CIE A-level Business Studies revision notes - for May/June 2012

This is a brief revision guide I made to aid my A-level Business Studies revision. I went through each topic from the May/June 2012 Cambridge syllabus and used the CIE Business Studies textbook & other resources from various sources combined to help me with the content. So this is basically a much shorter and simpler version of the big textbook! I really hope you guys would find this a bit useful to your studies. And good luck to all! 

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  • Created by: Cherrie.T
  • Created on: 06-06-12 14:18

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Page 1

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1AL.2
Business
Structure

Trading
links

International
trade
has
grown
rapidly
in
the
recent
years

More
countries
trading
together
means
can
be
beneficial:

Improve
their
political
&
social
aspects
and
resolve
differences
between

them

Wider
choices
for
consumers
­
may
lead
to
better
standards
of
living

Countries
may
obtain
any
raw…

Page 2

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Avoid
import
restrictions


Access
to
local
natural
resources

Problems
that
multinationals
might
face:

Communication
problems
(language
barriers)

Culture
&
legal
difference
(so
need
to
adapt)

Biggest
type
of
organisation
so
need
to
ensure
that
the
objectives
are

coordinated
between
all
plants
of
the
business

Benefits
to
`host'
countries:

Create
employment…

Page 3

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Arguments
against
privatisation:

The
state
should
take
decisions
about
essential
industries
which
are
based
on

society's
needs
not
just
interest
of
shareholders
(some
unprofitable
companies

may
be
kept
open)

It
is
more
difficult
to
achieve
coordinated
policy
to
benefit
the
whole
country
with

many
privately
run
businesses

Many
strategic
industries…

Page 4

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· Merger
­
an
agreement
by
shareholders
and
managers
of
two
businesses
to
bring

both
firm
together
under
a
common
board
of
directors
with
shareholders
in
both

businesses
owning
shares
in
the
newly
merged
business

· Takeover
­
when
a
company
buys
over
50%
of
the
shares
of
another
company…

Page 5

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Advantages
of
merging/integrating:

Two
firms
may
be
able
to
share
research
facilities
&
ideas
that
will
benefit

both
businesses
(only
if
firms
use
the
same
kind
of
technologies)

Larger
firms
may
benefit
from
economies
of
scale

The
new
business
can
save
on
marketing
&
distribution
costs
using
the

same
outlets…

Page 6

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Cyclical
­
unemployment
resulting
from
low
demand
for
goods
and
services
in
the

economy
during
a
period
of
slow
economic
growth
or
a
recession
(AD
falls,
firms

produce
less,
less
workers
needed)

Government
needs
to
avoid
substantial
swings
in
the
business
cycle
(stabilise

inflation
&
exchange
rate
so
that
domestic…

Page 7

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· Since
stocks
are
bought
in
advance
and
then
sold
later,
there
is
an
increase
in

profit
due
to
inflation




Drawbacks
of
high
inflation
(5-6%):

· Higher
wage
demands
from
workers
(adds
to
costs)

· Consumers
demand
may
fall

· Government
needs
to
raise
interest
rates
to
reduce
AD
and…

Page 8

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Improve
by:

Increase
staff
motivation

More
efficient
&
reliable
capital
equipment

Better
staff
training

Increase
worker
involvement
in
problem
solving
to
speed
up
production

Improve
internal
efficiency
(e.g.
no
waiting
for
supplies
of
materials
to

arrive)




· Absenteeism
rates
­
measures
the
rate
of
workforce
absence
as
a
proportion
of…

Page 9

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Improving
employee
performance

· Regular
performance
appraisal
against
pre-set
targets
­
if
constantly
failing
then

disciplinary
procedures
or
further
training
may
be
needed

· Offering
training
opportunities
to
stretch
and
challenge
every
worker
may
help
to

increase
efficiency

· Quality
circles
­
involve
everyone
in
suggesting
solutions
to
problems

·…

Page 10

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2. Collective
bargaining
between
trade
unions
and
employers
­
when
unions
and

national
employers
negotiate
wage
levels
and
working
conditions
for
the
whole

industry.
Unions
are
powerful
because
they
may
call
for
strike
actions,
which
bring

the
entire
industry
to
a
halt.
DISADVANTAGES:

National
agreements
may
not
be
affordable/suitable
for…

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