Identify and explain one effect on GT and one effect on GT's employees of workers being members of a trade union.

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2018). The mark or mark type is shown in brackets.

1. [1] Effect on GT: Easier to negotiate with just one organisation representing all employees at GT
2. [1] Effect on GT: May have to face increased wage costs if union successfully negotiates a pay rise
3. [1] Effect on GT: Improve communication between managers and workers
4. [1] Effect on GT: Improve relations between managers and workers
5. [1] Effect on GT: May be affected by industrial action
6. [1] Effect on GT's employees: May be able to negotiate a wage increase
7. [1] Effect on GT's employees: May be able to improve working conditions
8. [1] Effect on GT's employees: Collective bargaining (strength in numbers) increases likelihood of success for worker demands
9. [1] Effect on GT's employees: Worker views are put forward to management
10. [1] Effect on GT's employees: Can seek advice about issues of pay, dismissal, workers' rights
11. [1] Effect on GT's employees: More aware of employee rights.
12. [1] Explanation of an identified effect on GT (up to 2 marks)
13. [1] Explanation of an identified effect on GT's employees (up to 2 marks)
14. [2] Application marks for context (e.g., GT, large factory, many employees, production workers, wage agreement)
15. [1] Shareholders of GT: To decide whether to reinvest profit
16. [1] Shareholders of GT: To judge the success of the business/judge how much dividend they might receive
17. [1] Shareholders of GT: Whether they should buy or sell shares
18. [1] Managers of GT: To judge their performance
19. [1] Managers of GT: To justify asking for a bonus/pay rise
20. [1] Managers of GT: Take decisions on how to improve profit for the future as profit margin lower than competitors
21. [1] Managers of GT: How to improve liquidity as their liquidity is lower than competitors or feel secure as their liquidity is better than competitors if consider acid test of 1 as suitable
22. [1] Competitors of GT: To judge if GT is more successful than them
23. [1] Competitors of GT: To decide whether to take over GT
24. [L1] 1 mark for each outline of how the financial information is useful to a user. (max of 3 marks) (E.g. The shareholders of GT might use the information to decide whether to sell their shares)
25. [L2] Detailed discussion of how the financial information is useful to a user. (1 x L2 explanation can gain 4 marks and a further mark can be awarded for each additional L2 explanation (max 6 marks)) (E.g. The shareholders of GT might use the information to decide whether to sell their shares as the profit margin is 10% lower than the profit margin of competitors. This might mean the actual profit is lower and therefore the dividends paid to shareholders will be lower. If this happens then the share price might also fall therefore reducing the value of their shareholding. (4 marks for L2 answer plus 1 mark for application for use of the information from Appendix 3).)
26. [L2] Relevant financial calculations using data from App 3 can be rewarded with L2 marks
27. [L2] GT - gross profit = $15m net profit = $2m gross profit margin = 75%
28. [L2] Main competitor – gross profit = $22m net profit = $5m gross profit margin = 88%
29. [L3] For L3 to be awarded there need to be at least 2 L2 marks awarded and then a justified conclusion as to which user will find the information most useful when making decisions. (7-8 marks for some limited judgement, 9-10 marks for well justified conclusion)
30. [App] Award up to 2 additional marks for relevant application.
31. [App] Possible application marks: plc set up 50 years ago; manufacturer of toys; toys sold to large toy shops throughout country Y; toys also exported; Marketing manager wants to only sell toys online; toys manufactured using batch production; need to purchase cheaper components to reduce costs; recent price increases have resulted in falling sales.
32. [App] Any relevant reference to the data in Appendix 3.