Explain two leadership styles that Zane and Zaara could use when managing ET's employees.

Mark scheme

Marking points from the official mark scheme (May/June 2023). The mark or mark type is shown in brackets.

1. [8] (a) One mark for each leadership style (max 2). Award a maximum of 3 additional marks for each leadership style – one of which must be applied to this context. Relevant answers might include: Autocratic: The manager expects to be in charge and have all orders followed; Manager keeps themselves separate from the employees; Manager makes all the decisions and keeps information to themselves; Communication is one-way/employees having no opportunity to comment or take part in any decisions about business; Decision-making is quick. Democratic: Gets employees involved in decision-making about the business; Information about future plans for the business shared with employees and discussed before owners make the final decision; Communication is both downward and upward allowing the experience of employees to be considered by the owners – leading to possibly better decisions being made; Motivating for employees as they feel more involved in the business – less likely to leave/reduced labour turnover. Laissez-faire: Main objectives of the new business are shared with employees but then they are left to organise their own work and take decisions without any interference; Communication can be difficult as the leader has little involvement in the decisions made; Employees can be motivated as they are valued and trusted to take the decisions; Employees can be creative with fresh ideas about how to operate the business. For example: They could use a democratic leadership style (1) where communication is both downward and upward allowing the experience of employees to be considered by the owners (1) leading to possibly better decisions being made (1) about how to operate the theatre (app). Application could include: theatre; performances; 100 seats; pay fair wages; tourists; low-income area; 24 part-time employees; provides education for children under 5; costumes produced in the local area; refreshments from suppliers that do not pollute the environment.
2. [12] (b) Level 3 (9-12 marks): Sound application of knowledge and understanding of relevant business concepts using appropriate terminology. Detailed discussion of two or more issues. Well-justified conclusion. Candidates discussing all three issues in detail, in context and with a well-justified conclusion including why the alternative issues are rejected should be rewarded with the top marks in the band. Level 2 (5-8 marks): Sound application of knowledge and understanding of relevant business concepts using appropriate terminology. Detailed discussion of at least one issue. Judgement with some justification / some evaluation of choices made. Candidates discussing two or more issues in detail and applying them to the case should be rewarded with the top marks in the band. Level 1 (1-4 marks): Limited application of knowledge and understanding of relevant business concepts. Limited ability to discuss issues with little/no explanation. Simple judgement with limited justification / limited evaluation of choices made. Candidates outlining all three issues in context should be rewarded with the top marks in the band. Level 0 (0 marks): No creditable response. Relevant points might include: Paying fair wages to employees: This will provide local people with a higher income than they might have had - leads to higher standard of living in the local area – more likely to sell more theatre seats – increasing revenue for the theatre; Higher wage rates might lead to higher motivation - improved quality of performances at the theatre; Lower labour turnover – the 24 part-time employees may be less likely to leave and work for another theatre – improved employee loyalty – lower recruitment costs; Wage costs are likely to be higher which may lead to higher prices for theatre seats - may lead to lower demand – reducing revenue. Only buying costumes produced in the local community: Will attract local people to watch the theatre performances – increase revenue from ticket sales; May receive good publicity – many local people may encourage family and friends to support the theatre – increasing revenue; Provides work for local people – important as it is based in a low-income area - raising the standard of living for people in the local area; Local people may not have the skills necessary - limiting the quality of costumes used and possibly the overall performance. Purchasing all refreshments from suppliers that do not pollute the environment: May be more expensive than buying from less ethical suppliers – possibly lowering the profit margin for each performance; Reduces the range of refreshments available - may reduce revenue as choice may be less popular; Pressure groups will be less likely to protest outside the theatre – which might deter tourists from visiting the theatre. Conclusion Justification may include: Paying fair wages is likely to have the biggest effect on ET as this may increase costs which may lead to higher prices for the 100 seats so customers may go to their competitors instead and reduce revenue. Costumes from the local community may be of lower quality but if the performance is good then people will still buy tickets and revenue will not be affected. Refreshments only have a small impact on the theatre as they are a small proportion of the overall costs and revenue. So higher costs and lower revenue due to paying fair wages is likely to have the biggest effect on ET. Costumes produced locally provides work for the local community, so ET is more likely to sell all 100 seats for each performance as local people have the income to buy the tickets. Higher revenue from sales will lead to the biggest effect on ET. Refreshments purchased from ethical suppliers will lead to a good reputation for the theatre and hence attract customers concerned with the environment so revenue will be higher as more tickets are sold for each performance leading to higher profits for ET.