INTERNATIONAL A-LEVEL

BUSINESS
BU04
Unit 4 Business Decision Making

Mark scheme
June 2023
Version: 1.0 Final

*236xBU04/MS*
 MARK SCHEME – INTERNATIONAL AS BUSINESS – BU04 – JUNE 2023

Mark schemes are prepared by the Lead Assessment Writer and considered, together with the relevant
questions, by a panel of subject teachers. This mark scheme includes any amendments made at the
standardisation events which all associates participate in and is the scheme which was used by them in
this examination. The standardisation process ensures that the mark scheme covers the students’
responses to questions and that every associate understands and applies it in the same correct way.
As preparation for standardisation each associate analyses a number of students’ scripts. Alternative
answers not already covered by the mark scheme are discussed and legislated for. If, after the
standardisation process, associates encounter unusual answers which have not been raised they are
required to refer these to the Lead Examiner.

It must be stressed that a mark scheme is a working document, in many cases further developed and
expanded on the basis of students’ reactions to a particular paper. Assumptions about future mark
schemes on the basis of one year’s document should be avoided; whilst the guiding principles of
assessment remain constant, details will change, depending on the content of a particular examination
paper.

Further copies of this mark scheme are available from oxfordaqaexams.org.uk

Copyright information

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Copyright © 2023 Oxford International AQA Examinations and its licensors. All rights reserved.

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 MARK SCHEME – INTERNATIONAL AS BUSINESS – BU04 – JUNE 2023

How to mark

Aims
When you are marking your allocation of scripts your main aims should be to:

• recognise and identify the achievements of students

• place students in the appropriate mark band and in the appropriate part of that mark band (high, low,
middle)
• record your judgements with brief notes, annotations and comments that are relevant to the mark
scheme and make it clear to other examiners how you have arrived at the numerical mark awarded
• put into a rank order the achievements of students (not to grade them – that is done later using the
rank order that your marking has produced)
• ensure comparability of assessment for all students, regardless of question or examiner.

Approach
It is important to be open-minded and positive when marking scripts.

The specification recognises the variety of experiences and knowledge that students will have. It
encourages them to study business in a way that is relevant to them. The questions have been
designed to give them opportunities to discuss what they have found out about business. It is important
to assess the quality of what the student offers.

Assessment Objectives
This component requires students to:

AO1 Demonstrate knowledge of terms, concepts, theories, methods and models to show an
understanding of how individuals and organisations are affected by and respond to
business issues.
AO2 Apply knowledge and understanding to various business contexts to show how
individuals and organisations are affected by and respond to issues.
AO3 Analyse issues within business, showing an understanding of the impact on individuals
and organisations of external and internal influences.
AO4 Evaluate quantitative and qualitative information to make informed judgements and
propose evidence-based solutions to business issues.

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 MARK SCHEME – INTERNATIONAL AS BUSINESS – BU04 – JUNE 2023

The marking grids

The specification has generic marking grids for each Assessment Objective that is customised with
indicative content for individual tasks. These have been designed to allow assessment of the range of
knowledge, understanding and skills that the specification demands.

Within each Assessment Objective there are three or four broad levels representing different levels of
achievement. Do not think of levels as equivalent to grade boundaries.

The indicative content gives examples of the kind of things students might do that would exemplify the
level. They are neither exhaustive nor required – they are simply indicative of what would appear at this
level. You will find that they sometimes indicate areas of content that can be handled with increasing
sophistication and subtlety. You will also find statements which only characterise work at the bottom or
top of the range.

Depending on the part of the examination, the levels will have different mark ranges assigned to them.
This will reflect the different weighting of Assessment Objectives in particular tasks and across the
examination as a whole. You may be required to give different marks to bands for different Assessment
Objectives.

Using the grids

These levels of response mark schemes are broken down into levels, each of which has descriptors.
The descriptors for the level show the performance characteristics of the level. There is the same
number of marks in each level for an individual Assessment Objective. The number of marks per level
will vary depending upon the number of marks allocated to the various Assessment Objectives covered
by a particular question.

Having familiarised yourself with the descriptors and indicative content, read through the answer and
annotate it (as instructed below) to identify the qualities that are being looked for and that it shows. You
can now check the levels and award a mark.

Step 1 Determine a level

Start at the lowest level of the mark scheme and use it as a ladder to see whether the answer meets the
descriptors for that level. The descriptors for the level indicate the different qualities that might be seen
in the student’s answer for that level.

When assigning a level you should look at the overall quality of the answer and not look to pick holes in
small and specific parts of the answer where the student has not performed quite as well as in the rest.
If the answer covers different aspects of different levels of the mark scheme you should use a best fit
approach for defining the level and then use the variability of the response to help decide the mark within
the level; eg if the response fulfils most but not all of level 3 with a small amount of level 4 material, it
would be placed in level 3 but be awarded a mark near the top of the level because of the level 4
content.

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 MARK SCHEME – INTERNATIONAL AS BUSINESS – BU04 – JUNE 2023

Step 2 Determine a mark

Once you have assigned a level you need to decide on the mark.

It is often best to start in the middle of the level’s mark range and then check and adjust. If there is a lot
of indicative content fully identifiable in the work you need to give the highest mark in the level. If only
some is identifiable or it is only partially fulfilled, then give the lower mark.

The exemplar materials used during standardisation will also help. There will be an answer in the
standardising materials that will correspond with each level of the mark scheme. This answer will have
been awarded a mark by the lead examiner. You can compare the student’s answer with the example to
determine if it is of the same standard, better or worse than the example. You can then use this to
allocate a mark for the answer based on the lead examiner’s mark on the example.

You may well need to read back through the answer as you apply the mark scheme to clarify points and
assure yourself that the level and the mark are appropriate.

In addition to the generic descriptors (presented in bold text), paper-specific indicative descriptors
(presented in plain text) are provided as a guide for examiners. These are not intended to be exhaustive
and you must credit other valid points.

An answer that contains nothing of relevance to the question must be awarded no marks.

Examiners are required to assign each of the students’ responses to the most appropriate level
according to its overall quality, then allocate a single mark within the level. When deciding upon a mark
in a level examiners should bear in mind the relative weightings of the Assessment Objectives and be
careful not to over/under credit a particular skill. For example, in question 12, 13 and 14 more weight
should be given to AO4 than to AO1, AO2 and AO3. This will be exemplified and reinforced as part of
examiner training.

Annotating scripts
You should write a summative comment at the end for each Assessment Objective and indicate the
marks for each Assessment Objective being tested at the end of the answer in the margin in sequence.
It is vital that the way you arrive at a mark should be recorded on the script. This will help you with
making accurate judgements and it will help any subsequent markers to identify how you are thinking.
Please do not write negative comments about students’ work; this is unprofessional and it impedes a
positive marking approach.

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Section A Total for this section: 36 marks

Question Part Marking guidance Total

marks
1 A business sells high-quality, branded products. It is expecting a 12
long period of high levels of unemployment in its main market.
The business is considering whether to reduce the price of its AO1 = 2
products, in response to this change in the economic environment. AO2 = 2
AO3 = 2
Assess the arguments for and against reducing the price and AO4 = 6
make a judgement.

Examiners are reminded that AO1, AO2, AO3 and AO4 are regarded as interdependent. When deciding
on a mark all should be considered together using the best fit approach. In doing so, examiners should
bear in mind the relative weightings of the Assessment Objectives for this question. More weight should
therefore be given to AO4 than AO1, AO2 and AO3.

Level Marks Descriptor

4 10 – 12 An excellent response that focuses fully on the demands of the question

Likely to demonstrate sound, focused analysis and well-supported evaluation:
• includes supported evaluation in a final conclusion and within response
• includes well-focused analysis with clear, logical chains of reasoning
• includes well-focused application to the given context
• shows sound knowledge and understanding of business terminology and
with few, if any, errors
• is well-structured and well-focused on the question.
A complete and coherent overall argument with a clear conclusion. The
conclusion is arrived at through a balancing of arguments, with appropriate
weight given to each argument and to the argument overall. Where there are
crucial arguments, these are distinguished from less crucial ones.

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 MARK SCHEME – INTERNATIONAL AS BUSINESS – BU04 – JUNE 2023

3 7–9 A good response that focuses on many of the demands of the question
Likely to demonstrate sound, focused analysis and some supported evaluation:
• includes some reasonable, supported evaluation
• includes analysis with some logical chains of reasoning
• includes some good application to the given context
• shows sound knowledge and understanding of business terminology and
concepts with relatively few errors
• is relatively well-structured and generally focused on the question.
A relatively complete and coherent argument leading to an attempt to
conclude. The content is detailed and correct and most of it is integrated.
There is recognition of arguments and counter-arguments, but balance is not
always present and the weight to be given to each argument is not always fully
clear.

2 4–6 A reasonable response which focuses on some of the demands of the

question
Some reasonable analysis but generally unsupported evaluation:
• there is likely to be some attempt to make relevant judgements but these
have little support from arguments or do not address the question as a whole
• includes some reasonable analysis but which might not be adequately
developed or becomes confused in places
• includes reasonable application to the given context
• shows satisfactory knowledge and understanding of business terminology
and concepts but some weaknesses may be present.
There is an attempt to answer the question. There is likely to be a conclusion
but it has little support and response may lack balance. The content is largely
correct, though there may be some gaps and lack of detail.

1 1–3 A limited response that has little focus on the demands of the question
A limited response with some understanding.
• includes attempted evaluation which is weak and unsupported
• includes some limited analysis but it may lack focus and/or become
confused
• includes some limited application to the given context
• includes some limited knowledge and understanding of business terminology
and concepts but errors are likely.

0 No credit worthy material.

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 MARK SCHEME – INTERNATIONAL AS BUSINESS – BU04 – JUNE 2023

The demands of this question are to balance the arguments for and against the firm reducing the price
of its products in response to long term change in economic conditions to then make a judgement.

Indicative content

Possible arguments for

• Makes the product more affordable for consumers who are likely to be experiencing lower levels of
income.
• Lower price should lead to more sales which compensates for reduced profit margin on each sale.
• May prove to be an effective way to compete with rival businesses.
• May force other businesses to leave the market.
• May improve image of business in terms of responding to needs of consumers.
• Enables the business to reposition the product in response to the change in market conditions.

Possible arguments against

• May damage the image of the brand that has a reputation for good quality.
• Other elements in the marketing mix may be more effective in responding to change in economic
conditions.
• Lower price reduces profit margins, consequently damaging profitability of the business.
• May lead to a price war with rival producers leading to all businesses within the market experiencing
lower profits.
• Lower price may not stimulate extra sales.

Depends on

• Price Elasticity of Demand. Is demand for the product sensitive to the price?
• Can the costs of production be reduced so that profit margins can be maintained?
• Can the business easily exploit other markets that have better forecast economic conditions?
• Whether other changes in the market (social, technological, legal, environmental) have more influence
on sales of the product.
• The position of the business in the market. Is it the leader? Is it the price-setter?
• The long-term objectives of the business. Does it wish to maintain sales and market share or is it
more concerned with brand reputation and profit margin.

No decision is right or wrong but should be assessed on the quality of argument.

Accept other relevant content.

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Question Part Marking guidance Total

marks
2 A business currently exports to a rapidly growing overseas market. 12
It has identified a local business with which it may enter a joint
venture to meet the growing demand. AO1 = 2
AO2 = 2
AO3 = 2
Assess the arguments for and against entering this joint venture
AO4 = 6
and make a recommendation.

Examiners are reminded that AO1, AO2, AO3 and AO4 are regarded as interdependent. When deciding
on a mark all should be considered together using the best fit approach. In doing so, examiners should
bear in mind the relative weightings of the Assessment Objectives for this question. More weight should
therefore be given to AO4 than AO1, AO2 and AO3.

Level Marks Descriptor

4 10 – 12 An excellent response that focuses fully on the demands of the question

Likely to demonstrate sound, focused analysis and well-supported evaluation:
• includes supported evaluation in a final conclusion and within response
• includes well-focused analysis with clear, logical chains of reasoning
• includes well-focused application to the given context
• shows sound knowledge and understanding of business terminology and
with few, if any, errors
• is well-structured and well-focused on the question.
A complete and coherent overall argument with a clear conclusion. The
conclusion is arrived at through a balancing of arguments, with appropriate
weight given to each argument and to the argument overall. Where there are
crucial arguments, these are distinguished from less crucial ones.

3 7–9 A good response that focuses on many of the demands of the question
Likely to demonstrate sound, focused analysis and some supported evaluation:
• includes some reasonable, supported evaluation
• includes analysis with some logical chains of reasoning
• includes some good application to the given context
• shows sound knowledge and understanding of business terminology and
concepts with relatively few errors
• is relatively well-structured and generally focused on the question.
A relatively complete and coherent argument leading to an attempt to
conclude. The content is detailed and correct and most of it is integrated.
There is recognition of arguments and counter-arguments, but balance is not
always present and the weight to be given to each argument is not always fully
clear.

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 MARK SCHEME – INTERNATIONAL AS BUSINESS – BU04 – JUNE 2023

2 4–6 A reasonable response which focuses on some of the demands of the

question
Some reasonable analysis but generally unsupported evaluation:
• there is likely to be some attempt to make relevant judgements but these
have little support from arguments or do not address the question as a whole
• includes some reasonable analysis but which might not be adequately
developed or becomes confused in places
• includes reasonable application to the given context
• shows satisfactory knowledge and understanding of business terminology
and concepts but some weaknesses may be present.
There is an attempt to answer the question. There is likely to be a conclusion
but it has little support and response may lack balance. The content is largely
correct, though there may be some gaps and lack of detail.

1 1–3 A limited response that has little focus on the demands of the question
A limited response with some understanding.
• includes attempted evaluation which is weak and unsupported
• includes some limited analysis but it may lack focus and/or become
confused
• includes some limited application to the given context
• includes some limited knowledge and understanding of business terminology
and concepts but errors are likely.

0 No credit worthy material.

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 MARK SCHEME – INTERNATIONAL AS BUSINESS – BU04 – JUNE 2023

The demands of this question are to analyse the arguments for and against entering a joint venture
and to make a justified recommendation

Indicative content

Possible arguments for

• Local business should have useful knowledge on market conditions in the overseas market.
• Joint venture enables risks of trading to be shared.
• Local business may have valuable expertise that can improve the efficiency of operations.
• Joint venture may avoid tariffs or other protectionist measures.
• May provide another source of finance with which to expand production.
• May encourage consumers in the foreign market to buy the product, knowing that it is made by a
domestic business.
• Joint venture may enable a critical competitive advantage to be established.
• Success in initial joint venture may lead to future successful collaboration in other projects.

Possible arguments against

• Profits from sales will be shared.

• Local business may be inefficient and damage reputation of original business.
• Decision-making may be delayed as the management of both businesses need to agree.
• Culture clash. The businesses may have different ways of organising themselves and making
decisions.
• Loss of control. Working with another business may mean quality of product cannot be monitored
adequately.
• Local business may exploit the joint venture to improve its own working practices to become a
potential rival in the future.
• Business may already have some experience of operating in the foreign market

Depends on

• The long-term objectives of the exporting business. Does it wish to trade in the overseas market for a
long period?
• The organisational culture of both businesses. Are they able to adapt and work with other
businesses?
• The management of the business. Does it have experience / expertise in making a joint venture
work?
• Are there major barriers to entry into the overseas market? Will the joint venture enable the exporting
business to gain a competitive advantage?
• Legislation in the overseas market. Do laws protect the interests of foreign businesses investing in the
market?
• The attitude of the foreign government to overseas businesses. Does it encourage joint venture
arrangements or is it suspicious of foreign interference in domestic businesses?
• The need to react quickly to a fast-growing market. Delay could lead to rivals gaining an advantage.

No decision is right or wrong but should be assessed on the quality of argument.

Accept other relevant content.

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Question Part Marking guidance Total

marks
3 An employer of skilled workers is about to implement major 12
changes to working conditions to prevent profits from falling. In
order to overcome resistance from the workforce it is planning to AO1 = 2
use either coercion or participation. AO2 = 2
AO3 = 2
AO4 = 6
Using Kotter and Schlesinger’s theory, assess the arguments for
and against each option and make a judgement on which the
employer should use.

Examiners are reminded that AO1, AO2, AO3 and AO4 are regarded as interdependent. When deciding
on a mark all should be considered together using the best fit approach. In doing so, examiners should
bear in mind the relative weightings of the Assessment Objectives for this question. More weight should
therefore be given to AO4 than AO1, AO2 and AO3.

Level Marks Descriptor

4 10 – 12 An excellent response that focuses fully on the demands of the question

Likely to demonstrate sound, focused analysis and well-supported evaluation:
• includes supported evaluation in a final conclusion and within response
• includes well-focused analysis with clear, logical chains of reasoning
• includes well-focused application to the given context
• shows sound knowledge and understanding of business terminology and
with few, if any, errors
• is well-structured and well-focused on the question.
A complete and coherent overall argument with a clear conclusion. The
conclusion is arrived at through a balancing of arguments, with appropriate
weight given to each argument and to the argument overall. Where there are
crucial arguments, these are distinguished from less crucial ones.

3 7–9 A good response that focuses on many of the demands of the question
Likely to demonstrate sound, focused analysis and some supported evaluation:
• includes some reasonable, supported evaluation
• includes analysis with some logical chains of reasoning
• includes some good application to the given context
• shows sound knowledge and understanding of business terminology and
concepts with relatively few errors
• is relatively well-structured and generally focused on the question.
A relatively complete and coherent argument leading to an attempt to
conclude. The content is detailed and correct and most of it is integrated.
There is recognition of arguments and counter-arguments, but balance is not
always present and the weight to be given to each argument is not always fully
clear.

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 MARK SCHEME – INTERNATIONAL AS BUSINESS – BU04 – JUNE 2023

2 4–6 A reasonable response which focuses on some of the demands of the

question
Some reasonable analysis but generally unsupported evaluation:
• there is likely to be some attempt to make relevant judgements but these
have little support from arguments or do not address the question as a whole
• includes some reasonable analysis but which might not be adequately
developed or becomes confused in places
• includes reasonable application to the given context
• shows satisfactory knowledge and understanding of business terminology
and concepts but some weaknesses may be present.
There is an attempt to answer the question. There is likely to be a conclusion
but it has little support and response may lack balance. The content is largely
correct, though there may be some gaps and lack of detail.

1 1–3 A limited response that has little focus on the demands of the question
A limited response with some understanding.
• includes attempted evaluation which is weak and unsupported
• includes some limited analysis but it may lack focus and/or become
confused
• includes some limited application to the given context
• includes some limited knowledge and understanding of business terminology
and concepts but errors are likely.

0 No credit worthy material.

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 MARK SCHEME – INTERNATIONAL AS BUSINESS – BU04 – JUNE 2023

The demands of this question are to use Kotter and Schlesinger’s theory to analyse the expected
barriers to change from the workforce and to evaluate whether coercion or participation is the best way
to overcome them.

Indicative content

Potential barriers to change from workforce

• Self-interest. Fear of change & uncertainty of future working conditions.

• Different assessment of the situation. Trust that the management is able to take effective decisions.
• Inertia. Workforce may feel comfortable with existing arrangements.
• Misinformation. Workforce may interpret the trading conditions in a different way.

Ways to overcome them

• Effective communication with the workforce to educate them about the necessity for change.
• Honest explanation should reduce misinformation and misconceptions.
• Involvement of the workforce in the implementation of the changes which should lead to commitment
to the changes.
• Negotiation & bargaining of the future working conditions. This will involve the participation of the
workforce which may motivate them to accept the changes.
• Financial incentives to compensate for disruption and/or incentivise employees to accept new working
arrangements.
• Support for employees with appropriate training where necessary.
• Appointment of specific management roles to implement the changes that are planned.
• Coercion. Possible removal of benefits if workforce do not accept changes. Forcing the workforce to
accept the changes is likely to provoke resistance.

Depends on

• Nature of the workforce. Are they open or resistant to change?

• Style of management. Do they encourage employee involvement or not? Participation is a more
democratic style of management. Coercion is a more autocratic style.
• External labour market conditions. Can the employees be easily replaced? The skilled nature of the
workforce suggests that they will not be easy to replace.
• Previous changes to working conditions. Has the company handled previous changes well or badly?
• Can employees benefit from the changes?
• The ethical position of the business. Is it concerned about the welfare of the employees?
• The financial position of the business. Can it afford to compensate employees for the changes they
will be experiencing?
• The nature of the changes. Are there some compensating benefits to changes to offset reductions in
employment terms and conditions?
• The time available to implement the changes. If they need to happen quickly, participation may be too
slow. Coercion may be quick.

No decision is right or wrong but should be assessed on the quality of argument.

Accept other relevant content.

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Section B Total for this section: 44 marks

Question Part Marking guidance Total

marks
4 Using Table 1, calculate the current ratio for BL in 2022. 2

Current Ratio = Current Assets / Current Liabilities = AO1 = 1

450/600 = 0.75. AO2 = 1

Correct Formula = 1 mark.

If 0.75 or 0.75:1 only is written award 2 marks

Question Part Marking guidance Total

marks
5 Explain one way BL can improve its liquidity. 3

Increase cash flow into business via - more cash sales revenue, AO1 = 1
injection of capital, loan, faster repayment by debtors. BL may AO2 = 1
need to employ specialist staff, such as a credit controller to AO3 = 1
recover debts more quickly.

Decrease cash outflows by slower payment to creditors. Reducing

costs. Negotiating extended payment time to suppliers.

1 mark = identifying a valid way (AO1).

1 mark = relevant application to context of BL’s liquidity position
(AO2).
1 mark = explanation of how the method will improve the liquidity
position (AO3)

Question Part Marking guidance Total

marks
6 Using Table 1, calculate the payables days ratio for BL in 2022. 2

Payables days = Trade Payables / Cost of Sales x 365 = AO1 = 1

200 / 1800 x 365 = 40.5, rounded to 41 days AO2 = 1

Correct Formula = 1 mark

If 40.5 or 41 only is written, award 2 marks

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Question Part Marking guidance Total

marks
7 Using Table 1, calculate the receivables days ratio for BL in 2022. 2

Receivable days = Trade receivables / Revenue x 365 = AO1 = 1

300 / 2400 x 365 = 45.625, rounded to 46 days AO2 = 1

Correct Formula = 1 mark

If 45.625 or 46 only is written, award 2 marks.

Question Part Marking guidance Total

marks
8 Explain one impact of the increasing taxation on fuel for BL. 3

Increasing the price of fuel will in turn increase the cost of AO1 = 1
production for BL. AO2 = 1
AO3 = 1
1 mark for recognising that rising prices will increase costs.
1 mark for applying increased cost to BL that use a lot of fuel for
transport.
1 mark for explaining that this may lead to BL being more efficient
with their use of fuel. Likely to reduce profits as price rises. Likely
to encourage investment in more fuel-efficient vehicles and
practices.

Question Part Marking guidance Total

marks
9 Using Table 2, calculate the expected profit from the government 2
contract over five years, assuming the work is completed on time.
AO1 = 1
Formula = Revenue - Costs AO2 = 1
Profit per year = 650 – (500 + 100) = 50
Over 5 years = 5 x 50 = 250 ($250 000)

Correct Formula = 1 mark

50 or $50 000 = 1 mark
If 250 or $250 000 only is written, award 2 marks

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 MARK SCHEME – INTERNATIONAL AS BUSINESS – BU04 – JUNE 2023

Question Part Marking guidance Total

marks
10 1 Analyse the potential benefits to BL of accepting the government 9
contract.
AO1 = 2
AO2 = 2
AO3 = 5

Examiners are reminded that AO1, AO2 and AO3 are regarded as interdependent. When deciding on a
mark all should be considered together using the best fit approach. In doing so, examiners should bear
in mind the relative weightings of the Assessment Objectives for this question.

Level Marks Descriptor

3 7–9 A good response that focuses on many of the demands of the question
• includes well-focused analysis with logical chains of reasoning
• includes well-focused application to the given context
• shows sound knowledge and understanding of business terminology and
concepts with few, if any, errors
• is well-structured.

2 4–6 A reasonable response which focuses on some of the demands of the

question
• includes reasonable analysis but the analysis might not be fully developed or
may lack some accuracy in places
• includes reasonable application to the given context
• focuses on issues that are relevant to the question, showing satisfactory
knowledge and understanding of business terminology and concepts but
some weaknesses may be present.

1 1–3 A limited response that has little focus on the demands of the question
A limited response with some understanding that may:
• include some limited analysis but lacks focus and development
• include some limited application to the given context
• include some limited knowledge and understanding of business terminology
and concepts but some errors are likely.

0 No credit worthy material.

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 MARK SCHEME – INTERNATIONAL AS BUSINESS – BU04 – JUNE 2023

Indicative content

• Contract provides a secure source of revenue. Certainty is very valuable to businesses when there
are other changes in the trading environment.
• Contract is not dependent on economic conditions.
• Stable source of income means the business can plan ahead with confidence. A five-year contract
means the business can invest in specialist equipment, with confidence that it will be used efficiently.
• Provides activity during winter when there may be less demand for other services offered by the
business.
• Over time the business may become more efficient in planting the trees & contract becomes more
profitable.
• Effective completion of contract should enhance the reputation of the business leading to further work.
• Enhances the reputation of the business in terms of being environmentally friendly.
• Increases profit of business by extra $50 000 per year.
• Nearby locations helps to reduce transport costs and improve efficiency from reduced travelling time.
• BL may be able to negotiate faster payment terms from the government to reduce impact on cash flow
position.

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 MARK SCHEME – INTERNATIONAL AS BUSINESS – BU04 – JUNE 2023

Question Part Marking guidance Total

marks
10 2 Analyse the potential problems for BL of accepting the government 9
contract.
AO1 = 2
AO2 = 2
AO3 = 5

Examiners are reminded that AO1, AO2 and AO3 are regarded as interdependent. When deciding on a
mark all should be considered together using the best fit approach. In doing so, examiners should bear
in mind the relative weightings of the Assessment Objectives for this question.

Level Marks Descriptor

3 7–9 A good response that focuses on many of the demands of the question
• includes well-focused analysis with logical chains of reasoning
• includes well-focused application to the given context
• shows sound knowledge and understanding of business terminology and
concepts with few, if any, errors
• is well-structured.

2 4–6 A reasonable response which focuses on some of the demands of the

question
• includes reasonable analysis but the analysis might not be fully developed or
may lack some accuracy in places
• includes reasonable application to the given context
• focuses on issues that are relevant to the question, showing satisfactory
knowledge and understanding of business terminology and concepts but
some weaknesses may be present.

1 1–3 A limited response that has little focus on the demands of the question
A limited response with some understanding that may:
• include some limited analysis but lacks focus and development
• include some limited application to the given context
• include some limited knowledge and understanding of business terminology
and concepts but some errors are likely.

0 No credit worthy material.

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 MARK SCHEME – INTERNATIONAL AS BUSINESS – BU04 – JUNE 2023

Indicative content

• Contract does not fit with the key objective of attracting wealthy private customers.
• The contract is for basic repetitive work which may be demotivating. The business has expertise in
supplying high quality landscape construction.
• 5 years is a long-term commitment. The firm may want to do other activities over this time span.
• Contract could be a major distraction, particularly for Patrice who will need to supervise the temporary
employees.
• The contract may become a major source of stress if it proves difficult to complete within the terms
and conditions.
• Contract is fixed price. If costs rise in later years the contract may become unprofitable.
• Activity is weather dependent which could be disrupted by adverse conditions.
• Recruitment of temporary employees could affect reliability & reputation of the business.
• Waiting up to 6 months for payment is likely to make their cash flow position deteriorate further.
• Risk of no profit from failing to complete the work on time.
• Economic forecast environment is reasonable. Accepting the contract may mean sacrificing
potentially more profitable opportunities with private clients.

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 MARK SCHEME – INTERNATIONAL AS BUSINESS – BU04 – JUNE 2023

Question Part Marking guidance Total

marks
10 3 With reference to your analysis, recommend whether BL should 12
accept the contract. You should justify your recommendation.
AO2 = 2
AO3 = 4
AO4 = 6

Examiners are reminded that AO2, AO3 and AO4 are regarded as interdependent. When deciding on a
mark all should be considered together using the best fit approach. In doing so, examiners should bear
in mind the relative weightings of the Assessment Objectives for this question. More weight should
therefore be given to AO4 than AO2 and AO3.

Level Marks Descriptor

4 10 – 12 An excellent response that focuses fully on the demands of the question

Likely to demonstrate sound, focused analysis and well-supported evaluation:
• includes supported evaluation in a final conclusion and within response
• includes well-focused analysis with clear, logical chains of reasoning
• includes well-focused application to the given context
• shows sound knowledge and understanding of business terminology and
with few, if any, errors
• is well-structured and well-focused on the question.
A complete and coherent overall argument with a clear conclusion. The
conclusion is arrived at through a balancing of arguments, with appropriate
weight given to each argument and to the argument overall. Where there are
crucial arguments, these are distinguished from less crucial ones.

3 7–9 A good response that focuses on many of the demands of the question
Likely to demonstrate sound, focused analysis and some supported evaluation:
• includes some reasonable, supported evaluation
• includes analysis with some logical chains of reasoning
• includes some good application to the given context
• shows sound knowledge and understanding of business terminology and
concepts with relatively few errors
• is relatively well-structured and generally focused on the question.
A relatively complete and coherent argument leading to an attempt to
conclude. The content is detailed and correct and most of it is integrated.
There is recognition of arguments and counter-arguments, but balance is not
always present and the weight to be given to each argument is not always fully
clear.

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 MARK SCHEME – INTERNATIONAL AS BUSINESS – BU04 – JUNE 2023

2 4–6 A reasonable response which focuses on some of the demands of the

question
Some reasonable analysis but generally unsupported evaluation:
• there is likely to be some attempt to make relevant judgements but these
have little support from arguments or do not address the question as a whole
• includes some reasonable analysis but which might not be adequately
developed or becomes confused in places
• includes reasonable application to the given context
• shows satisfactory knowledge and understanding of business terminology
and concepts but some weaknesses may be present.
There is an attempt to answer the question. There is likely to be a conclusion
but it has little support and response may lack balance. The content is largely
correct, though there may be some gaps and lack of detail.

1 1–3 A limited response that has little focus on the demands of the question
A limited response with some understanding.
• includes attempted evaluation which is weak and unsupported
• includes some limited analysis but it may lack focus and/or become
confused
• includes some limited application to the given context
• includes some limited knowledge and understanding of business terminology
and concepts but errors are likely.

0 No credit worthy material.

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 MARK SCHEME – INTERNATIONAL AS BUSINESS – BU04 – JUNE 2023

Indicative content

• The contract does not take the business in the direction that it wishes to pursue – wealthy private
individuals. However, it does provide a more certain source of income which they may use to finance
marketing towards their preferred target market.
• Current Ratio of 0.75 means they ideally need to improve their cash position. In the short-term this
contract will not do this. They may be able to borrow as the contract is evidence of future liquidity.
• Trade Payables (41 days) & Trade Receivables (46 days) suggest the business is not efficient enough
at collecting debts. Danger that contract will make the business even more inefficient.
• Table 3 data suggests that there should be increasing demand for income sensitive, landscape design
& construction. The market for private individuals is likely to be more risky & competitive.
• Organising an effective temporary workforce may be challenging. Is this an activity that Jeanette &
Patrice want to do? Recruitment could be outsourced to an agency but this may affect profitability.
• It may be possible to delegate this project. This depends on whether the business is confident in
passing authority to others. It could provide an opportunity for development within the workforce.
• Opportunity to work in nearby locations may be important in terms of reduced travel time to work.
• The stress of undertaking hard, repetitive work may de-motivate Jeanette & Patrice.
• The business could become more financially secure by improving their financial efficiency rather than
taking on extra work.
• BL should tighten their credit position before undertaking the contract, otherwise their cash position
may threaten the future of the business. BL should improve their financial efficiency regardless of
whether they accept the contract. This will provide more security to the business rather than a
contract that they may struggle to complete.
• If BL can negotiate an extended period of credit with their suppliers then contract will not have such an
adverse effect on their cash position.
• Decision is dependent on the attitude to risk and uncertainty. Jeanette and Patrice may be happy with
the more risky and challenging market of attracting private clients. Alternatively they may prefer the
certainty of a long-term contract.

No decision is right or wrong but should be assessed on the quality of argument.

Accept other relevant content.

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 MARK SCHEME – INTERNATIONAL AS BUSINESS – BU04 – JUNE 2023

Assessment Objective Grid

AO1 AO2 AO3 AO4 Total

Section A
1 2 2 2 6 12
2 2 2 2 6 12
3 2 2 2 6 12
Section B
4 1 1 1 3
5 1 1 2
6 1 1 2
7 1 1 2
8 1 1 1 3
9 1 1 2
10.1 2 2 5 9
10.2 2 2 5 9
10.3 2 4 6 12
Unit Total 16 18 22 24 80

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