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O-LevelBusiness StudiesUnderstanding business activity7115/21 · May/June 2021 · Q120 Marks

Explain four reasons for changes in the relative importance of the primary, secondary and tertiary sectors in a country.

  1. (a)Explain four reasons for changes in the relative importance of the primary, secondary and tertiary sectors in a country.[8]
  2. (b)Consider the following three problems for FO as it grows through takeovers. Which problem will be the easiest for FO to overcome? Justify your answer. • More difficult to control the business • Lack of finance • Clash of business cultures[12]

Mark scheme

Marking points from the official mark scheme (May/June 2021). The mark or mark type is shown in brackets.

  1. [1] (a) Change in the primary sector – increase due to new discovery of natural resources / decreases due to depletion of natural resources
  2. [1] (a) Change in the secondary sector – increase due to industrialisation / decreases due to deindustrialisation
  3. [1] (a) Change in the tertiary sector – increase due to increased consumer incomes
  4. [1] (a) Increase in incomes / economic growth / increase in GDP – this could lead to a change in the secondary or tertiary sector
  5. [1] (a) Increase in demand for manufactured goods – increase in the size of secondary sector
  6. [1] (a) Increase in tertiary sector as consumers have higher disposable income to spend on services
  7. [1] (a) Increased mechanisation / increased technology – reduces number of employees in the secondary sector
  8. [1] (a) People move into the tertiary sector to provide services as demand for services grows as a country develops e.g. tourism
  9. [1] (a) Increase in exported products – more need to be manufactured in secondary sector
  10. [1] (a) Reduced employment in primary sector as now primary products produced using mechanisation / rural to urban migration
  11. [1] (a) Primary products are now processed in own country – increased manufacturers / secondary sector to process the raw materials into finished products
  12. [1] (a) Government policies to encourage development
  13. [1] (a) Increased globalisation
  14. [1] (a) Actions of environmental groups / pressure groups leading to sectoral change - primary extraction or dirty manufacturing in the secondary sector
  15. [1] (b) More difficult to control the business: Increased number of employees at the three factories means managers may not be in direct contact with employees
  16. [1] (b) More difficult to control the business: Need to employ more supervisors to control workers – increases costs as more wages to pay
  17. [1] (b) More difficult to control the business: May mean some workers are not supervised and may not work efficiently – less output from each worker
  18. [1] (b) More difficult to control the business: Difficulty of communication with employees across the three factories
  19. [1] (b) Lack of finance: As the private limited company has grown by taking over other two businesses then expansion costs have been high / may be high for future takeovers
  20. [1] (b) Lack of finance: Take out loans to finance the takeovers - increased interest payments for loans / increased costs – lower profits
  21. [1] (b) Lack of finance: Cannot sell shares to the public only family and friends as they are a private limited company – so amount raised may be limited
  22. [1] (b) Clash of business cultures: If the other two businesses that have been taken over have very different cultures and ways of doing things – may have clashes between staff
  23. [1] (b) Clash of business cultures: Employees not working effectively together as leadership styles were different at the two companies - reduced efficiency as output per employee drops
  24. [1] (b) Clash of business cultures: Resistance by workers to do things differently – reduces efficiency - workers demotivated after the takeover
  25. [1] (b) Conclusion: Controlling the new business after the takeover is the easiest to overcome by employing new supervisors who can pass on important messages from managers to employees in the three factories.
  26. [1] (b) Conclusion: As it is only a private limited company share issue will raise only limited capital. Cultures are embedded in businesses making employees very resistant to change.
  27. [1] (b) Conclusion: Lack of finance may be the easiest to overcome as it has been a successful business for over 20 years, and this will give confidence to banks to make loans.
  28. [1] (b) Conclusion: The clash of cultures may be the easiest to overcome as it involves ensuring different leadership styles in the three original businesses are modified. Employee participation could be used to make everyone accept working in a new environment.

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About this question

Topic
Understanding business activity, O-Level Business Studies (syllabus 7115). Structured question, 20 marks.
Source
O-Level Business Studies, May/June 2021 Paper 2 Variant 1, question 1.

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