This document provides a resource map for the Edexcel AS Business Studies Unit 4a: Making Business Decisions. It outlines the key topics covered in the unit including corporate objectives and strategy, strategic decision-making techniques, assessing competitiveness through financial ratios and human resource analysis, and issues related to company growth. For each topic, it lists the important concepts students need to know and provides guidance for teachers on real-world examples and activities to help students understand the content.

1. Edexcel AS Business Studies
Unit 4a Making Business
Decisions
Specification Resource Map
Key topics on the Edexcel Unit 4a Specification mapped
to the tutor2u Business Studies Blog

2. Unit 4a Making Business Decisions
4.3a Unit content
4.3.1a Corporate In this section the student considers stakeholder influences on
corporate objectives and the potential conflict between profit
objectives and based and other objectives. They are also introduced to how
strategy corporate strategy is developed and influenced by the competitive
environment.
Content What students need to know Teacher guidance
Corporate objectives Development of corporate objectives Use company annual reports and
from mission statement/corporate aims. accounts, company websites or Times
Critical appraisal of mission statements. 100 case studies (www.times100.
com) to identify company mission
statements, corporate aims and
objectives.
Stakeholder influences on Different influences on objectives, Use examples of conflicts between
corporate objectives conflicting and common aims between stakeholder objectives, for example
stakeholders. a supermarket wanting to build a
new store to create profit for their
shareholders compared with local
community concerns over traffic
growth.
Potential conflicts of socially responsible Examine the business principles and
and ethical behaviour with profit-based objectives of a multinational company
and other objectives. and consider how these conflict
with stories about their unethical
behaviour.
Corporate social responsibility (CSR.) Define corporate social responsibility
and consider the CSR policies of
major companies such as Cadbury
and Coca Cola.
Corporate culture Strong and weak cultures, classification Consider power, role, task, person
of company cultures, how corporate cultures (Charles Handy). Look at any
culture is formed, difficulties in changing company stories, heroes, sagas and
an established culture. symbols that may have influenced
the corporate culture. Also use the
mission statements and corporate
objectives considered earlier to see
how they may have influenced the
business culture.
Corporate strategy Development of corporate strategy, Definition of ‘portfolio’ in context,
aim of portfolio analysis, achieving how the Boston Consulting Group
competitive advantage through Matrix contributes to corporate
distinctive capabilities, effect of strategic planning. Distinctive capabilities
and tactical decisions on human, explained as the basis for competitive
physical, and financial resources, advantage.
Porter’s strategic matrix.
Competition versus co-operation:
resource implications and the difficulty
of changing corporate strategy
in response to the influence of a
competitive environment, political,
legal or other influences that encourage
co-operation between companies on
strategy.
2 Section C © Edexcel Limited 2010 Edexcel GCE in Business StudiesEconomics and Business

3. Making Business Decisions Unit 4a
4.3.2a Making This topic covers the various techniques that may be used by the
strategic decisions business to inform their strategic decision making. Students should
consider non-financial information as well information generated by
the techniques to aid decision making.
Content What students need to know Teacher guidance
Decision making model Use of Ansoff Matrix to communicate Ansoff Matrix and organic growth
intended strategic direction. could be taught together, for example
internal company growth by growing
products and markets.
Decision-making
techniques:
— investment appraisal Simple payback, Average Rate of
Return, Discounted Cash Flow (Net
Present Value only), calculations and
interpretations of figures generated
by these techniques, limitations of
technique.
— decision trees Construction and interpretation
of simple decision tree diagrams,
limitations of technique.
— project planning and Nature and purpose of Critical Path
network analysis Analysis, be able to draw simple
networks, calculate Earliest Start Time
and Latest Finish Time, identify the
critical path and calculate the total float.
Limitations of technique.
— contribution; special Whether an unexpected order is worth
order decisions accepting based on the contribution it
will bring.
Business contingency Need for contingency planning, for Use the Ansoff Matrix to consider
planning example consideration of risk of why a company may seek to invest
operating in a country or seeking in a factory overseas, for example
growth in new overseas markets, risk to reduce dependence on domestic
reduction through information from market through planning for growth.
decision-making models.
Edexcel GCE in Business StudiesEconomics and Business © Edexcel Limited 2010 Section C

4. Unit 4a Making Business Decisions
4.3.3a Assessing Students will use a limited number of ratios with simplified financial
competitiveness statements to assess a company’s performance. They will also
use labour productivity and turnover calculations. Students should
consider whether the results of financial and human resource
analyses confirm current corporate objectives/strategy or whether
new corporate objectives/strategy should be created.
Content What students need to know Teacher guidance
Interpretation of financial Ratio analysis using simplified financial Students could be provided with
statements statements to determine Profitability simplified financial statements from
(Gross and Net Profit Margin), Return which to calculate ratios. Teachers
on Capital, Liquidity (Current and Acid should also provide simplified financial
Test Ratio), and Gearing, examination statements when giving students their
of a company’s performance over own financial ratio exercises.
time, limitations of ratios as a decision
making tool, likely corporate responses
to results of ratio analysis, how level
of assets can influence the level of
financial borrowing permitted.
Human resource Use of labour productivity and labour Productivity calculations based on
competitiveness turnover calculations in monitoring labour/inputs/outputs. Labour turnover
organisational effectiveness (for calculations, including unavoidable
example, in different country offices), leavers. Use and limitations of such
developing strategies based on the analyses.
results.
Ask a representative from a business to
give a talk on their labour turnover and
productivity, reasons behind the figures
and how they seek to improve them.
4.3.4a Company Students will consider how and why companies grow and problems
growth that company growth can create.
Content What students need to know Teacher guidance
Nature of company growth Organic and external growth, examples Use a television or national
of different types of growth, differences newspaper website to look for articles
between mergers and takeovers, why on recent mergers and takeovers,
growth is necessary, role of competition historical articles should reveal if the
law. Case study examples used can Competition Commission intervened.
illustrate horizontal, vertical and Ansoff’s matrix and corporate culture
conglomerate, but these terms will not are useful concepts here.
be specifically examined.
Effects of growth Problems resulting from organisational
restructuring, for example diseconomies
of scale.
Section C © Edexcel Limited 2010 Edexcel GCE in Business StudiesEconomics and Business

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