Zalpha is a multinational company. It manufactures agricultural machinery and employs a large number of people. Figure 1 shows a simplified organisation chart for the business. The business decision making is centralised and some employees complain of poor communications within the company. Figure 1 Board of Directors Managing Director Managing Director Managing Director Asia Division Europe Division Africa Division Factory A manager Factory B manager Quality Warehouse Stock control manager manager manager

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2014). The mark or mark type is shown in brackets.

1. [2] Clear Understanding [2] – a business with factories, production or service operations in more than one country OR a business with production or service in another country outside its normal area of operation.
2. [1] Some Understanding [1] – e.g. has businesses everywhere / works in more than one country / operates in more than one country.
3. Note - do not accept examples.
4. [1] Application [1]: 2 (factory managers) OR factory A manager and factory B manager.
5. [1] Application [1]: 4 (levels).
6. [4] Knowledge [2 × 1] – award 1 mark for each relevant reason.
7. [4] Application [2 × 1] – award 1 mark for each relevant explanation in context (show why they might create poor communication for Zalpha).
8. Reasons might include:
9. Tall hierarchy / long chain of command/ distance from top to bottom of organisation [k] as there are at least 4 levels [app]
10. Choosing the wrong method of communication [k] for a business is split across 3 continents [app] / for such a large number of people [app]
11. Barriers to effective communication exist e.g. language issues [k] for different countries / multinational [app].
12. [6] Knowledge [2 × 1] – award 1 mark for each advantage identified.
13. [6] Application [2 × 1] – award 1 mark if relevant reference made to this business/manufacturer.
14. [6] Analysis [2 × 1] – award 1 mark for each relevant explanation (showing how the point create an advantage).
15. Advantages might include:
16. Speed of decision making increased [k] because not many people are involved [an]
17. Save money/lower cost [k]
18. Decrease level of conflict [k]
19. Power retained by senior management / control maintained [k] between the board and 3 directors [app]
20. Easier to ensure consistency / reduce inconsistency [k] across all divisions [app]
21. Economies of scale more achievable [k] as head office are able to order parts [app] in bulk to get larger discounts [an]
22. Easier to co-ordinate and control budgets [k]
23. Greater use of specialisation possible [k].
24. [6] Knowledge [2 × 1] award 1 mark for each relevant issue identified.
25. [6] Application [1] – award 1 mark if relevant reference made to this type of business.
26. [6] Analysis [1] – award 1 mark for relevant development of point(s).
27. [6] Evaluation [2] – justified decision made as to whether Multinationals benefit the countries in which they operate.
28. Points might include:
29. Create jobs / provides income [k] because Zalpha employs a large number of people [app] so improving living standards [an]
30. Technical knowhow increased [k] Zalpha makes agricultural machinery [app] and improves production [an]
31. Possible orders for local suppliers [k] to provide parts for machines [app] therefore increasing local incomes [an]
32. Competition [k] for local businesses [k] who manufacturer goods [app] leading to lower prices [an]
33. Improve international reputation of country [k]
34. Inward investment / infrastructure development [k]
35. More goods available [k]
36. Companies pay taxes [k] therefore increasing income for the government [an]
37. Profits are often repatriated [k] limiting the countries growth [an]
38. Resources are depleted [k] so there is less available for other businesses [an] manufacturing in the country needs raw materials [app]
39. Local businesses close [k] due to increased competition [app]
40. Exploitation can occur [k].