Refer to the As Fair As case study (SL/HL paper 1 Nov 2018).

With reference to AFA, outline one benefit and one cost to Sam of opening a new e-commerce website (lines 51–52).

Refer to the As Fair As case study (SL/HL paper 1 Nov 2018).

Distinguish between the leadership styles of Sam and Finn.

PLEASE NOTE: E- commerce is not included in the syllabus for 2024 exams onward.  Related parts of this multi-part question may be used.

Main context: Sam’s vision to operate at a global level. Management issues. Need to reduce costs.

Benefits include:

• targeting new customers locally, nationally and even globally, which is Sam’s vision
• sales volumes will increase, revenue will grow and – assuming costs are kept under control – AFA’s profits will increase
• economies of scale, eg with suppliers.
• possible reduced operating costs eg fewer sales assistants, lower rents without retails outlets.

Costs include:

• designing the website
• managing the website, maintenance costs
• managing orders – paying packers etc
• dealing with increased sales (eg, recruiting people, paying additional wages, more warehousing etc)
• other setup costs, eg for online payment systems
• diseconomies of scale (Sam and Finn are not managing well).
• opportunity cost – if developed.

N.B. Costs do not include general disadvantages

Mark as 2 (benefits) + 2 (costs)

Award [1] for each correct cost or benefit identified and [1] for a description of how that cost or benefit relates to AFA. Award a maximum of [2] per cost or benefit. There can be no more than one of each (cost or benefit).

Refer to Paper 1 markbands for May 2016 forward, available under the "Your tests" tab > supplemental materials.

N.B.: Culture is not on the SL guide.

Sam:

• Sam clearly wishes to remain in charge of AFA as a paternalistic or (soft) autocratic leader.
• Allow laissez faire and other leadership styles if explained effectively.
• There is evidence from the stimulus that Sam prefers to be a “big picture” thinker.
• He is mostly involved in the setting of the mission and vision of AFA.
• He does not enjoy the day-to-day running of the business and has left this to Finn.
• However, there is also evidence that Sam, given his positive thoughts towards Daniel Pink’s theory, is a “soft” autocrat, given that he is willing to delegate and empower some of the managers to run their own individual retail stores.
• Some candidates might mention that, using Handy’s classification from the Gods of Management, Sam is clearly a Zeus figure. – there is no need to mention these.

Finn:

• Finn clearly aligns his leadership to a more structured or bureaucratic style.
• He seemingly enjoys monitoring the details, which Sam finds boring.
• Finn enjoys centralization and control, which is tied to the way in which he communicates.
• Finn clearly believes in formal organization and his leadership style typifies this.
• His decision to employ a mystery shopper to effectively spy on his managers indicates that he is slightly paranoid and wishes to know about everything occurring in the business.
• Some candidates might mention that, using Handy’s classification form the Gods of Management, Finn is typically showing the leadership style inherent in an Apollo figure. There is no need to mention these.

Candidate can be rewarded if they argue that the styles are both the same (usually autocratic) provided, they support their argument.

Accept any other relevant explanation.

Marks should be allocated according to the paper 1 markbands for May 2016 forward, section A.

Award a maximum of [3] for a theoretical answer.

Award a maximum of [3] if only Sam or Finn.

Award a maximum of [5] if the explanation is mainly descriptive, but in context. Eg if both are explained but not distinguished.