O-LevelBusiness StudiesUnderstanding business activity7115/21 · Oct/Nov 2014 · Q220 Marks

Banking is a tertiary sector business. Identify four other types of tertiary sector businesses that PB Bank might use and explain what services they offer to PB Bank.

(a)Banking is a tertiary sector business. Identify four other types of tertiary sector businesses that PB Bank might use and explain what services they offer to PB Bank.[8]
(b)Refer to the organisational chart in Appendix 1. The directors are thinking of removing the middle management level (deputy managers). Consider the advantages and disadvantages of widening the span of control for the remaining managers. Recommend whether the directors should remove this level of management. Justify your answer.[12]

Mark scheme

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

[8] Content:
- Insurance
- Telephone communication
- Internet provider
- Advertising agency
- Training provider
- Recruitment agency
- Security
- Communication
- Accountants.
N.B. the service must be used by the bank directly.
The marks available for this question are as follows: 4 marks for knowledge and 4 marks for explanation/analysis.
1 mark for each example of a tertiary sector service identified (4 marks max). One further mark is available for explaining how the service will be helpful to the bank. (2)
Service: Insurance (1 mark for knowledge)
Explanation: Insurance (1) provides businesses with protection against risks such as theft or damage to branch premises.
[12] Content:
Advantages:
- Increased contact with senior managers
- Increased delegation
- Increased motivation
- Improved communication
- Reduced wage costs.
Disadvantages:
- Less control by managers
- Junior managers may make mistakes
- Less supervision of employees
- Greater workload/stress/extra hours
- More people to manage
- Fewer opportunities for promotion.
Level 1: 1 mark for each statement e.g. the removal of a layer of management is likely to lead to increased delegation. (1 mark)
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. e.g. the removal of a layer of management is likely to lead to increased delegation. This will mean that employees will have a wider range of jobs to do and also be given more responsibility to carry out tasks such as granting customer loans. This could be very motivating for the employees as they will feel trusted.
5 marks for level 2 answer plus one application mark for including reference to customer loans in the answer.
Level 3: Detailed discussion of at least two level 2 answers and then a conclusion at the end which justifies whether or not delayering should be carried out.