Analyse the advantages and disadvantages of PGP's privatisation for any one stakeholder group.

Mark scheme

Marking points from the official mark scheme (May/June 2018). The mark or mark type is shown in brackets.

1. [Knowledge] Sale of state owned assets/business to private sector owners.
2. [Knowledge] Customers - lower prices with private sector competition
3. [Knowledge] Danger of private monopoly.
4. [Knowledge] Workers - wages might be reduced to save costs; jobs might be lost but managers might be more highly rewarded.
5. [Knowledge] Customers - prices are less competitive (103 not 98) but more innovative products.
6. [Knowledge] Workers' wages have increased but by much less than managers
7. [Knowledge] Fewer jobs available – less job security?
8. [Knowledge] Other stakeholders are possible.
9. [Application] Reduction in size of total employees by 17 000
10. [Application] Increase in average pay of employees by $4000 (does this take into account inflation?)
11. [Application] Increase in average pay of managers by 73%
12. [Application] Increase in operating profit by 349%
13. [Application] Reduction in number of suppliers
14. [Application] Faster payment time to suppliers
15. [Application] More products developed
16. [Application] Relative increase in fuel price compared to industry average (fuel prices may have fallen over the whole period)
17. [Analysis] Customers: Private ownership might mean that PGP has taken over other companies to gain market power (PGP has grown externally) and this allows higher prices to be charged but more invested in innovative products to gain higher private sector profits in future.
18. [Analysis] Workers: cost cutting/profit motive in this industry has encouraged PGP to reduce workforce despite doubling revenue. Reduces job security.
19. [Analysis] Wages have risen – but do not know if this is in 'real' terms and certainly much less, proportionately, than managers' salaries – who are now able to set their own remuneration.
20. [Analysis] Danger of private monopoly and thus higher prices.
21. [Analysis] Other stakeholders are possible