3.1 Business in the real world Teach before: 3.2 Influences on business 3.1.1 The purpose and nature of businesses Specification content Learning objectives Additional guidance Suggested timing (hours) Learning activities and resources Purpose of business Reasons for starting a business To understand what a business is and the reasons for starting a business. Reasons for starting a business include: producing goods, supplying services, distributing products, fulfilling a business opportunity and providing a good or service to benefit others. 1 Business types – show pictures of a variety of businesses – students to explain what the purpose of each business is. Stretch and challenge opportunity – students to generate ideas of other businesses that are created for each purpose. What is a business – Why start a business – Reasons for starting a business will overlap with entrepreneur’s objectives. See section for further ideas.
Business enterprise and entrepreneurship To understand the term enterprise and what is meant by an entrepreneur. To outline the characteristics of an entrepreneur. 1 Pictures of famous entrepreneurs – students to guess names. Clip from Dragons’ Den or about successful entrepreneurs. Research task – students to research a famous entrepreneur – what is their business, how did they start etc. Students to produce a list of characteristics of entrepreneurs. Extension Students to explain which characteristic they think is the most important. This can be done using a diamond 9 template. To outline the objectives of an entrepreneur. Objectives of an entrepreneur include being their own boss, flexible working hours, to pursue an interest, earn more money, identify a gap in the market and dissatisfaction with current job. 1 video clips from previous lessons or the one below, students to list the main objectives of an entrepreneur – Social responsibility objective – Entrepreneurs – Dynamic nature of business To understand that businesses face a constantly changing business environment. Changes in business environment include changes in technology, economic situation, legislation and 1 Students to list the main external factors that impact a business. For each article students should briefly explain the impact on businesses.
Specification content Learning objectives Additional guidance Suggested timing (hours) Learning activities and resources Sole traders Partnerships To understand what is meant by a sole trader and the benefits and drawbacks of this legal structure. To understand what is by a partnership and the benefits and drawbacks of this legal structure. Benefits and drawbacks of each legal structure include issues such as management and control, sources of finance available, liability and distribution of profits. 1 Show pictures and logos of a variety of businesses – ask students what the difference is between these businesses (eg number of employees, number of owners, objectives) – different business situations require different legal structures. Pick out main benefits and drawbacks of a sole trader from or Students to list the main benefits and drawbacks in pairs. Extension Why is it now easier than ever to set up as a sole trader and reach a large market? Spot the errors paragraph about sole traders. Use business examples like a local solicitors or doctors to illustrate the benefits of partnerships – show the range of services on offer due to different specialists. Ask students the issues/problems they face when working in or teams – link this to conflicts and disagreements in partnerships. Explain how these can be resolved by having a deed of partnership. Students to generate a simple business idea with a partner and create a deed of partnership. Complete question 1b) 4 marks sole trader Paper 1 June 2016.
Private limited companies (Ltd) To understand what is meant by a private limited company and the benefits and drawbacks of this legal structure. To understand the concept of limited liability and which businesses benefit from this. No understanding of the legal process of incorporation is expected. 1 Show introduction to limited companies – Explain the difference between businesses and companies. Show a short clip from Dragons’ Den – why do businesses want to involve other investors? Why is limited liability helpful in this situation? Public limited companies (Plc) To understand what is by a public limited company and the benefits and drawbacks of this legal structure. 1 Show for famous Plcs. List of businesses who are Plcs and Ltds – include some which students might imagine are Plcs (eg Nintendo and Virgin group) – why would big businesses maintain their Ltd status? Fill in the gaps exercise assessing understanding of legal structures. Not-for-profit organisations To understand what is meant by a not-for-profit organisation and the benefits and drawbacks of this legal structure. To evaluate which legal structure would be the most appropriate for a variety of business examples. Including new start-up businesses and large established businesses. 1 – students to identify reasons for starting a not-for-profit organisation. Research not-for-profit organisations in the local area – why have they been set up? What is the social need that they are trying to improve? – what might be the potential drawback of these organisations? Students to create a table (without/minimal resources) including columns for type of legal structure, definition, benefit (x2), drawback (x2), real world example and size of business – what size of business would be most appropriate for the legal structure? Students given different business examples/scenarios – in groups they should judge which legal structure they would choose and justify why that is the most appropriate structure.
Students list the main disadvantages of international location. Student task – you are the production director of Cadbury. You have been asked to produce a report summarising whether Cadbury should focus increasing the size of its current factories in Bournville or move all production facilities abroad to Ghana. Complete question 2d) 9 marks Paper 2 June 2012. 3.1.6 Business planning Specification content Learning objectives Additional guidance Suggested timing Learning activities and resources The purpose of business planning The main sections within a business plan To understand the reasons why businesses create plans. To understand the main sections of a business plan. Reasons include importance in setting up a new business, raising finance, setting objectives and detailing how functions of a business will be organised. 1 Students plan what they intend doing at the weekend – why is it helpful for them to make a plan? (organise time, ensure they have the right resources to fulfill ideas etc) Show – why would a business plan have been helpful in this situation? Prince’s – .
Economies of scale due to economies of scale. Complete question 3b) 5 Paper 2 June 2014. Diseconomies of scale To understand that, with growth, businesses increase the risk of diseconomies of To calculate and interpret average unit Diseconomies of occur due to poor communication, coordination issues and reduced staff motivation. 1 – lots of good material 1–11 mins illustrates inefficiencies in a car warehouse area. Later sections (23–30 mins) show lack of motivation in a garage. Link video to diseconomies of scale – encourage students to generate solutions to the problems highlighted in the video. Complete question 2b) 4 marks Paper 2 June 2014. Teacher led introduction to formula for average unit costs. Calculation questions testing student understanding. 3.2 Influences on business Teach before: 3.4 Human resources Teach after: 3.1 Business in the real world 3.2.1 Technology Specification content Learning objectives Additional guidance Suggested timing Learning activities and resources
accept greater environmental responsibility in their and the costs and benefits of businesses behaving this way. traffic congestion, recycling, disposing of and noise and air pollution. Show Teacher led notes on social costs – Sustainability To identify and analyse there may be a possible trade-off between sustainability and profit. Sustainability issues include global warming and the use of scarce resources. 1 Students research what is meant by sustainability and a business that has a focus/aim on sustainability. McDonald’s video on Students to complete a 9-mark style question summarising the topic – recommend whether a business should behave in an ethical, environmental and sustainable manner. Give reasons for your advice. 3.2.3 The economic climate on businesses Specification content Learning objectives Additional guidance Suggested timing (hours) Learning activities and resources making
Interest rates To demonstrate and understand how businesses might be affected by changes in the rate of interest. An understanding of how fluctuating interest can affect businesses that rely on overdrafts and loans for finance. 1 Reference – Teacher introduction on interest rates – Show Graph showing Show to illustrate impact of changing interest rates. How does this impact business spending? To understand how fluctuating interest rates can affect consumer and business spending. Economic theory relating to how/why interest rates change is not required. 1 Show or for a particular property – explain how mortgages work. Show – calculate how much money would be left after the mortgage is paid – this is spending money (disposable income). Explain and illustrate the impact of increasing interest rates and thus mortgage payments. Students list reasons for consumers requiring loans or credit – cars, sofas, credit cards, home improvements etc. Good overview of employment To identify how and why businesses might be affected by changes in levels of employment. 1 Definition of unemployment. Show – students to explain what the graph shows and what this means for individuals and businesses. Consumer spending To understand how demand for products and services may change as incomes fluctuate. 1 Show images of Heinz baked beans and an own brand tin of baked beans – students explain which they would choose and why. Show – link to demand for luxury goods for high income earners. Show to illustrate the variety of products available depending on income earned.
3.2.4 Globalisation Specification content Learning objectives Additional guidance Suggested timing Learning activities and resources How UK businesses compete internationally To understand what is meant by globalisation. 1 Starter – students guess what is sold in this shop/café – Teacher explanation of globalisation or video explanation – Illustrate globalisation through Link back to used earlier. To understand the methods UK businesses use to compete internationally. Methods include better designs and higher quality products at lower prices. 1 Starter – – why is this product likely to be successful in a global market? – or – what were the possible reasons why Tesco wasn’t successful abroad? Show an – student discussion on the methods Sunseeker should adopt to compete successfully on an international stage – create a spider diagram. To analyse the benefits and drawbacks of globalisation for UK businesses. 1 Students create a poster or leaflet summarising what is meant by globalisation, examples of businesses that complete globally, the benefits and drawbacks for UK businesses.
Exchange rates To understand the impact of exchange rates on the profit and sales of those businesses that import and/or export. Students will not be asked to calculate exchange rate conversions. 1 Starter – students to list any currencies that they know countries use (eg dollar, pound, euro) – Teacher definition of exchange rates – link to when students have gone abroad on holiday and have changed money or used different currencies. Show – ask students if anyone what caused the fall in June 2016 (Brexit). Test understanding – Teacher led explanation of SPICED – Strong Pound Imports Cheaper Exports Dearer. Pair work – students to explain whether the current UK exchange rate is good for importers and exporters and the impact on their sales, costs and thus profits. 3.2.5 Legislation Specification content Learning objectives Additional guidance Suggested timing (hours) Learning activities and resources Employment law To assess the impact of employment legislation on businesses. To understand the consequences of failing to follow legislation for the business. Impacts of legislation on the business include costs, training needs, recruitment requirements. Employment law including: 1 Reference and final test – Reference – Research task – students to find out the minimum wage for each age group and the living wage.
after: 3.2 Influences on business 3.4.1 Organisational structures Specification content Learning objectives Additional guidance Suggested timing (hours) Learning activities and resources Organisational structures To understand internal organisational structures, span of control, chain of command, delayering and delegation. To understand why businesses have internal organisational structures. Reasons for having internal organisational structures include an understanding of different job roles and responsibilities throughout the business. 2 Teacher led explanation of an organisational structure Reference – Students draw an organisational chart for the school – outline what responsibilities members of staff have. Provide a list of jobs roles for students – students to create a simple organisational structure – the can be used as an example. Using their organisational chart, students should explain and label what is meant by span of control, chain of command, delayering and delegation. Tesco employ 476,000 employees – why would Tesco need to have a clear organisational structure? Students create a spider diagram of the main benefits of having an organisational structure. Complete question 1b) 4 marks Paper 2 June 2016. Appropriateness of organisational structures To understand the impact that having a tall or flat organisational structure has on how 1 Show – show clip in the plane loading area (around 22 mins into the programme) or with the delivery van (around 10.30 mins into the programme). Both clips illustrate situations whereby the business has expanded and the manager isn’t aware of what happens with workers loading planes/doing deliveries. Link the clips to issues of having the incorrect organisational structure.
a business is managed. To understand how an organisational structure may affect the different ways of communication. Students to generate two strategies to resolve the problems identified in the video clips. Split students into pairs. One student draws a tall organisational structure and explains the benefits, the other student does the same for a flat organisational structure. Reference – . Students to play Chinese whispers to illustrate the issues faced by the organisation from having a tall organisational structure. Show – show clip about a handyman in a hotel (around 14 mins into the programme). The video clip illustrates the issues of having a wide span of control and thus a lack of control. Teacher led explanation on how organisational structures impact communication. Students generate ideas for the best methods of communication for the different organisational structures. Centralisation and decentralisation To understand what is meant by centralisation and decentralisation. To understand the benefits and drawbacks of centralisation and decentralisation for business performance. 1 Starter – – link to differences in cultures etc. Use the case of a growing business like – what difficulties will the managers of Sprinkles face as they open more stores across the UK? Students to create a table including the definitions, benefits and drawbacks of centralisation and decentralisation. Reference – Complete question 2c) 4 Paper 2 June 2013 or question 3c) 6 marks Paper 2 June 2015. 3.4.2 Recruitment and selection of employees
Specification content Learning objectives Additional guidance Suggested timing (hours) Learning activities and resources The need for recruitment To understand the difference between internal and external recruitment. To understand the benefits and drawbacks of internal and external recruitment. 1 Starter – show a clip or for The Apprentice – why does Alan Sugar want to recruit the best workers? Teacher led notes on the reasons businesses need to recruit staff, for example fill a vacancy, expansion etc. Students create a mind map of methods businesses use to recruit their employees – job centres, recruitment agencies, word of mouth, job adverts, direct and promotions. Teacher explanation of the difference between internal and external recruitment – students mark next to their previous list of which methods are internal recruitment and which are external. Show – why would a business use a recruitment agency? Link to a benefit of external recruitment. Why might an external recruitment policy be a good option in ? Group work – split the class into groups focusing on the benefits of either internal or external recruitment. Each group to create a list of 2-3 benefits. Each group shares one benefit with another group. Complete question 1d) 9 Paper 2 June 2014. Methods of recruitment and selection of employees. To outline the main stages in the recruitment and selection process. To analyse the benefits of having an effective recruitment and Main stages in the recruitment and selection process include an understanding of job analysis, job description, person 2 Lesson one on recruitment Show Teacher led explanation on job analysis. Teacher led definition of a job description – show
motivated workforce. staff retention and high productivity. Teacher explanation on motivation. Reference – Students identify from the why motivation is important. Show clip from – show 8–16.30 mins. This clip workers who are demotivated in their job. Students to explain why they think workers are demotivated and what the impacts on the business are. Students list the main benefits of a motivated workforce. Methods to motivate staff To understand the use of financial methods of motivation (including an understanding of the main methods of payment including salary, wage, commission and profit sharing). Financial methods include an understanding of the main methods of payment including salary, wage, commission and profit sharing. Specific motivational theories (such as Maslow) will not be examined. 2 Starter – in pairs students imagine they are the owner of Amazon. Students list the methods they would use to motivate their workers. Students to list the main types of pay – to help students show a range of pictures of different types of businesses which are likely to use different payment methods, eg an office, an estate agents, a factory, a restaurant etc. Teacher led explanation on the difference between wages and salaries. the video explain briefly the idea behind . Use the video to explain the importance of pay dependent on output. Link this to commission and how workers are increasingly paid depending on the number of sales rather than output. No specific understanding of Taylor will be expected or examined. Show clip from – show 27–36 mins. This clip shows workers who are paid a higher wage. Students to identify and explain what the impacts on the motivation of workers are. Pair work – why do businesses increasingly use profit sharing? To help understanding show and webpage about Students go back to original list made at the start of the lesson and highlight which methods of motivation they wrote down are financial methods of motivation. Complete question 2c) 6 marks Paper 1 June 2014.
Alternative version is by Teacher led explanation of job and flow production. Students discuss which they thought was a more effective production technique in each situation. Lesson two Starter – show video clips on flow production – or – students consider why businesses use flow production. Show a of pictures of different products – students identify which are produced through flow production and which are job production. Show a video clip from – students consider why businesses use job production. To understand when each method of production is appropriate. 1 Starter – Excellent resource highlighting the use of flow production in the chocolate industry – or . Students produce a table with headings for type of production, definition, benefits, drawbacks and types of products made. Efficiency in production – lean production To understand how production might be made more efficient by the use of lean production techniques. 1 Starter – fill in the gaps activity on methods of production. Show two pictures of products that are in a highly competitive market – for example Primark and Next. Explain that the prices they can charge are dependent on each other and so can’t be changed. Ask students what Primark can do to increase the profit generated. Expected answers include marketing activities and reducing costs/waste in production. Explain that we are focusing on reducing waste and thus cost in production process. Show Reference – Create a spider diagram for the main methods of lean production. Teacher led explanation of kaizen. Show
Factors affecting choice of suppliers To understand the factors affecting the choice of suppliers. To analyse the factors that affect the choice of supplier for a given business. Factors affecting choice of suppliers include price, quality and reliability. 1 Students brainstorm the main factors that would affect which supplier businesses choose. Show images of a variety of businesses, for example Poundland, Gucci, a pharmacy, Rolls-Royce, Primark – what are the main factors that would influence the choice of suppliers in each case? Use the 9-mark question format to create a question analysing and evaluating the main factor influencing the choice of supplier for a chosen business. The effects of procurement and logistics on a business To understand what procurement and logistics are and their effect on a business. The effects of procurement and logistics on a business include efficiency and lower unit costs 1 Teacher led explanation of procurement and logistics. Good reference on Students list the main procurement and logistics decisions they would need to make if they were running a small café – buying food, ensuring delivery of food, replacing broken plates etc. For each decision they should identify what actions the café undertake to lower their unit costs. To understand that the benefits of reduced costs must be balanced against the quality of service. 1 Starter – students list 5 key terms from the production unit. Key terms are swapped with a partner who defines them. Recap understanding of procurement and logistics from last lesson. Students swap the list of strategies they generated last lesson with partner. The partner should consider the drawbacks/problems that might be encountered with each strategy. Drawbacks/potential issues should be written in a different coloured pen. The of effective supply chain management To understand what a supply chain is. The value of effective supply chain management includes working with suppliers to 1 Starter – show Teacher led explanation of a supply Discuss Fairtrade products and the supply chain for cocoa beans, bananas etc. Show
Students research 1-2 businesses that offer after sales service. Students research how they compare in terms of level of service and what they offer. Students to explain why they offer these services. Benefits of good customer service Dangers of poor customer service To understand the importance of providing good service to customers. To understand the dangers of poor customer service. Benefits of good customer service include increase in customer satisfaction, customer loyalty, increased spend and profitability. Dangers of poor customer service include dissatisfied customers, poor reputation via word of mouth and a reduction in revenue. 1 Linking to the research task in the last lesson why businesses offer after sales service. Why do businesses about offering good customer service – – link to Amazon. Why is Amazon currently the number one business for customer service? What do they offer? How has it benefitted them? Consider the value and services offered by Amazon prime. Complete question 3b) 4 marks Paper 1 June 2016. Show examples of poor reviews from trip advisor () Students research examples of businesses that have are seen as having poor customer service – Students list the main consequences for these businesses of poor customer service. Customer Service case study and materials – Complete question 2c) 5 Paper 1 June 2013. The ways in which advances in ICT have allowed customer services to develop To understand the reasons why advances in ICT have allowed customer services to develop. Reasons include advances in websites, and social media. 1 Starter – Read Students discuss their use of social media – how does this impact customer service? to base discussions.
Specification content Learning objectives Additional guidance Suggested timing Learning activities and resources Purpose of market research To understand why businesses conduct market research. To understand the types of information collected in market research. Reasons for conducting market research include to identify market opportunities and to get a better insight into their customers and competitors. Market research collects information about demand, competition and the target market. 1 Starter – Teacher led explanation and definition of market research. Students imagine they are the leader of Nintendo – what five pieces of information would you want to find out to help your decision making. Students should explain why they have chosen this information. References – Students discuss the benefits gained by businesses through conducting market research – discussion based on knowledge gained in previous lessons. Methods of market research To understand the meaning of primary market research and the methods used to collect primary data. Methods include questionnaires, surveys, interviews and focus groups. 1 Teacher led definition of primary research. Students brainstorm the methods businesses could use to collect primary data. Begin a marketing task in creating a new non-alcoholic drink or chocolate bar. Students create a questionnaire to help make product decisions, eg research what ingredients customers would want in their chocolate bar. Students should then circulate around the classroom collecting information for questionnaires. To understand the meaning of secondary Methods include internet research and the printed 1 Teacher led definition of secondary research.
The factors that influence pricing decisions To recognise the factors, internal and external, which might influence the pricing decision, particularly as businesses grow and expand. To evaluate the factors and use them to assess the suitability of pricing methods for a given business. Factors that influence pricing decisions include nature of the market, degree of competition and the product life cycle. 1 Use – includes resources to consider the factors that influence the price of bananas. Resource includes research tasks, videos etc. Research – the internet, students should research the price of a product in three different stores and explain why there are differences. Add additional factors that influence pricing decisions to the original list made in the first pricing lesson. Complete question 3c) 9 marks June 2014 or 2d) 9 marks June 2013. To understand the relationship between price and demand. Students should understand that as prices rise demand is likely to fall. 1 Starter – – why would businesses offer this type of scheme? Students create a for the number of times they would watch their favourite football team or go to the cinema over a year (with a max of 30 times) at a range of different prices. Students plot the data they have collected onto a diagram with and quantity on the two axes. Students explain the link between price and quantity demanded. In pairs students generate ideas of factors that might cause an increase in demand other than price. Teacher led discussion about why a business does not therefore always charge a very low price. Product To understand the benefits and risks of developing new products. 1 Why would it be beneficial for a business to produce the first commercial driverless car? Show – what are the benefits and risks for these entrepreneurs of developing this new product? – issues of creating a new product.
To understand the importance of product design, image and the needs of the target market when designing new products. 1 – issues of product design. Students brainstorm the main factors to consider when designing new products. Using the market research collected already to design the non-alcoholic cocktail or chocolate bar. Consider the main factors listed in your brainstorm when designing the new product. Product differentiation To understand the significance of having a USP in a competitive market. To understand the importance of a good brand image. 1 Starter – show students an image of two mobile phones (a new model and an older model) – students list the differences in the two products. For example aesthetics, battery life, features, screen size etc. Teacher led explanation of product differentiation and unique selling points. Students explain what the unique selling point is for three products, eg Polo mints, Terry’s chocolate orange etc. Show clips from – what do the teams do to differentiate their product from the competition? Students write down what they think are the 4-mark question explaining the benefit for Coca Cola of having a strong Students continue non-alcoholic cocktail or chocolate project by creating a brand for their product.
3.6 Finance Teach before: Revision Teach after: 3.5 Marketing 3.6.1 Sources of finance Specification content Learning objectives Additional guidance Suggested timing (hours) Learning activities and resources Methods businesses use to raise finance To understand the main internal and external sources of finance available. To be able to analyse the advantages and disadvantages of each method for a situation. Sources of finance available include family and friends, retained profit, a new issue, obtaining a loan or mortgage, selling unwanted assets, overdrafts, trade credit, hire purchase and government grants. 2 Starter – students brainstorm the reasons why businesses need to raise finance. Show – students discuss why entrepreneurs choose to go on the programme. Reference – Show video clip on raising finance – Research – students complete research on the main sources of finance available to new, growing or established businesses, eg , etc. Students create a with headings including sources of finance, internal or external source of finance, appropriate for what size of business, advantages and disadvantages. Students create a leaflet for the to guide businesses on what finance is available and which would be the most appropriate source of finance for their business. Complete question 1d) 9 marks Paper 1 June 2014.
Appropriateness of sources of finance To be able to evaluate the suitability of sources of finance for new and established businesses. 1 Starter – Give students a range of scenarios, eg purchasing more stock, purchasing a new factory etc. Students explain which source of finance is most appropriate in each case. Complete question 3d) 9 Paper 2 June 2013 or 2b) 6 marks Paper 1 June 2015 or 2c) 9 marks Paper 2 June 2015. 3.6.2 Cash flow Specification content Learning objectives Additional guidance Suggested timing (hours) Learning activities and resources Importance of cash to businesses Difference between cash and profit To understand the consequences of cash flow problems and the effect of positive cash flow. To understand the difference between cash and profit. 1 Starter – – students try to explain what is going on to their partner. Teacher led definition of cash flow. Students explain why an ice cream shop may have cash flow problems during the year. Students explain the impacts on the ice cream shop of cash flow problems. Research – students research what went with Woolworths. Students brainstorm the effects/benefits of having a positive cash flow position. Reference – Students list all the items that can be classified as cash in and all the items that can be classified as cash out. Students recap calculations for profit. Students identify the differences between cash flow and profit. Cash flow case study and materials – Complete question 3c) 5 Paper 1 June 2016.
Interpreting cash flow forecasts To understand how and why cash flow forecasts are constructed. To be able to complete and interpret sections of a cash flow forecast. This includes an understanding of cash inflows and outflows, net cash flow and the opening and closing balance. Students are not expected to be able to construct an entire cash flow forecast. 1 Starter – Teacher definition of a cash flow forecast. Recapping understanding from last lesson – students make a list of reasons why cash flow forecasts are constructed. Show a – students explain to their partner how the different sections are calculated. Students should complete a variety of cash flow forecasts and comment on the cash flow position of the business – , To be able to evaluate possible solutions to cash flow problems. Solutions to cash flow problems, including payments, overdrafts, reducing cash outflow, increasing cash inflow and finding new sources of finance. 1 Show a cash flow forecast for a hotel or other seasonal business suffering from cash flow problems during some months – students identify where the problem times occur and explain why this is likely to happen. Students create a spider diagram for solutions that can be used to resolve these cash flow issues. Reference – Complete question 2d) 9 marks Paper 1 June 2013.