Evaluation
AQA A-Level Business 7132
What Is Business?
Topic overviewWhy businesses exist and their objectivesRevenue, costs and profitCalculating and presenting business dataBusiness forms, sectors and liabilityShare capital, market capitalisation and dividendsWhat moves a share price, and how ownership shapes objectivesCompetition, market conditions and incomesInterest rates, demographics and environmental issues
Managers, Leadership and Decision Making
Topic overviewManagement, leadership and the four leadership stylesThe Tannenbaum Schmidt continuumChoosing a leadership style and its limitationsScientific and intuitive decision making, and expected valueReading a decision treeRisk, uncertainty and opportunity costWhat influences a management decisionStakeholders and stakeholder mappingStakeholder needs and managing the relationship
Marketing Management
Topic overviewWhy businesses set marketing objectivesBrand loyalty and calculating the marketing measuresPrimary and secondary market researchSampling methodsCorrelation, confidence intervals and extrapolationPrice and income elasticity of demandCalculating market share, market growth and sales growthSegmentation and the bases for itNiche and mass marketing, targeting and market mappingThe elements of the marketing mixProduct portfolio analysis and the Boston MatrixThe product life cycle and extension strategiesPricing, branding, place and the influences on the mix
Operational Management
Topic overviewOperational objectives: cost and qualitySpeed, flexibility and environmental objectivesAdded value and the trade-offs between objectivesLabour productivity and unit costsCapacity and capacity utilisationImproving capacity utilisationRaising labour productivity, and the obstaclesLean production and Just in TimeLabour-intensive and capital-intensive productionTechnology in operationsQuality control and quality assuranceThe benefits and costs of improving qualityMatching supply to demandThe inventory control chartInfluences on inventory and choosing a supplierSupply chain managementOutsourcing: benefits and drawbacks
Financial Management
Topic overviewFinancial objectives and return on investmentGross profit, operating profit and profit for the yearBudgets and variance analysisCash flow forecastsBreak-even, contribution and the margin of safetyBreak-even charts and how they shiftThe uses and limits of break-even analysisProfit margins, payables and receivablesInternal sources of financeShort-term external financeShare capital, loans, venture capital and crowd fundingChoosing a source of financeMethods of improving cash flowMethods of improving profitsThe difficulties and trade-offs in improving cash flow and profit
Human Resource Management
Topic overviewHuman resource objectives and their valueHard and soft human resource managementCalculating labour turnover and labour productivityEmployee costs as a percentage of turnover, and labour cost per unitUsing and interpreting human resource dataTypes of organisational structureSpan of control, hierarchy and delegationHuman resource flowThe value of a motivated workforce, and TaylorMaslow's hierarchy of needsHerzberg's two-factor theoryFinancial methods of motivationNon-financial methods of motivationChoosing and assessing methods of motivationEmployee involvement and the influences on itTrade unions, works councils and communication channelsThe value of good employer-employee relations
Analysing the Strategic Position of a Business
Topic overviewInfluences on the mission and corporate objectivesMission, objectives, strategy and tacticsFunctional objectives and their influencesSWOT analysis and its limitationsReturn on capital employed and the current ratioGearing and the ratios of working capitalFinancial statements and the categories of ratioUsing ratio analysis, and its limitsNon-financial measures of performanceBenchmarking and core competencesThe Triple Bottom LineCompetition law and labour market legislationEnvironmental legislation and government supportRegulators, infrastructure and environmental incentivesTrade policy and responding to political changeGDP, taxation and exchange ratesInflation, fiscal policy and monetary policyTrade, protectionism and responding to economic changeDemographic and social changeCorporate social responsibility and its criticsCarroll's pyramid and technological changePorter's five forces: entry and buyer powerSupplier power, rivalry and substitutesUsing five forces to shape strategyPayback period and average rate of returnNet present value and the time value of moneyInvestment criteria, risk and sensitivity analysis
Choosing Strategic Direction
Strategic Methods: How to Pursue Strategies
Topic overviewOrganic growth, external growth and retrenchmentEconomies and diseconomies of scale, synergy and overtradingMethods of external growthThe advantages and disadvantages of organic and external growthProduct and process innovation and its driversKaizen, research and development, and intellectual propertyThe causes of globalisation and its opportunitiesMethods of entering international marketsChoosing a country to trade with or invest inOff-shoring, re-shoring and multinationalsGlobal, multi-domestic and transnational strategiesDigital technology and the pressure to adopt itThe value and the limits of digital technology
Managing Strategic Change
Topic overviewTypes of change and Lewin's force field analysisFlexible organisations, restructuring and delayeringReasons for resistance and overcoming it through education, participation and supportOvercoming resistance: negotiation, manipulation and coercionOrganisational culture and Handy's four typesRecognising cultures and what shapes themChanging organisational culture and the difficultiesLeadership, communication and structure in implementationNetwork analysis and reading a network diagramFloat, the critical path and the value of network analysis
Problems with Strategy and Why Strategies Fail
Topic overviewUncertainty and cognitive bias in strategic decisionsResource and organisational barriers to implementationPlanned and emergent strategyReasons for strategic driftFinancial and non-financial measures of strategic performanceThe balanced scorecard, KPIs and the limits of evaluationThe value of strategic planningContingency planning and crisis management
Operational Management
- 17 subtopics
- 42 things to know
- Papers 1, 2 and 3
What Operational Management covers
Operational management can be examined on any of the three papers. It covers the objectives operations are set, the measures used to judge them, and the decisions taken to improve efficiency, quality and the supply chain.
Where it is assessed
Papers 1, 2 and 3
All three papers may draw on any part of the specification.
Check the AQA specification ↗The 17 subtopics
Each one has its own page.
- Operational objectives: cost and qualityWhat operational objectives are for, and the forms a cost or quality objective can take.Open →
- Speed, flexibility and environmental objectivesSpeed of response, flexibility and environmental objectives, and what each targets.Open →
- Added value and the trade-offs between objectivesHow added value is created, and the trade-offs between cost, quality, speed and flexibility.Open →
- Labour productivity and unit costsCalculating both, and what each says about how well operations are running.Open →
- Capacity and capacity utilisationCalculating utilisation, and why high and low utilisation each affect unit costs.Open →
- Improving capacity utilisationRaising demand, subcontracting and rationalisation, and the problems of running above normal capacity.Open →
- Raising labour productivity, and the obstaclesTraining, capital investment, motivation and reorganisation, and why each takes time or meets resistance.Open →
- Lean production and Just in TimeLean production and JIT against Just in Case, the benefits, and what JIT demands of suppliers.Open →
- Labour-intensive and capital-intensive productionWhat decides between them, and finding the optimal mix of labour and capital.Open →
- Technology in operationsAutomation, robotics, CAD, CAM and ERP, and the cost, training and obsolescence they bring.Open →
- Quality control and quality assuranceThe difference between checking output and building quality in, and who is responsible for each.Open →
- The benefits and costs of improving qualityWhat better quality earns a business, what it costs, and what poor quality costs instead.Open →
- Matching supply to demandProducing to order, outsourcing and flexible contracts, and the cost of holding too much or too little stock.Open →
- The inventory control chartReading maximum and minimum stock levels, buffer stock, lead time, re-order level and re-order quantity.Open →
- Influences on inventory and choosing a supplierDemand variability, lead time, storage and perishability, and the criteria for choosing a supplier.Open →
- Supply chain managementWhat coordinating a supply chain involves, and what effective management delivers.Open →
- Outsourcing: benefits and drawbacksAccess to expertise and lower fixed costs, against dependency, quality risk and confidentiality.Open →
What you need to know
Answer each one before you reveal it.
Your recallNot started
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How do operational objectives motivate staff, give direction and support strategy?
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What forms can a cost objective take?
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What are flexibility objectives, and what might a speed of response objective cover?
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What are environmental objectives, and how can flexibility serve the individual customer?
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What is added value, what do added value objectives focus on, and how can quality raise it?
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Why do operational objectives involve trade-offs, and how do efficient processes add value?
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What does labour productivity measure, and how is it calculated?
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What is unit cost, and how is it calculated?
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What are capacity and capacity utilisation, and how is utilisation calculated?
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How does capacity utilisation affect unit costs?
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How does operations data inform decisions, and how is labour productivity calculated and expressed?
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What is capacity utilisation, and what do actual and maximum output mean?
Evaluation
Why does under-utilisation reduce profit, and what problems come with over-utilisation?
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How can a business raise capacity utilisation, and what does efficiency mean?
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What is labour productivity, and what counts as total output?
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How do training and capital investment raise labour productivity and profit?
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How does reorganising production raise labour productivity?
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Why is raising productivity slow, and what is lean production?
Evaluation
What does Just in Time demand of suppliers and communication, and what if a delivery fails?
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How do automation and robotics improve efficiency, and where does flexibility matter?
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How do ERP and computer-aided manufacturing improve operations?
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What does poor quality cost a business in market position, law and morale?
Key term
Why might quality control lead to higher waste and rework costs compared to quality assurance?
Process
How does better quality raise revenue, and who is responsible for it?
Process
What ongoing requirements are needed to maintain quality standards once implemented?
Key term
Identify four ways in which poor quality increases business costs.
Numbers
What do the maximum stock, minimum stock and re-order levels show on an inventory control chart?
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What are buffer stock and the re-order quantity, and what shapes how much is held?
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How do ethics, financial stability and flexibility influence the choice of supplier?
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What does coordinating a supply chain involve, and what does it achieve?
Evaluation
What are the consequences of holding too much or too little inventory, and how does holding less cut storage costs?
Evaluation
How does effective supply chain management reduce waste and speed up response?
Process
How does outsourcing provide access to specialist expertise?
Process
How does outsourcing increase flexibility?
Key term
What does the re-order quantity look like on an inventory control chart?
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State the formula for calculating labour productivity.
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State the formula for calculating unit cost.
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State the formula for calculating capacity utilisation.
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What is the formula for calculating labour productivity?
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State the formula for calculating unit costs.
Key term
How do labour-intensive and capital-intensive production differ, and what decides between them?
Take Operational Management further
The same content, four other ways.
Commonly confused
Pairs that lose marks when they are blurred together.
Job production vs Batch production
Job production: producing one customised item at a time. Batch production: producing a specified quantity of identical items together.
Quality control vs Quality assurance
Quality control: inspection to detect defects in output. Quality assurance: systems that prevent defects throughout production.
Capacity utilisation vs Productivity
Capacity utilisation: share of maximum potential output currently produced. Productivity: output produced per unit of input.
Questions from this topic
Each one with the model answer underneath.
- 1
What are operational objectives?
Model answer
Specific, measurable targets set for the operations function of a business to guide day-to-day activities and support overall corporate aims.
- 2
How do operational objectives provide direction for the operations department?
Model answer
They enable managers and employees to understand priorities, giving clear focus to day-to-day activities.
- 3
Why do operational objectives allow performance measurement?
Model answer
They establish benchmarks against which actual outcomes can be compared, enabling assessment of whether targets have been met.
- 4
How do operational objectives facilitate coordination between functional areas?
Model answer
They clarify what operations must deliver to support marketing, finance and human resources, ensuring all departments work towards compatible goals.
- 5
In what way do operational objectives motivate staff?
Model answer
By providing clear targets and enabling recognition of achievement when those targets are met.
- 6
How do operational objectives support strategic decision-making?
Model answer
They translate corporate goals into actionable operational targets, linking day-to-day activities to the overall business strategy.
What is inside Levo
Six ways to work the same material.
Operational Management revision questions
- What does Operational Management cover in AQA A-Level Business?
- 17 subtopics: operational objectives: cost and quality, speed, flexibility and environmental objectives, added value and the trade-offs between objectives, labour productivity and unit costs, capacity and capacity utilisation, improving capacity utilisation, raising labour productivity, and the obstacles, lean production and just in time, labour-intensive and capital-intensive production, technology in operations, quality control and quality assurance, the benefits and costs of improving quality, matching supply to demand, the inventory control chart, influences on inventory and choosing a supplier, supply chain management and outsourcing: benefits and drawbacks. Each one has its own page with questions and model answers.
- How is Operational Management organised?
- By the AQA 7132 specification, subtopic by subtopic, so it matches the order you are taught it in.
Every question in Operational Management, on a schedule.
Attempt a question from memory, write the correct version, then attempt it again. Levo records the jump between your first attempt and your last, and brings each question back on the day you are due to forget it.
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