SECTION A

1 (a) Define the term ‘partnership’. [2]

A partnership is a form a business that only consists of two or more employees working towards achieveing a business objective

MS:

• a business formed by two or more people • business structure/unincorporated business within the private sector (1) • shared management of a business (1) • with shared capital/investment (1) • sharing responsibility (1) • with shared profits (1)

(b) Explain two limitations of partnership as a business structure. [3]

• unlimited liability for all partners – all personal assets at risk • profits have to be shared • all have to share losses • all partners bound by the decision of any one partner • compromises necessary in decision-making resulting in conflict • ability to raise capital limited – cannot sell shares • continuity is not assured – partnership will need to be reformed in the event of death of one or more partners

2 (a) Define the term ‘performance-related pay’. [2]

• usually a bonus payable in addition to basic salary (1) • for above average performance (1) • financial incentive/method of employee payment (1) • to encourage employees to meet (or exceed) agreed targets/complete set task (1) • the more they perform, the more they get (1) • method of motivating employees (1) • based on the quality of their work (1)

(b) Explain two advantages to employees of performance-related pay. [3]

• employees feel more motivated • may become more productive/efficient to increase their pay • more able to meet their needs, e.g. physical, self-actualisation • PRP will encourage some employees to focus more on targets • may be a link between high PRP and promotion opportunities • some employees will see PRP as a fairer system of payment – allows them to give extra effort and be rewarded • an attractive payment system for employees whose output is not measurable in quantitative terms, such as management and supervisory staff • incentivises employees to work hard and demonstrate their capability

3 Explain the link between corporate objectives and marketing objectives of a business. [5]

• marketing objectives set out what a business seeks to achieve through its marketing activities • marketing objectives may include: market share, brand identity, increase sales, develop customer loyalty, increase customer satisfaction • the objectives set for the marketing department help a business achieve its overall objectives • marketing objectives must fit with the aims and mission of a business • corporate objectives present specific business wide objectives that can be broken down into departmental targets/objectives • corporate objectives include survival, growth, profit maximisation • a corporate objective of increasing revenue by 20% in each of the next five years – could lead to supportive marketing objectives of increasing market share and increasing consumer spend by an appropriate percentage • corporate and marketing objectives must be in alignment

4 (a) Define the term ‘capital-intensive production’. [2]

• high quantity of capital equipment in the production process (1)