Section 3 – Long Questions – 60 marks each

How to maximise your marks in this section

1. Timing: Do not exceed the time limit allowed per question. Remember to allow 25 minutes per question. Match the time spent on a question with the marks available for it.

2. Detail: Make sure that the detail of your answers is appropriate to the available marks. The general rule is that if there are 20 marks available, give 4 points at 5 marks each (2 marks to state and 3 marks to explain for each point). This is usually true for 90% of the paper. However, there can always be exceptions, so always try to give an extra point for good luck, where possible.

3. State & Explain: you must develop answers with detailed, relevant points, ensuring to state each point and then explain it in two or three well developed sentences, giving an example where required. (Apply this method where possible for short questions in Section 1 also)

4. The Outcome Verb: make sure you do this before answering the question, so you know exactly what the verb (whatever you are being asked to do) means in the context of the question.

5. REMEMBER:

This section consists of 2 parts:

Part 1 based on units 1, 6 & 7 Part 2 based on units 2, 3, 4 & 5

NB: Must answer one question from part 1, 2 questions from part 2 and a fourth question from either part 1 or part 2

2017 Question 1: Unit 1 People in Business

Question 1 (A) (i) Explain the term co-operative relationship between stakeholders in a business.

(ii) Describe one example of a co-operative relationship which could arise between each of the following pairs of stakeholders:

● Employer and employee

● Investor and manager of a business

● Producer and consumer. (20 marks)

(B) Evaluate negotiation, conciliation and arbitration as methods to resolve industrial conflict in the workplace. (20 marks)

(C) Read the information supplied and answer the questions which follow.

(i) Name the act which protects consumers who purchased the

Samsung Galaxy Note 7.

(ii) Outline three provisions of the act regarding a consumer’s statutory (legal) rights in relation to the Samsung Galaxy Note 7. (20 marks) (60 marks) Sample answer

(A) 20 marks

(i)

A co-operative relationship occurs when a business seeks to work with stakeholders so that both sides gain and views the relationship between different stakeholders as a potential win/win one for all sides. A business with a co-operative approach will seek opportunities to work in partnership with stakeholders and not against them. 5 marks

(ii)

Employer versus employee:

A co-operative relationship will exist if workers receive a fair wage for a fair day’s work and safe working conditions. Recognition of hard work and empowerment of employees is good for staff morale and will enhance the co-operative relationship. The employee benefits from being rewarded good pay and conditions for their work and the employer

benefits from increased productivity, staff motivation and higher profits caused by employees working harder. 5 marks

Investor versus managers:

A co-operative relationship exists if the entrepreneur will provide the investor with complete transparent financial information (all the financial information provided by the entrepreneur/manager is accurate and up to date), ensures their financial resources are not wasted and used to generate a good return on their investment. The investor will benefit from seeing their investment is safe and the entrepreneur/

manager will benefit by finding it easier to acquire the necessary finance to fund new projects. 5 marks

Consumer versus producer:

A co-operative relationship will exist if consumers feel the producer is producing high quality goods that are reasonably priced and where brand loyalty exists as the consumer repeatedly purchases the good. The consumer benefits as they pay a reasonable price, their wants are satisfied and quality is assured. The producer benefits from the repeat purchase and brand loyalty of the product. It will make goods that satisfy consumer wants and needs, therefore satisfying the consumer and leading to customer loyalty. 5 marks

(B) 20 marks 3@6 marks each (3+3)

Negotiation:

- Discussion occurs between the disputants who are trying to work out a solution to their problem. The employer and the employee make a series of offers and counter offers intended to aim at a compromise.

- Both need to be aware of their bottom line and their ideal outcome. They need to be prepared to make concessions/

compromises. A timetable for the conclusion of the negotiations process needs to be put in place.

Conciliation:

- Conciliation is a voluntary process in which the parties to a dispute agree to avail of a neutral and impartial third party to assist them in resolving their industrial relations differences. - The conciliator will speak to the employer and the employee separately and then together, highlighting the other’s point of view.

Arbitration:

- With arbitration both sides in the disagreement agree beforehand to an independent third party’s intervention, investigation and judgement.

- They also agree beforehand on whether the arbitration outcome should be binding or non-binding.

EVALUATION: I believe that negotiation, conciliation and arbitration are all very effective methods to resolve industrial conflict in a non-legislative manner. Negotiation should be the first method tried, as it involves simple discussion between disputants. Conciliation can be implemented if negotiation is not successful, where an involuntary third party can assist the discussions. If an agreement is still not made, arbitration can be very effective as it involves the third party’s intervention, investigation and judgement. These three non-legislative methods of solving industrial conflict help avoid the possibility of industrial action for the business and its employees. 2 marks (C) 20 marks

(i) The Sale of Goods and Supply of Services Act 1980 2 marks

(ii) 3@6 marks each (3+3) Note: Merchantable quality is a compulsory point here.

Merchantable quality means that the mobile phones sold to consumers must be of reasonable standard/quality, taking into account what they are supposed to do, their durability and the price paid, even if they are sale items. The mobile phone is a high price commodity, therefore should be of a high standard. 6 marks

Goods must be fit for the purpose intended

This means that the phones must be able to do what they are supposed to do and what they were designed for. They must be fit for the particular purpose for which the buyer intends to use them. 6 marks

Goods sold must be as described

This means that the goods sold must be as described by the sales person, packaging, catalogue, brochure or sample. There should be no misleading descriptions or samples provided. If a phone is purchased from a demonstration of the salesperson, the actual phone purchased should correspond with the demonstration. 6 marks

2018 Question 2: Unit 6 Domestic Environment

Question 2

(A) Read the information supplied and answer the question which follows.

Discuss the advantages for a credit union of operating as a co-operative. (20 marks)

(B) Outline the benefits and challenges of increasing employment for the Irish economy. (25 marks)

(C) Evaluate the effectiveness of Enterprise Ireland in assisting indigenous Irish businesses. (15 marks) (60 marks)

Sample answer

(A) 4 @ 5 marks each

Formation and dissolution: The credit union will have continuity of existence, therefore it will continue to exist if a shareholder leaves or dies. Members of the credit union usually have a common bond (e.g. residents in a local area) and feel they are doing business with people they know.

Control: The credit union as a co-operative is owned and controlled by its members, who all have a say in how the business is run. Members are invited to the AGM and can vote on issues such as the dividend. Decisions are made on the basis of “One Member One Vote”.

Finance: Co-ops have better creditworthiness with the banks than other forms of ownership; therefore the credit union will find it easy to raise additional finance this way. Additional members will provide more finance for the credit union.

Profits and risk: Members in the credit union are protected by limited liability, which means if it goes bankrupt (is wound up), the owners’ loss will only be the amount they have invested in the company. The co-operative only has to pay 12.5% corporation tax on profits, which is relatively low, and the credit union has a wide range of costs that it can deduct against tax on profits.

(B) 5 @ 5 marks each

MUST refer to both benefits and CHALLENGES Benefits:

Sales: If employment is high, people have higher disposable income to spend on goods and services, therefore business sales are higher. This increases overall demand in the economy, increasing the rate of economic growth.

Business confidence: high employment encourages consumer and business confidence. This boosts business activity and results in more enterprise, creativity and innovation in the economy as well as fewer social problems associated with unemployment, such as rising crime, alcohol and drug abuse.

Government finances: There will be decreased government current expenditure on social welfare payments, as a result of high employment. Government revenue will also increase through more direct and indirect taxes, as more people are paying income taxes and spending more, therefore paying more VAT. Therefore the Government will have more money available to spend on encouraging business.

Challenges:

Costs: it becomes more difficult to recruit staff and demand for wage increases rises during times of employment. Therefore, wage costs are increased for businesses, which can lead to higher prices as a result (inflation).

Immigration: Immigration may increase as people come to Ireland seeking employment, a trend that is likely to continue, as we have had positive net migration for a number of years (immigration greater than emigration). This can result in cultural conflict.

(C) 2 @ 6 marks each (3+3) + EVALUATION @ 3 marks Enterprise Ireland is the state agency responsible for developing indigenous Irish industry with an export focus. It is focused on helping Irish-owned business with 10 or more employees seeking to deliver new export sales. For example: Enterprise Ireland assisted food entrepreneurs Cully & Sully when they were getting started and also helped them to successfully enter the export markets of the UK and continental Europe with their range of soups, pies and hot pots. Enterprise Ireland supports to indigenous Irish businesses:

Market research and funding: Enterprise Ireland provides supports for both companies and researchers to develop new technologies and processes that will lead to job creation and increased exports. It also provides funding and supports for companies to start up and to expand to reach international markets. 6 marks

Marketing and networking: Enterprise Ireland has 42 international offices that can assist in the growth of exports by providing marketing services and introductions to potential customers overseas. It also provides a programme of trade events to give clients the opportunity to connect with existing and new customers, increase sales in international markets and exchange ideas. 6 marks

Evaluation: I believe that Enterprise Ireland plays a very important role in helping indigenous Irish businesses to achieve export sales and develop and grow in global markets. Through its funding, assistance with marketing, information and advice, it enables Irish businesses with an export focus to succeed and become more profitable. 3 marks

2018 Question 5: UNIT 4& 5 Managing/Business in Action

Question 5 (A) Read the information supplied and answer the question which follows.

Outline the advantages and disadvantages for a business in the fast food sector of choosing franchising as a method of business expansion. (20 marks)

(B) Draft a business letter, using today’s date, from Phoenix Risk Management Ltd to Ricardo’s Burgers Ltd, a fast food retailer. In your letter identify the main types of insurance Ricardo’s Burgers Ltd should have and outline ways in which it could minimise business risks. Use fictitious names and addresses. (25 marks)

(C) Discuss the factors a business should consider before changing from a batch to a mass (flow) method of production. (15 marks) (60 marks)