O Level Business Studies: People in Business — 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 available free from your board.

Related: People in Business revision notes

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Section A

1. Identify three benefits of a well-motivated workforce identified in the syllabus. [3]

2. State two financial and two non-financial methods of motivation. [4]

Section B

3. Explain the difference between an autocratic and a democratic leadership style. [6]

4. Explain two benefits and two limitations of internal recruitment compared with external recruitment. [8]

5. Explain how dismissal and redundancy differ, giving one example situation for each. [6]

6. Explain two barriers to effective communication in a business, and one way each could be reduced. [8]

Section C

7. A furniture manufacturer with a highly skilled, experienced workforce is deciding on a leadership style for its production team. Recommend and justify an appropriate style, and identify one limitation of your recommendation. [8]

8. Explain Maslow’s hierarchy of needs, and use it to justify why a business might introduce non-financial motivation methods once pay is no longer a source of dissatisfaction. [8]

9. Explain how on-the-job and off-the-job training differ, giving one benefit and one limitation of each. [8]

10. Explain how span of control and chain of command differ between a tall and a short (flat) organisational structure. [6]

11. A retail business is experiencing high labour turnover among its shop-floor staff, who are currently paid only a fixed hourly wage with no other benefits. Recommend and justify one financial and one non-financial method the business could introduce to reduce labour turnover. [8]

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Answers

1. Any three: higher labour productivity, reduced absenteeism, lower labour turnover [1] [1] [1].

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

3. In an autocratic style, the manager makes decisions alone and simply informs employees, without seeking their input [1] [1] [1]. In a democratic style, employees are consulted and their views are taken into account before a decision is made, though the manager typically retains final authority [1] [1] [1].

4. Benefits of internal recruitment: it is generally cheaper and faster than external recruitment, since the candidate already knows the business [1] [1]; it can also motivate existing staff by offering a visible route for promotion [1] [1]. Limitations: it limits the pool of candidates and fresh ideas entering the business [1] [1]; it also creates a new vacancy elsewhere in the business that itself needs filling [1] [1].

5. Dismissal occurs when an employee is removed due to their own conduct or performance, for example persistent poor timekeeping [1] [1] [1]. Redundancy occurs when a role is no longer needed, regardless of the employee’s performance, for example when a task is automated or product demand falls [1] [1] [1].

6. Any two, 4 marks each: jargon or technical language the receiver doesn’t understand — reduced by using plain, receiver-appropriate language [1] [1] [1] [1]; an overly long chain of command, causing messages to be distorted or delayed as they pass through levels — reduced by shortening reporting lines or using direct channels for urgent messages [1] [1] [1] [1]; choosing an inappropriate method for the message (e.g. a complex instruction given only verbally) — reduced by matching the method to the message’s complexity and importance, e.g. following up verbally with written confirmation [1] [1] [1] [1].

7. Recommend democratic leadership (or a consultative approach) [1] [2]. Justification: a highly skilled, experienced workforce generally has valuable input to offer and tends to respond better to consultation than to being simply instructed, since their expertise is being under-used by an autocratic style [1] [1]. Limitation: full consultation on every decision can slow down decision-making, which may be a problem where production decisions need to be made quickly [1] [2].

8. Maslow’s hierarchy arranges human needs in levels, from basic physiological and safety needs up to belonging, esteem and self-actualisation, and argues lower-level needs must be substantially met before higher-level needs can motivate [1] [1] [1]. Once pay (addressing lower-level needs) is no longer a source of dissatisfaction, employees are more likely to be motivated by needs further up the hierarchy — belonging (e.g. teamworking), esteem (e.g. promotion, recognition) and self-actualisation (e.g. job enrichment) — which explains why non-financial methods become more effective once basic pay concerns are addressed [1] [1] [1] [1] [1].

9. On-the-job training happens while the employee continues working, learning skills in their actual role, often from a more experienced colleague [1] [1]. Benefit: directly relevant to the specific job and relatively low-cost [1]. Limitation: quality depends on the skill of whoever is training, and mistakes made while learning can affect production/output [1]. Off-the-job training takes place away from the workplace, e.g. an external course [1] [1]. Benefit: delivered by specialist trainers, often to a recognised standard [1]. Limitation: more expensive and results in lost working time while the employee is away [1].

10. A tall structure has many levels of hierarchy and a correspondingly narrow span of control at each level (each manager oversees relatively few staff), with a long chain of command from top to bottom [1] [1] [1]. A short/flat structure has fewer levels of hierarchy and a wider span of control (each manager oversees more staff directly), with a shorter chain of command [1] [1] [1].

11. Financial method: introduce a bonus or commission scheme linked to performance or sales, giving staff a direct financial incentive to stay and perform well, beyond the fixed hourly wage they currently receive [1] [2]. Non-financial method: introduce job enrichment or training with a genuine route to promotion, giving staff a sense of progression and development that a flat hourly wage alone does not provide [1] [2]. Justification: since the workforce currently has no motivation beyond a fixed wage, adding either a financial incentive tied to performance or a non-financial route to development directly addresses a specific gap in their current motivation package, which is a more targeted answer than simply recommending “better pay” or “more benefits” without linking the recommendation to what is currently missing [1] [1].