Level 3 Business Syllabus

Unit 1:
The Business Environment
Unit code:
Y/502/5408
QCF Level 3:
BTEC National
Credit value:
10
Guided learning hours: 60

Aim and purpose
The aim of this unit is to give learners the fundamental knowledge of a range of business organisations, and
the many factors that shape the nature of organisations operating in an increasingly complex business world.
Unit introduction
Learners new to the studying of business will already be familiar with organisations through having dealt
with them as customers or employees. One of the aims of this unit is to help learners to build on these
experiences and learn to walk in the shoes of owners, stakeholders and managers of organisations.
The unit introduces learners to a range of business activities. They will consider the purposes of different
organisations and the influence of stakeholders and how businesses organise themselves through strategic
planning and organisational structures.
Learners will then explore the dynamic nature of organisations through studying the impact of external
(political, legal and social) influences on business operations.
Next, they will study the fundamental economic principles that impact on businesses.
By studying two different business environments learners will gain some insight into how businesses operate
in different parts of the world and how the development of a global marketplace impacts on all businesses.
Learning outcomes
On completion of this unit a learner should:
Know the range of different businesses and their ownership
Understand how businesses are organised to achieve their purposes
Know the impact of the economic environment on businesses
Know how political, legal and social factors impact on business.
Edexcel BTEC Level 3 Nationals specification in Business

Issue 2 June 2010 Edexcel Limited 2010
Unit content
1 Know the range of different businesses and their ownership
Range of different businesses: local; national; international; global; public; private; not-for-profit/voluntary;
sectors of business activity (primary, secondary and tertiary)
Business purposes: supply of products or services; difference between profit and not-for profit organisations
Ownership: public, private and voluntary sectors; types of ownership (sole trader, partnerships, private
and public limited companies, government departments, government agencies, worker cooperatives,
charitable trusts); main implications of different types of ownership on businesses (extent of liability,
limitations to operation for public and charitable organisations)
Key stakeholders: customers; employees; suppliers; owners; trade unions; employer associations;
local and national communities; governments; influence of stakeholders on organisations
2 Understand how businesses are organised to achieve their purposes

Organisational structures: purpose (division of work, lines of control and communication); types of
structure (functional, geographic, product, type of customer); diagrammatic representation of structure
(organisation charts); span of control
Functional area: finance; marketing; production; customer service; sales; human resources.
Strategic planning: mission and values; development of strategic aims and objectives; cascading of
objectives throughout the organisation; strategic planning process; use of SMART (specific, measurable,
achievable, resourced, time-bound) objectives
Influencing factors: stakeholders; business environment; business type and ownership.
Different aims: private sector aims (breakeven, survival, profit maximisation, growth); public sector
aims (service provision, cost limitation, value for money, meeting government standards, growth
of range of provision)
3 Know the impact of the economic environment on businesses

Economic: importance of stability; impact on business of changes in the economic environment
(growth, recession, ripple effect); levels of inflation; availability and cost of credit; labour; changes
in government policy (legal, fiscal, monetary)
Demand: influenced by affordability; competition; availability of substitutes; level of Gross Domestic
Product (GDP); needs and aspirations of consumers
Supply: Influenced by availability of raw materials and labour; logistics; ability to produce profitably;
competition for raw materials; government support
Changes in supply and demand: supply and demand curves; elasticity of demand; price sensitivity;
influence of branding on price sensitivity
Global interaction: levels and types of interdependence (supply chains, ownership of businesses,
movement of capital and business operations, reducing ability of national governments to regulate
global businesses)

4 Know how political, legal and social factors impact on businesses

Political: political stability; government support for different types of organisations eg private, voluntary,
public; fiscal eg levels and types of taxation; direct support eg grants, loans; providing infrastructure
eg transport; internet; enhancing skills of the working population eg education, training, research;
organisations to support businesses eg Business Link; membership of international trading communities
eg European Union
Legal: providing framework for business eg company law; protecting consumers and employees
eg contract law, employment law, consumer protection; ensuring fair and honest trading
eg competition law.
Social: demographic issues eg population growth or decline; changes in structure eg ageing; households
and families; education; attitude to work; religions; attitudes to male and female roles; ethics

Assessment and grading criteria

In order to pass this unit, the evidence that the learner presents for assessment needs to demonstrate that
they can meet all the learning outcomes for the unit. The assessment criteria for a pass grade describe the
level of achievement required to pass this unit.
To achieve a pass grade the
evidence must show that the
learner is able to:
To achieve a merit grade the

evidence must show that, in
addition to the pass criteria,
the learner is able to:
P1
describe the type of business,

purpose and ownership of
two contrasting businesses
[RL]
P2
describe the different

stakeholders who influence
the purpose of two
contrasting businesses
[CT]
P3
describe how two businesses

are organised
[IE]
P4
explain how their style

of organisation helps them
to fulfil their purposes
P5
describe the influence of

two contrasting economic
environments on business
activities within a selected
organisation
M2 compare the challenges to

selected business activities
within a selected organisation,
in two different economic
environments
[IE]
P6
describe how political,

legal and social factors are
impacting upon the business
activities of the selected
organisations and their
stakeholders.
M3 analyse how political, legal

and social factors have
impacted on the two
contrasting organisations.
To achieve a distinction grade

the evidence must show that,
in addition to the pass and
merit criteria, the learner is
able to:
D1
evaluate the influence

different stakeholders exert
in one organisation
[IE]
D2
evaluate how future changes

in economic political, legal
and social factors, may impact
on the strategy of a specified
organisation.
M1 explain the points of view of

different stakeholders seeking
to influence the aims and
objectives of two contrasting
organisations
PLTS: This summary references where applicable, in the square brackets, the elements of the personal,
learning and thinking skills applicable in the pass criteria. It identifies opportunities for learners to demonstrate
effective application of the referenced elements of the skills.
Key
IE independent enquirers
RL reflective learners
SM self-managers
CT creative thinkers
TW team workers
EP effective participators

Essential guidance for tutors

Delivery
No previous knowledge of business is assumed and learners can use their experiences as customers, users
and part-time employees as a starting point. This will give learners a real-life view of business. In this unit
business activity should be interpreted as the provision of service, including public and voluntary sector activity
alongside commercial activity. Learners will find examples of the organisational activity mentioned in their local
area and may learn effectively through enquiring about these organisations. The unit may be introduced by
considering the range of businesses that lie at the heart of learners communities.
Learners should then explore the different types of ownership of businesses and how its ownership inevitably
influences the nature of a business. At this stage, it is important that learners gain a clear picture of the main
difference and types of ownership as a basis for more detailed study in other units. Learners then investigate
other stakeholders. This could be linked with any local issues over proposed changes or developments,
such as a proposed new airport runway or changes in the provision of health services.
In learning outcome 2, learners need to examine how organisations use structures and strategic planning
to achieve their purposes. When selecting case-study material care should be taken to ensure that it includes
the key functional areas listed in the unit content. For strategic planning learners could start by investigating
their own school or colleges strategic plan, perhaps supported by a talk from a visiting governor who could
explain the planning process and what internal and external pressures influenced the plan. Learners could
check objectives to see if they are SMART. Learners could undertake an activity where they are given some
basic facts about a proposal for an organisation and have to design an organisational structure, write a mission
statement and set strategic objectives.
In delivering learning outcome 3, which introduces the learners to the basic principles of economics, there
will need to be some delivery of theory but the focus should be on how the economic environment affects
different businesses. As assessment requires the comparison of two contrasting economic environments in the
UK and abroad
For delivery of learning outcome 4, the links used for learning outcome 3 could be continued. This could
involve the use of two UK based companies taking account of the impact that globalisation has on their activities.
Alternatively, use could be made of any established links with countries in different regions either at institutional
level or town/city level. Learners should compare and contrast the political and social environment in two
different places so as to gain an understanding of the importance of these factors. They will need information
on doing business in another country, perhaps through a guest speaker, learner to learner links, DVDs,
publications, visit or internet research.
Learners should be introduced to the basic principles of business law and its importance in providing a
framework in which businesses operate. The precise content for the different aspects of law can be chosen
and there is no expectation that learners will have a comprehensive knowledge of specific legislation.

Outline learning plan

The outline learning plan has been included in this unit as guidance and can be used in conjunction with
the programme of suggested assignments.
The outline learning plan demonstrates one way in planning the delivery and assessment of this unit.
Topic and suggested assignments/activities and/assessment
Introduction to unit and programme
Group activity exploring purposes and ownership of a range of local businesses
Ownership and liability issues whole group
Visit to organisation to carry out research for first assignment
Assignment 1: Two Businesses on our Doorstep report on two contrasting businesses (one business
selected by a group, the other an individual choice)
Organisational structures whole group charts drawn for familiar organisation

Strategic planning case study or business game
Political issues study of topical political issues and their potential impact on business operations through a visitor,
visit, video materials or case study
Group exercise to identify current issues and to assess their potential impact
Legal issues whole group outline of business related law
Case studies of legal cases small group exercises
Social issues whole group outline of social issues
Social issues small group exercise. Each group to research one social issue such as demographics, education,
gender etc and to report back to the whole class
Pair exercises on impact of social issues on different businesses (drawing on information gathered during
previous exercise)
Economic issues whole group
Supply demand business game
Small-group exercises on impact of economic changes on selected businesses (some research)
Pair exercise in following through global interdependencies for one business
Assignment 2: Similar Businesses in Different Worlds (feasibility study of two different markets for a business)
Tutorial support and feedback

Supervised assignment work
Non-supervised study time and completion of assignments

Assessment
This is an introductory unit and most groups of learners would benefit from a staged approach to assessment,
with several small assignments rather than one large one.
It is important that suitable organisations are chosen for investigation, so that learners can acquire the information
they need to achieve the assessment criteria.
For the first two learning outcomes the selected business organisations should include both profit and
not-for-profit sectors and some variation in size. Learners responses to P1 should include an accurate, but not
necessarily detailed statement, as to the extent of owners liability for debts. For P2 learners should describe
each of the different types of stakeholders listed in the unit content for their selected organisations. For P3,
learners should describe both the organisational structure with functional areas, and how the organisation
makes strategic plans. For P4, learners should explain how the organisational structure and strategic planning
help the businesses to achieve their purpose and aims.
For M1 learners explain the points of view of the different stakeholders and link the points of view with the
aims and objectives of each organisations.
For D1 learners should evaluate the influence exerted by the different types of stakeholders for one organisation.
As an evaluation this should go beyond stating an opinion and include higher level skills such as using evidence
from different sources and assessing the validity of the evidence.
For learning outcome 3, the selected organisation(s) need to encompass different economic environments.
This could be through using one organisation and two different phases in the economic cycle or using two
organisations operating in different economic environments, perhaps in different parts of the world.
For P5, learners should include descriptions of at least two economic topics.
In M2, P5 is developed further to compare the challenges to selected business activities in two different
economic environments.
For D2, learners should build on M2 and evaluate the responsiveness of an organisation to different economic
environments. The advice given for D1 on the assessment of evaluate applies equally to this criterion.
For learning outcome 4, there are two options. The first is to select one business that has operations
in two different business environments such as a UK-based business that has a call centre in the Indian
sub-continent. Alternatively, one business can be selected from each of two different business environments.
Greater differences in political and social environments are likely to be more interesting for learners.
However it could be possible to use different countries in Europe and for some industries the differences
between different countries in the UK could be explored, so long as the differences are sufficient to create
different business environments.
For P6, learners could describe the influence of two different political environments which should include
aspects, selected for their relevance, from the topics listed under both political and legal sub-headings in
the Unit content. Business activities can be read as any activities carried out by the organisation to achieve
its purposes. Examples include recruitment of staff, product design, transport of goods, promotion of products
etc. Learners need to explain the influence of two different social environments on the business activities
of the organisation(s). Learners could select at least three of the most influential social features from each
environment rather than attempting to explain the impact of a large range of social features.
To achieve M3, learners should build on P6 to explain how the organisation (s) has adapted their activities
to suit different business environments. Learners are not required to explain all activities comprehensively
but should select at least three activities that have been adapted because of the political, legal and social
aspects of the business environment.
For D2, learners should develop their work from M3 and make justified recommendations for the
development of business activities in the two different business environments.
Programme of suggested assignments

The table below shows a programme of suggested assignments that cover the pass, merit and distinction
criteria in the assessment and grading grid. This is for guidance and it is recommended that centres either
write their own assignments or adapt any Edexcel assignments to meet local needs and resources.
Criteria covered
Assignment title
Scenario
Assessment method
P1, 2, 3, 4, M1, D1 Two Businesses on our

Doorstep.
You work as a junior journalist

for the local newspaper which
is planning to run a feature
article on local businesses.
Produce an article on two

local, contrasting businesses
covering purpose, ownership,
organisational structure and
strategic planning.
P5, 6, M2, M3, D2 Similar Businesses in

Different Worlds.
The first article was well

received and you have been
asked to carry out research for
another article featuring two
businesses one local and one
in your towns twinned town in
China.
Select one business in your

local town and another in
a town or city in China.
Produce an article describing
how the political, legal, social
and economic business
environments affect each
of the selected businesses.
Links to National Occupational Standards, other BTEC units, other BTEC

qualifications and other relevant units and qualifications
This unit forms part of the BTEC Business sector suite. This unit has particular links with the following unit
titles in the Business suite:
Level 2
Level 3
Business Purposes
Business Resources
Business Organisations
Introduction to Marketing
Business Communication
Business and the Economic Environment
International Business
Business Markets and the Economy
Essential resources
For this unit learners should have access to a suitable business teaching environment with access to the
internet to carry out research. Tutors may consider building a bank of resource materials to ensure there is a
sufficient supply of relevant information across a range of business types and sectors.
Learners can generate evidence from a work placement or work experience. Other learners may have access
to information from family owned and run businesses.

Employer engagement and vocational contexts

Centres should develop links with local businesses. Many businesses and chambers of commerce want to
promote local business and are often willing to provide work placements, visit opportunities, information
about businesses and the local business context and visiting speakers.
www.businessbritainuk.co.uk Provides information about business in Britain and has extensive links to other
business and business news sites.
www.fsb.org.uk The Federation of Small Businesses provides information, support and guidance about small
businesses in the UK.
Many businesses provide information about themselves. For example, Unilever, can be found at: www.unilever.co.uk.
Indicative reading for learners

Textbooks
Bevan J, Dransfield R, Coupland-Smith H, Goymer J and Richards C BTEC Level 3 National Business Student
Book 1 (Pearson, 2009) ISBN 9781846906343
Bevan J, Goymer J, Richards C and Richards N BTEC Level 3 National Business Student Book 2
(Pearson, 2009) ISBN 9781846906350
Coupland-Smith H and Mencattelli C BTEC Level 3 National Business Teaching Resource Pack
(Pearson, 2009) ISBN 9781846906367
Dransfield and Needham GCE AS level Business ISBN 0435401149
Jewell B An Integrated Approach to Business Studies (Longman, 2000) ISBN 0582405424
Letts Revise AS Business Studies (Letts Educational Ltd, 2004) ISBN 1843154242
Marcouse, Surridge, Watson and Swift Business Studies for A level (Hodder, 2008) ISBN 0340966904
Marcouse I and Lines D Business Case Studies, AS and A Level, 3rd Edition (Longman, 2002)
ISBN 0582406366
Palmer and Hartley The Business Environment (McGraw-Hill, 2006) ISBN 0077109902
Worthington and Britton The Business Environment (Financial Times/Prentice Hall, 2006) ISBN 0273704249
Journals
Business Review Magazine (Phillip Allan Publishers see www.phillipallan.co.uk)

The Economist (The Economist Newspaper Group Inc)
Newspapers
Quality newspapers especially the business sections

Websites
www.bbc.co.uk/business
BBC News website
www.bbc.co.uk/news
BBC Business website
www.becta.org.uk
British Educational Communications and Technology Agency
www.bized.ac.uk
Business education website including learning materials and quizzes
www.careers-in-business.com
Information on a variety of business careers
www.carol.co.uk
Online company annual reports
www.direct.gov.uk
Gateway to public services
www.fenc.org.uk
Products and services for organisations involved in education
www.eubusiness.com
Online business information service about the European Union
www.examstutor.com/business
Support for teachers and students
www.jisc.org.uk
Joint Information Systems Committee (guidance and advice for further

and higher education)
www.lsda.org.uk
Learning and Skills Development Agency
www.learnthings.co.uk
Learnthings providers of interactive digital resources
www.nln.ac.uk
National Learning Network
www.projectalevel.co.uk
Project A Level revision resources for learners
www.rdn.ac.uk/news/headlines
Resource Discovery Network a gateway to internet resources for

learning, teaching and research
www.s-cool.co.uk
A-level and GCSE revision material
www.statistics.gov.uk
Official UK statistics
www.thetimes100.co.uk
Free materials and case studies
Broadcasts
The following programmes often include business items:

The Money Programme BBC2 (weekly)
Working Lunch BBC2 (daily)
10

Delivery of personal, learning and thinking skills

The table below identifies the opportunities for personal, learning and thinking skills (PLTS) that have been
included within the pass assessment criteria of this unit.
Skill
When learners are
Independent enquirers
investigating the ownership and objectives of business organisations
Creative thinkers
generating ideas about the links between the different functional areas in
business organisations
describing how work in different areas of organisations supports business purposes
Reflective learners
reflecting on the impact of economic and external factors on business.
Although PLTS are identified within this unit as an inherent part of the assessment criteria, there are further
opportunities to develop a range of PLTS through various approaches to teaching and learning.
Skill
When learners are
planning and carrying out research into the different types of organisation
planning and carrying out research into the aims of organisations
Creative thinkers
looking at how different functional areas fit together in organisations to ensure

business purposes are met
adapting their skills as circumstances change
Reflective learners
setting goals for researching businesses with success criteria

inviting feedback on their own work and dealing positively with praise, setbacks
and criticism
evaluating their experiences and learning to inform progress
Team workers
working in a group to discuss ideas about functional areas and prepare materials
for presentations
taking responsibility for their own role
managing activities to reach agreements and achieve results
Self-managers
seeking out challenges or new responsibilities and showing flexibility when

priorities change
dealing with competing pressures, including personal and work-related demands
responding positively to change, seeking advice and support when needed
Effective participators
taking part in group activities, working with colleagues, supervisors and managers.

11
Functional Skills Level 2

Skill
When learners are
ICT Use ICT systems

Select, interact with and use ICT systems independently
for a complex task to meet a variety of needs
researching organisations and their structures
Use ICT to effectively plan work and evaluate the

effectiveness of the ICT system they have used
tabulating information about organisations
ICT Find and select information

Select and use a variety of sources of information
independently for a complex task
finding illustrative materials for presentations and

tabulations about organisations
creating diagrams, presentations and tabulations about
the functional areas in businesses
Access, search for, select and use ICT-based

information and evaluate its fitness for purpose
exploring, extracting and assessing the relevance of

information from websites about business organisations
ICT Develop, present and communicate

information
Enter, develop and format information independently
to suit its meaning and purpose including:
text and tables
images
numbers
records
bringing together a variety of materials gathered

through research
preparing information to present to others about
business organisations
Bring together information to suit content and purpose

Present information in ways that are fit for purpose and
audience
Evaluate the selection and use of ICT tools and facilities
used to present information
Select and use ICT to communicate and exchange
information safely, responsibly and effectively including
storage of messages and contact lists
communicating with other members of a group
Mathematics
Understand routine and non-routine problems in a wide using numerical data in relation to business objectives
range of familiar and unfamiliar contexts and situations
that are in SMART terms
Identify the situation or problem and the mathematical
methods needed to tackle it
Select and apply a range of skills to find solutions
Use appropriate checking procedures and evaluate
their effectiveness at each stage
Interpret and communicate solutions to practical
problems in familiar and unfamiliar routine contexts
and situations
Draw conclusions and provide mathematical justifications
12

Skill
When learners are
English
Speaking and listening make a range of contributions
to discussions and make effective presentations in a
wide range of contexts
doing group work investigating organisations and their

structure
working with others in investigating businesses
(employees, colleagues, tutors, class mates)
attending team meetings
making presentations about organisations
Reading compare, select, read and understand texts

and use them to gather information, ideas, arguments
and opinions
reading about organisations, their purposes and structures

reading about organisations to obtain data to facilitate
comparing businesses
Writing write documents, including extended writing writing materials to provide information about
pieces, communicating information, ideas and opinions, organisations
effectively and persuasively
producing labelled charts and diagrams showing the
structure of organisations and the links between
sections within organisations.

13
Unit 2:
Business Resources
Unit code:
D/502/5409
QCF Level 3:
BTEC National
Credit value:
10

Aim and purpose
The aim of this unit is to develop learner knowledge of the range of human, physical, technological and
financial resources required in an organisation, and how the management of these resources can impact
on business performance.
Unit introduction
At the core of every organisation are the human, physical, technological and financial resources that enable
it to function. This unit will give learners a broad understanding of the importance organisations place on
managing their resources efficiently in order to achieve their objectives. It is important that learners are able
to relate their understanding of resource management to a real organisation. This will provide an essential
link between theory and practice.
Understanding how these resources are managed is one of the keys to assessing how well the organisation
is performing. The first part of this unit explores the range of human, physical and technological resources for
a selected organisation. Learners will investigate the importance of managing these resources efficiently. The
contribution that recruiting and retaining suitable staff can make to the organisations performance is examined.
The importance of managing the organisations physical and technological resources efficiently is also explored.
For an organisation to survive its finances need to be sound and secure. The second part of the unit explores
the sources of financial resources available to organisations. The level of an organisations performance can be
seen in its financial statements. The unit aims to develop knowledge and understanding of the financial statements
and it underpins other financial units in the qualification. This part of the unit focuses on the interpretation and
analysis of financial documents in order to highlight the need for the monitoring and control of costs and budgets.
It is important that learners appreciate that poor management of resources can have a negative impact on an
organisations performance.
Learning outcomes
Know how human resources are managed
Know the purpose of managing physical and technological resources
Know how to access sources of finance
Be able to interpret financial statements.

Unit content
1 Know how human resources are managed
Human resources: staffing to meet changing business demands; coordination of team resources to meet
targets; monitoring of team performance; liaison with other departments; establishment of professional
culture eg levels of formality, separation of professional from private activities; provision of appropriate
incentives; encouraging creativity and initiative; outsourcing versus in-house decisions
Maintenance of operation: adequate resources to meet tasks eg staffing, equipment, working capital,
facilities, administration; monitoring; troubleshooting and problem solving
Human resources: recruitment and retention; suitably skilled staff; contracts of employment; job descriptions
Employability skills: suitable qualifications; experience in similar role; knowledge of products/services;
experience of specific industry; effectiveness in meeting personal and team/departmental targets; ability
to observe and raise professional standards of production/service delivery
Personal skills: patient; hardworking; able to work as part of a team; good interpersonal skills; cooperating
with others eg line managers, colleagues; negotiation eg in seeking agreements, resolving conflicts,
agreeing targets, agreeing budgets; interviewing skills
2 Know the purpose of managing physical and technological resources

Physical resources: buildings and facilities; materials and waste; plant and machinery; equipment including
ICT; planned maintenance and refurbishment; emergency provision; insurance; security
Technological resources: intellectual property eg designs, drawings, text, music, video; accumulated
experience and skills; software licences; protection via patents and copyrights
3 Know how to access sources of finance

Internal sources: owners savings; capital from profits
External sources: banks eg overdraft, business loan, commercial mortgage, venture capital, hire purchase,
leasing, factoring, share issues
4 Be able to interpret financial statements

Costs and budgets: costs managed to budget (fixed costs/variable costs, monitoring budgets and variances);
breakeven; bidding to increase future resources eg capital grants, investment; provision of appropriate
liquidity/working capital; provision of appropriate reserves to address emergencies/crises
Financial statements: profit and loss (purpose and use, measure of trading performance, establishing profit
figures) and balance sheet (purpose and use, establishing net worth, business valuation)
Basic ratios: to determine solvency eg current ratio, acid test ratio; to determine profitability eg gross
profit percentage; net profit percentage; return of capital employed; to determine performance eg stock
turnover, debtors collection period, asset turnover


learner is able to:


able to:
P1
describe the recruitment

documentation used in
a selected organisation
M1 explain how the management

of human, physical and
technological resources can
improve the performance
of a selected organisation
D1
P2
describe the main

M2 assess the importance of
employability, personal and
employability, and personal
communication skills required
skills in the recruitment and
when applying for a specific
retention of staff in a selected
job role
organisation
[RL]
P3
describe the main physical

and technological resources
required in the operation
of a selected organisation
P4
describe sources of internal

and external finance for a
selected business
P5
interpret the contents of

a trading and profit and loss
account and balance sheet
for a selected company
[IE]
M3 interpret the contents of

D2
a trading and profit and loss
account and balance sheet
for a selected company
explaining how accounting
ratios can be used to monitor
the financial performance
of the organisation

evaluate how managing

resources and controlling
budget costs can improve the
performance of a business
evaluate the adequacy of

accounting ratios as a means
of monitoring the state of
the business in a selected
organisation, using examples

learner is able to:


able to:
P6
illustrate the use of budgets

as a means of exercising
financial control of a selected
company
M4 analyse the reasons why

costs need to be controlled
to budget.
D3
P7
illustrate the financial state

of a given business.
evaluate the problems

they have identified from
unmonitored costs and
budgets.
Key
SM self-managers
TW team workers


Delivery
This unit is an introduction to the ways in which human, technological and physical resources are important
to an organisation and how the management of these resources impacts on the performance of the business.
Learners will need to be aware of the importance of recruiting and retaining suitable staff. However, the unit
is only concerned with the paperwork involved in the recruitment of staff. Other aspects of the process are
considered in more detail in the Unit: Investigating Recruitment and Selection.
A study of how organisations are run can be useful. If a supermarket shelf is empty, it could be because the
item is unavailable from the supplier, it was not ordered, or there is a shortage of supermarket staff. Other
relevant examples include people visiting an electrical shop and requesting help or information about an
item they want to buy. They could find that they are unable to attract a salespersons attention because they
are busy or avoiding work by talking to a colleague. They may also find that even when they get hold of a
member of staff, they are unable to answer their questions. This could initiate a discussion about suitability
of staff. Management of business resources, such as facilities and technology, may be introduced at this point
as learners need to be aware that organisations need suitable buildings, facilities and equipment. This can
be covered by case studies and a visit to a local organisation. Many organisations have changed the way
they work due to evolving technology. They need staff that can set up and maintain computer networks,
and work areas need to be suitable for computer set-ups. In recent years, supermarkets have been changing
over to using bar code readers at tills, which is quicker than having to tap in numbers or prices. This has led
to differently designed till areas and work patterns. Staff now need to be trained to keep an eye on how
quickly the food is stacking up at the other end of the conveyor belt and sometimes need to slow down
a little to avoid overloading the customer areas. Companies also now need to be aware of the need to
protect electronic works, for example music and video, via copyrights and patents.
The unit provides an opportunity for learners to consider the availability of internal and external sources of
finance for a business. Learners should be encouraged to obtain information from banks (either in person or
online) or via websites concerning overdrafts, business loans, mortgages, etc. The unit also provides an early
introduction to the importance of managing budgets. Learners can draw on their own experiences to look at
how they manage their own finances. They can easily identify sources of their own income and consider how
they decide what is available for food, transport, clothes, etc. This can then be extended to a small business
exercise. Learners could work in groups to look at starting a small business, its start-up costs and work out a
budget. Alternatively, learners could be given a business scenario and allocated a particular budget. Over time,
they could be given items that must be covered by this budget and make decisions on how it is to be handled.
Learners need to study the purpose and use of financial statements. Learners must understand the purpose
of all items included in these statements and should understand how the items are calculated. This knowledge
can be gained by looking at ready-prepared statements. With the use of spreadsheet templates, learners could
also support and help in the preparation of these documents.
Another important aspect of financial management involves determining the solvency and profitability of
companies by using accounting ratios. These may be introduced as early warning signs of trading difficulty.
These ideas may be applied to case studies, and real business accounts may be adapted and simplified to
offer comparisons and allow calculation of key ratios. Skills could also be developed by using the spreadsheet
template, which could calculate ratios automatically.


The outline learning plan has been included in this unit as guidance and can be used in conjunction with the
programme of suggested assignments.
Introduction to unit and structure of the programme. Whole class
Overview of employability, personal and communication skills. Whole class
Assignment 1: Recruiting and Retaining the Right People
Introduction to the assignment. Whole class

Individual activity:
research into selected organisations staff profile
analysis of skill requirements
production and completion of recruitment documents
Introduction to physical and technological resources. Whole class

Assignment 2: The Impact of Non-Financial Resources

Group research:
to identify resources
analyse the ways in which management of resources impacts on the organisation
assessment of the effectiveness of methods of managing resources
Group presentation
Preparing group presentation
Giving group presentation
Overview of financial resources. Whole class
Assignment 3: The Role of Financial Resources

Tutor input:
costs
budgets
profit and loss account
balance sheets
accounting ratios
Practice exercises learners complete individually:
feedback on exercises. Whole class and individually
learners write up their report individually


Assessment
For P1 and P2, learners, describe the recruitment documentation for a specified job role. They start by
identifying a particular job role and obtaining application forms and job description. They then draw up a list
of the requirements for the post and describe the attributes they already possess or expect to possess by the
end of the course.
For P3, learners should be aware of the main physical and technological resources required for the operation
of a selected business. If the school or college is used as the business, classrooms and computer suites would
be obvious examples.
For P4, the range of internal and external sources of finance should be more than just a list. The sources
should be relevant to the selected business
For P5, learners should be given statements and be able to provide a brief written interpretation of the key
elements of the trading and profit and loss account and the balance sheet, explaining the purpose of each
element.
For P6, learners should be able to use break-even charts. They could be presented with a budget that has
not been managed properly and identify the problems and suggest remedies.
For P7 learners should be able to use accounting ratios to show the financial state of a given business
For M1, learners should be able to show their understanding of how resources are managed by explaining
how good management of human, physical and technological resources can improve the performance of
the selected organisation.
For M2, learners should assess the importance of employability and personal skills to the selected organisation
when they are recruiting new staff and attempting to retain existing staff. It is important that learners are able
to link this assessment to their selected organisation. This may involve the selecting key skills that are most
appropriate to the needs of the organisation
For M3, learners will extend their answer to P7, demonstrating that they can apply the use of various financial
ratios. They should show the formulae of the ratios and their workings to demonstrate how they have arrived
at their answer.
For M4, learners should show an awareness of the problems that can arise if costs are not controlled to
budget. This can be demonstrated by looking at a given scenario and breaking down the various elements
of the budget to determine why it is overspent and by identifying the problems that this will create for the
selected organisation.
For D1, learners should assess the relative merits of the methods of the managing resources and to make
judgements on the effectiveness of these methods in improving the performance of the selected business
For D2, learners will be expected to provide additional knowledge and understanding about accounting ratios.
They would be expected to provide judgements about the sufficiency of ratios as a measure of how well a
company is performing.
For D3, learners will build on the evidence provided for M4. They will evaluate the problems they have
identified from poorly controlled budgets by looking at the potential consequences for organisation arising
from the budget variances.


Criteria covered Assignment title
Scenario
Assessment method
P1, P2, M2, D2
Brief from the HR manager

asking for a leaflet describing
the benefits of managing human
resources and explaining the
importance they place on
staff having the employability,
personal and communication
skills which meet the companys
needs.
Leaflet on the purpose of

HR management and the
importance of employing staff
with the range of skills the
company needs.
Recruiting and
Retaining the Right
People.
Completion of documentation
for a specific job role.
Learners complete recruitment

documentation for a specified
job role.
They start by identifying a
particular job role and obtaining
application forms and job
description. They then draw up
a list of the requirements for the
post and describe the attributes
they already possess or expect to
possess by the end of the course.
P3, M1, D1
The Impact of
Non-Financial
Resources.
Working in a small group, select

an organisation and investigate
how the physical, technological
and human resources can impact
on the companys performance.
Group presentation on the

main resources used by an
organisation and the importance
of managing these resources
effectively.
P4, M4, P5, P6,

P7, M3, D3
The Role of Financial

Resources.
Learners interpret a given set

of financial information on a
Report back to stakeholders on

how financial resources impact
on the performance of the
business.

Level 2
Level 3
Business Purposes
Financial Forecasting for Business
Business Accounting
People in Organisations
Accounting Systems
Human Resource Management in Business
Training in the Business Workplace
Managing Physical Resources in a Business Environment

It is suggested that this unit should be completed before starting the Unit, Business Accounting.
This unit also links to the following draft National Occupational Standards in Accounting (February 2009),
particularly PS1 and PS2.
Business and Administration NOS, particularly Unit 303.

For this unit learners should select an organisation and research the resources used by that organisation.
Visiting speakers from local organisations would provide learners with a wider understanding of the range of
resources that are used and managed in different sectors. Visits to organisations to observe at first hand how
resources are utilised would complement the input from visiting speakers. Centres should develop links with
local businesses. Many businesses and chambers of commerce want to promote local business so are often
willing to provide work placements, visit opportunities, information about businesses and the local business
context, and visiting speakers.
businessbritainuk.co.uk/Provides information about business in Britain and has extensive links to other business
and business news sites.
www.fsb.org.uk/default The Federation of Small Businesses provides information support and guidance about
small businesses in the UK.
Many businesses provide information about themselves. For example, Unilever, can be found at:
www.unilever.co.uk.

Textbooks
(Pearson, 2009) ISBN 9781846906350
(Pearson, 2009) ISBN 9781846906367
Atkin B and Brooks A Total Facilities Management (Blackwell Publishing, 2005) ISBN 1405127902
Dransfield R BTEC National in Business Student Book (Heinemann, 2004) ISBN 0435455354
Dyson J R Accounting for Non-Accounting Students (FT Prentice Hall, 2007) ISBN 0273709224
Fardon M, Adcock F, Birth I et al Advanced Business (Osborne Books Ltd, 2000) ISBN 1872962041
Hall L, Torrington D and Taylor S Human Resource Management (FT Prentice Hall, 2004) ISBN 0273687131
Health and Safety Executive Successful Health and Safety Management, 2nd Edition (Health and Safety
Executive, 1997) ISBN 0717612767
Holman P and Snee D The Improving Efficiency Pocketbook (Management Pocketbooks, 2000)
ISBN 1870471776
Institute of Leadership and Management Controlling Physical Resources (ILM Super Series), 4th Edition
(Pergamon, 2002) ISBN 075065886X
Mason R Finance for Non-Financial Managers in a Week (Hodder Arnold, 2003) ISBN 0340849622

Journal
Facilities Management Journal (MPP Limited)

Websites
www.bbc.co.uk/business
BBC Business website
www.bbc.co.uk/news
BBC News website
www.becta.org.uk
British Educational Communications and Technology Agency
www.bized.ac.uk
www.careers-in-business.com
Information on a variety of business careers
www.carol.co.uk
Online company annual reports
www.direct.gov.uk
Gateway to public services
www.eubusiness.com
Online business information service about the European Union
www.examstutor.com/business
Support for teachers and learners
www.fenc.org.uk
Products and services for organisations involved in education
www.ferl.org.uk
Educational resources for learning
www.jisc.org.uk
Joint Information Systems Committee (guidance and advice for further

and higher education)
www.learnthings.co.uk
Learnthings providers of interactive digital resources
www.lsda.org.uk
Learning and Skills Development Agency
www.marketingteacher.com/
Lessonstore
Free marketing resources
www.nln.ac.uk
National Learning Network
www.peoplemanagement.co.uk
The online magazine of the Chartered Institute of Personnel and

Development
www.projectalevel.co.uk
Project A Level revision resources for learners
www.rdn.ac.uk/news/headlines
Resource Discovery Network a gateway to internet resources for

learning, teaching and research
www.s-cool.co.uk
A-level and GCSE revision material
Free materials and case studies
10


Skill
When learners are
carrying out research into the human, physical and technological resources of
Reflective learners
reflecting on the impact resources on business.
Skill
When learners are
planning and carrying out research
Creative thinkers
looking at job specifications and developing their skills as circumstances change
Reflective learners
setting goals, with success criteria, for researching businesses

and criticism
evaluating their experiences and learning to inform future progress
Team workers
working in a group to discuss ideas about resources and prepare materials for
presentations
Self-managers

priorities change
planning and carrying out research into the different resources used in business.

11

Skill
When learners are
ICT Use ICT systems

Select, interact with and use ICT systems
independently for a complex task to meet
a variety of needs
using spreadsheets when they are investigating the importance

of monitoring budgets
Bring together information to suit content

and purpose
using PowerPoint to give a presentation for Assignment 2
Mathematics
Understand routine and non-routine
problems in a wide range of familiar and
unfamiliar contexts and situations
Identify the situation or problem and the
mathematical methods needed to tackle it
Draw conclusions and provide mathematical
justifications
English
Speaking and listening make a range
of contributions to discussions and make
effective presentations in a wide range
of contexts
Writing write documents, including
extended writing pieces, communicating
information, ideas and opinions, effectively
and persuasively
12
using budgetary information
applying ratios to budget information

interpreting financial information
giving presentations
writing reports linked to their assignments.

Unit 3:
Unit code:
Y/502/5411
QCF Level 3:
BTEC National
Credit value:
10

Aim and purpose
The aim and purpose of this unit is to give learners an understanding of how marketing, research and planning
and the marketing mix are used by all organisations.
Unit introduction
Marketing is at the heart of every organisations activity. Its importance is also growing in the non-commercial,
public and voluntary sectors. Also, at the heart of marketing is the customer. This unit will introduce learners
to some of the tools and techniques all types of organisations use to achieve their objectives.
Firstly, learners will explore how different types of organisations use marketing principles to meet the needs
of their customers and achieve their objectives. The constraints under which organisations operate are
important and learners will study the legal requirements and voluntary codes that affect marketing.
Learners will then go on to investigate how organisations collect data through market research and turn
it into useful information which can be analysed and used to plan their marketing activities.
The segmentation and targeting of groups of customers is a key marketing technique and this is studied
in detail. This includes the different bases for segmentation of both consumer and business markets.
Next, learners will examine how a marketing mix is developed to meet the needs and aspirations of a
targeted group of prospective customers, before going on to develop a marketing mix for a new product
or service.
The unit gives a brief overview of the principles of marketing or can be used as a basis for further study
of specialist marketing units.
Learning outcomes
Know the role of marketing in organisations
Be able to use marketing research and marketing planning
Understand how and why customer groups are targeted
Be able to develop a coherent marketing mix.

Unit content
1 Know the role of marketing in organisations
Role: overall concept; marketing definitions
Objectives: private sector aims and objectives (survival, growth); public and voluntary sector aims and
objectives (service provision, growth of range of provision, cost limitation, meeting quality standards);
marketing objectives, eg market leadership, brand awareness, perceptions of customers or users; link
between organisational objectives and marketing objectives
Techniques: growth strategies (diversification, product development, market penetration or market
development, Ansoffs Matrix); survival strategies; branding (importance in influencing buyer behaviour,
brand building, positioning, brand extension); relationship marketing (definition, difference between
transactional marketing and relationship marketing, value of lifetime customer)
Limitations and constraints: legal (Sale of Goods Act 1979, The Consumer Protection from Unfair Trading
Regulations 2008, Consumer Credit Acts 1974 and 2006, Consumer Protection (Distance Selling)
Regulations, Data Protection Act 1998); voluntary, eg Code of Advertising Practice and Advertising
Standards Authority; pressure groups and consumerism; acceptable language
2 Be able to use marketing research and marketing planning

Marketing research: qualitative; quantitative; primary internal/external research; secondary internal/
external research; uses (reduce risk in decision making, measure progress over time); limitations
(cost effectiveness, validity of data collected)
Marketing planning: marketing planning process model (audit with PESTLE (political, economic, social,
technological, legal and environmental external factors); SWOT (internal strengths and weaknesses,
external opportunities and threats); set SMART (specific, measurable, achievable, resourced, time-bound)
objectives; determine strategy and tactics, implement changes; evaluate)
3 Understand how and why customer groups are targeted

Identifying customers in consumer markets: difference between customers, consumers and buyers;
importance of identifying who has influence over purchasing decisions
Market segmentation: importance; bases for segmentation of consumer markets (geographic, demographic,
psychographic, lifestyle); uses of geo-demographic systems to identify and reach target groups eg ACORN,
MOSAIC; reasons for choice of target group (accessibility, current and future prospects of group as
customers, profitability; ability to service customer group, fit with organisations mission)
Identifying customers in business to business markets: decision making unit (DMU)
Market segmentation: bases for segmentation of business markets (size, region, value, public/private/
voluntary sector, product, industry); benefits for different members of the DMU, eg cost benefits, ongoing
relationships, security of supply

4 Be able to develop a coherent marketing mix

Marketing mix: 4 Ps product; price; place; promotion; objectives of developing mix (support brand
building, satisfy needs and aspirations of targeted group of customers); importance of need for cohesion
of different elements of the marketing mix
Product: product range; benefits versus features of product or service for targeted customers; concept
of product life cycle
Price: pricing strategies (premium pricing, penetration pricing, economy pricing, price skimming, psychological
pricing, captive product pricing, product line pricing)
Place: distribution; online and/or physical presence
Promotion: promotional mix (advertising (different media, online techniques), personal selling, public relations,
sales promotion)


learner is able to:


able to:
P1
describe how marketing

techniques are used to
market products in two
organisations
[IE]
M1 compare marketing
D1
techniques used in marketing
products in two organisations
evaluate the effectiveness

of the use of techniques in
marketing products in one
organisation
P2
describe the limitations and

constraints of marketing
[RL]
P3
describe how a selected

organisation uses marketing
research to contribute to the
development of its marketing
plans
M2 explain the limitations

D2
of marketing research
used to contribute to the
development of a selected
organisations marketing plans
make justified
recommendations for
improving the validity
of the marketing research
used to contribute to the
development of a selected
organisations marketing
plans.
P4
use marketing research for

marketing planning
P5
explain how and why groups

of customers are targeted for
selected products
P6
develop a coherent
marketing mix for a new
product or service.
[CT]
M3 develop a coherent marketing

mix that is targeted at a
defined group of potential
customers.
Key
SM self-managers
TW team workers


Delivery
For learning outcome 1, it is important to address the assumption many learners may have that marketing is merely
advertising. In fact, it is a more complex activity and this unit gives a deeper understanding of the whole marketing
process. The business purposes and strategic planning covered in the Unit: The Business Environment, may be
revisited to show the links and differences between organisational and marketing objectives. Next, learners
move on to an overview of key marketing principles. Learners could apply Ansoffs matrix to a simple case
study, an organisation they are familiar with, or to a business game. Branding and relationship marketing
provide opportunities for linking with learners existing knowledge as consumers. Learners move onto the
legislation which constrains marketers. The principles of the legislation should be covered and then applied
to situations which may be familiar to learners as customers.
Learning outcome 2 includes an introduction to marketing research, and learners may enjoy conducting their
own research. However, if there is insufficient time for this, an exercise where learners plan research to meet
specified needs could be used to consolidate the teaching. Marketing research is covered in a separate specialist
unit. The rest of the outcome is about the marketing planning process and delivery would be enhanced if
learners could play the role of business-decision makers in a business game or a detailed case study.
Learning outcome 3 is about segmenting markets and targeting groups of potential customers. Learners
may find it interesting to examine the geo-demographic descriptors for different local postcodes. A practical
exercise where pairs of learners define target markets for different products could be used. Learners should
also consider the different segmentation and targeting methods used in business and again, a targeting exercise
could be useful.
In learning outcome 4 learners need to understand about the principles of a coherent marketing mix and there
are many examples of products where the marketing mix is targeted to the younger consumer. Learners could
analyse all aspects of the marketing mix and suggest how it has been designed to appeal to the target group.
This may be clearer if learners also examine products targeted to a different group. For the assessment of this
outcome, learners need to design their own marketing mix, so it would be useful for learners to be given a
step-by-step analysis of the process and perhaps a small group exercise in designing a marketing mix.


Introduction to unit, structure of the programme and basic definitions of marketing and its prevalence in business
Pair exercise where learners examine their recent transactions with organisations, the role marketing played
and the organisations marketing and organisational objectives
Introduction to use of marketing objectives to achieve organisational objectives and Ansoffs Matrix
Pair exercise on how Ansoffs Matrix could be used in own institution
Introduction to consumer legislation. Whole class
Small groups analyse case studies from consumer organisation on breaches of consumer legislation
Introduction to voluntary codes
Assignment 1: A Listed Marketeers, Part 1 select two organisations and research their marketing activities
and the constraints under which they conduct marketing.

Introduction to marketing research
Small group work: analysis of a case study showing use of marketing research in the development of a new
product, leading to exercise on planning marketing research for a new market
Introduction to the marketing planning process model and development of plan for known organisation
Assignment 2: A Listed Marketeers, Part 2 pick one of the organisations studied in Assignment 1 and
research the organisations use of marketing research to contribute to the development of their marketing plans
Introduction to the use of PESTLE and exercise on using it for an organisation known to the whole class
Introduction to use of SWOT and exercise on using it for an organisation known to the whole class
Introduction to concepts of segmentation and targeting
Use of instruments eg ACORN for learners to assess the segments into which customers would be classified
Introduction to business-to-business (b2b) segments
Group exercise based on a case study where learners have to present proposals for segmenting and targeting
a business market
Introduction to the principles of branding
Exercise where learners identify the positioning of brands and examples of brand building and brand extension
Introduction to concept of relationship marketing
Assignment 3: Segmentation and Targeting learners select ranges of products from the organisations they
have been studying and analyse the target groups, branding and relationship marketing for six different products
Introduction to marketing mix
Discussion of a range of examples of different marketing mixes and how they have been designed to satisfy
different groups of customers
Assignment 4: Marketing Mix learners develop their own marketing mix for a selected new product
or service


Assessment
For most groups of learners, a staged approach to assessment would help them to achieve the unit. Most
of the criteria need to be investigated in the context of one or more real organisations and learners may
need support in selecting the organisations to use for their assignments.
For P1, learners should describe how the marketing techniques listed in the unit content are used in
marketing products or services in two different organisations. It is sufficient to select one product/service or
product/service range in each organisation. For P2, learners need to describe the limitations and constraints
under which marketers operate; this should include legal requirements and the use of voluntary codes and
constraints. Learners should relate these constraints to examples.
To achieve M1, learners need to demonstrate higher-level skills through comparing or finding the similarities and
differences between the use of marketing techniques in marketing products or services in two organisations.
For D1, this will be developed further into an evaluation of the effectiveness of the use of marketing
techniques in one organisation. Evaluation requires more than stating an opinion and should demonstrate
higher-level skills such as researching and interpreting data and using logical judgements about the validity
and reliability of the data used to evaluate the effectiveness of the marketing techniques.
For P3, learners should investigate the marketing research used by one organisation and link this to the
development of the organisations marketing plans. This could be based on the school or colleges own
marketing research and plans, as this would provide a good opportunity to obtain the information required
for P4. Alternatively, this could be based on a link with a local commercial or not-for-profit organisation.
For M2, learners should identify and explain the limitations of the marketing research methods used in the
selected organisation investigated.
To achieve D2, learners should make, and justify, recommendations for improving the validity of the
marketing research used in the selected organisation. Three sound recommendations with justifications
would be sufficient to achieve the criterion.
For P5, learners should explain why the different types of target groups are chosen for different products
or services. This should include products for both consumer and business to business markets and different
methods of segmenting the market. Six different target groups will be sufficient to achieve the criterion.
For P6, learners should develop a coherent marketing mix for a new product or service. The product
or service does not have to be entirely new; it could be an established product or service introduced
to a new market. The marketing mix should include at least the 4 Ps.
For M3, the marketing mix must be clearly targeted to a defined group of potential customers and needs to
be detailed and coherent so that product, price, place and promotion are all designed to appeal to the clearly
defined needs and aspirations of the target group of customers.


Criteria covered
Assignment title Scenario
Assessment method
P1, P2, M1, D1
A Listed Marketers,
Part 1.
You work for a professional

organisation for marketers.
One of the activities that the
organisation undertakes is to
evaluate the marketing activities
of different companies and
produce a list of A Listed
Marketers. You are asked to
carry out research into two
possible contenders for inclusion
on the list.
Produce a report describing,

comparing and evaluating the
marketing activities of two
companies in relation to specified
products. Include details of the
constraints under which each
of the selected organisations
operate.
P3, P4, M2, D2
A Listed Marketers,
Part 2.
Ongoing from first assignment.

As part of the evaluation, you
are now asked to select one
of the companies previously
investigated and investigate its
use of marketing research.
Prepare presentation materials

describing how marketing
research is used to contribute
to the development of the
organisations marketing planning.
Go on to explain the limitations
of the marketing research and
make justified recommendations
as to how the validity of the
research could be improved.
P5
Segmentation and
Targeting.
Ongoing from previous

assignments. Your organisation
is going to produce information
sheets on examples of
segmentation and targeting
and you are asked to carry out
research into the segmentation
and targeting of six different
products.
Produce 6 information sheets

on different products in which
you describe the target groups
and explain why this group has
been selected for this product.
P6, M3
Marketing Mix.
You are thinking about setting up

your own business.
Develop a proposal for a

coherent marketing mix for a
product or service targeted to
a defined group of potential
customers.


Level 2
Level 3
Business Purposes
Business Resources
Creative Product Promotion
Market Research in Business
Relationship Marketing
Internet Marketing in Business
This unit also links to the following National Occupational Standards for Marketing and Sales for Non-Specialists,
particularly Units 1, 2, 3, 4, 5, 7.

The unit requires learners to investigate real examples of the application of marketing techniques. There are
a range of possibilities to the engage employers through educational visits and use of visiting speakers.
Centres need to develop links with local businesses. Many businesses and chambers of commerce want to
promote local business so are often willing to provide work placements, visit opportunities, information about
businesses and the local business context and visiting speakers.
Business Britain (www.businessbritainuk.co.uk/) provides information about business in Britain and has extensive
links to other business and business news sites.
The Federation of Small Businesses (www.fsb.org.uk) provides information, support and guidance about small
businesses in the UK.
Many businesses provide information about themselves. For example, Unilever, can be found at:
www.unilever.co.uk.


Textbooks
(Pearson, 2009) ISBN 9781846906350
(Pearson, 2009) ISBN 9781846906367
Cave S Consumer Behaviour in a Week (Hodder Arnold, 2002) ISBN 0340849711
Dibb S, Simkin L, Pride W M and Farrell O C Marketing Concepts and Strategies (Houghton Mifflin (Academic),
2005) ISBN 061853203X
Hall D, Jones R and Raffo C Business Studies, 3rd Edition (Causeway Press Ltd, 2004) ISBN 1902796837
Proctor T Essentials of Marketing Research (FT Prentice Hall, 2005) ISBN 0273694944
Journals
Business Review Magazine (Phillip Allan Publishers)

Campaign (Haymarket Business Subscriptions)
The Economist (The Economist Newspaper Group, Inc)
Marketing (Haymarket Business Subscriptions)
Marketing Week (Centaur Communications Ltd)
Websites
www.adassoc.org.uk
The Advertising Association
www.amazon.com
Amazon online shopping
www.asa.org.uk
The Advertising Standards Authority
www.bized.ac.uk
www.cadburys.co.uk
Cadbury Trebor Bassett
www.cim.co.uk
The Chartered Institute of Marketing
www.easyjet.com
easyJet main website
www.marketingteacher.com
Free marketing resources for learners, teachers and professionals
www.swatch.com
Main website for Swatch
www.tesco.com
Main website for Tesco
10


Skill
When learners are
investigating the marketing of business organisations
Creative thinkers
generating ideas about marketing in business organisations
Reflective learners
reflecting on the impact of marketing in business.
Skill
When learners are
planning and carrying out research into the marketing of organisations
Creative thinkers
looking at how organisations market their products and services
Reflective learners
setting goals with success criteria for researching businesses

and criticism
Team workers
working in a group to discuss ideas and prepare materials for presentations

taking responsibility for their own role in a team
Self-managers

priorities change
planning and carrying out research into the marketing of organisations.

11

Skill
When learners are
ICT Use ICT systems

researching organisations and their marketing

tabulating information about organisations


tabulations about organisations
creating diagrams, presentations and tabulations about
marketing in businesses
Access, search for, select and use ICT-based information

and evaluate its fitness for purpose

information from websites about business organisations
and their marketing

information
text and tables
images
numbers
records

through research
preparing information to present to others about
business organisations and their marketing activities

Present information in ways that are fit for purpose and
audience
12

communicating with organisations

Skill
When learners are
English
carrying out group work investigating organisations and

their marketing
working with others in investigating businesses
(employees, colleagues, teachers, class mates)
making presentations about organisations and their
marketing activities

and opinions
reading about organisations and their marketing

reading about organisations to obtain data to compare
businesses marketing activities
Writing write documents, including extended writing writing materials to provide information about
pieces, communicating information, ideas and opinions, organisations marketing activities
producing labelled charts and diagrams.

13
Unit 4:
Unit code:
H/502/5413
QCF Level 3:
BTEC National
Credit value:
10

Aim and purpose
The aim of this unit is to show learners that the collection and management of business information, and
the successful communication of that information throughout a business, is critical for the future prosperity
of the organisation.
Unit introduction
A business needs accurate and relevant information from internal and external sources in order to operate
profitably. Proper collection of data creates an environment where informed decisions can be taken for
the benefit of the business. In order to manage information effectively, there must be good communication
systems within the organisation. Staff must possess good verbal and written skills in order to communicate
and share information
Business information can be used to obtain competitive advantage and promote efficiency. Organisations generate
information internally, recording details of products manufactured, purchased and sold, and their associated costs.
Businesses use information to manage not only what is currently happening in the organisation but also to plan
for the future and ensure their survival. Information is collected, stored, manipulated, analysed and reported
to those who need to use it. People need to become skilled manipulators and users of information to ensure
organisations become more efficient and succeed in achieving their stated purposes. Since the development
of the personal computer and more recently the internet, communication methods have changed significantly.
Gathering relevant information from a range of sources is a skill that needs to be developed using electronic and
non-electronic sources.
Learning outcomes
Understand different types of business information
Be able to present business information effectively
Understand the issues and constraints in relation to the use of business information in organisations
Know how to communicate business information using appropriate methods.

Unit content
1 Understand different types of business information
Types of information: verbal; written; onscreen; multi-media; web based
Purpose of information: updating knowledge; informing future developments; strategic direction; SWOT
analysis; offering competitive insight; communicating sales promotions; inviting support for activities
Sources of information: internal, eg financial, human resources, marketing, purchasing, sales, manufacturing,
administration; external, eg government, trade groupings, commercially provided, databases, research;
reliability of data sources
2 Be able to present business information effectively

Presentation methods to meet the needs of the user: eg document, use of style, verbal presentations, role
plays, onscreen multi-media presentation, use of images, web-based presentation, multi-lingual support
Output requirement: eg resolution of images, page layout, text formatting, use of tables, combining
information from a range of applications, use of specialist software and hardware
Presenting corporate communication: methods; mission statements, advertising, packaging, logos, livery,
strap lines, endorsements, sponsorship
3 Understand the issues and constraints in relation to the use of business information
in organisations
Legal issues: relevant data protection legislation eg Data Protection Act 1998, Freedom of Information
Act 2000; other relevant legislation, eg Computer Misuse Act 1990
Ethical issues: codes of practice, eg on use of email, internet, whistle blowing; organisational policies;
information ownership
Operational issues: security of information; backups; health and safety; organisational policies; business
continuance plans; costs, eg additional resources required, cost of development; impact of increasing
sophistication of systems, eg more trained personnel, more complex software
4 Know how to communicate business information using appropriate methods

Audience requirements: eg age, gender, ethnicity, special needs, readability, legibility, attention span,
accessibility, interest, distraction avoidance, business experience and knowledge, industry-related
experience and knowledge
Methods of written communication: eg letter, memorandum, fax, invoice, flow charts, publicity material,
email and screen based, SMS (short message service), www (worldwide web)
Methods of non-written communication: eg telephone call, video conferencing
Technologies: computers; touch screens; digital broadcasting; DVD (digital versatile/video disc); mobile
phones; the internet and WAP (wireless application protocol)
Communication skills: formal/informal; verbal/non-verbal; listening; understanding; seeking clarification;
responsiveness; eye contact; facial expressiveness; body language; use of appropriate professional language;
ability to adapt communication techniques to audience requirements; presentation skills; ability to invite
commitment to shared goals


learner is able to:


able to:
P1
explain different types of

business information, their
sources and purposes
[IE, CT]
M1 analyse different types of

business information and
their sources
D1
evaluate the appropriateness

of business information used
to make strategic decisions
P2
present complex internal

business information using
three different methods
appropriate to the users
needs
[IE,CT]
D2
evaluate the effectiveness

of business information
and its communication as
key contributors to the
success of an organisation,
using examples to illustrate
your points.
P3
produce corporate
communications
[SM]
P4
evaluate the external

corporate communications
of an existing product
or service
[CT, RL]
P5
explain the legal and ethical

issues in relation to the use
of business information
[IE, CT]
P6
explain the operational issues

in relation to the use of
business information
[IE, CT]
M2 analyse the legal, ethical

and operational issues
in relation to the use of
business information, using
appropriate examples.


learner is able to:
P7


able to:
outline electronic and

non-electronic methods
for communicating business
information, using examples
for different types of audience.
[IE]
Key
SM self-managers
TW team workers


Delivery
The unit enables learners to explore the various types of information used in business organisations which will
develop their understanding as the unit progresses. By discussing the variety of communication media available
and drawing on their work experience or part-time employment, learners will gain a broad introduction to
the study of business communication and information. Learners can then expand these ideas to consider
the purpose and variety of sources of information.
Tutors should encourage learners to investigate how businesses communicate internally and externally.
The presentation of information needs to be explored and how careful selection of the presentation methods
meets the needs of the user. Learners should examine the use of documents, style and verbal presentations
as well as the range of electronic methods available. Learners should also be encouraged to investigate a
number of business organisations and research how their corporate communications are presented. This
could involve reviewing mission statements, advertising and other methods of marketing communications,
and identifying how these differ from one organisation to another. Displays could be created from learners
research to show the variety of corporate communications being used. This will provide a visual stimulus
that can be used to enhance understanding of the importance that business organisations attach to their
corporate communications.
Business organisations face a number of issues and constraints in relation to the use of business information
and learners need to understand the relevant legislation that controls the use of information in businesses.
There are also ethical issues related to the use of email and the internet, as well as the development of codes
of practice and organisational policies to give guidance on ethical issues. Similarly, there are organisational
policies that cover the security of information and associated health and safety issues. Case studies and
newspaper reports can be used to extend learners understanding of issues and constraints in relation to
the use of information in business organisations. Television programmes and DVD/videos can also be useful
formative tools especially when followed with class discussion or written summary. The internet can be
a useful tool, as many larger organisations provide web pages, specifically for learners, on how they control
information and their corporate communications strategies.
Tutors may find it useful for learners, working individually or in pairs, to investigate local businesses that may be
able to give examples of the types of communication and information that they manage. Learners will need
input on how to communicate using appropriate methods and should be encouraged to explore the different
types of audience which helps in making decisions on the most appropriate method for a particular situation.
Similarly, tutor input will be needed to provide an understanding of methods of written and non-written
communication. Learners can obtain examples to appreciate the range of methods available. Finally, learners
need to investigate formal and informal and verbal/non verbal methods of communication. Role play will be a
useful in helping learners understand the importance of verbal communication and the use of body language.
Tutors may use this unit to convey a range of ideas about business information, for example financial accounts,
stock levels or promotional messages. Tutors may, therefore, wish to deliver this unit by following given themes,
for example the role of quantitative financial information or qualitative textual information. At each stage, crucial
questions can be asked such as What is the central message of this information? What audience is it intended
for? What difference should it make to business behaviour? Why is it being presented? Could it be presented
more successfully? The emphasis is on developing learners critical faculties in understanding, interpreting,
selecting and applying business information.


The outline learning plan has been included in this unit as guidance and can be used in conjunction with
the programme of suggested assignments.
Introduction to unit and structure of the programme
Different types of information
Learners will receive or participate in:
formal theory input
a group exercise on information types
pair work on written information
a case-study exercise on sources of information in groups
a guest speaker on information management
a visit to local business communication and information
an individual exercise searching the internet for types of information
a class discussion on information management
a group exercise on reliable data sources
There may still be formal tutor input during group work

Assignment Task 1: Types and Purpose of Information
Presentation of information
formal theory input
a group exercise on presentation methods
a DVD/video on presentations
a group exercise on types of output
a class discussion on the use of images
an individual exercise on corporate communications
a class discussion on corporate communications


Assignment Task 2: Corporate Communications
Issues and constraints in use of information

formal theory input
a class discussion on legal issues
a guest speaker on ethical issues and information
a DVD/video on ethical issues
individual exercise on operational issues security of information
group exercise searching the internet to identify information systems

Assignment Task 3: Legal and Ethical Issues
Communication using appropriate methods

formal theory input
a class discussion on types of audiences
individual research into methods of written communication
a five minute individual presentation on the findings from the research
an exercise on non-written communication in groups
a case study on use of technology in communication
a review of the unit
Assignment Task 4: Electronic and Non-Electronic Communication


Assessment
For P1, learners need to investigate a business organisation in order to explain the different types of information
that are being used, where this information originates and its purpose.
For P2, learners need to present information using three different methods. This could be a verbal presentation
combined with a report on the information they obtained. The information could be a financial report from
a business which the learner could manipulate into a spreadsheet or chart. Alternative methods could include
a web page and a leaflet. Learners can then submit the information, indicating the nature of its intended
audience and its likely purpose. The information could be from the business organisation used for P1.
For P3, learners need to produce a corporate communication for a business organisation which could be an
advert for a poster or a leaflet communicating information about the business or one of its products or services.
The communication could be the information to be incorporated on a products packaging or a design for the
livery on delivery vehicles. The same business organisation used for P1 and P2 can be used.
For P4, learners will evaluate existing corporate communications for a product or service.
For P5, learners need to explain the legal and ethical issues relating to the use of business information. Learners
can use the same business, organisation or any other organisation, especially if it is difficult to obtain the
necessary information. Learners need to try and obtain the business organisations policies on ethical issues
in relation to business information and explain how that organisation complies with their legal obligations.
For P6, for the same or any other business organisation, the learner needs to explain the operational issues
in relation to business information. This would include how the organisation ensures their information is secure.
In addition, learners need to explain the health and safety issues associated with information management and
also the development of new systems to manage information, the possible need for more complex software
and staff training.
M1 requires learners to analyse different types of information and their sources. Again this can be based on
the information obtained from the business organisation that they have chosen to research and builds on the
work undertaken for P1.
M2 requires learners to analyse the legal, ethical and operational issues in relation to the use of information.
Again, learners will need to obtain information from a local organisation and build on the work for P5 and P6.
For D1, the learner has to evaluate the appropriateness of information used to make important strategic
decisions. They could look at marketing decisions made in an organisation and evaluate whether the information
used to make these decisions was appropriate. Similarly, financial performance of the company can lead to
strategic decisions being made. The learner should evaluate at least two sets of information which have been
used to make strategic decisions.
D2 requires learners to evaluate the effectiveness of business information and its communication as key
contributors to the success of a business organisation. Learners need to use illustrative examples as part
of their evaluation and should be encouraged to investigate organisations who have excellent communication
and information management systems. Comparisons can then be made with the situation in the organisation
that they have studied.


Scenario
Assessment method
P1, P2, M1, D1
All three tasks are related

to research carried out
on a business organisation
and how they manage and
communicate information.
Written report.
As above.
Production and evaluation

of two examples of
corporate communications.
As above.
Written report.
As above.
Written report.
Assignment Task 1
Individual work describing
types of information, where
the information originates
from and the purpose of the
information.
P3, P4, M2, D2
Assignment Task 2
Individual work on corporate
communications of chosen
business.
P5, P6, M3
Assignment Task 3
Presentation of information
using two methods.
Individual work on the

legal and ethical issues of
their chosen organisation
and explanation of their
operational issues.
P7
Assignment Task 4
Individual exercise outlining
electronic and nonelectronic communication.

Level 2
Level 3
Business Purposes
Customer Relations in Business

Business Online
Business Enterprise
Starting a Small Business
This unit also links to the following National Occupational Standards for Business and Administration,
particularly Units 301, 310, 318, 320.

Essential resources
For this unit learners should have access to a suitable business teaching environment with access to the
internet to carry out research. Tutors may consider building a bank of resource materials to ensure there
is a sufficient supply of relevant information on the subjects of business communication and information
management. Learners can generate evidence from a work placement or work experience.

Centres should develop links with local businesses. Many businesses and chambers of commerce are
often willing to provide work placements, visit opportunities, information about businesses, and provide
visiting speakers.

Textbooks
(Pearson, 2009) ISBN 9781846906350
(Pearson, 2009) ISBN 9781846906367
Argenti P Corporate Communication (Irwin McGraw-Hill, 1998) ISBN 0256-21723-8
Davies C Finding and Knowing: psychology, information and computers (Routledge, 2004) ISBN 0851424546
Lowe M Business Information at Work (Europa Publications, 1999) ISBN 0851424031
Niederst J Web Design in a Nutshell: A Desktop Quick Reference (OReilly, 2001) ISBN 0596001967
Websites
news.bbc.co.uk/1/hi/business
The business pages of the BBC website
www.bized.co.uk
A business education resource site
The Times 100 case studies
10


Skill
When learners are
planning to carry out research into a chosen organisation

identifying questions to ask and problems to solve when researching their chosen
organisation
Creative thinkers
asking questions to extend their thinking when researching their chosen organisation
Reflective learners
reviewing progress and acting on the outcomes when obtaining information from
an organisation
planning and carrying out research into communication in organisations.
Skill
When learners are
planning and carrying out research into communication and information within
organisations
Creative thinkers
looking at how different businesses communicate
Reflective learners
setting goals, with success criteria, for researching business communication

and information
and criticism
Team workers
working in groups to discuss communication

Self-managers

priorities change
planning and carrying out research into communication in organisations.

11

Skill
When learners are
ICT Use ICT systems

researching communication and information in business

organisations

tabulating information about finance or marketing


tabulations about business communication and
information
creating diagrams, presentations and tabulations for
information presentation


information from websites about business information
and communication

information
text and tables
images
numbers
records

through research
preparing information to present about business
information
Present information in ways that are fit for purpose

and audience
12

Skill
When learners are
Mathematics
Understand routine and non-routine problems in a wide using numerical data in relation to business information
range of familiar and unfamiliar contexts and situations
and situations
English
carrying out group work investigating business

communication and information

and opinions
reading about business information and communication
making presentations about business information
Writing write documents, including extended writing writing reports about business information
pieces, communicating information, ideas and opinions,
producing labelled charts and diagrams showing
business information.

13
Unit 5:
Business Accounting
Unit code:
M/502/5415
QCF Level 3:
BTEC National
Credit value:
10

Aim and purpose
The aim of this unit is to enable learners to understand the purpose of accounting, and the associated
processes and its role in the managing of a business. Learners will develop the skills and knowledge needed to
understand financial information.
Unit introduction
Understanding how a business operates and what makes it successful, requires knowledge of the accounting
process. Accounting involves recording business transactions and, this in turn, leads to the generation of financial
information which can be used as the basis of good financial control and planning. Inadequate record keeping
and a lack of effective planning ultimately lead to poor financial results. It is vital that owners and managers of
businesses recognise the indications of potential difficulties. Remedial action can then be taken.
The unit is divided into two parts. The first develops an understanding of the accounting processes necessary
to provide accurate and relevant financial information. The second part covers the practical aspect of carrying
out those accounting activities.
Learners will be introduced to accounting terminology as they study the purpose and function of accounting
and consider the various categories of business income and expenditure. It is important to know the sources of
an organisations income and the nature of its expenditure, as this clarifies the basis of its profitability and enables
more effective control of the business. Control begins with the planning process and learners will study the use
of a cash flow forecast which requires managers to set cash flow targets that can be monitored and adjusted on
a regular basis. Learners will consider the effective management of cash flow and the implications of cash flow
problems. The link between business failure and cash flow problems will be highlighted.
The measurement of an organisations financial performance and position requires an understanding of a basic
profit and loss account and balance sheet with this understanding learners can analyse profitability, liquidity and
efficiency of the organisation through the application of ratio analysis. Analysis will always require comparison
of current figures with those from a previous accounting period, or those of a similar business organisation.
Learners will discover how to carry out ratio analysis as well as the meaning and implication of the figures.
Learning outcomes
Understand the purpose of accounting and the categorisation of business income and expenditure
Be able to prepare a cash flow forecast
Be able to prepare profit and loss accounts and balance sheets
Be able to review business performance using simple ratio analysis.

Unit content
1 Understand the purpose of accounting and the categorisation of business income
and expenditure
Purpose: record transactions; monitor activity; control; management of the business (planning,
monitoring, controlling); measurement of financial performance (gross profit, net profit, value
owed to and by the business)
Capital income: sole traders; partners; shares; loans; mortgages
Revenue income: sales (cash and credit transactions); rent received; commission received
Capital expenditure: fixed assets (land and buildings; office equipment; machinery; furniture and fittings;
motor vehicles); intangibles eg goodwill, patents, trademarks
Revenue expenditure: premises costs eg rent, rates, heating and lighting, insurance; administrative costs
eg telephone charges, postage, printing, stationery; staff costs eg salaries, wages, training, insurance,
pensions; selling and distribution costs eg sales staff salaries, carriage on sales, marketing; finance costs
eg bank charges, loan and mortgage interest; purchase of stock (cash and credit transactions)
2 Be able to prepare a cash flow forecast

Cash flow forecast: structure; timescale; credit periods; receipts (cash sales, debtors, capital, loans, other
income); payments (cash purchases, trade creditors, revenue expenditure, capital expenditure, Value
Added Tax (VAT)); opening and closing cash/bank balances
Cash flow management: problems within the cash flow forecast eg insufficient cash to meet payments
due; solutions eg overdraft arrangements, negotiating terms with creditors, reviewing and rescheduling
capital expenditure
3 Be able to prepare profit and loss accounts and balance sheets

Profit and loss account: purpose and use; trading account and calculation of gross profit (sales, purchases,
opening and closing stocks); calculation of net profit (overheads, other revenue income eg discounts
received); commission received; transfer of net profit to balance sheet
Balance sheet: purpose and use; vertical presentation; order of permanence; fixed assets; current assets;
intangible assets; long-term liabilities; current liabilities; working capital; net assets; transfer of net profit
from profit and loss account; capital employed
International Equivalents: changes to reporting requirements under the International Accounting Standards
(IAS), eg statement of comprehensive income, statement of financial position.
4 Be able to review business performance using simple ratio analysis

Profitability: gross profit percentage of sales; net profit percentage of sales; return on capital employed
(ROCE)
Liquidity: current ratio; acid test ratio/liquidity ratio
Efficiency: debtors payment period; creditors payment period; rate of stock turnover


learner is able to:
P1
describe the purpose of

accounting for an organisation
[IE]
P2
explain the difference

between capital and revenue
items of expenditure and
income
[TW]
P3
prepare a 12-month cash

flow forecast to enable
an organisation to manage
its cash
[CT, RL, SM]
P4
prepare a profit and loss

account and balance sheet for
a given organisation
[SM]
P5
perform ratio analysis to

measure the profitability,
liquidity and efficiency
of a given organisation.
[CT]


able to:
M1 analyse the cash flow

problems a business might
experience
D1
justify actions a business might

take when experiencing cash
flow problems
M2 analyse the performance of a

business using suitable ratios.
D2
evaluate the financial

performance and position
of a business using ratio
analysis.
Key
SM self-managers
TW team workers


Delivery
Delivery of this unit should include a variety of delivery methods that use a range of sources and resources,
to enable learners to gain a wider knowledge and appreciation of the accounting function. Accounting is
a vital part of any organisation dealing with money or monetary worth. Learners should be encouraged to
appreciate that the knowledge and skills gained here are equally useful when approaching personal finance.
Simulation is an excellent means of delivery, giving learners a good understanding of accounting principles
and developing their accounting skills. Simulations include simple business and accounting games and the
preparation of accounting documents such as cash flow forecasts. Using computerised spreadsheets,
particularly in preparing cash flow forecasts, removes the calculation element of the task, allowing learners
to concentrate more closely on the results.
Case studies allow learners to develop their analytical and evaluative skills particularly where group work
and discussions are used. Visiting speakers, from different types of business organisation, will give learners
a different perspective on accounting issues that may be faced in practice. Group tasks involving research,
including use of the internet, should motivate the learners, and group presentations of accounting information
using multi-media will encourage learners to share and discuss their learning.
For learning outcome 1, learners should be introduced to the unit by considering, in groups, potential sources
of income and the nature of likely expenditure. Case studies or simulations based on business start-up can be
discussed and used to consider the requirement to make a profit and how profit can be generated. Scenarios
could also be used to illustrate particular aspects of business such as the differences between trading and service
organisations or the effect of delays in customers settling their bill. Guest speakers may be used to explain the
importance of the various aspects of income and revenue, their impact on a business and how problems might
be dealt with.
The initial concepts of cash flow in learning outcome 2 could be introduced by considering personal finance.
Learners could produce a personal cash flow forecast in which they consider how they might deal with having
insufficient funds to meet their expenditure. The concepts of business cash flow must be introduced by using
the format of a cash flow forecast and demonstrating the way in which the figures will be added. Banks and
business advisory organisations, such as Business Link, produce preset formats for business start-ups that can
be used. The management of cash flow can be taught through case studies, group work and business games.
Learners will use computerised spreadsheets to prepare cash flow forecasts, and suitable templates may be
available online. Spreadsheets will be adjusted to show the effects of various events, such as reduced sales
revenue, debtors taking longer to pay, or a delay in major expenditure.
Learning outcome 3 can be delivered using a combination of simulation, learner research, discussion and
practical exercises. Learners must discuss what is meant by the term profit and how it is calculated. They
will investigate real profit and loss accounts and balance sheets to ascertain their format, content and the
rationale behind them. These might be obtained from the internet or intranet. Published accounts may be
too technical and complex for learners to understand fully and tutors may want to adjust their content or
produce accounts for a fictitious business. Through discussion, group tasks and individual practical exercises,
learners must be encouraged to use their understanding of the nature of income and expenditure to appreciate
the accounting treatment of each of the components. Tutors must be able to direct learners investigations
in order to highlight different styles of balance sheet presentation, such as for a bank and for an engineering
company, to enable comparisons to be made.

Simple calculations and exercises, using appropriate performance ratios and based on simulations, must be
used to help build up learners analytical skills. They will use profitability ratios to analyse the profit and loss
account, and liquidity and efficiency ratios to analyse the balance sheet. The subsequent review of business
performance will be based on case studies of real businesses, although simulation could be used where this
is not possible. Analysis and evaluation of the results must be carried out through group work, which will
be used to produce a multi-media presentation.
Learners should understand the new requirements under IAS and be aware that although at the time of
accreditation of this specification only public companies have to comply with IAS.

Introduction and outline scheme of work/programme of assignments
Visits/speakers
Formal theory input on income and expenditure
Practical class exercises/scenarios
Formal theory input on cash flow
Research
Assignment 1: Cash Flow
Formal theory input on profit loss and balance sheets

Research
Assignment 2: Profit and Loss and Balance Sheets
Formal theory input on ratios

Assignment 3: Using Ratios
Research
Tutorial support and feedback

Assessment
To achieve P1, learners will describe clearly the main purpose of accounting for an organisation. The
description may be brief but should be accurate and incorporate historical data in order to be able to check
on current financial performance and position, as well as the planning aspect of management accounting.
For P2, learners will be expected to explain the different categories of capital income, capital expenditure,
revenue income and revenue expenditure as listed in the unit content. This may be achieved in a number
of ways. For example, learners could examine a specific type of organisation, identifying the likely income
and revenue and indicating in each case whether it is of a capital or revenue nature. They should also describe
clearly what each category means. At this stage, learners are not expected to calculate profit or to know the
impact of income and expenditure items on profit.
For P3, learners should construct a 12-month cash flow forecast from the information given in a scenario,
accurately calculating each months receipts, payments, opening and closing balances. For M1, learners should
comment on the cash flow, highlighting any problems that are evident, such as a shortage of cash resulting
from costly capital expenditure in one month. For D1, learners will make appropriate recommendations
to solve the cash flow problems, such as re-timing large payments or arranging an overdraft. Learners
should show awareness of the dangers and costs of poor financial planning.
For P4, learners will prepare a profit and loss account and balance sheet for an organisation. They will also
show how gross profit and net profit are calculated by indicating the kinds of income and expenditure that
are included. Learners will be presented with a trading and profit and loss account and a balance sheet for
a business organisation, which should be set out using the vertical style. Learners will label the cost of goods
sold section and the overheads section of the profit and loss account.
For P5, learners will use ratio analysis to measure profitability, liquidity and efficiency of a given organisation,
outlining clearly what is meant by these terms including the meaning and relevance of each ratio. For M2,
learners will identify the accounting ratios they will use to analyse profitability, liquidity and efficiency and
calculate these accurately, based on the trading and profit and loss account and balance sheet. The relevant
accounting ratios from the previous year, or from another similar type of business organisation, will be given
to learners. For D2, learners will demonstrate a good understanding of the meaning of the accounting
ratios used by comparing the figures calculated with those given. Learners will work in groups to evaluate
the performance and position of the business organisation, based on the ratio analysis, giving appropriate
supporting evidence for any conclusions. Learners could present their evidence and findings as part of
a group using a PowerPoint presentation or OHTs.


Criteria covered
Assignment title
Scenario
Assessment method
P1, P2, P3, M1, D1
Cash Flow.
Case study on a new business.

Financial information either
provided/or to be collected.
Controlled assignment in
class. Individual assignment
covering costs and expenses,
completing a cash flow, then
something happens to cause
cash flow problems, actions
recommended.
P4
Profit and Loss and

Balance Sheets.
Case study/real info and figures

provided.
Controlled class assignment.
P5, M2, D2
Using Ratios.
Case study/real info and figures

provided.
Controlled class assignment.

Level 2
Level 3
Business Resources
Bookkeeping for Business
Financial Accounting
Management Accounting
Accounting Systems
Computer Applications for Financial Management.
This unit should be delivered before any other specialist finance units.
This unit also links to the following draft National Occupational Standards for Accounting, particularly FA1,
FA2, FA3, FA4, FA5, MA4.
Essential resources
Learners can find information using company annual reports, journals, magazines, company websites
and newspapers.
Access to a range of information resources to complete investigative assignments and case studies will be
essential, including relevant CD ROMs and the internet, as will be access to computers for research and
preparing cash flows (using a spreadsheet package) This will enhance the delivery of this unit. Learners will
also need access to relevant paper-based research material including published financial reports and books.


Visits to companies and from employees are useful for the delivery of this unit. The use of vocational contexts
is essential in delivery and assessment.
Sources of support to enable centres to initiate and establish links with industry, and to networks arranging
visits to industry are given below:
Work Experience/Workplace learning frameworks Centre for Education and Industry (CEI - University of
Warwick): www.warwick.ac.uk/wie/cei
Learning and Skills Network: www.vocationallearning.org.uk

Textbooks
Brammer J, Cox D, Fardon M and Penning A Active Accounting (Osborne Books, 2002) ISBN 1872962378
Cox D Business Accounts (Osborne Books, 2004) ISBN 1872962634
Cox and Fardon M Management of Finance (Osborne Books, 1997) ISBN 1872962238
Dyson J R Accounting for Non-Accounting Students (FT Prentice Hall, 2007) ISBN 0273709224
Journals
Accounting Technician (Centurion Publishing Group)

PQ Magazine (PQ Publishing)
Websites
www.accountingtechnician.co.uk
Association of Accounting Technicians Online
www.accountingweb.co.uk
Accounting Web for news and analysis
news.bbc.co.uk/1/hi/business
www.bized.co.uk
www.canterbury.gov.uk
An example of a specific local business support website
www.tutor2u.net/business/accounts
Support for teachers and learners
Broadcasts
The following programmes often feature business items:

The Money Programme, BBC2 (weekly)
Working Lunch, BBC2 (daily)


Skill
When learners are
investigating business finances
Creative thinkers
generating ideas about cash flow, accounts and ratios
Reflective learners
reflecting on situations which result in changes in finances
Team workers
working in a group to discuss ideas about finance

Self-managers

priorities change
responding positively to change, seeking advice and support when needed.
Skill
When learners are
planning and carrying out research into the different types of business finances
Creative thinkers
looking at how different business costs/expenses are classified

examining reasons/solutions to business change
Reflective learners
setting goals, with success criteria, for researching business finances

and criticism
Team workers
working in a group to discuss ideas about finance

Self-managers

priorities change
planning and carrying out research into accounts.


Skill
When learners are
ICT Use ICT systems

researching business organisations

tabulating information

preparing accounts

tabulations about business accounting
creating diagrams, presentations and tabulations


information from websites about business accounting

information
text and tables
images
numbers
records

through research
preparing information to present to others

and audience
10

Skill
When learners are
Mathematics
Understand routine and non-routine problems in
a wide range of familiar and unfamiliar contexts and
situations
using numerical data in relation to business finances

and situations
English

and opinions
reading about business change to obtain data to

compare businesses and to examine business trends

making presentations about business
Writing write documents, including extended writing writing materials to provide information about business
pieces, communicating information, ideas and opinions, change
effectively and persuasively.
producing accounts and diagrams showing business.

11
Unit 7:
Management Accounting
Unit code:
J/502/5419
QCF Level 3:
BTEC National
Credit value:
10

Aim and purpose
The aim of this unit is to enable learners to understand how important management accounting is to all
businesses. It looks at costing and budgeting, and how to use current or historical financial data to plan for
the effective finances and costs of the business for the future.
Unit introduction
Whether an organisation is successful and long established or a business start-up, one of the most important
aspects of its management is effective financial planning and control. This is known as management accounting
and it builds on historical accounting information provided by financial accounts. A sound understanding of
costs and cost accounting is an essential part of managing finances.
Learners need to understand the nature of costs and the impact on those costs of expanding the organisation
or increasing business activity. Appropriate pricing of an organisations products or services will play a large part
in its future profitability. This unit aims to help learners to understand how management accounting begins with
planning the activity levels and establishing the costs, incomes and profits for future periods. Break-even analysis
allows managers to assess optimum activity levels whilst historical data can be used to look for trends that can
forecast more accurately the figures that are used in budgets.
Simply preparing financial forecasts is not sufficient to keep control of a business organisation will then want to
compare actual activity levels, costs and incomes with those that were planned. The management accountant
will calculate and consider the differences between budgeted and actual figures. This will form the basis of
management decisions which are used to steer the business back towards its planned targets.
On completion of this unit, learners will have a good appreciation of the skills and understanding necessary
to manage the finances of an organisation. They will be able to assess the problems highlighted by variance
analysis and make realistic decisions on the likely courses of action.
Learning outcomes
Understand how production costs are determined and used to calculate prices
Be able to use break-even analysis
Be able to use appropriate statistical information to review and predict business performance
Be able to use budgetary techniques.

Unit content
1 Understand how production costs are determined and used to calculate prices
Costs: direct costs (raw materials, unfinished goods, direct labour costs, direct expenses); variable costs;
depreciation; semi-variable costs; stepped costs; indirect costs; fixed costs; cost centres; profit centres;
non-production (service) department overheads; overhead allocation; apportionment; overhead
absorption rate; absorption costing; activity-based costing; marginal costing; standard costing
Prices: cost plus; discounting; impact of pricing policies on production and costs; income
2 Be able to use break-even analysis

Break-even analysis: contribution; break-even formula; break-even graph; break-even point; area of profit;
area of loss; margin of safety; budgeted activity and sales levels; numerical calculation; changing overheads;
direct costs; selling prices and budgeted activity levels; target profit levels of activity; use of computerised
spreadsheet (tabulation, charts, goal-seeking); limitations and assumptions (sales levels being identical to
production levels, consistency of selling price, contribution and overhead behaviour); external factors
(inflation, interest rates)
3 Be able to use appropriate statistical information to review and predict business

performance
Accounting data: previous period (sales, production costs, profits); information from published financial reports
Statistical information: changes over time; moving averages; seasonal variations; price indices eg Retail
Price Index (RPI); trends to assess and predict business performance
Performance: ratio analysis; liquidity ratios (current ratio, liquid capital ratio); profitability ratios (gross profit
mark-up, gross profit margin, net profit margin, overheads to sales margin, return on capital employed);
efficiency (stock turnover days, debtors collection days, creditors payment days, fixed assets turnover
ratio, net current asset turnover ratio); capital gearing; previous periods
4 Be able to use budgetary techniques

Budgets: master; sales; production; purchases; debtors; creditors; cash; departmental (consolidation);
standard costing; analysis of variances eg change of activity levels, costs and prices; use of accounting and
statistical information
Budgetary techniques: preparing and revising budgets (changes to costs and selling prices); use of budgets
for short-term target setting; monitoring (comparison of standard or budgeted costs with actual costs,
calculation and explanation of variances); control measures (decision making, taking action); reliability
(importance of accuracy, results of error, inaccurate assumptions); relationship between costs and
incomes at different activity levels; strengths and weaknesses of budgetary techniques


learner is able to:


able to:
D1
evaluate the reliability

of break-even analysis
in estimating budgeted
activity levels for a selected
organisation
D2
evaluate the implications

of budget variances for a
P1
explain how an organisation

can cost a product and
determine its price at any
activity level
[IE]
P2
carry out a break-even

analysis for a selected
organisation
M1 assess the implications

of different activity levels
using the results of a breakeven analysis for a selected
organisation
P3
use accounting data and

statistical information
to measure business
performance
[CT]
M2 analyse the importance of

accounting data and statistical
information to assess and
predict business performance
P4
use budgetary techniques

to prepare budgets for
M3 analyse the impact on a

budget of changes in costs
and selling prices for a
[RL]
P5
describe how budgets can

be used to set targets, to
monitor and control an
organisation.
[RL]
Key
SM self-managers
TW team workers


Delivery
Management accounting builds on information gained from financial accounting and encompasses the skills
and techniques of costing and cost accounting. Successful organisations will build on the performance of
previous years by setting realistic and achievable targets for the following year. For new businesses without
historical data, the task is much more difficult. However, the same objectives and principles will be applied
to put together budgets that will be used to guide owners as they make both short-term and long-term
decisions. This unit is about short-term planning or target setting.
The unit is designed to include practical tasks involving the calculation of costs, prices, income, profits and
variances. Learners will be able to draw on their own knowledge of products and services they have bought
and many will have experience of employment and rates of pay. All learners will have experience of handling
money and many will have budgeted their own funds, either formally or informally.
Learning outcome 1 is about production costs and these include fixed and variable costs. Initially, learners will
learn how to recognise common costs and their nature. In costing a product, indirect costs of non-production
cost centres must be included and learners will learn how these overheads might be absorbed into unit
costs, using traditional and modern absorption costing techniques. Absorption costing techniques will be
compared with marginal costing. Standard costs are an important feature of budgeting and learners will work
in groups and carry out the necessary research to calculate the actual costs of materials for a product of their
own choice. This research will include use of the internet. Learners will also work in groups to establish a
reasonable price for the product based on direct costs, estimated overheads and current market prices.
Learners will need to understand how break-even analysis is used to find the activity level at which all
overhead costs are covered. Organisations will consider the margin of safety at budgeted activity levels as well
as calculating the activity level that will result in a given profit. These techniques are an essential part of the
budgeting process and allow organisations to predict activity levels that are achievable and sufficiently profitable.
For learning outcome 2, learners will carry out practical calculations based on case studies and simulations
and will produce break-even charts. Learners will use computerised spreadsheets to tabulate the data.
Simple goal seeking functions will enable learners to observe the changes in a variety of scenarios, such
as an increase in overheads, direct costs, selling prices, budgeted activity and sales levels. Break-even
analysis does have its limitations and assumes that all output is sold, selling prices remain constant, overheads
do not vary at any point and contribution per unit is the same for all units of output. These factors will limit
the value of this technique and learners will need to discuss the limitations and appreciate the dangers of
taking an over-simplistic view.
Forecasting sales and costs with accuracy can be remarkably difficult in practice, even with several years
historical data as a guide. Sales volume can be influenced by many factors, including price, quality, market
forces and interest rates. Since budgeted activity levels should be based on forecast sales, learners should
appreciate the importance of those forecasts being accurate. Overestimating sales may result in high levels
of unsold stock. Underestimating sales may result in the loss of customers. Organisations can turn to a range
of statistical information and historical accounting data that should enable them to produce forecasts that
reflect historical patterns and trends more closely.

More importantly, current business performance can be analysed and better understood by considering
historical accounting data and statistical data. Comparative results are always more meaningful, and this
is where ratio analysis is so important. Interpretation of the final accounts from previous years enables an
organisation to calculate liquidity, profitability, efficiency and gearing ratios. Compared over time, these ratios
give an accurate picture of past performance which can be compared with current performance. Eventually,
they will provide an accurate basis to predict future performance.
For learning outcome 3, learners will be presented with statistical information that allows them to calculate
relative changes over time. They will be able to observe trends and seasonal variations through calculating
moving averages. Price indices will be used to remove the effects of inflation from previous periods data,
giving a more accurate picture of actual current performance. Learners will learn how to calculate moving
averages and use past and current trends to predict future trends. The impact of these trends on future
sales and costs will be calculated to provide informed forecasts. Learners will work on case studies in small
groups and will use the internet to check on current relevant indices, while making budget adjustments.
Case studies from websites such as Bized will give learners more relevant accounting information about
individual companies. Learners will read, and combine, information about a company from two different
sources, including the internet and published financial reports. They will produce a report of the key
accounting information.
Learning outcome 4 covers the initial preparation of budgets and their subsequent comparison with actual
figures. Organisations begin with a sales budget and all other budgets will follow from this, including budgets
for production, purchases, debtors, creditors and cash. Departmental budgets may be consolidated to produce
one company budget. Ultimately, these budgets give the information needed for the master budget and it is vital
that learners understand how they are so closely linked. Budget preparation will be demonstrated and learners
will then continue the calculations using case studies and simulations. The use of computerised spreadsheets will
allow learners to link budgets directly and then observe the effects on the budgets of changes to sales volume,
prices or costs. Learners will discuss, in small groups, any assumptions made for each budget and consider any
strengths and weaknesses. Learners will also calculate and comment on variances between budgeted and actual
figures. Group discussion will enable learners to consider the implications of adverse and favourable variances
before suggesting decisions that might be made to address the differences. For an organisation, budgetary
control is a key factor in many financial decisions. Learners must be encouraged to examine budgets and
variances critically.


Induction and outline scheme of work/programme of assignments
Formal theory input on how production costs are determined and used to calculate prices
Practical class exercises for application of theory work on scenarios
Research and group work
Assignment 1: Production Costs
Formal theory input on how to use break-even analysis

Visits and speakers from business
Assignment 2: Breakeven
Formal theory input on using appropriate statistical information to review and predict business performance
Assignment 3: Measuring Business Performance
Formal theory input on being able to use budgetary techniques

Practical class exercises for application of theory/work on scenarios
Assignment 4: Budgets, Targets and Monitoring
Research
Assessment
The practical activities should generate assessment evidence. Carefully planned assignments will include a
number of calculations and some analytical or evaluative comments. Assessment of the learning outcomes
might involve three or four assignments, but could be combined into two assignments.
For P1, learners must explain clearly the main costs elements and the nature of those costs including variable,
fixed and semi-fixed (semi-variable). They should give examples of costs relevant to the product in question.
They should mention the absorption of overheads as well as marginal costs, although a distinction between
traditional and modern absorption costing methods (ABC) is not required. They should describe at least two
methods of setting the price, including cost.
For P2, learners should be given the relevant information in a case study and they will explain what is meant
by break-even analysis. They will carry out break-even analysis, calculating the accurate break-even point from
the information on direct costs, selling price and overheads, using the correct formula. They will also calculate
margin of safety and target profit levels of activity. They will prepare a break-even chart to show the same
results in diagrammatic form, labelling break-even point, budgeted activity level, margin of safety, area of profit
and area of loss. P2, M1 and D1 are linked. P1 could be linked with P2, M1 and D1 using a larger assignment.

For P3, learners will need to describe how an organisations previous years data on sales income and costs
can be used initially to monitor current business performance and assess its relative success based on current
data. They will also need to explain how historical data can be used to detect trends, through the use of
moving averages and appropriate indices. They should explain how this statistical information is used in
forecasting future trends and business performance. P3 links with P4 and M2.
For P4, learners will be given a case study with some historical accounting information as well as an appropriate
price index. Learners will calculate any relevant trend and then apply that trend when calculating the budgeted
figures for a future accounting period. The budget might be for sales, production or cash. Learners should
prepare a budget in an appropriate tabular format and show evidence of having calculated the moving average
accurately and applied a trend to the forecast figures. P4 links with criteria P3 and M2.
For P5, learners will describe clearly the target-setting nature of preparing budgets and the subsequent
monitoring process involving comparing budgeted figures with actual figures. Learners will emphasise the
importance of calculating and analysing the variances, by trying to understand their likely causes. They will
need to describe how management action or decision making will follow in order to ensure budgetary control.
P5 links with D2.
For M1, learners will work with the break-even figures calculated in the case study for P2 and will decide on
an appropriate selling price for a product and an activity (production) level. Learners will make their decisions
on the basis of appropriate cost mark-up, current market prices, break-even point and the required margin
of safety. Other factors might be included in the information, but learners are expected to identify the most
important ones when making their decisions.
For M2, learners will identify the different factors that can influence the figures used in a budget including
production, sales, costs and profits in previous accounting periods, changes over time, moving averages,
seasonal variations, price indices and performance and trends detected in previous accounting periods.
For M3, learners will identify the likely effects of changes that would occur in a budget if costs and selling
price increased or decreased. Learners would base this on the budget prepared for P4 and would be
expected to identify cost increases causing increases in overall costs and reductions in profits. They would
also be expected to identify that an increase in costs might require a change to the selling price, where that
price is based on cost plus. Learners might add that changes in costs would impact on the break-even point,
necessitating an increase in budgeted activity levels to maintain profits.
For D1, learners will review the information used in carrying out break-even analysis and they will explain the
limitations of these techniques. They should draw out any inaccurate assumptions the relationship between
costs and income remaining the same at all levels of activity. They should also identify other limitations, such as
assumptions that all units produced will be sold, that there is only one product and that all products make the
same contribution. External factors such as the effects of inflation and interest rates might also be pertinent.
For D2, learners are expected to suggest possible budget variances, such as an increase in direct materials
costs, and to consider likely causes such as the purchase of faulty materials causing wastage. Learners
should then go on to suggest, for each possible variance, suitable management decisions or actions such as
changing the supplier or buying better-quality materials. This criterion could be achieved through a case study
where budgeted and actual figures are already given so that the learner has to calculate variances and make
appropriate observations. Learners will be asked to work in groups and make a presentation. Learners must
demonstrate a good understanding of the issues and the fact that this is probably the most important aspect
of budgeting and budgetary control.


The following table shows a programme of suggested assignments that cover the pass, merit and distinction
criteria in the grading grid. This is for guidance and it is recommended that centres either write their own
assignments or adapt any Edexcel assignments to meet local needs and resources.
Scenario
Assessment method
P1
Production Costs.
Case study on costs and pricing.
Controlled class assessment.
P2, M1, D1
Breakeven.
Case study on break-even, including Controlled class assessment.

calculations.
P3, M2
Measuring Business
Performance.
Case study detecting trends from

information and predicting new ones..
P4, P5, M3, D2
Budgets, Targets and

Monitoring.
Case study on budgets, targeting

and monitoring.

Level 2
Level 3
Business Resources
Bookkeeping for Business
Business Accounting
Financial Accounting
Accounting Systems
Computer Applications for Financial Management
This unit should only be delivered after Business Accounting.

This unit also links to the following draft National Occupational Standards for Accounting, particularly MA1,
MA2, MA3, MA4.
Essential resources
Learners can find information using company annual reports and websites, journals, magazines and newspapers.
Access to a range of information resources to complete investigative assignments and case studies will be
essential, including relevant CD ROMs and the internet, as will be access to computers for research and
preparing cash flows (using a spreadsheet package) This will enhance delivery of this unit. Learners will also
need access to relevant paper-based research material including published financial reports and books.


Visits to companies and from employees are useful to delivery of this unit. The use of vocational contexts
is essential in the delivery and assessment of this unit. Sources of support to enable centres to initiate and
establish links with industry, and to networks arranging visits to industry are given below:
Work Experience/Workplace learning frameworks Centre for Education and Industry (University of
Warwick): www.warwick.ac.uk/wie/cei/
Learning and Skills Network: www.vocationallearning.org.uk

Textbooks
Brammer J, Cox D, Fardon M and Penning A Active Accounting (Osborne Books, 2002) ISBN 1872962378
Dyson J R Accounting for non-Accounting Students (Prentice Hall, 2007) ISBN 0273709224
Fardon M and Cox D Accounting (Osborne Books, 1998) ISBN 1872962289
Journals
Accountancy (CCH)
Accountancy Age (VNU Business Publications)
Accounting Technician (Centurion Publishing Group)
PQ Magazine (PQ Publishing)
Websites
www.accountancyage.com
Accountancy news and information
www.accountingtechnician.co.uk
Association of Accounting Technicians Online
www.accountingweb.co.uk
Accounting news, information and case studies
news.bbc.co.uk/1/hi/business/default.stm
www.bized.co.uk
www.bizhelp24.com
Help and support for businesses
www.businesslink.gov.uk
Business guidance for businesses, including accounting
www.canterbury.gov.uk
An example of a specific local business support website
UK Government statistics, including Retail Prices Index
www.thetimes100.co.uk/
www.tutor2u.net
Educational website for business and economics
Broadcasts
The following often feature business items are:

The Money Programme, BBC2 (weekly)
Working Lunch, BBC2 (daily)


Skill
When learners are
investigating business finances costs and pricing
Creative thinkers
generating ideas about data
Reflective learners
reflecting on situations which result in changes in finances.
Skill
When learners are
planning and carrying out research into the different types of businesses
Creative thinkers
looking at costs and pricing

examining reasons/solutions to business change
Reflective learners
setting goals, with success criteria, for researching business finances and frameworks
and criticism
Team workers
working in a group to discuss ideas and research

Self-managers

priorities change
10
planning and carrying out research into budgets and monitoring.


Skill
When learners are
ICT Use ICT systems

researching business organisations and finances

tabulating information

preparing/adjusting cash flow and breakeven

tabulations about business and management accounting
creating diagrams, presentations and tabulations

exploring, extracting and assessing the relevance

of information from websites about business and
management accounting

information
text and tables
images
numbers
records

through research
preparing information to present to others

and audience

11
Skill
When learners are
Mathematics
Understand routine and non-routine problems in
a wide range of familiar and unfamiliar contexts and
situations
using numerical data in relation to business finances

and situations
English

and opinions
reading about regulations and companies to obtain data

to compare businesses and to examine business trends

making presentations about business
Writing write documents, including extended writing writing materials to provide information about business
pieces, communicating information, ideas and opinions, change
effectively and persuasively.
producing accounts, graphs and tables, together with
reports.
12

Unit 16:
Human Resource
Management in Business
Unit code:
K/502/5445
QCF Level 3:
BTEC National
Credit value:
10

Aim and purpose
The aim of this unit is to introduce learners to methods of managing human resources in the workplace.
Learners will use their knowledge of relevant human resources management theory and link it with current
human resource management practices in organisations.
Unit introduction
Human resource management is a dynamic activity in any organisation as it takes place against a changing
economic, technical, legal and social background. It is important for learners to appreciate that effective human
resource management means getting the best out of the people who work for an organisation in order to
ensure the organisation fulfils its purposes, whether it is a football club winning the premiership, or a hospital
increasing the success rates for medical operations.
Many organisations say that their employees are their most valuable resource because of their skills, knowledge
and attitudes. As labour is both an expensive and valuable resource, it is important to ensure it is planned and
that the best value is obtained from employees contributions. Human resource managers have to plan their
human resource requirements against a background of internal and external factors which are dynamic and
constantly changing. The first part of this unit introduces learners to the factors that influence human resource
managers when they are planning current and future human resource requirements. It is important to ensure
that once staff have been recruited, their contribution to the organisation is maximised. Learners will develop
their understanding of the importance organisations place on gaining the cooperation and commitment of their
employees. Managers need to understand how to motivate employees and gain their commitment to the
organisation. The unit introduces learners to motivational theory, employee involvement techniques and the
role that reward systems can play in gaining commitment from employees. Learners will explore the methods
that managers use to measure and manage the performance of their employees.
Learning outcomes
Know the factors that are involved in human resource planning in organisations
Know how organisations motivate employees
Understand how to gain committed employee cooperation
Understand the importance of managing employee performance at work.

Unit content
1 Know the factors that are involved in human resource planning in organisations
Internal planning factors: organisational needs eg demand for products and services, new products and
services, new markets, technological change, location of production; skills requirements; workforce
profiles (age, gender, ethnicity, ability)
External planning factors: supply of labour (international, national, regional, local, long-term trends,
short-term trends); labour costs; workforce skills; government policy; labour market competition;
changing nature of work; employee expectations eg full-time, part-time, permanent, temporary, casual
work; impact of automation; demand for products and services
Employee skills: people as organisational resources; skill sets eg job specific, generic; skill acquisition; skills
audit, skill transferability; impact of technology
2 Know how organisations motivate employees

Motivation theory: theories of motivation eg Taylor, Mayo, Maslow, Herzberg, McGregor, McClelland, Vroom
Reward systems: pay; performance-related pay; pension schemes; profit sharing; employee share options;
mortgage subsidies; relocation fees; bonuses; company vehicles; loans/advances; childcare; school fees;
corporate clothes; staff discounts; flexible working; leave; health care; extended parental leave, career
breaks; cafeteria incentive schemes; salary sacrifice schemes
3 Understand how to gain committed employee cooperation

Contracts of employment: contractual entitlements (pay, hours of work, leave, notice period, pension
benefits); employee and employer rights; types of employment contract (full time, fractional, part time,
temporary, casual); disciplinary procedures; grievance procedures; union membership; codes of behaviour
Employee involvement techniques: membership of work groups eg board, works councils, quality circles,
intra-organisational groups (transnational, national, site specific); suggestions schemes; devolved authority
and responsibility; open communications (formal, informal, top-down, bottom-up, lateral); types of
communication (newsletters, company bulletins); organisational culture (ethos, values, mission); national
accreditation (Investors in People (IIP), Charter Mark, International Standards Organisation (ISO))
4 Understand the importance of managing employee performance at work

Measuring performance: performance indicators (achievement against targets); goal theory; SMART
(specific, measurable, achievable, realistic, time-bound) targets eg sales targets, growth targets, financial
targets, waiting times, pass rates, punctuality, attendance; benchmarking
Managing performance: probation; appraisal; supporting employees eg mentoring, monitoring, buddying;
occupational health; managing workloads; delegating authority; responsibility; capacity; competence;
autonomy; linking rewards to performance; discipline; employee development(training, learning, job
rotation, accelerated promotion, personal, professional)


learner is able to:

P1
describe the internal and

external factors to consider
when planning the human
resource requirements
of an organisation
[IE, CT]
M1 explain why human resource

planning is important to an
organisation
P2
describe how the skills that

employees require to carry
out jobs in an organisation
are identified
P3
outline how an organisation

motivate its employees
[IE]
P4
explain how organisations

obtain the cooperation
of their employees
P5
explain how employee

performance is measured
and managed.
[SM]

able to:
M2 compare the use

of motivation theories
in an organisation
D1
suggest, with justification,

ways of improving motivation
in an organisational setting
[IE]
M3 explain how the results from

measuring and managing
performance inform
employee development.
D2
assess the importance of

measuring and managing
employee performance at
work.
[IE, SM]
Key
SM self-managers
TW team workers


Delivery
For this unit, learners will need to establish links with staff in the human resources department of an
organisation. It is recommended that this link is established at the beginning of the teaching programme
for this unit. Links with human resources staff will ensure that theory and practice can be integrated in
a meaningful way.
The unit is designed to be taught using practical examples that may draw on learners own experiences of
employment from their work placement or part-time jobs. Current examples of human resources practice
can be found in newspapers and journals which are a good source of topical examples.
After an introduction to human resource planning, and as an introduction to the first assignment, learners
could research newspapers and journals in pairs and discuss and analyse current examples of internal and
external factors that impact on human resource planning in organisations. One way of putting this into
perspective is to invite a visiting speaker from a local organisation to talk about the current issues they face
in planning their human resources requirements.
Learners will need to be familiar with current theories of motivation and the range of reward systems used by
organisations. However, it is important that they understand the role that motivation theories play in helping
to inform motivational practice. Group discussions using topical examples of current practice from newspapers
and journals or case studies will help to contextualise this area of understanding. Once again, a visiting speaker
would be an ideal way to bring this area of learning together. The speaker could discuss current examples
of gaining employee involvement, using motivation techniques and the effectiveness of the reward systems
currently used in the organisation.
For the second assignment, learners will need time to research human resource management practice in
the organisation of their choice. As an introduction to the second part of the unit learners could discuss their
own experiences of contracts of employment and employee involvement from their part-time jobs or work
placement. Learners should be aware of the range of methods available to measure and manage employee
performance. Group discussions using learners own work experience and topical articles from newspapers
are effective ways of introducing human resource management. A visiting speaker from a human resources
department, ideally with management responsibility, will give learners an insight into the practicalities of
managing employee performance.


Overview of the unit and structure of the programme. Whole class
Introduction to human resources planning. Whole class
Internal factors
External factors
Employee skills
Pair work researching newspapers for examples of internal and external factors and skills gaps
Visiting speaker from a local organisation Human Resource Planning
Assignment 1: Human Resource Planning
Assignment launch. Whole class
Individual research on the organisation
Interviews with organisation HR staff
Writing up the article
Introduction to motivation and reward systems. Whole class
Theories of motivation. Whole class
Reward systems. Whole class
Pair work on motivation theory and practice
Pair work researching examples of reward systems
Visiting speaker from local organisation on motivational practice and reward systems
Introduction to employee involvement and cooperation
Contracts of employment. Whole class
Pair work researching and comparing examples of contracts of employment
Employee involvement techniques. Whole class
Pair work researching and comparing examples of employee involvement techniques
Introduction to measuring and managing employee performance. Whole class
Measuring employee performance at work. Whole class
Managing employee performance at work. Whole class
Pair work comparing examples
Visiting speaker from HR department on managing employee performance
Assignment 2: Human Resource Management
Assignment launch
Individual research on the organisation
Interviews with HR staff
Writing up report


Assessment
For P1, learners should examine how an organisation is developing and how changes which may arise from
internal decisions and external events can affect the direction the organisation is moving in. This means human
resourcing needs to be planned accordingly. There may be a gap between the demand for and supply of
particular skills. Skills of existing staff can be audited and measures can be taken to bridge the perceived skills
gap. As supermarkets move into selling financial services or pharmaceutical dispensing, different employee
skills are needed.
Competition might lead to leaner, fitter organisations with flatter hierarchies where employees have more
autonomy and a wider range of skills. Regulatory pressures (such as in the caring professions) mean that only
employees with specific certificated skills can be employed to do certain jobs. Nurses are now trained to
take over more work from doctors and can write prescriptions. The consequences of slimming down the
civil service and merging Customs and Excise and the Inland Revenue require human resources to plan 10
years ahead, as significant expertise at a senior level is being lost. There will be examples of national and local
organisations that are planning to use human resources in a way that takes account of the internal and external
changes that impact on them. Evidence is likely to be in the form of a report or an article resulting from an
investigation into an organisation. (P1, P2 and M1are linked.)
For P2, learners will need to look at an organisation and consider the skill sets required of the employees.
Employees begin work with a set of skills that will need to be adapted and modified as their skill requirements
develop as organisations develop. Technological change, for example, has required many people to retrain
or acquire new capabilities. Airline pilots learn to use fly-by-wire technologies and shelf stackers use hand-held
data terminals to count and re-order stock. These are techniques that were not used a decade ago. Evidence
is likely to be in the form of a report or an article resulting from an investigation into an organisation. (P1, P2
and M1 are linked.)
For P3, learners will show how the ideas of writers on motivation have shaped the way organisations motivate
their employees. Some reward systems emphasise payment by results and are influenced more by ideas
of scientific management and Taylorism. Other reward systems emphasise the personal and social nature
of motivation and draw on ideas from Maslow and Herzberg. Organisations use reward systems because
they believe they work in motivating employees, so a case study is likely to illustrate why an organisation
chooses a particular approach to motivation. Learners can use their employer, the centre where they study
or another suitable organisation as a case study. (P3, M2 and D1 are linked. It would also be possible to
use a larger case study covering P3, P4, P5, M2, M3, D1 and D2).
For P4, learners need to understand what contracts of employment stipulate and how adherence to
a contract can be managed. Most employees commit to an organisation by meeting their contractual
obligations. At times it may be necessary to enforce the contract through disciplinary measures. A wide
variety of schemes exist to tie employees to an organisation and learners should consider how employers
involve their employees. Many people identify themselves strongly with their work and often define themselves
in terms of the work they do and the company they work for. When asked what do you do? most people
are more likely to reply with their job title then say Im a music lover. The culture of an organisation makes
its own demands on employees. Consideration should be given to how organisations create and maintain
their culture. They may, for example, have strong community links (sponsoring sporting activities and clubs)
or there may be an open management style with few signs of hierarchy (personal offices, reserved parking).
A case study on a specific organisation, or different organisations, about how employee cooperation is
obtained would be acceptable. For P5, learners will need to appreciate that the maximum contribution is
required from each employee at work. Jobs often have specific performance criteria associated with them,
so sales staff may have to generate 50,000 of sales per month. This may be because there is a business
objective showing a sales target of 6 million for a sales team of 10 people. Individuals need to be monitored
to ensure they are working effectively and meeting targets and standards set for them. Both above par and
below par performance must be managed. A case study for a specific organisation, or different organisations,
would be acceptable. (P5, M3 and D2 are linked.)

For M1, learners must explain why human resource planning is needed to ensure an organisation has employees
with the necessary skills, knowledge and abilities to fulfil its purposes. The failure of Golden Wonder Crisps
shows how a lack of marketing skills saw the market leader first lose its pre-eminent position and then fail
over a period of 20 years.
For M2, learners must compare how different theories of motivation contribute to the techniques
used for employee motivation in an organisation. The wage earned by a crew member at McDonalds is
motivating in itself because it offers a reasonably well-paid hourly rate for a 16 year old. Being part of a crew
recognises a persons social need to belong to a group. Managing a branch is not particularly well paid but
has associated status.
For M3, learners must be able to identify suitable performance indicators to use with individual employees
and show how the individuals performance can be improved through the use of performance management.
Experienced teachers are not judged in the same ways as chefs, so different performance indicators are used
to manage them. Examination pass rates might be used for the former and passing through a pay threshold
may be the reward. The latter may be judged on good reviews, gaining Michelin stars or the gross profit
margin of dishes. Attending a course on portion control may be needed to remedy poor profit performance.
However, they might both have their punctuality and attendance monitored as these are basic requisites for
working satisfactorily in both occupations.
For D1, learners must reach justified conclusions about how an organisation might modify and develop the
motivational techniques and associated reward systems it uses.
For D2, learners must make judgements about the value of monitoring and managing employees. The benefits
of performance management should be contrasted with the consequences of failing to manage performance.
Criteria covered
Assignment title Scenario
Assessment method
P1, P2, M1
Human Resource
Planning.
Produce an article for the

Human Resource Manager to
be included in the organisations
annual report.
Select an organisation and

investigate the following aspects
of their HR planning.
How they identify their skills
needs.
How internal and external factors
impact on their H/R planning.
Why H/R planning is important
to the organisation.
P3, 4, 5
M2, 3
D1, 2
Human Resource
Management.
Use the organisation from

Assignment 1 to explore the
ways in which the organisation
seeks to gain commitment from
its employees. Using relevant
theories and current practice,
analyse the effectiveness of the
HR management processes
involved.

Produce a report for the human

resources manager on your
findings.

Level 2
Level 3
Business Purposes
Business Resources
People in Organisations
Recruitment and Selection in Business
Aspects of Employment Law
Development Planning for a career in Business
Training in the Business Workplace
Developing Teams in Business
This unit links to the Level 3 National Occupational Standards for Management and Leadership, particularly
Units D1 and D2.
Essential resources
Learners will need access to organisations in order to research human resource management policies and
practices. They will need access to computers to conduct web-based research.

Centres should develop links with organisations that can provide visiting speakers on topics related to human
resources planning and management. The centre, as an organisation, is a valuable resource for visiting speakers
and as a vehicle for learners to research into human resource planning and management. Learners can draw
on their own experience through their part time jobs and work placements.

Textbooks
Cole G A Personnel Management: Theory and Practice (Thomson Learning, 2003) ISBN 1844800881
Graham H T and Bennett R Human Resources Management (FT Prentice Hall, 1998) ISBN 0273634011
Hall L, Torrington D and Taylor S Human Resource Management (FT Prentice Hall, 2004) ISBN 0273687131
Journal
Personnel Today
Website
www.Personneltoday.com
A website which often has useful updates on legislation and HR practice


Skill
When learners are
researching into areas of human resource planning in organisations

using the results of their research to analyse and assess the impact and
effectiveness of human resource policies and practices in organisations
Creative thinkers
asking questions about human resource planning in different organisations
Self-managers
organising time and resources and prioritising actions when researching an

organisation.
Skill
When learners are
Creative thinkers
generating ideas and exploring possibilities on HR issues when working in groups

questioning their own and others assumptions when working in groups on HR issues
Reflective learners
inviting feedback and dealing positively with praise, setbacks and criticism when
working in groups
Team workers
showing fairness and consideration to others in group discussions on HR issues
Self-managers
managing their emotions and building and maintaining relationships in group

discussion on HR issues
act as an advocate for views and beliefs that may differ from their own in group
discussions.


Skill
When learners are
ICT Use ICT systems

Manage information storage to enable efficient retrieval word processing and saving assignment work
English
and opinions
participating in pair work or small groups to discuss

human resource policies and practices in different
organisations
reading textbooks, journals, newspapers and web
pages related to human resource policies and practices
Writing write documents, including extended writing writing reports and assignments on human resource
pieces, communicating information, ideas and opinions, management in organisations.
10

Unit 36:
Starting a Small Business
Unit code:
Y/502/5487
QCF Level 3:
BTEC National
Credit value:
10

Aim and purpose
The aim of this unit is to enable learners to understand the skills needed to set up and run a business, and the
regulations that need to be complied with, and to have the opportunity to prepare a detailed business plan.
Unit introduction
Starting a small business is an ambition for many people. The business idea could be almost anything such as
a coffee shop, a courier service, a hairdresser, a motor vehicle repair workshop, a DJ service, a painting and
decorating business, an equipment hire operation, or an organic smallholding producing fruit and vegetables.
However, starting a small business can be fraught with difficulties and the idea may not always be successfully
realised. Those setting out on this venture need to consider the business idea, where funding will come from,
the potential market, the competition and a host of other issues that must be addressed if the business startup is to be successful.
This unit gives learners the opportunity to consider their business idea within structured business parameters,
such as the type of business, the attractiveness of the business idea, the target market and the need to balance
personal and business needs. Learners will also consider their ability to run the business, including the skills
they already have to support the business idea and what personal development they may have to undertake
in order for the venture to be successful.
Learners will also develop their knowledge and understanding of the legal status and trading terms and
conditions of their proposed business, legal aspects such as fire regulations, taxation, VAT and HM Revenue
and Customs, and financial aspects such as start-up and operational costs, as well as personal needs.
Learners will have the opportunity to devise an outline proposal for a business start up. This will cover the
reasons for preparing a business proposal and will include the components expected by financial advisers,
including the type of business, its target market, available resources, financial information and forward
planning.
Learning outcomes
Be able to present the initial business idea using relevant criteria
Understand the skills and personal development needed to run the business successfully
Know the legal and financial aspects that will affect the start up of the business
Be able to produce an outline business start-up proposal.

Unit content
1 Be able to present the initial business idea using relevant criteria
Criteria: type eg new, purchase an existing business, franchise; aims; business planning; attractiveness of
idea eg unique selling point, demand for new business, competitive edge; balancing personal/business
needs; checking profitability; business trends; external influences eg commercial, political, local, national,
international; self-esteem eg work for self, independence, power, achievement
Identifying target market: eg market research, published research, sales forecasts, customers actions and
choices, effect on business, competition, strengths and weaknesses, market trends; environmental issues
2 Understand the skills and personal development needed to run the business
successfully
Skills: own contribution; technical/operational relating to products/services, management, recording and
checking performance of business, personal selling, administration, previous experience, strengths and
weaknesses
Development: identify skills gap/shortages; professional help; training; planning; cost implications;
accessibility; timescales
3 Know the legal and financial aspects that will affect the start up of the business
Legal aspects: legal status eg sole trader, partnership, limited company, co-operative; legal liabilities; trading
terms and conditions; trading standards; licences; record keeping; resolving problems; national/local
laws; regulations and bylaws; health and safety; fire regulations; licensing; liabilities; planning permission,
contracts, duties and responsibilities; regulatory bodies; sources of advice
Financial aspects: personal survival budget; cost of premises, equipment and supplies; running costs;
employing staff; pricing policy; break even; cash flow forecasting; profit and loss budgets/accounts; sources
of finance eg grants, loans, borrowing, sponsorship; record keeping
4 Be able to produce an outline business start-up proposal

Business proposal: models; reviewing information and ideas; setting targets and goals; purpose of plan;
components (type of business, market, human/physical/financial resources, financial and profit forecasts,
growth and development, contingencies)


learner is able to:


able to:
P1
present the initial business

idea using relevant criteria
M1 explain methods used to

identify the target market for
the proposed business
D1
P2
explain how to identify the

target market
P3
describe the skills needed to M2 analyse the personal

run the business successfully
development needed to run
and what areas require
the business successfully
further personal development
[TW, EP]
P4
describe the legal and

financial aspects that will affect
the start-up of the business
P5
produce a proposal
M3 assess the implications of the
containing the essential
legal and financial aspects that
information for the start up of
will affect the start up of the
a business.
business.
[TW, EP]
present a comprehensive
business proposal that
addresses all relevant aspects
of business start up.
learning and thinking skills which are embedded in the assessment of this unit. By achieving the criteria,
learners will have demonstrated effective application of the referenced elements of the skills.
Key
SM self-managers
TW team workers


Delivery
This unit enables learners to investigate and identify the skills needed to run a successful small business.
The term small business is related to people operating on their own as sole traders or partnerships and
limited companies employing 10 or fewer staff. To begin developing thoughts and ideas, a discussion group
could brainstorm a wide range of small business opportunities, such as a coffee shop, a courier service, a
hairdressing business, a motor vehicle repair workshop, a DJ service, a painting and decorating business,
an equipment hire operation, or an organic smallholding producing fruit and vegetables. Learners should
be encouraged at this early stage to begin to focus on a possible small business idea. They should not be
deterred if their ideas change during this unit. They need to concentrate on the processes involved rather that
the specific outcomes.
Learners will need some theoretical input to develop their understanding of the criteria for developing a
business idea. Tutors should use case study materials to illustrate a range of examples and help learners to
focus their thoughts during the formulation of their ideas, including how the business idea will relate to its
target market.
Learners need to carry out a skills audit to examine the skills they currently have to support the new business
operation. They also need to consider what personal development they might need. This could usefully
be supported by investigating similar businesses and talking to their owners/managers to see what skills are
needed and how these match the learners current and proposed development. These investigations could
also inform learner knowledge of market research, although small businesses should be properly advised
about learner activities and be briefed about how their contribution will support the unit.
Learners should consider exploring a number of legal aspects:
national/local laws
regulations and bylaws
health and safety
fire regulations
licensing
liabilities eg tax and VAT, insurances
planning permission, contracts, duties and responsibilities
regulatory bodies for example Environmental Health Office, HM Revenue and Customs
sources of advice for example Business Link centres, solicitors and the Small Business Service.
When considering legal and financial aspects of small business start-ups, learners would benefit from guest
speakers such as those operating a small business, business start-up advisors, accountants, and representatives
from banks, the HM Revenue and Customs, training and advice services and local enterprise agencies.
Visits to local small businesses or presentations by representatives from local trade associations, such as the
Chamber of Commerce, would help learners to develop an awareness of what is needed to run a small
business.
Delivery of the unit must ensure that learners understand the full implications of setting up a small business.
It will be important for learners to know what skills they have and would need, their survival needs and how
much money, and other resources, will be required to start up the business. Learners should develop a clear
outline for a business start-up proposal as a result of completing the unit. Learners can select from a wide
range of supporting materials available in a variety of formats, for example the internet or small business

start-up packs available from banks and building societies. However, it is important they understand that this is
only an outline and not a fully-fledged business plan.

Induction and outline scheme of work/programme of assignments
Formal theory input on initial business ideas
Assignment 1: Business Idea and Target Market
Input on skills and development

Input on legal and financial aspects for start up
Assignment 2: Required Skills
Input on business plans

Assignment 3: Business Plan
Supervised assignment time

Assessment
Learners will be expected to produce evidence that shows their knowledge and understanding of how small
businesses are started. It may include:
an explanation of the initial idea for developing a small business
findings from their analysis of the skills and personal development needed to run the business
an explanation of the legal and financial aspects that will affect the start up of their business
an outline proposal for starting up a new small business.
Evidence for this unit should primarily be formal due to the nature of the unit. Initial ideas can be evidenced
either through an oral or written presentation, or through a short report. Other evidence such as records of
discussions and notes of meetings would provide useful support.
To meet P1, learners must present the initial business idea using relevant criteria. These criteria should be
clear from the business idea, for example the type of business, what its unique selling points may be, any
external influences (eg location) and so on. Learners should discuss the development of their evidence with
their tutor and, where possible, a business mentor. This presentation can be in the form of a formal report or
a presentation to a group. Where this is the case, tutors should ensure that any business mentors used are
present. For P2, the presentation should include an explanation of how to identify the target market, which
will be informed by the business idea and the criteria used to define it.

For P3, learners must be realistic about their skills and personal development analysis. Although the small
business idea may not come to fruition, intentions should be realistic and evidence should highlight learners
awareness of their skills and development opportunities. Learners are not expected to undertake additional
development work but need to be aware of what the requirements would be.
For P4, learners must produce a proposal which describes the legal and financial aspects that will affect the
start up of the business. They may need to consult with specialists (this should be guided by the delivery of the
unit) and should address aspects such as the legal status of the business, the form of trading it will undertake,
together with specific relevant legal and financial issues. Learners should presume that their ideas can become
reality and should consider these areas accordingly.
For P5, the outline business plan should follow a formal report format and can be developed into a
comprehensive document. This should reflect legal aspects relating to the start up of a new business,
but monetary aspects will need to involve some simulation. The report should be supported by an oral
discussion, which may be undertaken with a specialist such as a bank manager.
For M1, learners need to demonstrate their understanding of the methods used to identify the target market
for the proposed business. This will require them to consider a range of methods that could actually be used
and to provide reasons for their choice. Market research will almost certainly be included but learners need to
explain why. Other methods may prove more challenging but the selection and justification should contribute
to a possible business launch, rather than just being a descriptive account of how they could be applied.
For M2, if learners were to launch a business, they would certainly need to undertake further personal
development. P3 has already addressed what areas require further development. At merit level, learners
need to analyse these areas of development and explain how they would pursue each in order to strengthen
their ability to start a business. Examples could include sources of training with appropriate timelines that fit
with the business launch dates.
For M3, learners also need to consider the impact of legal and financial aspects. This may require them to
describe systems they will have in place for addressing such issues, such as recording systems for tax and VAT
liabilities. Learners may wish to include a summary of how these will be embedded within the overall business
plan.
To meet D1, learners need to draw all their evidence together into a comprehensive business proposal that
addresses all relevant aspects of business start up. Other pass and merit criteria will already have covered
much of the evidence they will need. For distinction level, they need to present all the evidence in a fluent
proposal. Learners should be encouraged to seek guidance on the preparation of their proposal, much as
they would do in the real world. They should discuss a draft with their tutor and/or business mentor, making
improvements and revisions, before presenting the final version.
assignments or adapt Edexcel assignments to meet local needs and resources.
Criteria covered
Assignment title
Scenario
Assessment method
P1, P2, M1
Business Idea and Target

Market
Setting up a Business.
Group Practical Work.
P3, P4, M2
Required Skills
P5, M3, D1
Business Plan


This unit forms part of the BTEC Business suite. This unit has particular links with the following unit titles in the
Business suite:
Level 2
Level 3
Business Purposes
Financial Forecasting
Business Online
Essential resources
Many of the learning outcomes for this unit require learners to undertake research. To enable research skills
to be developed effectively, they should be introduced to as many different forms of information as possible,
eg libraries and other research facilities including the internet, national newspapers, local banks, start-up
business training agencies.
Learners will also benefit from case study materials, which may focus on specific aspects of developing small
business ideas.
Most clearing banks offer small business packs which could be useful teaching and learning resources.
Additionally, Business Links and Chambers of Commerce can provide additional information to complement
learning activities.
Learners can find information using company annual reports, journals, magazines, company websites and
newspapers.
Learners will need access to a range of information resources to complete investigative assignments and case
studies will be essential, including relevant CD ROMs and the internet.

Visits to companies and from employees are useful to the delivery of this unit. The use of vocational contexts
is essential in the delivery and assessment of this unit.
Work Experience/Workplace learning frameworks Centre for Education and Industry (CEI, University of
Warwick) www.warwick.ac.uk/wie/cei/
Learning and Skills Network www.vocationallearning.org.uk
National Education and Business Partnership Network www.nebpn.org


Textbooks
Materials that illustrate the level of learning required and that are particularly relevant.
Barrow C and Barrow P The Business Plan Workbook, 3rd Edition (Kogan Page, 1998) ISBN 0749426969
Barrow C Financial Management for the Small Business (Kogan Page, 1998) ISBN 0749426454
Deakins D Entrepreneurship and Small Firms (McGraw-Hill Publishing Company, 1999) ISBN 0077094522
Wisdom J Checklists and Operating Forms for Small Businesses (John Wiley and Sons, 1997)
ISBN 0471138401
Wolinski J AQA AS Business Studies: Unit 1: Planning and Financing a Business (Student Unit Guides)
(Paperback)


Skill
When learners are
Team workers
working together in teams
planning, negotiating and communicating with integrity.
Skill
When learners are
planning and carrying out research into businesses
Reflective learners
reviewing and reflecting on their coursework and acting on the outcomes to

modify and improve their work
and criticism
Team workers
collaborating with others to research information about business organisations

managing discussions to reach agreements and achieve results
Self-managers
organising time and resources and prioritising actions when producing coursework,
whether on their own or in a group
deal with competing pressures, including personal and work-related demands
planning, negotiating and communicating with integrity.


Skill
When learners are

Select and use a variety of sources of
selecting and using information
information independently for a complex task
Access, search for, select and use ICTbased information and evaluate its fitness for
purpose
ICT Develop, present and

communicate information
Enter, develop and format information
independently to suit its meaning and
purpose including:
text and tables
images
numbers
records
researching and selecting information to make comparisons
producing tables, graphs

and purpose
bringing the information together
Present information in ways that are fit for

purpose and audience
producing reports
Evaluate the selection and use of ICT tools

and facilities used to present information
exchanging information with tutors and using reflective practice
English
Reading compare, select, read and
understand texts and use them to gather
information, ideas, arguments and opinions
research into businesses

and persuasively
writing reports.
10

Unit 39:
International Business
Unit code:
F/502/5502
QCF Level 3:
BTEC National
Credit value:
10

Aim and purpose
The aim of this unit is to introduce learners to the role played by international business. The importing and
exporting of goods and services are important economic activities to any economy. Learners will study
national and international businesses and the framework in which they operate.
Unit introduction
Apples iPods and insurance from Aviva are products that have a global identity. Brand names are often
recognised across the world as organisations seek to increase demand for their products, by expanding
from a national to an international market. Initially, the nature of the international business environment will
be considered by looking at the size and importance of international markets. Governments encourage
businesses to trade internationally but protectionism is also common. International business is regulated by
national governments and also by transnational trading arrangements promoted by trading blocs such as the
European Union and global agencies such as the World Trade Organization (WTO).
Both large and small businesses trade internationally but this is often more complex than doing business in
the home market. Consideration will be given to the issues facing a business when it expands its operations
internationally. However, additional insight is provided by considering issues faced by overseas businesses as
they have expanded their operations by moving into the UK market. Tesco has had very limited success in
extending operations into France but has had more success in Malaysia and China. The business environment
needs to be considered with its mix of political, economic and legal issues. Cultural questions about how
best to operate in international settings, as individual markets have unique characteristics that need to be
understood before they can be exploited, need to be explored.
Support is available to businesses that want to work internationally. It includes trade delegations, voluntary
industry-specific groups, government assistance and help from commercial businesses for example how
to finance international business activities. Working internationally requires businesses to look at strategies
and techniques that promote international working. Should factories be built or should local partnerships
be developed using local businesses in joint ventures or licensing deals? Activities such as production, sales,
marketing, human resource management and purchasing will need to be adapted. Each venture needs to be
considered on its own merit. The next time you have a drink on holiday, read the label on the bottle it comes
in and think about the significance of the production information.

Learning outcomes
Understand the international business environment
Know how cultural differences affect international business
Know how international business is financially supported
Understand the strategies used by international businesses.

Unit content
1 Understand the international business environment
International business: economic value of international trade (to individual businesses, to the economy);
imports; exports; balance of trade; balance of payments; value of world trade; trends; globalisation;
multinational corporations; competition; economies of scale; labour movement; foreign investment;
developing countries
Economic activities that encourage/restrict international trade: free trade; barriers to trade; embargoes;
quotas; tariffs; economic blocs, eg European Union; World Trade Organization (WTO)
2 Know how cultural differences affect international business

Environment: ideology; political; economic; technology; social; legal; ethics, environmental issues
Culture: language; religion; values; attitudes; customs; manners; education; material culture; institutions;
infrastructure; work attitudes
3 Know how international business is financially supported

International monetary environment: foreign exchange system; the European Monetary System (EMS);
balance of payments; international money markets; international banking; trade credit; letters of credit;
Export Credit Guarantees; forfeiting; factoring; bills of lading; international debt; methods of protection
against exchange rate fluctuations
Trade support: government agencies; trade associations; insurance; legal issues
4 Understand the strategies used by international businesses

Reasons: growth (value, volume, market coverage); diversification; emerging markets; economies of scale;
cost reduction; taxation regime; legal and regulatory regime
Marketing: identifying markets; data analysis; marketing information systems; promotion; advertising;
adaptation/standardisation of product and promotion, licensing, co-production, joint ventures
Production and distribution: standardisation of products; product differentiation; product pricing; distribution
channels; transportation; supply chain; logistics
Human resources management: staff; foreign personnel; expatriate personnel; labour expertise; labour
mobility; recruitment; induction and training; cross-cultural training
Technology: internet; industrial development; transfer of technology; adapting technology to conditions


learner is able to:


able to:
P1
explain the international

business environment in
which a selected organisation
operates
[IE]
M1 assess the methods to

increase trade between
countries and the methods
to restrict trade between
countries
D1
evaluate the potential

problems faced by businesses
that trade internationally
when entering new markets
P2
describe the mechanisms that

regulate international trade
[IE]
P3
describe how the

environment and culture
of another country affects
a business operating
internationally
[IE, CT, RL]
M2 compare how cultural

differences and foreign
business environments affect
multi-national corporations.
D2
evaluate the impact of cultural

differences on international
business performance in the
international market.
P4
describe how the monetary

environment affects
businesses that operate
internationally
[RL, IE]
P5
identify why businesses

operate internationally
[CT, IE]
P6
explain the business strategies

used by a business operating
internationally.
[IE, CT]
learning and thinking skills which are embedded in the assessment of this unit. By achieving the criteria,
learners will have demonstrated effective application of the referenced elements of the skills.
Key
SM self-managers
TW team workers


Delivery
Learners will develop an understanding of the importance of international business by considering current
data on trade which will establish the level of current activity and will introduce some of the important terms
used in international business. Up to date information is available in the financial press and from government
departments.
To understand the context of international business, learners should consider why international business
activities are important. Many businesses see overseas markets as an opportunity for growth and they adopt a
range of strategies to enable this. Some manufacturers may just sell their products in new markets but others
may move some of their manufacturing overseas to take advantage of lower operating costs. In some cases,
all manufacturing may be moved abroad so goods are then imported back to the UK. A lot of the tableware
that was once made in the Potteries in the Midlands of the UK is now manufactured in the far East. Other
business with no manufacturing activity in the UK will seek to import goods from those countries where costs
are lowest. Textiles come from Bangladesh, India and Vietnam. Electrical goods come from China and Eastern
Europe. Services can similarly be imported. International business involves both buying and selling overseas.
Additional insight is provided by looking at foreign businesses that choose to set up in the UK because of
the advantages of operating here. They use the UK as a base for some of their international activity. Honda,
Nissan and Toyota all manufacture cars in the UK and are significant exporters. Overseas businesses are set up
in the UK because English is the global language of business, the transport system is extensive and the labour
force is skilled. UK businesses sell, manufacture and import from countries where the local environment is
understood. India provides an educated, English speaking population which accounts for the popularity of
the country in which to do business. There are country and business case studies that consider how specific
organisations approach working internationally. Newspapers, TV and radio cover specific businesses from
time to time. Local expertise also exists and Chambers of Commerce and staff in local businesses may be able
to provide material on international working.
The practicalities of international business activities need to be covered. Support mechanisms exist, provided
by government, both local and national, to promote international business. Government departments,
Chambers of Commerce and specialist consultancies provide advice and expertise and banks provide finance.
Once a business has opted to operate internationally then it has to decide what it wants to do and how it
wants to do it. Production, marketing, distribution, human resources, technical factors and legal issues all need
to be considered. A company such as Cadbury provides interesting material. It builds plants overseas but
also acquired existing businesses as this might offer easier access to an established market as well as providing
new brands. Promoting a bubblegum, Bubbaloo, in India offers better returns than promoting luxury brands
such as Green and Blacks organic chocolate. Bubbaloo, however, is manufactured in South America.
When exploring international business strategies, learners need to be aware of the practical issues that need
to be considered. This can be done through the use of case studies and examples that consider how an
international presence can be established. Much pertinent current material is readily accessible, as a result of
companies like Cadbury plc.


Introduction to unit and structure of the programme
Introduction to international business and its economic importance to organisations
Pair work on the international business environment. This will be supported by tutor input on technical topics.
Learners:
investigate the significance of imports and exports to the economy and trends in imports and exports.
identify the factors that influence international business
gather information on the factors that promote and/or restrict international business.
There will be formal input during group work.

Assignment 1 The International Environment Investigations, presentations, and discussions
Pair work on the environmental and cultural issues that affect international business. This will be supported by
tutor input on technical topics. Learners:
investigate different countries as places to do business
investigate the UK as a place for overseas businesses to operate
undertake PESTLE analyses of new countries in which a business might choose to operate in
analyse the cultural factors in different countries that might affect businesses choosing to operate in those
countries.

Assignment 2 Cultural Differences Research, presentations, discussions and displays
Pair work (group work) on the how international business is supported. This will be supported by tutor input on
technical topics. Learners:
identify the characteristics of the monetary environment.
investigate the services offered by banks in support of international business
investigate the range of services offered by government agencies in support of international business.

Assignment 3a: The Monetary Environment and Business Strategies how international business
activities are supported Investigation, discussion and presentations
Pair work on the strategies and techniques used by businesses that operate internationally. This will be supported
by tutor input on technical topics. Learners:
identify the range of factors that an organisation needs to consider when operating internationally
examine how selected organisations respond to the demands of establishing international business activities.
Assignment 3b: The Monetary Environment and Business Strategies strategies and techniques used by
organisations when working internationally Research and presentations
Supervised assignment time


Assessment
For P1, learners will need to consider the importance of international business to a selected organisation
and to the economy. They will need to look at data on the value and volume of activity together with
recent trends in activity. National data needs to be considered together with evidence of the significance of
international activity for specific organisations. Both import and export information needs to be explored as
different international business are involved with both of these activities.
For P2, the factors that encourage and/or restrict international trade need to be reviewed. A variety of
mechanisms exist. For example membership of the EU alongside non-membership of European Monetary
Union, could be considered in relation to the international business environment.
For P3, learners should look at the significance of the international business environment and international
cultures for businesses that operate internationally. Familiar environments allow businesses to operate
internationally but within their comfort zone. Large and emerging markets offer more of a challenge. Legal
and regulatory contexts are likely to be codified but cultural issues are less formally defined. So, selling a TV
format such as Who wants to be a Millionaire presents problems in China as Chinese TV is largely state
controlled and game shows on TV are novel for many Chinese. In Australia, by contrast, TV is run mainly by
public companies and the cultural influences are, in many cases, similar to those in the UK.
For P4, learners need to consider some of the mechanics of international business such as how business is
established, promoted, financed and payments are made. International trade carries risks, such as fluctuating
currencies and operating in different legal jurisdictions, and learners should know how government agencies
offer a range of support to mitigate the possible effects of risk. Again, both domestic businesses importing
goods and services as well as establishing export presences need to be considered.
For P5, learners should look at why a business might want to work internationally and there is a wide variety
of reasons. There are problems and these may be difficult to resolve but international operations are viewed
positively by business and government.
For P6, learners should look at how a business operating internationally approaches the task and makes
arrangements using a range of techniques to work successfully in an international market. Learners should
consider how businesses can develop strategies to operate internationally. Drinks companies usually seek a
local joint venture since the basic ingredient in many drinks is water and water is expensive to ship. Soft drinks
and beer are almost always produced and bottled under licence but spirits are not. Cars need to be made
with a left hand drive and chocolates need to be labelled in the local language. Mainstream products in the UK
may be premium products in international markets and so are promoted differently.
This can be linked to P3 which looks at different counties in general terms whereas P6 is about many of the
specific issues. Having chosen a new country, is a start up the best option rather than establishing a partnership
with an existing business in the new country? The focus is on establishing an international presence.
For M1, learners should consider the purpose of methods of promoting and restricting international trade and
identify how and why they might be used.
For M2, learners need to look at how different international business and cultural environments affect
organisations. Products may need to be adapted and marketing techniques modified in order to sell
successfully in a different market which has different expectations and requirements.
For D1, learners need to assess the possible impact of problems posed by operating in international markets.
Rather than build complex car assembly plants in too many countries, where there may be insufficient skilled
labour, vehicle manufacturers supply vehicles in knock down form that are re-assembled locally saving on
capital costs and shipping costs.
For D2, learners should evaluate the impact of cultural issues on international business performance. Health,
welfare, social considerations, environmental issues and belief systems all influence how well organisations do
in different international settings.

Criteria covered
Assignment title
Scenario
Assessment method
P1, P2, M1, D1
The International Environment
Case Study
Case Study
P3, M2, D2
Cultural Differences
Case Study
Case Study
P4, P5, P6
The Monetary Environment and

Business Strategies
Case Study
Case Study

Level 3
Supply Chain and Stock Management
Business and the Economic Environment
This unit also links with the following units of the Level 3 National Occupational Standards in Supply Chain
Management:
Unit T3: Analyse information on the supply chain
Unit T6: Complete export procedures and requirements
Unit T7: Complete import procedures and requirements.
Essential resources
For this unit learners should have access to a suitable business teaching environment and access to current
resources about international business activities. Current and specific advice and information is easy to come
by. Government websites provide definitions of processes and documentation. Data for PESTLE analyses of
specific countries is available in many reference works as well as online. Local organisations and businesses can
provide information from personal experience.

Centres should develop links with local employers involved in import and export activities. Many businesses
look to employ learners when they finish their programmes of study. They may want some of the expertise
some learners can offer if for example they are bi-lingual or come from abroad.


Textbooks
The books are aimed at undergraduates and are expensive. They are best for dipping in to.
Czinkota M R, Ronkainen I A and Moffett M H International Business (Thompson Learning, 1998)
ISBN 0030223784
Czinkota M R Fundamentals of International Business (Cram101 Textbook Outlines, 2003)
ISBN-10 1428805521
Monir Tayeb International Business: Theories, Policies and Practices, (Financial Times/Prentice Hall, 2000)
ISBN-10 0273637126
Morrison J International Business Environment: Global and Local Marketplaces in a Changing World (Palgrave
Macmillan, 2006) ISBN 1403936919
Wild J and Kenneth Wild International Business, The Challenges of Globalization (Prentice Hall, 2007)
ISBN10: 0135032814
Journal
Journal of International Business Studies (Palgrave Macmillan)

Newspapers
The Economist
The Financial Times
Websites
http://europa.eu
Website of the European Union
http://news.bbc.co.uk
Provides up-to-date country profiles
www.bbc.co.uk/learning/subjects/business_studies.
shtml
A changing bank of learning resources and up to date

case studies. This site also has links to other useful
sites
www.bized.co.uk
Business studies resources for teachers and students
www.britishchambers.org.uk
British Chambers of Commerce site for exporting
www.businesslink.gov.uk
Business Link site for importing and exporting
www.cadbury.co.uk
Cadbury plc, particularly the Corporate part of the

site
www.direct.gov.uk
Follow the links to information for businesses

which then has links to specific information at the
Department for Business and Regulatory reform
(BERR)
www.wto.org
The World Trade organisation


Skill
When learners are
describing the international business environment in which a selected organisation

operates
describing the mechanisms that regulate international trade
describing how the environment and culture of another country affects a business
operating internationally
describing how the monetary environment affects businesses that operate
internationally
identifying why businesses operate internationally
describing the business strategies used by a business operating internationally
Creative thinkers
Reflective learners
describing how the monetary environment affects businesses that operate
internationally.
Skill
When learners are
planning and carrying out research into the international business environment
investigating the mechanisms that regulate international trade
researching the environment and culture of other countries
Creative thinkers
considering why businesses operate internationally

reviewing business strategies used by businesses operating internationally
Reflective learners
looking at how international cultures affect the choice of location for businesses
inviting comment on own researches in to the issues associated with international
business operations
evaluating own experiences and learning to inform future progress
Team workers
working in a group to discuss ideas, gather materials about international business

agreeing roles with others in any group investigations about countries and their
cultures
taking responsibility for own role
10

Skill
When learners are
Self-managers

priorities change
acting as an advocate for own views and opinions when working in groups.

11

Skill
When learners are
ICT Use ICT systems

Select, interact with and use ICT systems
independently for a complex task to meet a
variety of needs
researching international business activity, and the business

environment and culture in overseas locations
Use ICT to effectively plan work and

evaluate the effectiveness of the ICT system
they have used
producing plans to research international business

Select and use a variety of sources of
finding material about international business
information independently for a complex task
researching the environment and culture of different countries
researching the support available to international businesses
Access, search for, select and use ICTbased information and evaluate its fitness for
purpose
exploring, extracting and assessing the relevance of international

business information from websites and other sources
ICT Develop, present and

communicate information
Enter, develop and format information
independently to suit its meaning and
purpose including:
text and tables
images
numbers
records
combining information from a variety of sources gathered

through research
preparing data on exports and imports and the associated trends
preparing country profiles for international businesses

and purpose
Present information in ways that are fit for
purpose and audience
Evaluate the selection and use of ICT tools
and facilities used to present information
Select and use ICT to communicate and
exchange information safely, responsibly and
effectively including storage of messages and
contact lists
12
communicating with chambers of commerce, businesses and

other parties who can provide information about international
business

Skill
When learners are
Mathematics
Understand routine and non-routine
problems in a wide range of familiar and
unfamiliar contexts and situations
using numerical data about imports, exports, sales, revenues and

marketing
identifying opportunities for growth for international businesses
Identify the situation or problem and the

mathematical methods needed to tackle it
Select and apply a range of skills to find
solutions
Use appropriate checking procedures and
evaluate their effectiveness at each stage
Interpret and communicate solutions to
practical problems in familiar and unfamiliar
routine contexts and situations
Draw conclusions and provide mathematical
justifications
English
Speaking and listening make a range of
contributions to discussions and make
effective presentations in a wide range of
contexts
Reading compare, select, read and
understand texts and use them to gather
information, ideas, arguments and opinions
carrying out group work when investigating international business

asking questions about international business and the support
available to international businesses
making presentations
reading about the international business environment and country
and company-specific information
reviewing the PESTLE and cultural environments overseas
identifying opportunities for operating overseas
considering how best an international organisation might establish
itself in a new market

and persuasively

preparing accounts of various aspects of international business

activity
justifying choice of new markets
specifying how to establish international business activities in new
markets.
13

Level 3 Business Syllabus

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Level 3 Business Syllabus

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Unit 1:

The Business Environment

Guided learning hours: 60

Know the range of different businesses and their ownership

Understand how businesses are organised to achieve their purposes

Know the impact of the economic environment on businesses

Know how political, legal and social factors impact on business.

Edexcel BTEC Level 3 Nationals specification in Business

2 Understand how businesses are organised to achieve their purposes

3 Know the impact of the economic environment on businesses

Edexcel BTEC Level 3 Nationals specification in Business

4 Know how political, legal and social factors impact on businesses

Edexcel BTEC Level 3 Nationals specification in Business

Assessment and grading criteria

To achieve a merit grade the

describe the type of business,

describe the different

describe how two businesses

explain how their style

describe the influence of

M2 compare the challenges to

describe how political,

M3 analyse how political, legal

To achieve a distinction grade

evaluate the influence

evaluate how future changes

M1 explain the points of view of

Edexcel BTEC Level 3 Nationals specification in Business

Essential guidance for tutors

Edexcel BTEC Level 3 Nationals specification in Business

Outline learning plan

selected by a group, the other an individual choice)

Organisational structures whole group charts drawn for familiar organisation

Tutorial support and feedback

Edexcel BTEC Level 3 Nationals specification in Business

Programme of suggested assignments

P1, 2, 3, 4, M1, D1 Two Businesses on our

You work as a junior journalist

Produce an article on two

P5, 6, M2, M3, D2 Similar Businesses in

The first article was well

Select one business in your

Links to National Occupational Standards, other BTEC units, other BTEC

Edexcel BTEC Level 3 Nationals specification in Business

Employer engagement and vocational contexts

Indicative reading for learners

Business Review Magazine (Phillip Allan Publishers see www.phillipallan.co.uk)

Quality newspapers especially the business sections

Edexcel BTEC Level 3 Nationals specification in Business

BBC News website

BBC Business website

British Educational Communications and Technology Agency

Business education website including learning materials and quizzes

Information on a variety of business careers

Online company annual reports

Gateway to public services

Products and services for organisations involved in education

Online business information service about the European Union

Support for teachers and students

Joint Information Systems Committee (guidance and advice for further

Learning and Skills Development Agency

Learnthings providers of interactive digital resources

National Learning Network

Project A Level revision resources for learners