Outline one benefit of Viv’s leadership style and one benefit of Salah’s leadership style (lines 82–84).

Explain suitable sources of finance for Option B.

Leadership styles identified:

Viv: Autocratic when re-establishing business. Benefit is that it got things done and she had very clear determination. Later more democratic when she consulted engineers. Benefit is that manager may have been in a better position. Overall situational which may be appropriate for an evolving business.

Salah: Largely laissez-faire although some elements of democratic. Candidates will have to identify this for themselves. Creative employees work best when left alone – suitable for the innovation division.

There is no need for answers to identify the leadership style – the question is about benefits.

Award [1] for relevant benefit identified and [1] for a description of how that benefit relates to DA. Award a maximum of [2] per benefit.

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

Key factors:

• Amount: It’s a large amount needed.
• Private limited company: so shares could be issued to family members but may not raise a lot. Would family members be able to buy more shares?
• Converting to public limited and raising share on the stockmarket
• Family business: so ownership and control very important so venture capitalists, business angels and other external investors may not be suitable unless argued otherwise
• Retained profits: Seems like a major impact on Dividends. Would shareholders be happy with that?
• Loans/mortgages/Debentures: has a policy of internal finance. With disagreement in the business would it be willing to change this policy?
• Leasing the necessary machinery for the option
• Short term sources: Overdrafts, debt factoring, trade credit, hire purchase/leasing not sufficient finance. Short term sources are not suitable.
• Sale of assets: not suitable - no evidence of underused or unused assets but is contextual with leaseback
• Selling shares on the stockmarket is not suitable unless linked with converting to plc.

Remember the concept of positive marking – full marks can be achieved with more than one suitable method even if some unsuitable methods are identified.

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 (unsuitable methods) or if there is only one source.

Award a maximum of [5] if the explanation is mainly descriptive, but in context. E.g. if most of the context is mentioned but not developed.

Most candidates were able to identify Viv's and Salah's leadership styles. Many candidates were able to provide the standard textbook benefits of these leadership style but fewer candidates were able to put these benefits into context. The best answers identified times in DA's history when Viv's predominantly autocratic style was needed to get through tough times, and how Salah's largely laissez faire style is likely to be conducive to creating ideas for the innovation division.

Many candidates were able to name possible sources of finance, such as bank loan or sale of assets, however those sources were not always suitable (for example overdrafts). The best answers commented on the suggestions, for example about the fact that involving business angels could lead to a loss of control (for the family), or the fact that selling shares would not be possible (unless there is a change of legal status).