Analyse the benefits to a business of a labour intensive production process.

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2022). The mark or mark type is shown in brackets.

1. [8] (a) Understanding of a labour intensive production process; Reference to the benefits of using a labour intensive production process in a business context; More labour may provide the opportunity to give a more unique product in production processes, e.g. hand crafted furniture; More labour may provide the opportunity to give a more personal service when dealing with the customer face-to-face; Labour intensive production is more appropriate and necessary for some businesses, e.g. hotels and restaurants due to the customer service nature of the business; In certain situations, it is less expensive to use labour than expensive machines, especially in countries where labour is inexpensive; In some businesses, machines are not appropriate for the work being carried out, perhaps it involves a complex set of actions or decisions; Capital investment can be expensive, and finance may not be available; There is less of a fixed cost associated with many types of labour and, particularly in recession times, labour is more flexible, and costs can be cut by 'laying off staff'; Businesses might get government grants to support new jobs, encouraging labour intensive approaches. Accept any other valid response
2. [12] (b) Understanding of intellectual capital; Understanding of business assets; Reference to the use of intellectual capital in a (information technology) business; Reference to the use of assets in a (information technology) business; Intellectual capital is regarded or an important resource and a key contributor to the economic success and value creation of a business – an intangible value-driver; Intellectual capital is the intangible value of a business, including human capital (skills and expertise of employees), structural capital (databases and systems) and relational capital (links with suppliers/customers); Intellectual capital is an asset in that it can provide knowledge, know-how, ability, creativity, innovation, rich productive cultures, business processes, data, intellectual property, business contacts, partners, investors and customers; In an information technology business intellectual capital could include the expertise of research and design staff, the relationships with local, national and international business and the unique systems and methods established to attract investors and government funding; A judgement may be made using the following arguments: How important an asset is intellectual capital in the business operations of an information technology business?; Without the hardware (tangible asset) to develop the ideas, the intellectual capital cannot be of use; A judgement may well be made between the intangible asset of intellectual capital and other assets (tangible and intangible) such as a sound financial base, IT hardware, an efficient management and leadership system, an effective HR policy for staff recruitment, an effective marketing strategy for products; Is there a recognition that the distinction between the other assets and the intangible intellectual capital assets of a business is not so clear cut as at first might appear?. Accept any other valid response