PPQ - EXTERNAL - gov influence/tech

Question 1

2022 - As a result of the global pandemic, the UK entered into a recession in 2020. Explore the methods the UK and Scottish Governments could use to support organisations during a recession. (10 marks)
Monetary, fiscal

Answer 1

Monetary Policy
- lower interest rates on loans supplies cash to businesses at low cost
- quantitative easing drives interest rates down encouraging borrowing and spending

Fiscal Policy
- reduced VAT can lower selling prices encouraging spending o for example, VAT was cut from 20% to 5% on hospitality food and accommodation, and attractions in 2020
- reduced income tax can increase disposable income which encourages spending
- reduced corporation tax will increase profit after tax
- stamp duty was cut in 2020 to encourage the sale of housing

Question 2

2018 - Discuss the impact of e-commerce on the functional areas of an organisation. (10 marks)
HR, Finance

Answer 2

Human Resources
- Spend less on employees’ wages as many of the tasks can be automated (in-store cashiers) - reduce number of workers needed
- Training costs increased as employees need to be trained in new ways of working.
- Shift workers have to be employed at unsociable hours as people will be able to buy goods 24/7 and need employees available at help desks.

Finance
- No cash transactions – all electronic funds transfer means that money is immediately received - keeping track of cash flow is more accurate.
- Payments for shop rent etc. are reduced as there is no need for a physical outlet for customers to visit.
- Investment in a website will increase costs in short term.

Question 2

2018 - Discuss the impact of e-commerce on the functional areas of an organisation. (10 marks)
Operations, marketing

Answer 2

Operations
- Computerised inventory system used making process of inventory control more accurate.
- Goods for sale do not have to be kept on premises (warehouse) as the organisation can be a ‘middle-man’ and order goods from their suppliers once an order has been received from a customer

Marketing
- Having a website to buy goods through can be used to advertise and promote their products - cheaper than traditional TV, Radio, Magazine advertising.
- Details of customer’s preferences can be used to segment customers and save money by targeting customers with specific deals.

Question 3

2022 - As a result of the global pandemic, the UK entered into a recession in 2020. Explore the methods the UK and Scottish Governments could use to support organisations during a recession. (10 marks)
Support schemes and financial assistance, legislation

Answer 3

Support Schemes and Financial Assistance
- funding in the form of grants can be issued, for example, over £2 billion made available in 2020 to support job creation and training
- tax deferrals can support short-term liquidity problems
- investments can be made into the Department for Work and Pensions, for example, in 2020 funding was made available to support careers advisors to help support people into jobs
- ‘Kickstart’ scheme will pay employers to create new jobs for youths between the ages of 16-24 at risk of unemployment

Legislation
- an increase in the national minimum wage legislation could result in increased spending which generates sales revenue

Question 4

2019 - Explore the impact on UK organisations of monetary policy, fiscal policy and legislation, other than the Equality Act 2010. (10 marks)
Monetary + health and safety legislation

Answer 4

Monetary
- higher interest rates increase the cost of borrowing for an organisation which may mean it will be unable to invest in product development
- higher interest rates will encourage individuals to save, which will reduce consumer spending
- lower interest rates will increase consumer borrowing and therefore spending and consumer purchasing

Health and safety legislation
- organisations may have to appoint specialist staff to ensure safety equipment and procedures are regularly reviewed
- the organisation may be liable for work-related injuries suffered by employees which may result in compensation payments which reduces cash flow

Question 5

2019 - Explore the impact on UK organisations of monetary policy, fiscal policy and legislation, other than the Equality Act 2010. (10 marks)
Fiscal + legislation

Answer 5

Fiscal
- increases in corporation tax reduces the organisations retained profit
- increase in income tax reduces disposable income so the demand for goods and services reduces
- increases in VAT and excise duties increases the price the customer pays and organisation may not wish to pass the increase onto customers thus reducing their profits
- decrease in government spending will negatively impact on the ability to provide a quality service by public sector organisations for example NHS and state schools

Legislation
- if the minimum wage is increased by the government then this will lead to increased costs for UK organisations