IGCSE Business Studies: People in Business — Practice Questions (Cambridge 0450)

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 — Cambridge International holds copyright in its own papers. Use these alongside the official past papers available free from your board.

Related: People in business study guide and revision notes

---

Section A

1. Identify one financial and one non-financial method of motivating employees. [2]

2. Define “span of control.” [2]

3. State the difference between dismissal and redundancy. [2]

Section B

4. A business is deciding between internal and external recruitment to fill a management vacancy.

(a) State one benefit and one limitation of internal recruitment for this vacancy. [2] (b) Recommend, with justification, which recruitment method the business should use if speed and familiarity with the business are the priority. [3]

5. A small, newly formed business with a highly skilled, creative team is deciding on a leadership style.

(a) Identify a leadership style likely to suit this team, and justify your recommendation. [3] (b) Explain one limitation of using this style if the business later needs to make a fast decision in a crisis. [3]

6. A business has recently introduced new machinery, and a manager sends a written memo to explain the changes to staff, but many employees remain confused about what to do.

(a) Identify one possible barrier to communication in this scenario. [1] (b) Identify one way this barrier could be reduced, and justify your choice. [3]

7. A business has recently automated part of its production line and needs to make some production workers redundant.

(a) Explain why this is a genuine redundancy situation rather than a dismissal. [2] (b) Identify one factor the business might consider when deciding which specific employees to make redundant, and justify your choice. [3]

8. A retail business is training a newly hired employee with no previous retail experience, alongside an experienced employee who has just been promoted to team leader.

(a) Recommend a suitable training method for each employee, and justify your choices. [4]

---

Answers

1. Financial: for example, wage, salary, bonus, commission, or profit sharing [1]. Non-financial: for example, job enrichment, job rotation, teamworking, training, or opportunities for promotion [1].

2. Span of control is the number of subordinates who report directly to one manager or supervisor [2].

3. Dismissal occurs when an employee is removed from their job due to their own conduct or performance [1]. Redundancy occurs when a job role itself is no longer needed, for reasons unrelated to the employee’s own performance, such as automation or reduced product demand [1].

4. (a) Benefit: internal recruitment is faster and cheaper, and the candidate already understands the business’s culture and systems [1]. Limitation: it may not bring in new skills or fresh ideas that an external candidate could offer [1]. (b) Internal recruitment is recommended [1], because it is faster to complete and the successful candidate already has familiarity with the business, directly matching the stated priorities of speed and familiarity [2].

5. (a) A democratic leadership style is likely to suit this team [1], because skilled, creative employees are more likely to be motivated by having input into decisions and being consulted, rather than being closely directed [2]. (b) A democratic style typically involves consulting employees before reaching a decision, which takes more time than a single manager deciding alone [1–2]; in a crisis requiring a fast decision, this consultation process could delay the response the business needs, making an autocratic style more appropriate in that specific situation [1].

6. (a) The message may have used an inappropriate or overly technical method or language for the audience, or the memo may not have allowed for feedback or questions from employees who did not fully understand it [1]. (b) The manager could hold a face-to-face briefing or training session instead of, or alongside, the written memo [1–2], because this allows employees to ask questions immediately and allows the manager to check understanding directly, which a one-way written memo does not allow for [1].

7. (a) This is a redundancy because the job role itself is no longer needed as a result of automation, rather than the employees having performed poorly or acted improperly, which would instead be grounds for dismissal [2]. (b) The business might consider factors such as length of service, performance record, or which specific skills remain needed following automation [1–2], justified on the basis that retaining employees with skills still required by the business, or applying a fair and consistent criterion across affected employees, helps the business maintain productivity and avoid claims of unfair treatment [1].

8. (a) Induction training is recommended for the newly hired employee with no previous retail experience, since they need to be introduced to the business’s basic procedures, layout and workplace culture before working independently [1–2]. Off-the-job training, such as a leadership or management course away from the workplace, is recommended for the newly promoted team leader, since it can develop the broader management skills the new role requires without the pressure of ongoing daily production duties [1–2].

A note on exam technique for this topic

Every scenario question above rewards a recommendation justified by the specific detail given — the priority stated, the type of workforce described, or the nature of the crisis — rather than a definition of the underlying concept alone. The study guide identifies “recommend and justify” as a skill tested repeatedly across this topic’s four sub-topics, so practising this applied structure across motivation, leadership, recruitment and communication questions alike is more valuable than revising each sub-topic’s definitions in isolation.