Business 7115 · O Level · Organisation and management
Organisation and management — practice question
GDC operates a transport delivery business in country Z. It competes in a competitive market. GDC employs 5000 staff and owns 1000 delivery vehicles. GDC’s organisational structure contains many layers of hierarchy and a long chain of command. The managers adopt an autocratic leadership style. In the previous year GDC delivered 2 billion parcels for businesses. The Managing Director said: ‘Having a good reputation is important. We have also benefited from economies of scale’. GDC plans to expand its operations into another country, but it cannot decide the best way to do this.’
(a)[2]
What does ‘economies of scale’ mean?
(b)[2]
What does ‘autocratic leadership style’ mean?
(c)[4]
Identify and explain one benefit and one drawback of GDC’s organisational structure.
(d)[6]
Identify and explain two reasons why a good reputation could be significant for GDC.
(e)[6]
Recommend the most suitable method for GDC to expand its business into another country. Justify your answer.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “reasons why average costs fall as a business grows in size” …