Business 9609 — specification explorer

1. Enterprise

• 1.1.1

  The nature of business activity:

  • the purpose of business activity
  • the factors of production needed for business activity: land, labour, capital and enterprise
  • the concept of adding value
  • the nature of economic activity, the problem of choice and opportunity cost
  • the dynamic business environment
  • why businesses succeed or fail
  • differences between local, national, international and multinational businesses
• 1.1.2

  The role of entrepreneurs and intrapreneurs:

  • the qualities entrepreneurs and intrapreneurs need for success
  • the role of entrepreneurship in creating and starting up a business
  • the role of intrapreneurship in the ongoing success of a business
  • barriers to entrepreneurship
  • business risk and uncertainty
  • the role of business enterprise in the development of a country
• 1.1.3

  Business plans:

  • the meaning and purpose of business plans
  • the key elements of business plans
  • the benefits and limitations of business plans

2. Business structure

• 1.2.1

  Economic sectors:

  • the primary, secondary, tertiary and quaternary sectors and businesses within those sectors
  • the public and private sectors and businesses within those sectors
  • the reasons for and consequences of the changing relative importance of these sectors
• 1.2.2

  Business ownership:

  • the main features of different types of business ownership: sole traders, partnerships, private limited
  • the appropriateness of different types of business ownership
  • the concepts of unlimited liability and limited liability and their importance
  • the advantages and disadvantages of changing from one type of business ownership to another

3. Size of business

• 1.3.1

  Measurements of business size:

  • the appropriateness of different methods of measuring the size of a business
• 1.3.2

  Significance of small businesses:

  • the advantages and disadvantages of being a small business
  • the strengths and weaknesses of family businesses
  • the importance of small businesses and their role in the economy
  • the role of small businesses as part of the industrial structure in some industries
• 1.3.3

  Business growth:

  • why and how a business might grow internally (organic growth)
  • the different types of external growth through merger and takeover: horizontal, vertical (backward and
  • the impact of a merger/takeover on stakeholders
  • why a merger/takeover may or may not achieve objectives
  • the importance of joint ventures and strategic alliances as methods of external growth

4. Business objectives

• 1.4.1

  Business objectives in the private sector and public sector:

  • the objectives of businesses – private sector, public sector, and social enterprises
  • the importance of business objectives
  • corporate social responsibility (CSR) and the triple bottom line – economic (financial), social and
  • the relationship between mission statement, aims, objectives, strategy and tactics
• 1.4.2

  Objectives and business decisions:

  • the different stages of business decision-making and the role of objectives in the stages of business
  • how objectives might change over time
  • the translation of objectives into targets and budgets
  • the need for communication of objectives and their likely impact on the workforce
  • SMART (specific, measurable, achievable, realistic, time-limited) objectives
  • how ethics may influence business objectives and activities

5. Stakeholders in a business

• 1.5.1

  Business stakeholders:

  • individuals or groups with an interest in the activities of a business
  • internal stakeholders and external stakeholders
  • the roles, rights and responsibilities of stakeholders
• 1.5.2

  The relative importance and influence of stakeholders on business activities:

  • the impact of business decisions on stakeholders, and their reactions
  • the impact of stakeholder aims on business decisions
  • how and why a business needs to be accountable to its stakeholders
  • how conflict might arise from stakeholders having different aims and objectives
  • how changing business objectives might affect its stakeholders

1. Human resource management (HRM)

• 2.1.1

  Purpose and roles of HRM:

  • the role of HRM in meeting organisational objectives
• 2.1.2

  Workforce planning:

  • the reasons for and role of a workforce plan
  • measurement of labour turnover
  • the implications of high and low labour turnover for a business
• 2.1.3

  Recruitment and selection:

  • recruitment of employees: process (job descriptions and person specifications) and recruitment methods
  • internal and external recruitment
  • selection methods: curriculum vitae, résumé, application forms, interviews, references, testing, assessment
  • employment contracts
• 2.1.4

  Redundancy and dismissal:

  • the difference between redundancy (voluntary and involuntary) and dismissal (fair, unfair)
• 2.1.5

  Morale and welfare:

  • the relationship between HRM, employee morale and welfare in a business including the concept of work-
  • the impact of diversity and equality in the workplace on a business
• 2.1.6

  Training and development:

  • different types of training: induction, on-the-job, off-the-job
  • the impact of training and development on a business
  • employee development to encourage intrapreneurship
  • employee development to encourage multi-skilling and flexibility
• 2.1.7

  Management and workforce relations:

  • how cooperation between management and the workforce can be of benefit to both
  • the impact on employers and employees of trade union involvement in the workplace including their role in

2. Motivation

• 2.2.1

  Motivation as a tool of management and leadership:

  • the need to motivate employees to achieve the objectives of a business
• 2.2.2

  Human needs:

  • a simple explanation of human need
  • how human needs may or may not be satisfied at work
• 2.2.3

  Motivation theories:

  • the ideas of the main content theories (Taylor, Mayo, Maslow, Herzberg and McClelland) and process theory
• 2.2.4

  Motivation methods in practice: financial motivators, non-financial motivators:

  • the theories in practical situations
  • different payment methods: time based, salary, piece rates, commission, bonuses, profit sharing,
  • different types of non-financial motivators: training, opportunities for promotion, development, status, job
  • ways in which employees can participate in the management and control of business activity

3. Management

• 2.3.1

  Management and managers:

  • traditional manager functions: planning, organising, directing, controlling
  • the role of managers: Fayol, Mintzberg
  • the contribution of managers to business performance
  • management styles: autocratic, democratic, laissez-faire, paternalistic
  • McGregor’s Theory X and Theory Y managers

1. The nature of marketing

• 3.1.1

  The role of marketing and its relationship with other business activities:

  • marketing objectives
  • the link between marketing objectives and corporate objectives
• 3.1.2

  Demand and supply:

  • the factors influencing the demand for and supply of the products of a business
  • interactions between demand, supply and price
• 3.1.3

  Markets:

  • how markets may differ: consumer and industrial markets; local, national and international markets
  • the difference between product orientation and customer (market) orientation
  • measurement of market share and market growth
  • the implications of changes in market share and market growth
• 3.1.4

  Consumer and industrial marketing:

  • the classification of products
  • how marketing might differ for consumer products (B2C – business to consumer) and industrial products
• 3.1.5

  Mass marketing and niche marketing:

  • the features of mass and niche markets
  • the advantages and disadvantages of mass marketing and niche marketing
• 3.1.6

  Market segmentation:

  • methods of market segmentation: geographic, demographic and psychographic
  • the advantages and disadvantages of market segmentation
• 3.1.7

  Customer relationship marketing (CRM):

  • the aims of CRM
  • the costs and benefits of CRM

2. Market research

• 3.2.1

  The purposes of market research:

  • identification of main features of a market: size, growth, competitors
  • identification of customer and consumer characteristics, profiles, wants and needs
• 3.2.2

  Primary research and secondary research:

  • the distinction between primary research and secondary research, and the main features of each
  • usefulness of data collected using primary research methods
  • usefulness of data collected from secondary research sources
• 3.2.3

  Sampling:

  • the need for and limitations of sampling
• 3.2.4

  Market research data:

  • the reliability of the data collected
  • analysis of quantitative and qualitative data
  • interpretation of information presented in tables, charts and graphs

3. The marketing mix

• 3.3.1

  The elements of the marketing mix (the 4Ps):

  • the 4Ps: Product, Price, Promotion, Place (distribution channels)
• 3.3.2

  Product:

  • the difference between goods and services
  • tangible and intangible attributes of products
  • the importance of product development
  • product differentiation and unique selling point (USP)
• 3.3.3

  Product portfolio analysis:

  • product life cycle and decisions about extension strategies
  • Boston Matrix analysis and its uses
  • impact of product portfolio analysis on marketing decisions
• 3.3.4

  Pricing methods:

  • objectives and usefulness of different pricing methods: competitive, penetration, skimming, price
• 3.3.5

  Promotion methods:

  • the objectives and usefulness of different promotion methods
  • advertising promotion
  • sales promotion
  • direct promotion
  • developments in digital promotion
  • the role of packaging in promotion
  • the role of branding in promotion
• 3.3.6

  Place (channels of distribution):

  • the objectives and usefulness of different channels of distribution
  • digital and physical distribution

1. The nature of operations

• 4.1.1

  The transformational process:

  • the use of factors of production: land, labour, capital and enterprise
  • the stages of the transformational process: inputs to outputs
  • the contribution of operations to added value
• 4.1.2

  Efficiency, effectiveness, productivity and sustainability:

  • the importance of efficiency, effectiveness, productivity and sustainability
  • measurement of labour productivity
  • the impact on a business of measures to improve sustainability of operations
• 4.1.3

  Capital intensive and labour intensive operations:

  • the benefits and limitations of capital intensive operations
  • the benefits and limitations of labour intensive operations
• 4.1.4

  Operations methods: job, batch, flow, mass customisation:

  • differences between methods – advantages and disadvantages of each method
  • the problems of changing from one method to another

2. Inventory management

• 4.2.1

  Managing inventory:

  • the purpose of inventory within a business (raw materials, work in progress, finished products)
  • the costs and benefits of holding inventory
  • buffer inventory, re-order level and lead time
  • interpretation of simple inventory control charts
  • the importance of Supply Chain Management
• 4.2.2

  Just in Time (JIT):

  • the purpose of JIT and JIC (Just in Case) inventory management
  • the impact of adopting a JIT approach on a business

3. Capacity utilisation and outsourcing

• 4.3.1

  Significance and measurement of capacity utilisation:

  • the measurement of capacity utilisation
  • the impact of operating under or over maximum capacity on a business
  • methods of improving capacity utilisation
• 4.3.2

  Outsourcing:

  • the impact of outsourcing on a business

1. Business finance

• 5.1.1

  The need for business finance:

  • reasons why businesses need finance to start up, to grow and to survive
  • the distinction between short and long term need for finance
  • the difference between cash and profits
  • business failure as a consequence of lack of finance: bankruptcy, liquidation and administration
• 5.1.2

  Working capital:

  • the meaning and importance of working capital
  • managing trade receivables and trade payables
  • the distinction between capital expenditure and revenue expenditure

2. Sources of finance

• 5.2.1

  Business ownership and sources of finance:

  • the relationship between the form of business ownership and availability of sources of finance
• 5.2.2

  Internal and external sources of finance:

  • internal sources of finance: owners investment, retained earnings, sale of unwanted assets, sale and
  • external sources of finance: share capital, debentures, new partners, venture capital, bank overdrafts,
• 5.2.3

  Factors affecting the sources of finance:

  • the factors influencing the choice of sources of finance in a given situation: cost, flexibility, need to retain
• 5.2.4

  Selecting the source of finance:

  • the appropriateness of each possible source in a given situation

3. Forecasting and managing cash flows

• 5.3.1

  Cash flow forecasts:

  • the meaning and purpose of cash flow forecasts
  • the interpretation and amendment of simple cash flow forecasts: calculating opening and closing balances
  • different methods of improving cash flow

4. Costs

• 5.4.1

  Cost information:

  • the need for accurate cost information
  • different types of costs: fixed, variable, direct and indirect
• 5.4.2

  Approaches to costing: full, contribution:

  • the differences between full and contribution costing
  • the uses and limitations of the full costing method
  • the nature of the technique of contribution costing
  • the difference between contribution and profit
  • the limitations of contribution costing
  • situations in which contribution costing would be and would not be used
• 5.4.3

  Uses of cost information:

  • cost information for decision-making purposes, e.g. average, marginal, total costs
  • how costs can be used for pricing decisions
  • how costs can be used to monitor and improve business performance, including using cost information to
  • contribution costing as a means to help make special order decisions
• 5.4.4

  Break-even analysis:

  • the meaning and importance of break-even analysis
  • calculation and interpretation of break-even level of output, contribution, margin of safety and level of profit
  • the uses and limitations of break-even analysis

5. Budgets

• 5.5.1

  The meaning and purpose of budgets:

  • the measurement of performance
  • the benefits and drawbacks from the use of budgets
  • the meaning and use of incremental budgets, flexible budgets and zero budgeting
  • the uses of budgets for measuring performance, allocating resources, controlling and monitoring a business
• 5.5.2

  Variances:

  • the meaning of adverse variances and favourable variances
  • the calculation and interpretation of variances