PAPER 1

Section A

4.a) Ethics have moral values and implications. Ethical decisions are
taken by considering the impact a decision could have on the
society,and the environment. A busines’s ethics would set the tone for
how it would be run on a day-to day basis.

4.b) Ethical regulations such as, paying workers above the minimum way
could encourage businesses to abide by the law as they could be
penalised otherwise. This could lead to firms making ethical decisions
which could help them make decisions that would benefit the business
as a whole. Furthermore, engaging in ethical behaviour could help firms
create positive effects, such as, retaining highly skilled employees.
Workers may be more productive and feel a sense of responsibility
towards businesses that operate ethically.

3) Human resource management aims to ensure high levels of staff

morale and welfare. HRM department could help ensure that safety and
health legislation is followed, so that the department can deal with any
problems that could arise regarding a breach of health and safety laws.
Moreover, HRM department would be able to offer help and guidance to
employees who are being affected outside work, such as housing. They
may be able to take measures to boost the quality of their performance,
and lower absenteeism.This could enable the business to encourage
employees to achieve a sensible work life balance which could help the
business achieve its objectives.

2.a) A cash flow forecast is an estimate of the amount of cash inflows

and outflows of a business over a period of time. It shows firms the
amount firms might need to borrow and how they will repay loans (if
borrowed).

2.b) Cash flow forecast could be used to estimate the cash outflows.
With this information, the business would be able to take measures to
reduce the outflows and ensure that a deficit does not take place.
Additionally, cash flow forecast could also be used to determine the
liquidity position of the business. If there is higher cash inflows
estimated, the business would be able to take steps to reduce the
tied-up capital of the business.

1.a) Price elasticity of demand is a measure of responsiveness of

quantity demanded to a change in price It is measured by dividing the
percentage change in price with the percentage change in quantity
demanded.

1.b) ​By calculating PED, a business can assess how a change in price
will affect the demand for its products.​ For instance, ​the effect of a
change in an indirect tax (e..g VAT, fuel or other duties) on price and
quantity demanded and also whether the business is able to pass on
some or all of the tax onto the consumer. Furthermore, Information on
the PED can be used by a business as part of a policy of price
discrimination. This is where a business decides to charge different
prices for the same product to different segments of the market e.g. peak
and off peak rail travel or prices charged by many of our domestic and
international airlines.

Section B

7.a) Labour intensive production ​refers to a production process where

labour costs are the largest component. Labour intensive implies that
capital (machines/equipment) are a small percentage of the final cost.

Labour​, ​unlike machinery can be used flexibly to meet changing levels

of consumer demand, e.g. temporary workers. This could help a
business reduce its costs as the business would not have to hire full-time
employees in case there is a sudden rise in demand. Moreover, the
quality of output might be better as different workers would be able to
work in various shifts and workers would not have to work continuously
for long periods. Thus, there might be an increase in the motivation level
which could encourage workers to be more productive and produce high
quality goods that meet the demands of customers.

Moreover, labour (workers) can provide feedback that provides ideas for
continuous improvement. Workers can adapt to introduce new ideas.
There would be a higher chance of products being of a high standard as
workers could enforce strict quality control, and quality assurance. If
there is a change in production line or method, workers would also be
able to take adequate measures to ensure that the quality of products
are not being compromised. Hence, managers may be able to
communicate with employees and take steps to ensure that the products
meet customer satisfaction and the production process is running
smoothly. As a result, the business might b e able to be more efficient.

Therefore, labour intensive production may be beneficial for businesses

in different manners, depending on the industry the business operates in
and the type of production it is opting for.

7.b) ​Operational efficiency is the capability of a business to deliver

products or services to its customers in the most cost efficient manner
possible while still ensuring a high quality of its products.where lower
costs equals greater efficiency.

Process innovation could be used to share knowledge. Businesses are

more innovative when staff know and understand what's happening in
other areas. Someone may have an idea that could also benefit another
department. The inspiration for innovative ideas can come from both
within your business and externally - from customers, suppliers,
technological advances, etc. Thus, a parcel delivery business would be
able to understand the differences in operating in the domestic market
and the international market by consulting stakeholders of the business
and taking measures that could benefit the business in a positive
manner.

Moreover, by taking​ ​risks the business would be able to venture out and
encourage customers around the world to use their parcel delivery
service.It's impossible to innovate without taking risks. The business
would be able to fill in market gaps by ensuring productivity as it could
reduce unit costs and give the firm a competitive advantage against rival
companies.Waste minimisation technologies and processes could help
reduce costs and help the business charge a lower price in an
international market, which could attract higher sales.

Hence, innovation doesn't always involve developing new products or

services. It often focuses on improving what already exists, for example
your lean production process. Such innovation can lead to great
improvements in business performance and efficiency. An international
parcel delivery company would be able to use process innovation- which
is ​the implementation of a new or significantly improved production or
delivery method, after conducting proper market research and identifying
the needs of potential target markets.

Thus,how well the operational efficiency could be improved might

depend upon the amount of costs incurred while distributing parcels in a
foreign country.