VCE Business Management 2025

Question 4b (4 marks): TQM and negative customer reviews

Based on Section A Question 4b (4 marks). A vegetarian meal manufacturer is receiving negative reviews about meal quality. Explain how Total Quality Management could be used to reduce the number of negative reviews.

Model answer (two features, each linked to fewer negative reviews):

• (a) Continuous improvement. TQM commits the whole business to constantly looking for small improvements in every process, not just checking meals at the end. Ready VEG Meals could review recipes, suppliers and cooking steps against customer feedback, for example switching to fresher produce or tightening portion and seasoning standards. Because the causes of poor taste and texture are removed before meals are made, more customers receive a meal that meets their expectations, so fewer write negative reviews.
• (b) Commitment from all employees, through quality circles. Under TQM, quality is every employee's responsibility. Small groups of kitchen and packing staff could meet regularly to identify problems in their own part of the process (such as meals sitting too long before packing) and propose fixes. Defects are prevented at the source, so faulty meals do not reach customers and the number of complaints falls.

Marker's note: the report capped answers at 2 marks when they described quality control (inspecting meals after they are made) or talked about "quality" in general, because TQM is a proactive, whole-of-business approach. Full marks needed named TQM features and an explicit causal link to fewer negative customer reviews, which few students made.

Question 4c (6 marks): Performance-related pay as a motivation strategy

Based on Section A Question 4c (6 marks). Discuss how the meal manufacturer could use performance-related pay to motivate its staff.

Model answer:

1. What it is and how it motivates. Performance-related pay gives employees extra money (a bonus or pay rise) when they meet or exceed pre-set targets. It motivates because it links effort directly to a reward employees value. At Ready VEG Meals, kitchen staff could earn a bonus for cutting wastage below an agreed level or for a quarter with fewer quality complaints.
2. Advantage: aligns behaviour with business goals. Because the targets are chosen by management, employees are motivated to work towards exactly what the business needs, here lower wastage and better meal quality, which should lift efficiency and customer satisfaction.
3. Advantage: rewards high performers. Staff who contribute most are recognised and paid more, which can be seen as fair when criteria are clear, and gives an incentive to be innovative (for example suggesting a way to reuse offcuts).
4. Disadvantage: unhealthy competition. If bonuses are individual, staff may compete rather than cooperate. In a kitchen that depends on teamwork, this could damage relationships and even raise errors as people rush to beat colleagues.
5. Disadvantage: cost and administration. Bonuses add to expenses, reducing net profit, and managers must measure each person's performance fairly, which takes time and invites claims of favouritism.
6. Conclusion. Performance-related pay is likely to motivate staff at Ready VEG Meals if the targets are clear and team-based (shared wastage and quality goals), which keeps the motivational benefit while limiting rivalry.

Marker's note: the report said many students overlooked the words "as a motivation strategy" and did not explain how the pay motivates. It also penalised "double dipping": arguing it works in the short term and then, as the disadvantage, that it does not work in the long term. Use genuinely different advantages and disadvantages, and link each to the business.

Question 5 (10 marks): Global considerations, effectiveness and efficiency

Based on Section A Question 5 (10 marks). Using a statement that businesses must work out how to produce effectively and efficiently in a competitive, global market, examine how global sourcing of inputs, overseas manufacture and global outsourcing could help.

Model answer (define the terms once, then treat each consideration separately):

• Opening, linked to the statement. Efficiency is how well a business uses its resources to produce output (minimising cost and waste); effectiveness is how well it achieves its objectives, such as market share or net profit. In a competitive global market, each consideration below can improve one or both.
• (a) Global sourcing of inputs. The business imports raw materials or components from overseas suppliers but still produces in Australia (for example, a clothing maker importing fabric and sewing garments locally). Efficiency: lower-cost or higher-quality inputs cut the cost per unit. Effectiveness: lower costs let it compete on price or lift net profit. Limitation: longer supply chains risk delays that interrupt production.
• (b) Overseas manufacture. The business runs its own production at a site in another country, often where wage costs are lower, then ships finished goods home. Efficiency: lower labour and production costs per unit. Effectiveness: lower prices can win market share against global rivals. Limitation: quality control is harder at a distance and ethical concerns about working conditions can harm reputation.
• (c) Global outsourcing. The business contracts a separate overseas business to perform one part of its operations, usually a non-core function such as a call centre, distribution or marketing. Efficiency: a specialist can do the task at lower cost, freeing internal resources. Effectiveness: managers can focus on core activities that build competitive advantage. Limitation: loss of direct control over service quality.
• Close, back to the statement. Used well, these considerations let a business compete globally by lowering costs (efficiency) and meeting its objectives (effectiveness), but each carries risks that must be managed.

Marker's note: answers that described all three considerations accurately but never referred to the opening statement were capped at 8 of 10. The report also wanted efficiency and effectiveness discussed as separate measures, not blended, and a clear distinction between the three considerations. Contemporary examples help but were not needed for full marks.

Question 2 (3 marks): Processes in manufacturing versus a service business

Based on Section B Question 2 (3 marks). Distinguish between the processes (the transformation stage, not the outputs) in a manufacturing business and at Maxi Mini Golf.

Model answer:

• (a) Manufacturing. Processes such as assembling, moulding or packaging take place in a factory, separate from the customer, and consumption happens later, often after the product has been sold through a retailer. Customer interaction during processing is low and output is usually standardised.
• (b) Service at Maxi Mini Golf. The processes happen with the customer present and at the same time as consumption: players pay at the automated pay stations, collect balls from the machine, pick up clubs on the course and play the holes. Production and consumption are simultaneous and customer involvement is high.
• (c) The distinction. So manufacturing processes are separated from the customer in time and place, while at Maxi Mini Golf the process is the customer's experience on the course.

Marker's note: this was one of the lowest-scoring questions on the paper (average 1.3 of 3, with 35% scoring zero). The most common error was comparing outputs (tangible goods versus intangible services) instead of processes. Good answers used features of processing such as the degree of customer interaction or customisation, and tied the service side directly to the case study.

Question 5 (6 marks): Evaluating the consultative style at Maxi Mini Golf

Based on Section B Question 5 (6 marks). Norma uses a consultative management style. Evaluate it given the tasks due by the end of 2025 (installing automation, redesigning the course with six new holes, and cutting staff from 16 to 10).

Model answer:

1. Advantage, staff reduction. A consultative manager seeks employees' views before making the final decision herself. When reducing staff, Norma can learn each person's circumstances, so some may leave voluntarily or be offered outplacement support. Staff feel valued, which protects morale among the 10 who remain.
2. Advantage, new equipment. Two-way communication lets staff who know the course suggest where the automated pay stations and ball machine should go, improving the quality of the decision and staff commitment to the new processes.
3. Disadvantage, time. Consulting takes time. With several large changes due by the end of 2025, meetings could delay decisions and push the project past the deadline.
4. Disadvantage, expertise. Some staff may lack the knowledge to contribute to technical tasks such as the design of the six new holes, which is being done by an expert team, so consultation adds little there.
5. Judgement. On balance the consultative style is appropriate: the most sensitive task, reducing staff, benefits most from consultation, and Norma keeps final decision-making authority, so she can limit consultation on technical tasks to protect the deadline.

Marker's note: "evaluate" requires advantages and disadvantages plus a clear conclusion with justification. The report said many answers did not link the style to the specific tasks in the case study; high scorers tied each point to a named task (staff reduction, automation, new holes) and the end-of-2025 deadline.

Question 6 (6 marks): Lewin's Force Field Analysis before the decision

Based on Section B Question 6 (6 marks). Explain how Norma could have applied the key principles of Lewin's Force Field Analysis before deciding to have six new holes designed and installed.

Model answer (follow the study design's principles, all before the change starts):

• (a) Identify and weight the forces. Norma lists the driving forces (market share down from 35% to 24% in two years; competition from the other two Williamstown courses) and the restraining forces (the cost of an expert team; staff uncertainty about what the change means for them). She then weights each by strength, for example on a 1 to 5 scale, giving falling market share a 5 and cost a 4.
• (b) Rank the forces. She compares the totals to see whether driving or restraining forces are stronger, and which individual forces matter most. Cost might rank as the strongest restraining force.
• (c) Implement a response. She acts to strengthen the driving forces and weaken the restraining ones, for example by securing finance in advance or cutting costs elsewhere to reduce the financial restraint, and by explaining to staff how new holes could win back customers.
• (d) Evaluate the response. She re-assesses the forces. Only when the driving forces clearly outweigh the restraining forces does she decide to go ahead with the six new holes.

Marker's note: the report listed the study design principles as weighting, ranking, implementing a response and evaluating the response, and said all of them happen before the change begins. "Implement" means acting on the forces, not starting the change; "evaluate" means checking whether conditions now favour change, not judging whether the change worked. The report warned that many online sources give different principles, but marking follows the study design, and the principles had to be linked to Maxi Mini Golf. This was one of the weakest questions (average 2.5 of 6, 24% scored zero).