Feb/March 2023

HCB makes cars in country X. Its factory employs 200 workers. New technology has caused the business to change its production method. HCB’s Managing Director is thinking about how it can act more ethically. She knows that other firms in country X have begun importing cars. Rising inflation has led to an increase in the interest rate in country X.

Production of goods and services

WFH manufactures hats and sells them to a mass market. It keeps inventory at a high level. The Managing Director is worried about the liquidity of the business and has been studying WFH’s financial statements. An extract is given in Table 2.1. The Managing Director believes the business could fail. Other stakeholder groups may also want to look at WFH’s financial statements.

Cash-flow forecasting and working capital

AH is an insurance company. It operates within a highly competitive market. AH employs 1000 workers, including 50 supervisors. Those supervisors adopt an autocratic leadership style. AH currently has a 5% market share and is planning to acquire a competitor. The Managing Director is weighing up how to communicate the takeover to AH’s employees. There are many finance sources available to support business growth.

Business finance

Viktor is setting up a photography business. He will operate as a sole trader. Quality control will matter. Viktor intends to use sampling for his market research. There are legal controls that may influence his marketing strategy. Viktor will hire 5 photographers. He knows that there are many methods of motivating employees.

Motivating employees

Explain one benefit and one drawback to RW of using flow production.

Production of goods and services

Explain two problems that RW could encounter as the business expands.

Location decisions

Explain four legal controls that may help employees.

Recruitment, selection and training of employees

Explain two external benefits and two external costs connected with RW’s factories.

Environmental and ethical issues