Cambridge IGCSE and O Level Business Studies

7 Organisation and management

Answers to Coursebook activities
Activity 7.1 (page 91)
Any two of the directors.

Activity 7.2 (page 91)

4: The recruitment manager is directly responsible to the human resources director.

Activity 7.3 (page 92)

The supervisor of Factory B.

Activity 7.4 (page 94)

Student’s own answer.

Test yourself (page 97)

1 Shows formal relationships within an organisation.
2 Set objectives, motivate employees, make sure employees have resources needed to complete tasks.
Answers might also identify roles or functions of management.

Activity 7.5 (page 97)

1 Person responsible for a certain group of tasks or area of a business, e.g. the manager of each restaurant
is responsible for making sure that all tasks for that restaurant are completed and employees have the
resources needed to complete tasks.
2 a Number of levels in business. Four levels in Mohinder’s business.
b Number of subordinates who report directly to the supervisor/manager. Chef in restaurant C has a
span of control of six.
c Route through which authority is passed down in an organisation. In Mohinder’s business it is from
Mohinder to the restaurant managers to the chefs and finally to the other employees.
3 Shows their position in the organisation, who they report to and who they are responsible for.
4 Answers should discuss advantages/disadvantages of centralisation. Advantages: faster decision-
making; Mohinder can make decisions for the whole business; benefits of economies of scale; easier for
Mohinder to control business. Disadvantages: centralisation might demotivate restaurant managers
who are not able to make decisions; communication is slower; restaurant managers are unable to
respond quickly to local factors – opportunities missed. Answers should include a decision on whether
advantages outweigh disadvantages or vice versa.

Activity 7.6 (page 99)

1 Giving authority to subordinates to perform certain tasks.
2 Answers should explain ‘organising’ and ‘commanding’ as these are functions of managers at local
level. The other three functions of managers are probably specific to senior management, e.g. reference
to the planning function of a country director.
3 Advantages: local managers can respond to factors that are local to their offices; used to motivate
managers; used to prepare managers for promotion; gives the country director more time to

© Cambridge University Press 2018 Chapter 7 Answers to Coursebook activities 1

Cambridge IGCSE and O Level Business Studies

concentrate on more important decisions. Disadvantages: local managers might not have the skills
or experience needed to make ‘good’ decisions; communication problems; loss of control by senior
managers; decisions taken might not support the overall objectives of the business.

Test yourself (page 99)

1 Planning, organising, commanding, coordinating, controlling.
2 Fear loss of control, lack trust in the abilities of subordinates, feel threatened by subordinates who
might do the job better, have an autocratic leadership style.

Activity 7.7 (page 101)

1 Laissez-faire
2 Autocratic
3 Democratic
4 More autocratic than democratic
5 Laissez-faire
6 Democratic
Students might disagree with the suggestions above. Purpose of the activity is to encourage students to
learn how to justify a particular choice.

Case study (page 102)

a Secondary and tertiary sectors.
b Someone who has responsibility for a group of tasks or an area/department of a business.
c Because of the nature of the work and the fact that an installations manager is responsible for health
and safety issues, it could be argued that a more autocratic style is the most appropriate. However, a
democratic leadership style might also be used if there is a need to discuss with others the health and
safety issues and how best these might be implemented and communicated to all employees.

Test yourself (page 102)

1 Styles are complete opposites. Autocratic leaders make all the decisions without discussion with
subordinates. They tell employees what to do and expect orders to be obeyed without question.
Communication is one-way. Might threaten or punish employees if they do not follow instructions.
Democratic leaders encourage participation in decision-making by subordinates. Communication is
two-way.
2 A crisis situation that requires an immediate decision, e.g. if a product is found to have a serious fault
that could endanger the life of users.

Activity 7.8 (page 104)

1 Organisation formed and financed by employees to protect their interests and negotiate with employers
on their behalf for improvements in pay and conditions of work.
2 Union will negotiate with employer to try to get pay increase for employees. Easier for trade union to
negotiate with employer than individual employees.
3 Strike would mean employees do not go to work and this would stop production of sugar and could
affect sales and profits of companies who are MSPA members.
4 Physical environment of the workplace and how well it meets the health and safety needs of employees,
e.g. temperature, noise, cleanliness, washroom facilities, rest areas, drinking water, canteen facilities.

© Cambridge University Press 2018 Chapter 7 Answers to Coursebook activities 2

Cambridge IGCSE and O Level Business Studies

5 Answers should consider how important dock workers and the work they do are to the economy of
Argentina. According to the article they are very important and, because of this, it is likely that any
strike action could have a damaging effect on the economy. Government will want to avoid this.
However, it will also depend on the cost of improving working conditions and whether employers can
afford this. Some idea of the strength of the union because of the type of employee it represents and
their importance to the economy, but balanced against the cost of meeting the union’s demands.

Test yourself (page 104)

1 To represent the interests of members when dealing with employers to get improved pay and working
conditions.
2 Employee may not be able to pay the fee needed to join a union.

Exam-style practice questions (page 105)

1 a Someone in charge of a group of tasks, or an area or department of business, e.g. marketing
manager. [2]
b The formal, internal framework of a business that shows how it is managed and organised. [2]
c Planning, controlling, coordinating, organising, commanding. (1 mark each) [Total: 4]
d Helps develop the skills of GL’s employees (1), which gives GL a more flexible workforce (1).
Employees will be able to cover for absent colleagues (1). GL’s managers can focus on more important
tasks (1), which improves the management of GL (1). Better and quicker decision-making (1).
[Total: 6]
e Autocratic leaders make all the decisions without consultation (1) and expect orders to be followed
without question (1). Some evidence in the text suggests that Gopal is an autocratic leader. Gopal
likes to know what all the directors and managers are doing (1) and has blocked the pay rise agreed
by the local manager (1). However, Gopal has delegated authority for marketing, finance and HRM
(1), which suggests that he does not want to make all decisions for every area of business, which
implies that Gopal is not autocratic (1). [Total: 6]
2 a Appointed or elected member of the Board of Directors of the company who has responsibility for
setting and implementing the company’s policy. Some directors have a management role too, e.g.
Bimla’s uncle is responsible for management of RF’s finance. [2]
b Planning, organising, controlling, coordinating, commanding. [2]
c When employees join together in a trade union they have greater power (1) to negotiate with their
employer for improved pay and conditions (1). Trade unions provide free legal advice to members
who are being unfairly treated or injured at work (1). Individual employees would probably not be
able to afford this legal help themselves (1). [Total: 4]
d Features might include chain of command, span of control, levels of hierarchy (up to 2 marks).
Further 2 marks for each feature explained. The award of 2 marks requires students to use the
organisation chart provided. For example, RF has a tall structure (1), there are five levels in the
hierarchy (1), this might slow down decision-making (1). The two supervisors have a span of control
of 12 (1), which is wider than the marketing manager who has only a narrow span of control (2), the
wider span of control might make it more difficult to communicate with and control the production
workers (1). [Total: 6]
e The Board of Directors are the most senior managers of RF (1) appointed or elected by shareholders
(1). They are responsible for setting strategy (1), making sure resources are available to achieve
objectives (1), providing the leadership for the success of RF (1). Justification of importance (1).
[Total: 6]

© Cambridge University Press 2018 Chapter 7 Answers to Coursebook activities 3