VCE Business Management 2023

Section A Question 2a (4 marks): Justifying a public listed company

Based on Section A, Question 2a (4 marks). A juice manufacturer planning to expand overseas has just changed from a partnership to a public listed company. Justify the decision.

Model answer.

1. What the structure is. A public listed company is an incorporated business owned by shareholders, whose shares are traded on the Australian Securities Exchange (ASX).
2. Reason 1, linked to the stimulus: capital for expansion. Listing lets Blue Berry Juice raise large amounts of equity by selling shares to the public, which a partnership cannot do. That money can fund what the owners actually plan, entering overseas markets (new production capacity, export distribution, marketing abroad), without relying only on the partners' own funds or on loans.
3. Reason 2: limited liability. As an incorporated body, the company is a separate legal entity, so the owners are no longer personally liable for all the business's debts as partners are. This matters more as the business takes on the higher risk of international expansion.
4. Judgement. Because the expansion needs capital beyond what the partners can supply and carries more risk, the public listed company structure is the more suitable one for Blue Berry Juice now.

Marker's note: the report said the most common error was listing strengths and weaknesses of companies instead of justifying why the change suited this business. High-scoring answers tied each advantage (share capital for overseas expansion, limited liability, and the company tax rate) back to Blue Berry Juice's situation.

Section A Question 3 (6 marks): Comparing Maslow with another motivation theory

Based on Section A, Question 3 (6 marks). Compare Maslow's Hierarchy of Needs with one other motivation theory, referring to the idea that money is the main motivator for some employees but not for others.

Model answer (Maslow and Lawrence and Nohria's Four Drive theory).

• Similarity 1. Both theories hold that employees are motivated by more than one thing. Money fits within each (Maslow's physiological and safety needs; the drive to acquire), but so do social factors (belonging needs; the drive to bond). This explains why money is the main motivator for some employees and less important for others.
• Similarity 2. Both recognise the need for status and recognition (Maslow's esteem needs; the drive to acquire covers status as well as material rewards), so a pay rise or bonus can motivate partly because it signals recognition, not just because of the money itself.
• Difference 1. Maslow says needs are met in a set order, from lowest to highest, whereas Four Drive theory says all four drives act at the same time and must be balanced. Under Maslow, money motivates mainly while lower-level needs are unmet; under Four Drive theory, an employee can be motivated by money (acquire) and by learning or belonging at once.
• Difference 2. Under Maslow, a satisfied need stops motivating, so once an employee earns enough to meet basic needs, money matters less and higher needs take over. Four Drive theory treats the drive to acquire as ongoing, so money can keep motivating alongside the other drives.

Marker's note: this was marked globally. For full marks the report wanted at least three detailed points (two similarities and one difference, or the reverse) that show clear understanding of both theories, with the money statement woven into both the similarities and the differences. Long separate descriptions of each theory did not earn the marks.

Section A Question 4a (3 marks): Materials management and efficient inputs

Based on Section A, Question 4a (3 marks). Describe one way a large bread manufacturer could use a materials management strategy to improve the efficient management of its inputs.

Model answer.

• Strategy. Eshan's Breads could use Just In Time (JIT), where inputs arrive from suppliers only as they are needed for production, rather than being held as large stockpiles.
• Link to its inputs. Flour, yeast, oil and other perishable ingredients would be delivered in the quantities needed for each day's scheduled baking.
• Link to efficiency. Less stock sits in storage, so fewer ingredients spoil and are thrown out, and less money and space is tied up in inventory. The business uses fewer resources to produce the same output, which is more efficient management of its inputs.

Marker's note: the report required three things: describe a materials management strategy (JIT, Materials Resource Planning, forecasting or a master production schedule were all acceptable), link it to efficiency, and link it to inputs at this business. Common errors were linking the strategy (often forecasting) to outputs instead of inputs, not mentioning efficiency, or not referring to actual inputs such as flour. The average was only 1.5 of 3.

Section B Question 2 (3 marks): Developing corporate culture after the change

Based on Section B, Question 2 (3 marks). Outline one way ECF Air could develop its corporate culture after the change has been implemented.

Model answer.

• Strategy. ECF Air could run training for the remaining staff on its new sustainability practices, such as reducing waste on board and handling the new biodegradable packaging, together with recognising staff who come up with ideas for cutting emissions.
• How it builds culture. Training and recognition show employees what the airline now values, so environmentally responsible behaviour becomes part of the shared values and everyday practices of staff (the real culture), not just a slogan in the CEO's email.
• Link to the case study. After half the workforce was offered redundancy, morale among remaining staff is likely to be low; shared training builds commitment to the new direction and supports the relaunch as an environmentally sustainable airline.

Marker's note: a wide range of strategies was accepted because the study design does not list specific ones. The report said many students named a sensible strategy but did not link it to the change at the airline; high-scoring answers referred to rebuilding culture after the 50 per cent redundancies or to embedding environmentally friendly practices. The average was 1.5 of 3.

Section B Question 3 (6 marks): Comparing transition and entitlement considerations

Based on Section B, Question 3 (6 marks). Compare transition considerations with entitlement considerations as they apply to the airline's employees during the change.

Model answer.

• Difference 1: legal obligation. Entitlement considerations are legal obligations: ECF Air must pay the employees being made redundant what they are owed under the National Employment Standards and their award or agreement, such as redundancy pay, notice, and accrued annual leave and long service leave. Transition considerations are not required by law; they are support the airline chooses to give, such as career counselling or resume and interview workshops.
• Difference 2: what they cover. Entitlements are financial payouts to the departing employee. Transition considerations help the employee move to their next job or circumstance. For ECF Air, the employees taking redundancy would receive their leave balances (entitlement) and could be offered outplacement services to find work at other airlines (transition).
• Similarity 1. Both apply to the same group, the employees leaving the airline, and both are part of the termination process, so both can be built into the redundancy packages the email says will be offered.
• Similarity 2. Both add to the airline's costs during the change, because paying out leave and funding outplacement services both require money, and both can involve the union, which the email says was consulted.
• Link. Handling both well would matter at ECF Air, where the email says redundancies will be communicated by email within 48 hours; transition support in particular could soften the damage to morale and reputation.

Marker's note: "compare" needs both similarities and differences, at least three points in total, each linked to the case study. The report said defining the two terms was not enough, many students gave no similarities, and signposting ("A difference is...", "A similarity is...") helped. It also noted that sick leave is not paid out on termination, so do not list it as an entitlement. Average 2.3 of 6.

Section B Question 4 (10 marks): KPIs and management strategies during change

Based on Section B, Question 4 (10 marks). Analyse the relationship between key performance indicators (KPIs) and management strategies during the airline's change to an environmentally sustainable airline, in response to a statement that significant change only follows analysis of KPIs and a range of strategies.

Response plan (write it in paragraphs, not dot points).

1. Opening: the relationship. KPIs are measures of business performance that managers track over time. When the trend in KPIs shows performance is falling short of objectives, managers use that data to choose management strategies, and then keep tracking KPIs to see whether the strategies are working. At Fly-A-Lot Airlines, the 12 months of planning the CEO mentions is when this analysis would have happened.
2. KPI 1: net profit and number of sales. Rising fuel prices and more competition from globalisation would have pushed expenses up and bookings down, so falling net profit would show the existing business was not sustainable. The strategies chosen in response: cost reduction (flying fewer routes, concentrated on high-demand destinations, and reducing staff numbers) and investment in new, more fuel-efficient aircraft and cleaner fuels (innovation and technology).
3. KPI 2: level of waste. High waste figures (on-board packaging and fuel) signal inefficiency and damage to the environment. The strategy: lean management and waste minimisation, including biodegradable packaging, which also supports the new sustainable identity. The waste KPI then measures whether the strategy is working.
4. KPI 3: number of customer complaints and market share. If customer complaints were rising and market share falling as customers shifted towards more sustainable transport, managers would respond by redeploying resources towards a new target market, customers with an environmental focus, and by training remaining staff to deliver that service.
5. Relationship over time. The link runs both ways: KPIs identify the need for change and help select strategies, and after implementation ECF Air must set targets (for example, lower emissions per flight, lower waste, recovering market share) and monitor the same KPIs to judge whether the strategies succeeded or need adjusting.
6. Conclusion on the statement. The statement is largely supported: ECF Air's major change followed monitoring of several KPIs and a choice among several strategies, though the timing of implementation (a 2.23 am email and redundancies within 48 hours) shows that choosing the right strategy is not the same as implementing it well.

Marker's note: the report said high-scoring responses described several KPIs, explained how they might have changed to show declining performance, showed how senior managers used them to select and implement management strategies, and linked everything directly to the airline. Common errors were confusing management strategies with management styles or skills, using driving forces (such as societal attitudes) as the reason for decisions instead of changing KPIs, and writing about only one KPI when the task used the plural. A brief plan and paragraphs helped students sustain a line of argument. The average was 3.7 of 10.