Explain four benefits to employees of being members of a trade union.

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2022). The mark or mark type is shown in brackets.

1. [1] Possibly improved pay
2. [1] trade union negotiations make wage demands for a pay rise more likely to be successful
3. [1] Improved working conditions
4. [1] as trade union can put forward a case to the employer if conditions are not good
5. [1] Employee views are represented in grievances with managers
6. [1] more likely to be listened to as strength in numbers
7. [1] Provides advice to members
8. [1] such as if they feel they have been dismissed unfairly / unfairly treated, employees will know if they have a case against the business
9. [1] The communication between employers and employees is better
10. [1] as there is a channel through which issues/points from employees can be raised
11. [1] Provides services to members
12. [1] such as insurance or social facilities at reduced rates
13. [1] Improved job satisfaction
14. [1] by encouraging training
15. [1] Improved job security
16. [1] especially if it is a closed shop
17. [1] Influence government policy e.g. pressure to increase legal minimum wage
18. [1] NM's shareholders: CC's profit (42m) is higher than NM's (3.5m), potentially leading to higher dividends if takeover proceeds, making them more likely to accept CC shares.
19. [1] NM's shareholders: ROCE is 10% higher for CC, suggesting better returns for shareholders if NM is taken over.
20. [1] NM's shareholders: NM's liquidity (current ratio 1, acid test < 1) is lower than CC's, indicating CC has better liquidity, which might encourage supporting the takeover for a more stable company.
21. [1] NM's shareholders: CC is significantly larger ($170m more in shareholders' equity), indicating a more stable and safer company to own shares in.
22. [1] CC's managers: CC is more efficient (profit margin 25%, 10% higher), so CC managers might use their working practices to improve NM's efficiency.
23. [1] CC's managers: NM's high inventory and low acid test (0.33) suggest CC's managers could improve NM's profit by lowering inventory levels and warehousing costs.
24. [1] CC's managers: NM's presence in country Z means familiarity with the market, helping CC enter this new market and use NM's distribution channels for higher revenue.
25. [1] CC's bank manager: CC already has a $10m loan and needs $35m for the takeover; this is small relative to its $200m shareholders' equity.
26. [1] CC's bank manager: Needs to assess if CC can repay the loan, noting CC's profit of $42m and NM's profit of $3.5m, making NM a profitable takeover target.
27. [1] CC's bank manager: NM being profitable makes the loan likely to be repaid, increasing bank confidence in granting the loan.
28. [1] Conclusion: NM's shareholders find financial information most useful to assess takeover benefits (higher dividends, returns, stability).
29. [1] Conclusion: CC's managers find financial information most useful to assess NM's efficiency and implement improvements post-takeover.
30. [1] Conclusion: CC's bank manager finds financial information most useful to assess CC's loan repayment capability and decide on granting the takeover loan.