Describe two changes in the external environment that have affected RDM.

Explain how the methods used to motivate employees could have changed when RDM transformed from traditional mass production to highly automated production.

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

A number of changes in the external environment are referred to in the stimulus.

Social:

• Changes in how people heat their homes (declining use of kerosene stoves).
• The aging population of Europe increasing demand for medical care.

Technological:

• The Czech Republic’s improvement in the country’s IT infrastructure
• Changing use of technology by customers eg smartphones (could also be classed as a social factor).

Economic:

• The change in economic system from communist/command to market.
• The integration of the Czech Republic into the broader economy of central and Western Europe.

Ecological:

• Increased use of renewable sources of energy.

Political:

• The change in Czechoslovakia from communist to democratic.

Legal:

• Compliance with EU regulations.

Ethical:

• Growth in CSR since the 1980s.

N.B. No need for candidates to actually mention STEEPLE features by name.
There may be some other external factors that are relevant eg competition, changes in demand which can also be included.

Mark as 2 + 2.

Accept any other relevant change in the external environment.

Award [1] for each change in external environment identified, up to [2], and award [1] additional per external factor identified for appropriate description and application to the stimulus.

Maximum award: [4].

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

Historically:

• RDM was a traditional manufacturing firm.
• It was hierarchical, its leadership was autocratic.
• The business had many workers, who were expected to perform relatively simple functions repeatedly.
• In such an environment, motivation typically relies upon paying workers more for high productivity. Workers can in turn accelerate their work if they want to earn more.
• Its motivational approach was, in all likelihood, Taylorist.

After change (to highly automated):

• RDM had to hire different types of “workers”: highly trained engineers and computer scientists.
• Employees of this type are typically less motivated by money and more by what Daniel Pink refers to as autonomy, mastery and purpose.
• Employees want the freedom to do jobs without being micro-managed; they want to develop themselves professionally so that they become experts in their field, and they want to know that they are doing more than just making money, that they are connected to some larger purpose.

In the case of RDM:

• The changes in leadership style have given employees more autonomy to work with customers to help them.
• The core competency of RDM is cutting edge automation and innovation suggests that the engineers and computer scientists themselves must be masters in their area of expertise to stay on the leading edge.
• Candidates are not bound to mentioning either Taylor, Pink or other theorists. They may refer to other appropriate theorists. In their selection, however, they must convey some understanding that most employees now will not be satisfied with traditional money-based incentives alone.

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 or for limiting answer to only the traditional situation or to only the highly automated situation.

Award a maximum of [5] if the answer is mainly descriptive but in context.

Award a maximum of [6].

Candidates were asked to describe two changes to the external environment that affected RDM. Most candidates were able to answer these in context but many answers were limited in describing the effects. Changes often included: the ageing population suggesting to RDM that they enter the market for health products; the political changes (communism and the velvet revolution affecting the ownership and management of RDM); technological changes allowing innovation at RDM; the Czech economy and role in Europe; and changes to the Czech IT infrastructure, affecting how RDM operated and developed. The best answers identified the changes and described how they affected RDM.

It is clear that candidates understand issues to do with motivation and how these may relate to leadership styles. Some candidates gave very general answers or limited their answers to the situation currently prevailing at RDM. The best answers explored how motivation may have been achieved when the workforce was fairly large, unskilled and doing repetitive jobs to the current situation which has a smaller workforce, skilled labour and responsible jobs.

In Paper 1, for all these questions, theoretical answers are not enough: candidates are expected to provide a balance of “theory” and “practice” – such is the nature of Business Management, an applied subject.