Identify and explain two disadvantages to PB Bank of being a public limited company.

Mark scheme

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

1. [8] Content:
2. - Cannot control who buys the shares/Easier to be taken over
3. - Expect dividends to be paid
4. - Accounts published
5. - Legal formalities need to be followed
6. - Divorce between ownership and control
7. - More difficult for effective communication
8. - May experience diseconomies of scale/management problems.
9. The marks available for this question are as follows: 2 marks for knowledge; 4 marks for analysis and 2 marks for application.
10. 1 mark for each disadvantage identified plus 2 explanation marks for each disadvantage plus 1 application mark. (4 marks × 2 disadvantages)
11. Disadvantage: Accounts published (1 knowledge mark)
12. Explanation: Accounts published (1) as this is a legal requirement and the accounts need to be published each year. Anyone can see the accounts and so this means competitors can look at the accounting details of the bank. (2) A rival bank might want to take over the bank and finding out about its accounts could help it decide to take it over. (3) (Plus 1 application mark for answering in the context of banks).
13. [12] Content:
14. - Email
15. - Telephone
16. - Text/SMS
17. - Meetings
18. - Memorandum
19. - Company newsletter
20. - Noticeboards/posters
21. - Letters
22. - Put information on the website
23. - Improve managers' communication skills
24. Level 1: 1 mark for each suitable way/statement e.g. the HR Director could use email to inform employees about any new changes to the bank. (1 mark)
25. Level 2: 5 marks for the first level 2 answer and then one extra mark for each additional level 2 answer up to maximum of 8 marks.
26. e.g. The HR Director could use email to inform employees about any new changes to the bank. Email is quick and cheap to use and can be sent out as a global email which means it goes to everyone on the email contact list. However, not all 15000 employees may have a bank email address, so the message may not get through to all employees and it will be difficult to know if the message has been read.
27. 5 marks for level 2 answer plus one application mark for including reference to 15000 employees at the bank.
28. Level 3: Detailed discussion of at least two level 2 answers and then a recommendation at the end which justifies which is the best form of communication to choose compared to the other forms of communication.