SQA Higher Business UPDATED ACTUAL Exam Questions and
CORRECT Answers
flow production - A process in which production items move continuously from one operation to
the next. Each part of the process leads to the eventual production of the final product with the
aid of machinery to save labour costs.
labour-intensive production - Manufacturers rely heavily on their workforce rather than
machinery to manufacture their products.
capital-intensive production - Manufacturers rely heavily on machinery and automation in their
production process.
delayering - Reducing staff levels by cutting out levels of management to flatten the structure. It
creates a smaller hierarchy where each manager has an increased span of control.
downsizing - Involves removing certain areas of the organisation's activities by closing factories
or merging divisions together.
hierarchical structure - Tall pyramid with many management levels
flat structure - Low pyramid with few management levels
entrepreneurial structure - Used in small businesses
Decisions are made by few people at the core of the organisation
matrix structure - Teams are made by bringing together members of different departments to
carry out a complex task
,decentralised structure - Control and decision-making is delegated to departments, which relieves
senior management from routine day-to-day tasks and burdens
centralised structure - Control and decision-making lies with top management in head office. Top
management are more likely to possess higher quality decision making skills
line relationship - Exists between a manager and their subordinates
Vertical relationship
lateral relationship - Exists between staff on the same horizontal level
functional relationship - Exists where a specialist function is given to a department e.g. HR and
that department is given responsibility for the function throughout the organisation
staff relationship - Someone has an advisory relationship with another member of staff. He/she
has no authority over departments as he/she only advices
informal relationship - Develop between staff at breaks, during work and when socialising. This
builds up a range of sources staff can seek advice from.
functional grouping - Departments where staff have similar skills and expertise and do similar
jobs.
product/service grouping - Departments where each deals with a different product or product
range.
customer grouping - Divisions dealing with different types of customer.
, place grouping - Divisions deal with different geographical areas
technology grouping - Grouping in which a manufacturing company groups its business
activities according to technological or production processes.
Quality Measures - Benchmarking
Quality Control
Quality Assurance
Quality Circles
Quality Management (good training, constant auditing, purchase of good quality materials)
Benchmarking - Copying the best techniques used by another organisation regarded as the 'best'
Quality Control - A manufacturer passes a sample of their raw materials and the final product
through a quality control check. Any unacceptable products are then discarded as waste or sent
back for reworking. This ensures that substandard products are not sold to customers.
Quality Assurance - At certain points in the production process, products are checked to ensure
that they meet agreed quality standards. All aspects of the production process are looked at to
ensure that errors do not occur.
Quality Circles - Small groups of workers meeting at regular intervals to discuss where
improvements can be made in the production process. Suggestions are then made to management
for approval before being implemented.
Penetration Pricing - Initial low price which then is raised once customer loyalty is built.
Promotional Pricing - Prices are reduced for a short period of time to inject life in to a product
CORRECT Answers
flow production - A process in which production items move continuously from one operation to
the next. Each part of the process leads to the eventual production of the final product with the
aid of machinery to save labour costs.
labour-intensive production - Manufacturers rely heavily on their workforce rather than
machinery to manufacture their products.
capital-intensive production - Manufacturers rely heavily on machinery and automation in their
production process.
delayering - Reducing staff levels by cutting out levels of management to flatten the structure. It
creates a smaller hierarchy where each manager has an increased span of control.
downsizing - Involves removing certain areas of the organisation's activities by closing factories
or merging divisions together.
hierarchical structure - Tall pyramid with many management levels
flat structure - Low pyramid with few management levels
entrepreneurial structure - Used in small businesses
Decisions are made by few people at the core of the organisation
matrix structure - Teams are made by bringing together members of different departments to
carry out a complex task
,decentralised structure - Control and decision-making is delegated to departments, which relieves
senior management from routine day-to-day tasks and burdens
centralised structure - Control and decision-making lies with top management in head office. Top
management are more likely to possess higher quality decision making skills
line relationship - Exists between a manager and their subordinates
Vertical relationship
lateral relationship - Exists between staff on the same horizontal level
functional relationship - Exists where a specialist function is given to a department e.g. HR and
that department is given responsibility for the function throughout the organisation
staff relationship - Someone has an advisory relationship with another member of staff. He/she
has no authority over departments as he/she only advices
informal relationship - Develop between staff at breaks, during work and when socialising. This
builds up a range of sources staff can seek advice from.
functional grouping - Departments where staff have similar skills and expertise and do similar
jobs.
product/service grouping - Departments where each deals with a different product or product
range.
customer grouping - Divisions dealing with different types of customer.
, place grouping - Divisions deal with different geographical areas
technology grouping - Grouping in which a manufacturing company groups its business
activities according to technological or production processes.
Quality Measures - Benchmarking
Quality Control
Quality Assurance
Quality Circles
Quality Management (good training, constant auditing, purchase of good quality materials)
Benchmarking - Copying the best techniques used by another organisation regarded as the 'best'
Quality Control - A manufacturer passes a sample of their raw materials and the final product
through a quality control check. Any unacceptable products are then discarded as waste or sent
back for reworking. This ensures that substandard products are not sold to customers.
Quality Assurance - At certain points in the production process, products are checked to ensure
that they meet agreed quality standards. All aspects of the production process are looked at to
ensure that errors do not occur.
Quality Circles - Small groups of workers meeting at regular intervals to discuss where
improvements can be made in the production process. Suggestions are then made to management
for approval before being implemented.
Penetration Pricing - Initial low price which then is raised once customer loyalty is built.
Promotional Pricing - Prices are reduced for a short period of time to inject life in to a product
