolores	6	12,000	Part-time, mornings only. Good record. Holds food hygiene certificate

Recommend and justify which employee Delmora should make redundant. [8]

12. Delmora Care Homes’ kitchen staff are thinking of joining a trade union.

(a) Define the term trade union. [2] (b) Explain two benefits to the employees of being a member of a trade union. [4]

Answers

1. Marketing [1]. Finance [1] (or human resources). [2] Examiner insight: Identify asks only for names. Naming two areas is enough, and operations is excluded by the question, so repeating it earns no credit.

2. The line of authority from the top of the business to the bottom [1], showing who gives orders to whom and who reports to whom [1]. [2] Examiner insight: Add what the term shows, not just its name. Confusing it with span of control loses the marks.

3. (a) 8 [1]. [1] (b) Operations director, managers, team leaders and staff: 4 levels [1]. [1] (c) Each manager has 2 team leaders, each with 8 staff, so one manager’s branch has 2 + 16 = 18 people [1]. Total = 1 + 3 + (3 x 18) = 1 + 3 + 54 = 58 [1]. [2] Examiner insight: Count every box, including the director, and show the branch total.

4. (a) With fewer levels, messages pass through fewer people [1], so decisions are made and communicated faster [1]. [2] (b) Each manager will have a wider span of control [1], so managers have less time to support and supervise each person and their workload rises [1]. [2] Examiner insight: A feature alone, such as “fewer managers”, is thinner than a feature with its effect on the business or managers named.

5. (a) Employees can start and finish at times that suit them, for example to fit around childcare [1], which may make them more satisfied and more willing to stay [1]. [2] (b) Staff working at home are harder to supervise [1], so it is harder to check that work is done and harder to hold team meetings, which may slow the work [1]. [2] Examiner insight: Keep each part to the viewpoint asked: employees in part (a), the business in part (b).

6. (a) 3 x 40 x 14 = 1,680 [1]. [1] (b) Hours = (2 x 40) + (2 x 10) = 100 [1]. 100 x 14 = 1,400 [1]. [2] (c) 1,680 - 1,400 = 280 a week [1]. 280 x 52 = 14,560 [1]. [2] (d) There are more people to train and manage [1], and handovers between staff can cause mistakes or lost information at the counter [1]. [2] Examiner insight: Show each step in money calculations. A saving is the old cost minus the new cost, so check the sign.

7. (a) Ms Pellow: planning [1]. Mr Bose: coordinating [1]. Ms Chaudhry: controlling [1]. [3] (b) Advantage: the manager is freed from routine tasks [1] and has more time for work such as planning [1]. Disadvantage: the employee may lack the skill and make mistakes [1], and the manager is still responsible for the result [1]. [4] Examiner insight: Match each function to the clue in the statement, such as comparing results with a budget.

8. (a) A style where the leader sets the aim or task [1] and leaves staff free to decide how to do it, with little direction [1]. [2] (b) The leader asks staff for their views, so their ideas and knowledge are used [1], and staff feel involved, which can raise motivation [1]. [2] Examiner insight: Separate democratic from laissez-faire. In democratic leadership the leader still makes the final decision after consultation.

9. Recommendation: a democratic style [1]. The designers are experienced, so they can contribute ideas and do not need close direction [1]. The client wants original ideas, and consulting nine experienced designers is more likely to produce them than one person deciding [1]. The current autocratic approach may be linked to the four departures in 12 months, so involving staff could improve motivation and help keep them [1]. The cost is that discussion takes longer, so Mr Faroq should set clear deadlines and take the final decision if views differ [1]. Laissez-faire is less suitable because a fixed deadline and a valuable contract need some direction [1]. [6] Examiner insight: Use the facts given: experience, departures, deadline and the client’s request. A style named with no link to them stays descriptive.

10. (a) Deliberately reducing the number of employees [1] that a business has [1]. [2] (b) Wages saved = 6 x 19,000 = 114,000 [1]. Net saving = 114,000 - 11,000 = 103,000 [1]. [2] (c) Payments to packers = 6 x 3,500 = 21,000 [1]. Total cost = 288,000 + 21,000 = 309,000 [1]. 309,000 / 103,000 = 3.0 years [1]. [3] (d) Reduced demand for the firm’s products [1], so it needs fewer employees and would be paying for work that is not needed [1]. [2] Examiner insight: In part (c) the redundancy payments must be added to the machine cost. Leaving them out is a common reason for a lower figure.

11. Recommendation: make Chen redundant [1]. Chen has three written warnings for lateness and several absences, a weaker record than the other three [1], and the role has to be reduced anyway, so the business keeps staff with the better records [1]. Chen’s pay of 19,500 also saves slightly more than Asif’s 19,000. Brenda should stay because she plans menus, trains staff and has no absences, so losing her would lose key skills [1]. Asif has the shortest service but is flexible on evenings and weekends and holds two certificates [1]. Dolores costs least and has a good record, but works mornings only, so she is less flexible [1]. The downside is that Chen has nine years’ knowledge and might improve, and Delmora must show the choice is fair and based on records [1]. On balance, Chen is the better choice [1]. [8] Examiner insight: Compare all four people using the table, then admit the downside. A choice based on one fact alone reads as thin.

12. (a) An organisation of workers [1] who join together to protect and improve their interests at work [1]. [2] (b) Benefit 1: the union speaks for members as a group when dealing with the employer about pay and conditions [1], and a group has more influence than one kitchen worker alone [1]. Benefit 2: members can get advice and support if they have a dispute with Delmora [1], so they do not have to face the employer on their own [1]. [4] Examiner insight: Each benefit needs a reason it helps the employee. Benefits to the employer do not answer a question about employees.

Where marks are usually lost

• Defining chain of command or span of control with the wrong term, or with no mention of reporting.
• Stating a feature of a structure with no effect on the business in the question.
• Forgetting the director or owner when counting total employees on a chart.
• Leaving payments to departing employees out of the cost of an automation plan.
• Using the old cost minus the new cost the wrong way round when finding a saving.
• Confusing coordinating, commanding and controlling.
• Recommending a leadership style without using the facts given.
• Choosing a person for redundancy using one criterion only, or giving no downside.

Frequently asked questions

Are these questions taken from Cambridge IGCSE Business 0264 past papers? No. They are original questions written for Marlbridge on section 2.2 (Organisation and management) and do not copy past papers, their structure or their mark tariffs. Use them alongside the official past papers from your board or school.

How do you count employees on an organisational chart without losing marks? Count every box, including the director or owner at the top, and show the total for each branch. Forgetting the person at the top is a common reason for a wrong total.

What do you need to include when calculating the cost of replacing workers with a machine? Add the payments to departing employees to the cost of the machine, and set any running costs against the wages saved. Leaving out redundancy payments, or subtracting the costs the wrong way round, gives a lower or wrong figure.

How do you recommend a leadership style in a case study? Use the facts given, such as the staff’s experience, the deadline, staff departures and the type of task, and link the chosen style to them. A style named without those links stays descriptive and earns fewer marks.

How should you answer a question on who to make redundant? Compare all the people in the data using several criteria, such as skills, attendance record, length of service and cost, then choose one and admit the downside. A choice based on one fact alone reads as thin.

Next steps

• Review the study guide and use the revision notes.
• Return to the course hub and the printable checklist.
• Try all free 10-minute diagnostics.
• Book a free trial class.

Official syllabus

Aligned to section 2.2 of the Cambridge IGCSE Business 0264 syllabus for examination in 2027, 2028 and 2029, published by Cambridge University Press & Assessment (Cambridge International Education).