1 (a) Identify and explain one advantage and one disadvantage to CC of being a public limited company. Advantage: Explanation: Disadvantage: Explanation:

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2015). The mark or mark type is shown in brackets.

1. Knowledge (2× 1) – award one mark for each advantage/disadvantage identified
2. Analysis (2 × 1) – award one mark for an explanation of each advantage/disadvantage
3. Application (2 × 2) – award two application marks for each advantage/disadvantage
4. Award one mark for each advantage/disadvantage (maximum of two), such as:
5. Advantages:
6. • Raise large amounts of capital through share issue
7. • No limit to the number of shares sold
8. • Shares can be sold to the public
9. • Shares can be sold on the stock exchange
10. • Limited liability
11. • Company has separate legal identify for shareholders
12. • Continuity of company if shareholder dies
13. Disadvantages:
14. • Accounts are published
15. • Risk of takeover
16. • Divorce between ownership and control
17. • Loss of control as increased number of shareholders
18. Award a maximum of three additional marks for each advantage/disadvantage – 2 of which must be applied to this context.
19. Indicative response:
20. Shares can be sold on the stock exchange (k) and this means that CC can raise large amounts of capital to finance the building of new factories in other countries (ap). CC will not have to pay interest on this source of finance and so costs of producing camping equipment are lower (ap) as only dividends may be paid when profits are gained (an).
21. Possible application marks: recognition that the plc is large; business wants to expand; manufactures camping equipment; customers have tents or caravans; merging with a competitor; three factories; capital intensive method of production; camping cooker; prices just below competitors prices; CC share price; takeover; equipment listed from Appendix 1.
22. There may be other examples in context which have not been included here.
23. Relevant points might include:
24. Posters on factory noticeboards
25. Advantages: Easily seen by factory workers, Cheap to produce, Placed in relevant position, Remains visible for long period of time
26. Disadvantages: Not seen by other employees, May not be noticed, Easily removed/damaged, Not know whether or not poster has been read
27. CC website
28. Advantages: Seen by a large number of people - all employees, Visual images enhances the message, Cost to set up (can be argued as a disadvantage)
29. Disadvantages: Only seen if employee accesses the website, May not have access to Internet
30. Text (mobile phone message) to factory workers
31. Advantages: Directly reaches worker, Send it to multiple people at once
32. Disadvantages: May not be noticed, Phone switched off, May not own a phone, Can be expensive to send out text messages, Too easily deleted, Communication delays/network errors
33. Knowledge/Analysis/Evaluation – award up to 10 marks using the levels-based mark scheme below.
34. Level 3: At least 2 × Level 2 + 9-10 marks for well justified recommendation as to the most effective method of communication to use. 7-8 marks for some limited judgement shown in recommendation as to the most effective method of communication to use.
35. Level 2: 4-6 marks Detailed discussion of advantages and/or disadvantages of each communication method.
36. Level 1: 1-3 marks Outline of advantages and/or disadvantages of each communication method.
37. Level 1: 1 mark for each L1 statement (max of 3 marks) e.g. Posters seen by target workers as they will be in the factory and pass by the noticeboard.
38. Level 2: one L2 explanation can gain 4 marks and a further mark can be awarded for each additional L2 explanation (max 6 marks) e.g. Posters seen by target workers as they will be in the factory and pass by the noticeboard. This is a cost effective method to use as the posters will be cheap to produce. However, it will only be seen by factory workers who pass by those particular noticeboards and there may be many workers who are not working near or walk past these noticeboards and will not see the poster. (4 marks for L2 answer).
39. Level 3: for L3 to be awarded there needs to be at least two L2 marks awarded and then a recommendation which justifies the most effective method to use.
40. Award up to 2 additional marks for relevant application.
41. Possible application marks: in country X; manufactures camping equipment; three factories; 100 skilled workers in each factory; many machines in factory; not allowed trade union membership; public limited company; equipment listed from Appendix 1.
42. There may be other examples in context which have not been included here.