Explain two possible reasons why Aisha set up CC as a business partnership.

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2020). The mark or mark type is shown in brackets.

1. [1] More capital can be raised - than if the business was a sole trader when only one person would be providing capital
2. [1] Shared responsibilities of running the business – each partner can specialise in one aspect of the business where they have expertise
3. [1] To share risks - if there are debts or losses these are shared between the partners
4. [1] To share ideas/more ideas/help make decisions
5. [1] To share the workload/cover when one partner takes holidays
6. Award a maximum of 3 additional marks for each explanation of the reason – one of which must be applied to this context.
7. For example: Aisha can raise more capital (1) as she can also gain $10000 from her brother (app). If CC was a sole trader then she would only have her own money which may not be sufficient (1) and additional capital will allow Aisha to invest in more equipment for the factory (1).
8. Application could include: mobile phone covers; $10000 invested by each partner; bank loan of $10000; leased a factory when setting up; brother; always wanted to be her own boss; new business; Operations Manager.
9. Application form - Advantages: Provides a wide range of written information on the applicants - quicker to gather information than interviewing applicants
10. Application form - Advantages: Easier to compare applicants
11. Application form - Advantages: Takes time to review application forms – and can be referred back to later to compare applicants
12. Application form - Disadvantages: Applicants may lie on the form
13. Application form - Advantages: The workers need to be skilled to operate the equipment and therefore an application form will show the qualifications they have so CC can see if they can do the job efficiently
14. Application form - Advantages: The two new production workers may need qualifications/basic education to show they are capable of being trained to operate machinery and this can be a question on the application form
15. Interview - Advantages: Will show Aisha the personality of the applicant. Meeting them face-to-face will be easier to assess their personality and whether the applicant may fit into the working environment of the factory making phone covers
16. Interview - Advantages: Shows whether the worker will work well in a team as team work is required on the production line this may improve worker motivation
17. Interview - Disadvantages: If the worker is unfriendly then they may not be good to employ as the other workers may not like them and output may fall
18. Interview - Advantages: It will allow applicants to ask questions and therefore they can be sure the job is right for them. If they are appointed and do not like the work, then they may leave and CC will have increased costs from recruiting more workers to replace those that have left
19. Aptitude test - Advantages: Shows whether the worker can do the job effectively - cannot lie about own skills
20. Aptitude test - Advantages: Should prevent an unsuitable person being employed and efficiency producing phone covers being reduced in the factory
21. Aptitude test - Advantages: Easier to select the most skillful person for the job – possibly reducing unit costs if productivity is higher
22. Aptitude test - Disadvantages: Can be expensive and time consuming to carry out tests showing their skill at operating the equipment on the production line
23. Recommendation Justification: Application forms should be used as all the necessary information is provided on the form and a written record is provided that can be checked. Interviews may miss out questions and are time consuming to carry out. Aptitude tests may also take too much time to carry out and may not show the potential of applicants to learn new skills suitable for CC to produce mobile phone covers.
24. Recommendation Justification: Interviews should be used as they allow CC to assess if the worker will fit into the teams in the factory and work well with the other employees in producing mobile phone covers. An application form will not allow CC to assess whether the applicant will fit into the working environment.
25. Recommendation Justification: Aptitude tests should be used as they show the ability of the applicant to actually carry out the job efficiently when producing mobile phone covers, whereas someone can seem very good on an application form but be less suitable in practice.