Explain four effects of training on a business.

Mark scheme

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

1. [1] Effect: Greater motivation of employees.
2. [1] Explanation: Work harder to produce output.
3. [1] Effect: More flexible workforce.
4. [1] Explanation: Employees can be moved between tasks as necessary.
5. [1] Effect: Increased productivity/efficiency.
6. [1] Explanation: Lower unit costs.
7. [1] Effect: Quality of the product may be improved.
8. [1] Explanation: Greater customer satisfaction / improved brand image / improved reputation.
9. [1] Effect: Employees able to use new technology.
10. [1] Explanation: Easier to introduce new equipment to speed up production.
11. [1] Effect: Improves customer service.
12. [1] Explanation: If trained how to answer customer queries.
13. [1] Effect: Fewer mistakes as employees are trained.
14. [1] Explanation: Less waste/less repair costs.
15. [1] Effect: Workforce is more knowledgeable/skilled.
16. [1] Explanation: Able to complete tasks more effectively.
17. [1] Effect: Output lost whilst training employees.
18. [1] Explanation: Higher costs.
19. [1] Effect: Employees may expect higher pay increasing wage costs.
20. [1] Explanation: Lower motivation if pay is not increased.
21. [1] Effect: Training costs are incurred by the business.
22. [1] Explanation: Higher costs for the business may lead to lower profit initially.
23. [1] Effect: Employees may leave the business after they have been trained.
24. [1] Explanation: Therefore increases recruitment costs.
25. [2] Benefit: Creates jobs, lowering unemployment (which has been rising in country Z), raising incomes, and helping to increase economic growth/GDP.
26. [2] Benefit: Increased investment, as the new factory will create jobs to build it and new infrastructure may be built, benefiting local businesses.
27. [2] Benefit: TT could export from country Z, improving its balance of payments and earning foreign currency to purchase more imports.
28. [2] Benefit: TT may pay taxes to the government, increasing tax revenue to provide more services for its population of 200 million.
29. [2] Benefit: Increased consumer choice, more competition, and more unique toys available to buy.
30. [2] Drawback: The jobs created may be unskilled and low paid.
31. [2] Drawback: Reduced sales for the three local toy businesses as their costs may be higher.
32. [2] Drawback: Profits may be sent back to country Y, leading to a loss of government tax revenue in country Z.
33. [2] Drawback: Scarce resources may be used up quickly by the multinational business, leaving few non-renewable resources when it leaves.
34. [2] Drawback: The multinational business could have significant political influence and gain concessions like grants that could have been spent on local businesses.
35. [2] Drawback: Increased noise and air pollution when the factory is being built, potentially damaging the environment and health of the local population.
36. [4] Conclusion (Allow): Allowing TT to locate in the country has more benefits for country Z than it has drawbacks. The jobs created when unemployment is increasing will help the country develop and may benefit from a technology transfer from TT to other businesses in the country. This may increase their efficiency and improve their productivity – so many other local businesses may benefit which outweighs the drawbacks to the three local toy companies that may not be able to compete with TT.
37. [4] Conclusion (Not allow): The government in country Z should not allow TT to build a factory there as it may not gain tax revenue if the government of country Z has to make concessions to attract TT to locate there. As TT's production is quite automated few jobs will be created and these may not increase incomes much so there will be little gain to the economy.