BTEC Level 3 National Extended Certificate in
Business
Comprehensive Questions and Answers Guide
Qualification Details
Level: 3 (equivalent to A-Level)
GLH (Guided Learning Hours): 360 hours
Total Qualification Time: 630 hours
UCAS Points: Up to 56 points (equivalent to AAA*)
Assessment: Mix of internal and external assessment
UNIT 1: EXPLORING BUSINESS
External Assessment - 1.5 hours - 80 marks
Learning Aim A: Explore the features of different businesses and analyze what makes them
successful
Question 1 (12 marks)
Evaluate the extent to which the ownership structure
affects the success of two contrasting businesses.
Suggested Businesses:
Business A: Tesco PLC (Public Limited Company)
Business B: John Lewis Partnership (Partnership/Cooperative)
Model Answer:
,Introduction: Business ownership structure significantly influences operational decisions,
growth potential, and stakeholder relationships. This evaluation compares Tesco PLC, a publicly
traded retail giant, with John Lewis Partnership, a unique employee-owned cooperative, to
assess how ownership affects business success.
Tesco PLC - Public Limited Company Structure
Advantages for Success: The PLC structure provides Tesco with substantial advantages for
achieving large-scale success. Access to capital markets allows the company to raise funds
through share issues and bond sales, enabling rapid expansion both domestically and
internationally. Tesco's ability to acquire competitors (like Booker Group in 2018) demonstrates
how PLC status facilitates growth through mergers and acquisitions.
Limited liability protection encourages investor confidence, as shareholders risk only their
investment amount. This has enabled Tesco to attract institutional investors and maintain a
strong market capitalization, providing financial stability during challenging periods like the
2014 accounting scandal.
Disadvantages: However, PLC status creates pressure for short-term profit maximization to
satisfy shareholders, potentially conflicting with long-term strategic planning. Tesco's aggressive
expansion into international markets (later reversed) exemplifies how shareholder pressure can
lead to poorly considered decisions that ultimately harm performance.
John Lewis Partnership - Employee Ownership Structure
Advantages for Success: John Lewis Partnership's unique structure, where employees (called
Partners) own the business, creates exceptional staff motivation and customer service quality.
Partners receive annual bonuses based on company profits, aligning employee interests with
business success. This ownership model has contributed to John Lewis's reputation for
outstanding customer service and staff retention rates significantly above industry averages.
The democratic decision-making process, including Partner representation on the board,
ensures decisions consider long-term sustainability rather than short-term profit maximization.
This approach has enabled consistent brand reputation and customer loyalty over decades.
Disadvantages: The partnership structure limits growth potential due to restricted access to
external capital. Unlike Tesco, John Lewis cannot issue shares to fund major expansions or
acquisitions. Recent financial challenges, including store closures and reduced bonuses,
highlight how the partnership model can struggle during economic downturns when it cannot
easily access external funding.
Comparative Analysis Tesco's PLC structure has enabled massive scale and international reach,
generating £53.4 billion revenue in 2022 compared to John Lewis Partnership's £10.9 billion.
, However, John Lewis consistently achieves higher customer satisfaction scores and employee
engagement metrics, suggesting that success metrics extend beyond purely financial measures.
Conclusion Ownership structure significantly affects business success, but the definition of
"success" varies. Tesco's PLC status enables financial growth and market dominance but creates
shareholder pressure that can compromise long-term planning. John Lewis Partnership's
employee ownership fosters exceptional service quality and staff loyalty but limits growth
potential. Both structures can achieve success, but they optimize for different outcomes - scale
versus sustainability, growth versus stakeholder satisfaction.
Mark Scheme:
Level 4 (10-12 marks): Comprehensive evaluation with detailed analysis of both
businesses, clear comparison, and justified conclusions
Level 3 (7-9 marks): Good analysis of both businesses with some comparison
Level 2 (4-6 marks): Basic analysis with limited comparison
Level 1 (1-3 marks): Simple description with minimal analysis
Learning Aim B: Investigate how businesses are organized
Question 2 (8 marks)
Analyse the advantages and disadvantages of a tall
organizational structure for a large multinational
corporation.
Model Answer:
Advantages of Tall Organizational Structure
Clear Chain of Command A tall structure with multiple hierarchical levels provides clear
reporting lines and accountability. Each manager has a defined span of control, typically 3-6
subordinates, ensuring close supervision and detailed oversight. This is particularly valuable in
multinational corporations where standardization across different countries is crucial for brand
consistency and quality control.
Specialization and Expertise Multiple management layers allow for specialized roles and
expertise development. Senior managers can focus on strategic planning while middle managers
Business
Comprehensive Questions and Answers Guide
Qualification Details
Level: 3 (equivalent to A-Level)
GLH (Guided Learning Hours): 360 hours
Total Qualification Time: 630 hours
UCAS Points: Up to 56 points (equivalent to AAA*)
Assessment: Mix of internal and external assessment
UNIT 1: EXPLORING BUSINESS
External Assessment - 1.5 hours - 80 marks
Learning Aim A: Explore the features of different businesses and analyze what makes them
successful
Question 1 (12 marks)
Evaluate the extent to which the ownership structure
affects the success of two contrasting businesses.
Suggested Businesses:
Business A: Tesco PLC (Public Limited Company)
Business B: John Lewis Partnership (Partnership/Cooperative)
Model Answer:
,Introduction: Business ownership structure significantly influences operational decisions,
growth potential, and stakeholder relationships. This evaluation compares Tesco PLC, a publicly
traded retail giant, with John Lewis Partnership, a unique employee-owned cooperative, to
assess how ownership affects business success.
Tesco PLC - Public Limited Company Structure
Advantages for Success: The PLC structure provides Tesco with substantial advantages for
achieving large-scale success. Access to capital markets allows the company to raise funds
through share issues and bond sales, enabling rapid expansion both domestically and
internationally. Tesco's ability to acquire competitors (like Booker Group in 2018) demonstrates
how PLC status facilitates growth through mergers and acquisitions.
Limited liability protection encourages investor confidence, as shareholders risk only their
investment amount. This has enabled Tesco to attract institutional investors and maintain a
strong market capitalization, providing financial stability during challenging periods like the
2014 accounting scandal.
Disadvantages: However, PLC status creates pressure for short-term profit maximization to
satisfy shareholders, potentially conflicting with long-term strategic planning. Tesco's aggressive
expansion into international markets (later reversed) exemplifies how shareholder pressure can
lead to poorly considered decisions that ultimately harm performance.
John Lewis Partnership - Employee Ownership Structure
Advantages for Success: John Lewis Partnership's unique structure, where employees (called
Partners) own the business, creates exceptional staff motivation and customer service quality.
Partners receive annual bonuses based on company profits, aligning employee interests with
business success. This ownership model has contributed to John Lewis's reputation for
outstanding customer service and staff retention rates significantly above industry averages.
The democratic decision-making process, including Partner representation on the board,
ensures decisions consider long-term sustainability rather than short-term profit maximization.
This approach has enabled consistent brand reputation and customer loyalty over decades.
Disadvantages: The partnership structure limits growth potential due to restricted access to
external capital. Unlike Tesco, John Lewis cannot issue shares to fund major expansions or
acquisitions. Recent financial challenges, including store closures and reduced bonuses,
highlight how the partnership model can struggle during economic downturns when it cannot
easily access external funding.
Comparative Analysis Tesco's PLC structure has enabled massive scale and international reach,
generating £53.4 billion revenue in 2022 compared to John Lewis Partnership's £10.9 billion.
, However, John Lewis consistently achieves higher customer satisfaction scores and employee
engagement metrics, suggesting that success metrics extend beyond purely financial measures.
Conclusion Ownership structure significantly affects business success, but the definition of
"success" varies. Tesco's PLC status enables financial growth and market dominance but creates
shareholder pressure that can compromise long-term planning. John Lewis Partnership's
employee ownership fosters exceptional service quality and staff loyalty but limits growth
potential. Both structures can achieve success, but they optimize for different outcomes - scale
versus sustainability, growth versus stakeholder satisfaction.
Mark Scheme:
Level 4 (10-12 marks): Comprehensive evaluation with detailed analysis of both
businesses, clear comparison, and justified conclusions
Level 3 (7-9 marks): Good analysis of both businesses with some comparison
Level 2 (4-6 marks): Basic analysis with limited comparison
Level 1 (1-3 marks): Simple description with minimal analysis
Learning Aim B: Investigate how businesses are organized
Question 2 (8 marks)
Analyse the advantages and disadvantages of a tall
organizational structure for a large multinational
corporation.
Model Answer:
Advantages of Tall Organizational Structure
Clear Chain of Command A tall structure with multiple hierarchical levels provides clear
reporting lines and accountability. Each manager has a defined span of control, typically 3-6
subordinates, ensuring close supervision and detailed oversight. This is particularly valuable in
multinational corporations where standardization across different countries is crucial for brand
consistency and quality control.
Specialization and Expertise Multiple management layers allow for specialized roles and
expertise development. Senior managers can focus on strategic planning while middle managers
