GCSE 2003 June Series

GCSE 2003 June Series Report on the Examination Applied Business 3830/1 3830/2 3830/3 GCSE - (3831)

Further copies of this Report on the Examination are available from: Publications Department, Aldon House, 39, Heald Grove, Rusholme, Manchester, M14 4NA Tel: 0161 953 1170 or download from the AQA website: www.aqa.org.uk Assessment and Qualifications Alliance 2003 COPYRIGHT AQA retains the copyright on all its publications. However, registered centres for AQA are permitted to copy material from this booklet for their own internal use, with the following important exception: AQA cannot give permission to centres to photocopy any material that is acknowledged to a third party even for internal use within the centre. Set and published by the Assessment and Qualifications Alliance. The Assessment and Qualifications Alliance (AQA) is a company limited by guarantee, registered in England and Wales 3644723 and a registered Charity 1073334. Registered address Addleshaw Goddard, Sovereign House, PO Box 8, Sovereign Street, Leeds LS1 1HQ. Kathleen Tattersall, Director General

CONTENTS GCSE Applied Business 3831 Page No. General 3831...5 Unit 1 3830/1...6 Unit 2 3830/2...9 Unit 3 3830/3... 11 Mark Ranges and Award of Grades... 13

Report on the Examination GCSE Applied Business Applied Business General This was the first time the three individual units of the GCSE Applied Business qualification were awarded. The full award of the qualification will not take place until the summer of 2004. Evidence of good practice was found where students were involved in guided investigation and where a genuine understanding of what went on inside businesses had been developed. There was also evidence of students achieving high scores in the examined finance unit due to a firm grasp, and working knowledge, of key financial concepts. It was also clear that large numbers of candidates and centres have faced difficulties in interpreting the demands of the qualification. Within the portfolio units too many large portfolios were submitted which consisted of little more than padding which was of little practical use for assessment purposes. It is important that centres appreciate the applied nature of the qualification where genuine, and often brief, supported insight is rewarded at a high level. The following report contains pointers for improving performance in all of the units. It indicates that a closer inspection of the portfolio units assessment evidence grids is required and that certain key concepts within the finance unit are generally misunderstood. It is hoped that these pointers will help centres as they work towards a successful completion of the qualification where their students are involved in active, relevant and interesting activities. Levels of response marking This specification uses levels of response mark schemes in all three units. A levels of response mark scheme describes the quality of outcome required to achieve various marks. Each level of response is associated with a mark band. Higher levels of response receive higher marks eg level 3 might have a mark band of between 10 and 8 marks, whilst level 2 might have a mark band of between 7 and 4 marks. In this specification, three levels of response are used ie level 3, level 2 and level 1. In applying a levels of response mark scheme, assessors must consider each student s work as a whole. They should assess top-down ie first consider the work against the level 3 descriptor and work down the levels as the quality of the evidence dictates. Assessors should use their professional judgement when deciding on an appropriate level (and mark within that level) as the reality of evidence will rarely coincide with the exact wording of the level descriptors or associated guidance on assessment. 5

Applied Business - GCSE Report on the Examination Unit 1 (3830/1) This was the first time Unit 1 Investigating Business had been moderated and it was pleasing to see that a number of centres had a good understanding of the unit s requirements. These centres had set investigative tasks for their students which encouraged them to get inside the two businesses being studied. The chosen businesses were often contrasting in size eg a national organisation and a local sole trader or partnership. Candidates often performed better when investigating sole trader businesses as they could gain an overview of how they operated, without being burdened with the complexities of a national or multinational organisation. When assessing the portfolio evidence, successful centres clearly understood the requirements of the assessment evidence shown on page 21 of the specification. However, many centres set tasks that did not allow their students to demonstrate higher levels of performance and/or misinterpreted the differences between the levels of response when assessing student portfolios. Levels of response marking The assessment evidence grid on page 21 of the specification describes the levels of response required for a candidate to gain mark ranges in the four themes assessed in unit 1. The three levels apply to each theme. Level 3 responses were produced by candidates who had applied their knowledge to each business to the extent that they could reflect on what they had found out. Level 3 candidates knew how the businesses operated and could make sensible recommendations about each of the businesses future operations. These recommendations were supported by their applied work and were not ideas plucked from thin air. Level 2 responses began to apply business facts and concepts to the businesses being investigated. The reality of each business was apparent and it was clear that candidates were inside the business ie candidates telling authentic stories about how the business operated. Level 1 responses were characterised by evidence which was descriptive and lacking any understanding of how businesses operated in practice. If the candidate fails to apply his/her knowledge to the businesses being investigated it is important for centres to note that theoretical work should not be awarded higher than level 1. 6

Report on the Examination GCSE Applied Business Theme A: an overview of the main activities of the business, its aims and objectives, the type of ownership and the liabilities of the owners This is a key theme. Without an applied understanding of each businesses activities, aims and objectives it is difficult for a candidate to make sense of themes B, C and D. Too many candidates produced text book responses to this theme and failed to apply their knowledge and understanding. Few candidates achieved level 3 marks. Many centres theme A marks were adjusted because insufficient evidence of a level 3 thought process was present. It is not sufficient for candidates to produce three pieces of unconnected work one for level 1, the second for level 2 and the third for level 3. When setting tasks for students, it is sound class management to divide a theme into two or three tasks, but these tasks must be connected and capable of supporting each candidate s understanding of the whole theme. When suggesting how and why the ownership, and the aims and objectives of the business may need to change in order to respond to a change in business activities, candidates must reflect on what they found out about the progress of each business how successful each had been before commenting on possible changes in activities and associated alterations to aims and ownership. To gain level 2 marks, candidates needed to explain the extent to which the businesses were achieving their aims. Candidates who had gathered together performance statistics or comments from the owner(s) of one of their businesses achieved level 2 marks. Those who went on to explain (in practical and authentic ways) why the type of ownership was suitable to both businesses achieved high level 2 marks. Candidates who chose to investigate a local sole trader business often managed to achieve level 2 marks. Candidates who looked at two large organisations (perhaps entirely through internet research) found this theme difficult and invariably achieved level 1 marks. Theme B: how the business is organised, the functional areas, their purpose and activities To achieve level 3, candidates needed to have a sound understanding of how the business operated and their suggested improvements/developments in ICT should have grown out of these observations. Too often, as in theme A, these were ideas that bore little relationship to the actual practices of the business. Candidates who suggested practical uses of ICT, which could help a sole trader organise their activities, often gained level 3 marks. These suggestions were clearly derived from their earlier applied investigation into the activities of the sole trader. Candidates who provided real stories of what each business did to achieve its aims, for example by interviewing someone within a department, began to achieve level 2 marks. Realistic examples of how ICT helped departments/functional areas work together served to consolidate this level 2 mark. As before, those who chose smaller businesses often found it easier to provide authentic evidence. Investigating how a sole trader managed their weekly activities often generated level 2 evidence. As in theme A, too many candidates produced text book descriptions of functional areas within a business. This level 1 work contained no indication of how the functional areas of their businesses helped to achieve the aims of each business beyond generic statements such as marketing need to set the best price and have the best products 7

Applied Business - GCSE Report on the Examination Theme C: how the business communicates internally and externally This theme proved to be the most problematic in terms of moderation. Far too many centres provided insufficient evidence of achievement at levels 3 and 2, relying too heavily on PowerPoint slides that had no associated notes. Evidence was insufficient and was not helped by brief witness statements. Witness statements are useful if they detail aspects of the level 3 and 2 descriptors, but often the witness statements were generic key skills documents that imparted little additional evidence beyond that shown by the presentation slides. Those candidates who used the notes facility within PowerPoint, or who produced additional commentary to accompany their presentation, sometimes achieved level 3 marks and often achieved level 2 marks. To achieve level 2 in this theme, candidates must present evidence explaining why the internal and external methods of communication, including ICT, used by the businesses are appropriate. This requires that the generic forms of communication, liberally discussed by many level 1 candidates, be contextualised within each business: how does each business communicate and why do they use these methods? Given that few candidates could explain why one or both of their businesses used particular forms of communication, it was not surprising that few could suggest improvements. Many, as in themes A and B, stated improvements that had no real connection to the businesses again, this is level 1 evidence as it is not applied. Centres should note that those candidates who had investigated a sole trader or small business often found it easier to comprehend the practical use of communication and could provide supported suggestions for improvement. Theme D: the external influences, including reference to location, competitors and environmental constraints This theme was treated in a variety of ways by centres and candidates. It presented the most problems in terms of knowledge and concepts. Many candidates produced focussed and applied work when considering how each business competed with their competitors. This would seem to be the best way into this theme for most candidates. Unfortunately too much of the evidence relating to the location of each business was limited to describing the location and providing text book discussions on the factors affecting location. This is level 1 evidence. For levels 2 and 3 candidates need to consider how the location of each business helps it to cope with competitors, economic conditions and/or environmental constraints. Again, the extent to which the current location of the business helps it cope with competition and/or gives it a competitive advantage is likely to be the best way into this part of the theme. Too many candidates approached the economic conditions through a macro-economic discussion about the UK s rates of interest and inflation. This invariably produced level 1 evidence as it had little to do with the day to day realities of the businesses they were investigating. Centres are advised that candidates should look at local economic conditions when studying a local business eg local unemployment, local growth in retailing, local housing development etc. The same comments apply to environmental constraints. Pages of text book discussion of environmental legislations achieved little more than level 1 evidence and served to confuse candidates. Candidates would do better to carry out a simple environmental audit of each business (eg brainstorm what kind of pollution each business might produce) before considering how each business deals with environmental constraints. All of these discussions should be specific to each business and kept simple. 8

Report on the Examination GCSE Applied Business Unit 2 (3830/2) This was the first opportunity for centres to present work for moderation for Unit 2 People and Business. This meant that there were few candidates to moderate, but this served to highlight some of the problems that might be encountered when there are larger numbers. There were several common misunderstandings or misinterpretations, both in general, and in each of the themes. In general, centres should be conscious that there is a content which has to be taught and understood before candidates can begin to apply it. In many cases it was apparent that this has not happened, and candidates dived into the work without any real knowledge of terminology or how businesses work or the overview of content that is necessary for them to make a concerted effort at a portfolio piece. Candidates who attempted to complete a piece of portfolio work after each lesson, for example, were likely to produce low level work which did not show any real insight. Higher level work contained judgements, arguments, reasoning and justification of ideas and decisions. It gave a sense that the candidate was inside the business and had really experienced it and could therefore show an informed insight into its workings. There was evaluation of evidence (not self evaluation) and evidence of synthesis. Candidates at high levels were able to draw the various strands of a study together. Work in the lower mark bands tended to be characterised by a lack of operational knowledge. There was little evidence that the candidate had more than a rudimentary brush with the business in question. There was often a generic structure, which could be applied to any business. Often it was not clear which business the candidate was referring to, and in some cases, candidates have even interchanged business names in the same piece. There was a lack of analysis and a lot of repetition of given knowledge and received sources of information eg from text books or class notes, again with no real evidence that this has been applied. Judgements tended to be rare, and where there were judgements they were unsupported or, along with many decisions, made as a result of teacher guidance rather than individual thought. It is recommended that the candidates, where possible, choose a different business rather than all studying a common one. The flashes of insight and high level evidence that appeared came when a candidate made judgements about a business that they were really are close to, and where they could apply their knowledge. It is often difficult to do this if all are sharing the same business. Teachers tended to be particularly generous in awarding marks for the oral presentation, giving undue importance to the presentation itself, and less to the content. Many had not realised that the presentation does not have to be of a 'public speaking' type, but could be conducted on a one-to-one basis. In many cases, the only evidence supplied was in the form of slides. To achieve the higher level marks for this theme it is necessary for candidates to explain and respond to questioning in order to demonstrate the depth of their applied knowledge, rather than just to produce computer generated slide shows. In certain cases some of the particular requirements of the specification had not been complied with, or had been misunderstood. This was particularly true of those centres which had chosen to use certain internet sites in order to study a business. The specification clearly states that centres may provide a case study for the business, but that this must be in the form of raw data which candidates can then access to satisfy the assessment criteria. With at least one commercial internet site, answers are being provided rather than raw information. This resulted in candidates 'copying and pasting' into portfolios. This does not demonstrate knowledge, understanding or application. Most importantly, because answers are necessarily identical, there is no differentiation between candidates. Centres should use the forms and paperwork supplied and annotate the work. Centres should realise that clear annotation helps the moderator to make a judgement, and also helps the centre to justify the 9

Applied Business - GCSE Report on the Examination mark that was given. Comments on the Candidate Record Forms can also be extremely helpful. It is not good practice to use forms that have been prepared for other specifications such as GNVQ internal verifier forms and coursework mark sheets for other specifications or boards. 10

Report on the Examination GCSE Applied Business Unit 3 (3830/3) General Unit 3 Business Finance was successful in assessing candidates across the ability range. It was particularly pleasing to see the weaker candidates were attempting all questions, although not necessarily all parts of each question. Most descriptive questions were assessed using a level of response mark scheme. The majority of candidates will need to develop explanations further in order to reach the higher marks available for level 3 responses. The poor quality of some calculation work suggest that candidates may not have brought calculators into the examination. Question 1 (a) Good introduction to the paper with most candidates scoring full marks. The most common error was to confuse invoice and statement of account in part (iv). (b) Very few candidates were able to achieve full marks, however nearly all candidates were able to make a level 2 response by recognising that trade discount would attract or retain customers. Unfortunately many candidates confused trade discount with quantity and cash discounts. (c) Whilst many candidates achieved full marks it was disappointing that some did not correctly calculate trade discount and then added trade discount instead of subtracting from the total before trade discount. Random calculation errors were evident from weaker candidates. (d) The question asked candidates to explain two possible problems for Scent Sensations Ltd. Candidates focused on identification of mistakes rather than the consequences of the mistake and therefore the majority of candidates could only offer a partial explanation. Question 2 (a) Very well answered with many instances of full marks. Common errors included rent, insurance, wages and refreshments. (b) Few instances of completely correct answers in this section but with many candidates scoring 4/5 marks. Common errors included placing wages and electricity as variable costs. (c) Most candidates correctly identified the break-even point as 600 customers, however others failed to read the horizontal axis carefully and incorrectly stated that the break-even point was 6 customers. (d) Only a minority of candidates were able to determine correctly the level of profit at 2000 customers per year. It was interesting to note that very few showed clear workings and indicated how they had calculated their answer. (e) Most candidates were able to state that the break-even would rise and some were able to calculate that it would rise to 800 customers. Unfortunately few candidates were able to reach a level three response by indicating why break-even would rise. (f) Most candidates were able to attempt this section but generally only producing a partial explanation. Question 3 (a) Few candidates were able to offer an accurate and concise definition of trade credit. (b) Whilst unclear as to the exact nature of trade credit most candidates were able to score one mark here, usually by referring to the potential for increased sales. Candidates often mentioned trade discounts and discounts generally. 11

Applied Business - GCSE Report on the Examination (c) Whilst many candidates scored full marks scores of 2 out of 4 were not uncommon with credit sales for September and total outflow for October usually correct. Closing balance for July often negative and Net monthly cash flow often treated as positive. (d) Most candidates were able to identify two actions, but as with question 1(d) few were able to offer anything more than a partial explanation. Those candidates who did score well here often referred to information in the text of the question as a basis for their answers. Many candidates were confused between cash and profit. A number of candidates opted for cutting wages rather than delaying employing new staff an option clearly possible from the data provided. Question 4 (a) Quite poorly answered. Many candidates were unable to describe one way, but instead identified an advantage of using ICT in a very general way. Few candidates referred to an appropriate package such as a spreadsheet. (b) Generally well answered with many candidates scoring 6 marks or better. A common error included failing to add wages to other expenses when determining the total expenses. (c) Varied responses here, which revealed that candidates had difficulties with the terms fixed assets, current assets and liabilities common errors included premises and office furniture as current assets, debtors as a liability and mortgage as fixed or current assets. (d) Most candidates were only able to offer a general comment (level 1 or low level 2 response) to both stake-holding groups, usually referring to wages/job security (for employees) and profits (for owners). It was rare for a candidate to achieve more than two marks for either. Candidates appeared to score slightly better for employee stakeholder then owners. (e i)very poorly done with marks of 1 or 2 at best for identifying information from either of the two documents mentioned in the question. Few were able to explain the usefulness of the information. It would appear that only a minority of the candidates referred back to parts (b) and (c) to identify information from the accounts. Most wrote in very general terms about profit without mentioning Net Profit. (e ii)again poorly done with most candidates able to identify a cash flow forecast and/or a break-even chart, but did little more than state what they were. 12

Report on the Examination GCSE Applied Business Mark Ranges and Award of Grades Unit Unit 1 Investigating Business Portfolio (3830/1) Unit 2 People and Business Portfolio (3830/2) Maximum Mark (Raw) Maximum Mark (Scaled) Mean Mark (Scaled) Standard Deviation (Scaled) 50 50 19.3 9.0 50 50 15.6 13.3 Unit 3 Business Finance (3830/3) 100 100 48.9 14.7 Unit 1 Investigating Business (3830/1) (920 candidates) Max. mark A* A B C D E F G Scaled Boundary Mark 50 44 36 28 20 16 12 9 6 Uniform Boundary Mark 100 90 80 70 60 50 40 30 20 Unit 2 People and Business (3830/2) (94 candidates) Max. mark A* A B C D E F G Scaled Boundary Mark 50 45 40 35 30 23 16 9 2 Uniform Boundary Mark 100 90 80 70 60 50 40 30 20 Unit 3 Business and Finance (3830/3) (773 candidates) Max. mark A* A B C D E F G Scaled Boundary Mark 100 79 70 61 52 45 38 31 24 Uniform Boundary Mark 100 90 80 70 60 50 40 30 20 13

Applied Business - GCSE Report on the Examination Definitions Boundary Mark: the minimum (scaled) mark required by a candidate to qualify for a given grade. Mean Mark: is the sum of all candidates marks divided by the number of candidates. In order to compare mean marks for different components, the mean mark (scaled) should be expressed as a percentage of the maximum mark (scaled). Standard Deviation: a measure of the spread of candidates marks. In most components, approximately two-thirds of all candidates lie in a range of plus or minus one standard deviation from the mean, and approximately 95% of all candidate lie in range of plus or minus two standard deviations from the mean. In order to compare the standard deviations for different components, the standard deviation (scaled) should be expressed as a percentage of the maximum mark (scaled). Uniform Mark: a score on a standard scale which indicates a candidate s performance. The lowest uniform mark for grade A* is always 90% of the maximum uniform mark for the unit, similarly grade A is 80%, grade B is 70%, grade C is 60%, grade D is 50%, grade E is 40%, grade F is 30% and grade G is 20%. A candidate s total scaled mark for each unit is converted to a uniform mark and, when subject grades are awarded in 2004, the uniform marks for the units will be added in order to determine the candidate s overall grade. 14