Question
Refer to the Ducal Aspirateurs case study (DA)
a. Outline one benefit of Viv’s leadership style and one benefit of Salah’s leadership style (lines 82-84). [4]
b. Explain suitable sources of finance for Option B.[6]
▶️Answer/Explanation
Ans:
Leadership styles identified:
Viv: Autocratic when re-establishing business. Benefit is that it got things done and she had very clear determination. Later more democratic when she consulted engineers. Benefit is that manager may have been in a better position. Overall situational which may be appropriate for an evolving business.
Salah: Largely laissez-faire although some elements of democratic. Candidates will have to identify this for themselves. Creative employees work best when left alone – suitable for the innovation division.
There is no need for answers to identify the leadership style – the question is about benefits.
Award [1] for relevant benefit identified and [1] for a description of how that benefit relates to DA. Award a maximum of [2] per benefit.
a.
Refer to Paper 1 markbands for May 2016 forward, available under the “Your tests” tab > supplemental materials.
Key factors:
Amount: It’s a large amount needed.
Private limited company: so shares could be issued to family members but may not raise a lot. Would family members be able to buy more shares?
Converting to public limited and raising share on the stockmarket
Family business: so ownership and control very important so venture capitalists, business angels and other external investors may not be suitable unless argued otherwise
Retained profits: Seems like a major impact on Dividends. Would shareholders be happy with that?
Loans/mortgages/Debentures: has a policy of internal finance. With disagreement in the business would it be willing to change this policy?
Leasing the necessary machinery for the option
Short term sources: Overdrafts, debt factoring, trade credit, hire purchase/leasing not sufficient finance. Short term sources are not suitable.
Sale of assets: not suitable – no evidence of underused or unused assets but is contextual with leaseback
Selling shares on the stockmarket is not suitable unless linked with converting to plc.
Remember the concept of positive marking – full marks can be achieved with more than one suitable method even if some unsuitable methods are identified.
Accept any other relevant explanation.
Marks should be allocated according to the paper 1 markbands for May 2016 forward section A.
Award a maximum of [3] for a theoretical answer (unsuitable methods) or if there is only one source.
Award a maximum of [5] if the explanation is mainly descriptive, but in context. E.g. if most of the context is mentioned but not developed.
Question
Refer to the Multi Marketing (MM) case study
a. With reference to $M M$, outline two sources of finance suitable for taking over the film studio in India (lines 144-147).[4]
b. Explain how a formal system of appraisal may have avoided the problems caused by Clare (lines 86-100).[6]
▶️Answer/Explanation
a. The following four sources of finance are suitable:
loan capital (i.e. long term bank loan, mortgage)
share capital (either through new shareholders, or by changing MM legal status to public limited company i.e. going public) venture capitalists / business angels grant / subsidies from the Indian government (to support FDI); this answer is unlikely but acceptable.
Sale of assets is a suitable method but there is no context to suggest that this is an option for MM. Award one mark for sale of assets but not the second for context.
Other sources are not suitable (e.g. retained profit, leasing, crowdfunding, overdrafts, trade credits, etc.) and must not be credited.
Mark as a $2+2$
Award [1] for each appropriate source and a further [1] for an outline of the source in context.
b.
Refer to Paper 1 markbands for May 2016 forward, available under the “Your tests” tab > supplemental materials.
Candidates are expected to show some understanding of one or more of the approaches to appraisal, including:
Formative
Summative
360-degree
Self-appraisal
They apply both to Clare as an appraiser (Claire appraising her staff) and Clare as an appraisee (Clare being appraised by her own line manager). The problems caused by Clare should have been identified earlier on, before they escalated into such a conflict where employees have asked for Clare to be dismissed for harassment (line 99).
Clare seemingly resented the fact that staff in her department went to her own line manager to complain about her behind her back, without telling her directly. A system of formative appraisal may have made her aware of the problems earlier on, if she had regularly and formally asked her staff about their work and their progress. Of course, they may have been reluctant to tell her the truth, which is why a 360-degree appraisal, with anonymous feedback from her staff about her own performance, could have made her aware of the extent of their dissatisfaction and their feelings of being bullied.
Similarly, a summative appraisal of Clare (by her own line manager) could have identified not only Clare’s positive results (“Customer satisfaction is very high, and some of the marketing strategies designed by Clare’s team have won awards”, line 90), but also areas of improvement, for example about how, as a leader, she reflects $\mathrm{MM}$ core values.
This said, it is not certain that formal systems of appraisal would have avoided all the problems: the way Clare reacted when she heard about her staff feelings (“she was rude to them, blocked their pay rises and threatened them with less interesting work” line 98) implies that her autocratic style is not aligned with MM cultural values. MM “considers it important that the organizations with which it works value freedom of expression” (line 60) – clearly Clare herself does not believe that this applies to her staff.
Accept any other explanation.
Marks should be allocated according to the paper 1 markbands for May 2016 forward section A.
Award a maximum of [3] for a theoretical answer.
Award a maximum of [4] for a descriptive answer.