OCR Cambridge Technicals Level 3 Business Past Paper PDF 2016

2016 Suite Cambridge TECHNICALS LEVEL 3 BUSINESS Unit 1 The business environment A/507/8148 Guided learning hours: 120 Version 3 Opportunities for applying learning across units updated - August 2016 ocr.org.uk/business ...

2016 Suite Cambridge TECHNICALS LEVEL 3 BUSINESS Unit 1 The business environment A/507/8148 Guided learning hours: 120 Version 3 Opportunities for applying learning across units updated - August 2016 ocr.org.uk/business  First teaching September 2016 LEVEL 3 UNIT 1: The business environment A/507/8148 Guided learning hours: 120 Essential resources required for this unit: None This unit is externally assessed by an OCR set and marked examination. UNIT AIM Businesses operate in an environment which is dynamic, competitive, uncertain and frequently hostile. They need to constantly adapt to changes in their internal and external environments in order to be successful. These changes may include anticipating the actions of competitors, reacting to economic or political changes or making use of new technologies. Whether you aspire to be a business professional, manager, charity worker or entrepreneur, understanding the business environment is key to ensuring that the business in which you work reaches its full potential. In this unit you will develop an understanding of how and why businesses operate in the way they do. You will look at a range of different types of business and business structures, and explore how the ownership of a business and its objectives are interrelated. You will learn about the importance of different functions within a business and how they work together. You will understand the legal, financial, ethical and resource constraints under which a business must operate and how these can affect business behaviour. You will explore ways in which businesses respond to changes in their economic, social and technological environment, and the necessity for a business to plan. You will appreciate the influence different stakeholders can have on a business, and you will learn how to assess business performance. The knowledge, skills and understanding gained by completing this unit is fundamental to being effective in business and, therefore, has synoptic links to all of the other units in the OCR Level 3 Cambridge Technical in Business suite of qualifications. © OCR 2015 1 Unit 1: The business environment  First teaching September 2016 TEACHING CONTENT The teaching content in every unit states what has to be taught to ensure that learners are able to access the highest grades. Anything which follows an i.e. details what must be taught as part of that area of content. Anything which follows an e.g. is illustrative. For externally assessed units, where the content contains i.e. and e.g. under specific areas of content, the following rules will be adhered to when we set questions for an exam: a direct question may be asked about unit content which follows an i.e. where unit content is shown as an e.g. a direct question will not be asked about that example. Learning outcomes Teaching content Exemplification The Learner will: Learners must be taught: 1. Understand different types 1.1 different types of business activity, i.e. 1.1 To include purposes, key features and examples of of businesses and their primary each type. objectives secondary tertiary 1.2 different sectors of operation, i.e. 1.2 To include key features and examples for each private sector. public third sector 1.3 different forms of legal business ownership, i.e. 1.3 To include advantages and disadvantages of each sole trader form of legal ownership and the most appropriate form of ownership for a particular business. partnership private limited company public limited company state/government owned charity/not-for-profit © OCR 2015 2 Unit 1: The business environment  First teaching September 2016 Learning outcomes Teaching content Exemplification The Learner will: Learners must be taught: community interest companies (CIC) 1.4 factors which inform business ownership, i.e. 1.4 To include the most appropriate form of legal legal status ownership for a particular business. liability funding control/decision making legal/administrative requirements 1.5 To include the appropriateness of the objectives of a 1.5 differing business aims and objectives, i.e. business. survival financial, i.e. o break-even o increase revenue o reduce cost o make profit growth, i.e. o physical expansion o increase in market share o increase provision reputation (e.g. quality, offering value for money, being ethical, social responsibility, being environmentally friendly) being enterprising (e.g. own boss, pursue own interests, being competitive) © OCR 2015 3 Unit 1: The business environment  First teaching September 2016 Learning outcomes Teaching content Exemplification The Learner will: Learners must be taught: 2. Understand how the 2.1 key tasks of functional areas of businesses, i.e. 2.1 Different businesses may have different names for functional areas of finance some of these functions, for example, Finance may businesses work together marketing be called Accounting, Business Support Services to support the activities of may be called IT or Administration, HR may be called businesses sales Personnel and Operations Management may be human resources (HR) known as Production. operations management customer services The tasks should be limited to the key activities: business support services finance – financial control and record keeping research and development marketing – promoting the business using purchasing/procurement different and relevant forms of media, including social media sales – selling business products/services human resources (HR) – planning recruitment, redundancies, remuneration and reward systems operations management – converting inputs to outputs customer services – liaising with customers, managing expectations and resolving queries business support service – managing resources, maintaining equipment, providing IT support, providing administrative support research and development – developing new products and services in response to research findings purchasing/procurement – sourcing and providing materials or services. 2.2 how business functions interrelate with other business 2.2 To include the consequences of poor functions interrelationships between business functions. © OCR 2015 4 Unit 1: The business environment  First teaching September 2016 Learning outcomes Teaching content Exemplification The Learner will: Learners must be taught: For example, the actions of the sales function may impact on the operations management function if output needs to be increased. If the sales function fails to inform the operations management function of the likely increase in sales, there may be insufficient products to sell. 3. Understand the effect of 3.1 different organisational structures, i.e. 3.1 To include organisation by function, product/service, different organisational flat structures geographic location. structures on how hierarchical/tall structures businesses operate centralised decentralised matrix 3.2 elements of organisational structures, i.e. 3.2 Division of work in large organisations, subtasks are division of work often distributed to functional areas such as span of control operations management, finance, or marketing. chain of command 3.3 how the elements of the organisational structures 3.3 Implications include: impact on businesses operations, i.e. authority can be delegated; responsibility cannot. communication paths span of control may increase if chain of command accountability, authority and responsibility is shorter or a flat structure is adopted. delegation empowerment To include the advantages and disadvantages of different organisational structures. To include the appropriateness of an organisational structure for a business. © OCR 2015 5 Unit 1: The business environment  First teaching September 2016 Learning outcomes Teaching content Exemplification The Learner will: Learners must be taught: 3.4 the use of organisation charts to show: 3.4 To include reporting status (upwards) and command elements of the organisational structure status (downwards). To include an awareness of the the status of different levels of job role, i.e. key tasks associated with each job role. o chief executive o directors o managers o supervisors o assistants/operatives 4. Be able to use financial 4.1 what is meant by the terms: 4.1 To include definitions and examples. information to check the cost (including fixed and variable costs) financial health of Learners should understand the difference between revenue businesses revenue, profit and cash flow. cash flow net cash flow profit break-even margin of safety 4.2 how to calculate: 4.2 Profit = revenue – cost profit/loss Break-even output = fixed costs/(selling price – variable cost) break-even point/output Graphical analysis is not required. 4.3 how to interpret financial statements, i.e. 4.3 To include description of components in financial an income statement statements and analysis of data. a statement of financial position a cash flow statement A cash flow statement is a record of actual cash inflows and outflows, whereas a cash flow forecast is a cash flow forecast a prediction. © OCR 2015 6 Unit 1: The business environment  First teaching September 2016 Learning outcomes Teaching content Exemplification The Learner will: Learners must be taught: Interpretation of statement of financial position would be limited to a comparison between different time periods. To include recommendations for future success. 5. Understand the relationship 5.1 who the main stakeholders are, i.e. 5.1 A stakeholder is any person, group or organisation between businesses and internal stakeholders which has an interest in a business because they are stakeholders affected by, or may be affected by, the activities of external stakeholders that business. and their objectives Internal stakeholders include owners (sole trader, partners), employees (e.g. chief executive, directors, managers, supervisors, assistants), and trade unions. To include external stakeholder groups such as shareholders, customers, suppliers, potential investors, lenders, local community, pressure groups, and central and local government (e.g. HM Revenue & Customs (HMRC), environmental health, planning department). To include internal and external stakeholder objectives; for example, employees’ objectives may include job security, pay and benefits, rewards and recognition. 5.2 the ways in which different stakeholder groups attempt 5.2 Consider practical examples from real businesses, to alter business behaviour (e.g. an environmental pressure group could protest about the expansion plans of a business, causing negative media publicity and a customer boycott or denial of planning permission). © OCR 2015 7 Unit 1: The business environment  First teaching September 2016 Learning outcomes Teaching content Exemplification The Learner will: Learners must be taught: 5.3 how businesses respond to the different and sometimes 5.3 Business response includes: conflicting objectives of different stakeholders the degree of influence individual stakeholders possess is likely to determine how businesses respond to the individual stakeholder’s objectives conflict resolution and conflict management of stakeholder objectives the benefits and drawbacks of meeting stakeholder needs. 5.4 the consequences to a business of not listening to its 5.4 Including not listening to specific stakeholder groups stakeholders or a specific stakeholder (e.g. local residents or the business owner). 6. Understand the external 6.1 the factors which comprise the external business 6.1 To include: influences and constraints environment, i.e. social factors such as demographic issues, on businesses and how social factors attitudes to work, disposable income, social businesses could respond technological factors trends, cultural beliefs economic factors, i.e. technological factors such as automation, o interest rates communication, purchasing/sales, mobile o exchange rates environmental factors such as energy management, carbon emissions, waste reduction, o inflation recycling, pollution o unemployment political factors such as political instability, change o taxation of government, government initiatives. environmental factors legal factors to include purpose and main political factors provisions of itemised legislation. By current legal factors, i.e. legislation we mean the legislation specified or its o the impact of current legislation on business equivalent should it be revised during the lifetime operations, i.e. of the qualifications in which this unit is taught.  Business framework, i.e. © OCR 2015 8 Unit 1: The business environment  First teaching September 2016 Learning outcomes Teaching content Exemplification The Learner will: Learners must be taught: Companies Act Partnership Act The implication of failing to meet legal  Consumer protection, i.e. requirements to include legal (e.g. fine) and non- Sale and Supply of Goods Act legal implications (e.g. effect on reputation). Supply of Goods and Services Act Consumer Protection Act  Employee protection, i.e. Equality Act Health and Safety at Work Act Working Time Directive National Minimum Wage Act  Data Protection Act  Copyright, Designs and Patents Act  Planning permission o the implications of a business failing to meet legal requirements ethical factors, i.e. ethical to be taken to mean doing what is morally right, by acting above and beyond what the law o ways in which a business can act ethically, i.e. requires. To include ways in which a specific  as an employer (e.g. not exploiting workforce, business can improve its ethical profile (e.g. a no child labour, pay above minimum wage, restaurant could buy fair trade products). living wage, fair working practices) To include both positive and negative impacts of a  as a trader (e.g. fair trade, fair prices) business operating in an ethical manner.  environmentally friendly (e.g. waste To include both positive and negative impacts of a management, recycling, carbon emissions, business not operating in an ethical manner. transport miles, energy use)  sustainability (e.g. fossil fuels, land management, green energy)  corporate social responsibility activities (e.g. charity donations, humanitarian aid, health and welfare schemes, sponsorship of sport/educational/ cultural events) o the impact on a business and its stakeholders of © OCR 2015 9 Unit 1: The business environment  First teaching September 2016 Learning outcomes Teaching content Exemplification The Learner will: Learners must be taught: operating ethically o the consequences for a business and its competitive factors such as the strength of stakeholders of not operating ethically competition, market share of business and competitor factors competitors, competitor behaviour and position in market. 6.2 to identify how the external environment can impact on 6.2 To include positive and negative impacts on a a business and its stakeholders business and its stakeholders. 6.3 how businesses can respond to changes in their 6.3 To include the advantages and disadvantages of external environment differing responses, including seizing opportunities and dealing with threats. 7. Understand why 7.1 why businesses plan, i.e. 7.1 Survival to include why businesses fail (e.g. flawed businesses plan to survive/avoid business failure business plans, poor financial control, lack of to develop business ideas knowledge of market and competition, lack of clear unique selling point, concentration risk (e.g. relying o where business ideas come from (e.g. problem on one major customer)) solving, innovation or accidental discovery, from employees, inventors, entrepreneurs) Attitude to risk (e.g. willingness to take risk, risk to avoid unnecessary risk averse). o attitude to risk and uncertainty to meet objectives 7.2 to determine appropriate sources of finance for 7.2 To include the need for internal and external sources businesses, i.e. of finance, short and long-term sources, the savings advantages and disadvantages of each source, and reserves their appropriateness to a specific business. overdraft loan mortgage © OCR 2015 10 Unit 1: The business environment  First teaching September 2016 Learning outcomes Teaching content Exemplification The Learner will: Learners must be taught: credit card hire purchase trade credit venture capitalist share issue crowd-funding 7.3 what may be included in a business plan, i.e. 7.3 To include what a business plan can be used for and identification of a product or service who may wish to see one. the unique selling point how to protect a product/service prioritisation of business objectives results of market research that has been carried out including competitor analysis identification of financial requirements (e.g. cash flow forecast, the sources of finance to approach) identification of resource requirements (e.g. finance, number of employees, skills of employees, premises requirements and location) 8. Be able to assess the 8.1 factors affecting the success/failure of a business, i.e. 8.1 To include past and present success/failure. performance of businesses financial to inform future business non-financial activities short-term long-term © OCR 2015 11 Unit 1: The business environment  First teaching September 2016 Learning outcomes Teaching content Exemplification The Learner will: Learners must be taught: 8.2 how to conduct a SWOT (Strengths, Weaknesses, 8.2 SWOT assesses a business’ current position. Opportunities and Threats) analysis Strengths and weaknesses are internal and within a business’ control. Opportunities and threats are external; they need to be managed as they cannot be controlled. 8.3 how to interpret business performance, i.e. 8.3 To include both assessment of the current financial analysis performance of a business against its past assessment of non-financial data performance and assessing various measurements of comparison with organisational objectives its current performance. Industrial averages could comparison with industrial averages include benchmarking. comparison with similar businesses trends over time methods used to improve business performance Methods used to improve business performance should include making specific recommendations for future business objectives. © OCR 2015 12 Unit 1: The business environment  First teaching September 2016 LEARNING OUTCOME (LO) WEIGHTINGS Each learning outcome in this unit has been given a percentage weighting. This reflects the size and demand of the content you need to cover and its contribution to the overall understanding of this unit. See table below: LO1 6-24% LO2 3-14% LO3 6-17% LO4 6-17% LO5 6-17% LO6 6-17% LO7 3-14% LO8 3-14% ASSESSMENT GUIDANCE All Learning Outcomes are assessed through an externally set written examination paper worth a maximum of 90 marks and 2 hours in duration. The assessment comprises: multiple choice questions short answer questions to which responses should be based on businesses that learners have researched. The research brief will be pre-issued. short answer and extended answer questions based on a given business scenario. Some of the questions will require the skills of analysis and evaluation. Please note in relation to LO6 by current legislation we mean the legislation specified or its equivalent should it be revised during the lifetime of the qualifications in which this unit is taught. © OCR 2015 13 Unit 1: The business environment  First teaching September 2016 SYNOPTIC ASSESSMENT It will be possible for learners to make connections between other units over and above the unit containing the key tasks for synoptic assessment, please see section 6 of the centre handbook for more detail. *OPPORTUNITIES FOR APPLYING LEARNING ACROSS UNITS This identifies opportunities for developing links between teaching and learning with other units in the business suite. Name of other unit and related LO This unit and specified LO Unit 2 Working in business LO3 Understand the effect of different organisational structures on how LO1 Understand protocols to be followed when working in business businesses operate LO5 Understand how to communicate effectively with stakeholders LO5 Understand the relationship between businesses and stakeholders Unit 3 Business decisions LO6 Understand the external influences and constraints on businesses and LO1 Understand factors to be taken into account when making business how businesses could respond decisions LO7 Understand why businesses plan LO2 Be able to use financial date to inform business decisions LO8 Be able to assess the performance of businesses to inform future LO6 Be able to use information to make and justify business decisions business activities Unit 4 Customers and communication LO1 Understand different types of businesses and their objectives LO1 Understand who customers are and their importance to business LO6 Understand the external influences and constraints on businesses and LO5 Know the constraints and issues which affect the sharing, storing and how businesses could respond use of information for business communications Unit 5 Marketing and market research LO2 Understand how the functional areas of businesses work together to LO2 Know the constraints on marketing support the activities of businesses LO7 Understand why businesses plan Unit 6 Marketing strategy LO1 Understand different types of businesses and their objectives LO1 Understand the purpose of marketing strategies LO6 Understand the external influences and constraints on businesses and LO2 Understand factors influencing marketing strategies how businesses could respond LO5 Be able to use business tools to propose marketing strategies LO8 Be able to assess the performance of businesses to inform future business activities Unit 7 Marketing campaign LO6 Understand the external influences and constraints on businesses and LO1 Understand the purpose of marketing campaigns how businesses could respond © OCR 2015 14 Unit 1: The business environment  First teaching September 2016 Name of other unit and related LO This unit and specified LO Unit 8 Introduction to human resources LO2 Understand how the functional areas of businesses work together to LO1 Know the factors that are involved in human resources planning support the activities of businesses LO5 Understand the importance of confidentiality within the human LO6 Understand the external influences and constraints on businesses and resources function how businesses could respond Unit 9 Human resources LO6 Understand the external influences and constraints on businesses and LO1 Understand the responsibilities of the human resources function and how businesses could respond the factors that affect it Unit 10 Economics for business LO2 Understand how the functional areas of businesses work together to LO2 Understand how macroeconomic factors can impact on UK support the activities of businesses businesses LO6 Understand the external influences and constraints on businesses and LO3 Understand how UK government policies can impact on UK how businesses could respond businesses LO5 Understand how businesses might respond to changes in the local, national and international economic environment Unit 11 Accounting concepts LO2 Understand how the functional areas of businesses work together to LO1 Understand why businesses keep accurate accounting records support the activities of businesses LO4 Be able to use financial information to check the financial health of businesses Unit 12 Financial accounting LO4 Be able to use financial information to check the financial health of LO2 Understand the reporting requirements of private limited companies businesses and public limited companies Unit 13 Management accounting LO4 Be able to use financial information to check the financial health of LO5 Be able to prepare and use cash flow forecasts businesses Unit 14 Resource management LO2 Understand how the functional areas of businesses work together to LO1 Understand how businesses obtain and manage physical resources support the activities of businesses LO2 Understand factors that influence how physical resources are managed LO6 Understand the external influences and constraints on businesses and by businesses how businesses could respond LO3 Understand how resource management can contribute to business LO7 Understand why businesses plan performance Unit 15 Change management LO6 Understand the external influences and constraints on businesses and LO3 Be able to plan for change, manage change and overcome barriers how businesses could respond © OCR 2015 15 Unit 1: The business environment  First teaching September 2016 Name of other unit and related LO This unit and specified LO Unit 16 Principles of project management LO2 Understand the relationship between businesses and stakeholders LO3 Understand how and why projects are monitored and factors that influence a project Unit 17 Responsible business practices LO5 Understand the relationship between businesses and stakeholders LO1 Understand how business act responsibly LO6 Understand the external influences and constraints on businesses and LO2 Understand the importance of adopting responsible business practices how businesses could respond Unit 18 Business operations LO2 Understand how the functional areas of businesses work together to LO1 Understand how business decisions influence business operations support the activities of businesses LO5 Understand how business operations comply with legislation LO6 Understand the external influences and constraints on businesses and how businesses could respond Unit 19 International business LO6 Understand the external influences and constraints on businesses and LO2 Understand the opportunities and challenges that businesses face how businesses could respond when operating internationally Unit 20 Business events LO2 Understand how the functional areas of businesses work together to LO1 Be able to prepare for a business event support the activities of businesses. LO3 Be able to review a business event LO5 Understand the relationship between businesses and stakeholders LO8 Be able to assess the performance of businesses to be able to inform future business activities Unit 21 Being entrepreneurial - evaluating viable opportunities LO7 Understand why businesses plan LO4 Be able to evaluate the viability of opportunities Unit 22- Delivering a business project LO2 Understand how the functional areas of businesses work together to LO1 Be able to scope a project support the activities of businesses. LO2 Be able to collaborate to deliver a project LO5 Understand the relationship between businesses and stakeholders LO3 Be able to evaluate the effectiveness of the project against its LO8 Be able to assess the performance of businesses to be able to inform objectives and own contribution towards the project future business activities © OCR 2015 16 Unit 1: The business environment To find out more ocr.org.uk/business or call our Customer Contact Centre on 02476 851509 Alternatively, you can email us on [email protected] Oxford Cambridge and RSA OCR is part of Cambridge Assessment, a department of the University of Cambridge. For staff training purposes and as part of our quality assurance programme your call may be recorded or monitored. ©OCR 2015 Oxford Cambridge and RSA Examinations is a Company Limited by Guarantee. Registered in England. Registered office 1 Hills Road, Cambridge CB1 2EU. Registered company number 3484466. OCR is an exempt charity.