What does Business Functions cover in WJEC A-Level Business?

Business Functions is AS Unit 2. It examines the main functional areas of a business: marketing (the 4Ps marketing mix, digital marketing, the product life cycle and the Boston Matrix), finance (cash-flow forecasting, budgeting and variances, the income statement and profitability ratios), human resources (recruitment, training, motivation, leadership and employer relations), and operations (methods of production, productivity, capacity utilisation, lean production, stock control and quality), together with research and development, innovation and economies of scale.

How is Business Functions (Unit 2) assessed?

Unit 2 is assessed by a written examination of 2 hours worth 80 marks, which is 25 percent of the full A level. The paper uses data-response questions, so you apply the functional concepts to information about a real or hypothetical business and perform calculations such as profitability ratios, productivity and capacity utilisation.

What are the main motivation theories in WJEC Business?

The course expects Taylor, Maslow and Herzberg. Taylor's scientific management argues workers are motivated mainly by money, justifying piece rates and close supervision. Maslow's hierarchy of needs runs from physiological and safety needs, through social and esteem, to self-actualisation, and argues lower needs must be met before higher ones motivate. Herzberg's two-factor theory separates hygiene factors (pay, conditions) that prevent dissatisfaction from motivators (achievement, recognition, responsibility) that genuinely motivate. These justify financial and non-financial methods of motivation.

How do you calculate gross and net profit margins?

Gross profit margin equals gross profit divided by revenue, times 100, where gross profit is revenue minus cost of sales. Net profit margin equals net profit divided by revenue, times 100, where net profit is gross profit minus expenses. For example, with revenue of £200,000, cost of sales of £120,000 and expenses of £40,000, gross profit is £80,000 (margin 40 percent) and net profit is £40,000 (margin 20 percent). Both ratios divide by revenue, not by cost or profit, which is a common error.

How should I revise Business Functions?

Work through each function in turn. Learn the models (marketing mix, product life cycle, Boston Matrix, motivation theories, methods of production) and drill the calculations (profitability ratios, productivity, capacity utilisation, contribution and break-even from Unit 1) until they are automatic. Because the paper is data-response, practise applying concepts to a business context and weighing trade-offs, for example JIT's cost saving against supply risk, and rehearse past-style data-response questions.

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WJEC A-Level Business Business Functions (AS Unit 2): a deep dive on marketing, finance, human resources, operations and economies of scale

A deep-dive WJEC A-Level Business guide to Business Functions (AS Unit 2). Covers marketing and the marketing mix, finance and financial planning, human resources, operations management, and research and development with economies of scale, including the calculations and the exam patterns WJEC repeats.

Generated by Claude Opus 4.818 min readWJECUpdated 2026-06-16

Reviewed by: AI editorial process; not yet individually human-reviewed

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What Business Functions actually demands
Marketing and the marketing mix
Finance and financial planning
Human resources
Operations management
R&D, innovation and economies of scale
How Business Functions is examined
Check your knowledge

What Business Functions actually demands

Business Functions is the second AS unit of WJEC A-Level Business. Where Unit 1 sets up a business, Unit 2 examines how its functional areas - marketing, finance, human resources and operations - actually work, plus research and development and the cost effects of growing larger. The paper is data-response, so examiners test knowledge of the models, accurate calculation, application to a given business, and balanced judgement of trade-offs.

This guide ties together the five dot-point pages for the unit. Each has its own page with worked exam questions and cross-links; this overview shows how they connect and where the marks lie.

Marketing and the marketing mix

The marketing mix is the 4Ps: product, price (penetration, skimming, cost-plus, competitive), place (channels including online) and promotion (including digital marketing). The elements must be consistent and fit the target market. The product life cycle (introduction, growth, maturity, decline) guides marketing at each stage, with extension strategies to prolong maturity, while the Boston Matrix (stars, cash cows, question marks, dogs) helps balance a product portfolio.

Finance and financial planning

A cash-flow forecast predicts the timing of cash in and out so a firm can avoid running out of money - vital because a profitable firm can still fail on cash. Budgets set targets, and variance analysis (favourable or adverse) compares actual against plan. The income statement shows revenue minus cost of sales (gross profit) minus expenses (net profit). Profitability ratios are gross profit margin and net profit margin, both dividing by revenue.

Human resources

HR plans the workforce, recruits (internally or externally) and selects, trains (on-the-job or off-the-job), motivates (financial and non-financial methods justified by Taylor, Maslow and Herzberg), leads (autocratic, democratic, laissez-faire) and manages employer-employee relations including trade unions. The marks reward linking HR choices to performance and using theory to justify motivation methods.

Operations management

Operations covers methods of production (job, batch, flow), productivity (output per worker), capacity utilisation (actual / maximum x 100), lean production and JIT stock, stock control, and quality (control versus assurance and TQM). The trade-offs - efficiency versus flexibility, JIT's cost saving versus supply risk, cost versus quality - are central to the evaluation marks.

R&D, innovation and economies of scale

R&D invests in new and improved products and processes, bringing competitive edge, premium prices and patents but at high cost and risk. Economies of scale lower unit cost as output grows: internal (purchasing, technical, managerial, financial, marketing, risk-bearing) and external (from a growing industry). Beyond an optimum size, diseconomies of scale (communication, coordination, motivation) raise unit cost again.

How Business Functions is examined

A typical WJEC profile for Unit 2:

Data-response analysis. Apply a functional concept to information given about a business.
Calculations. Profitability ratios, productivity, capacity utilisation and contribution/break-even, with method marks.
Explanation. Explain a functional decision (a pricing strategy, a recruitment choice, a production method) in context.
Evaluation. Weigh trade-offs, for example internal versus external recruitment, or JIT against supply risk.

Check your knowledge

A mix of model, calculation and application questions covering the whole unit. Attempt them under timed conditions, then check against the solutions.

State the four elements of the marketing mix. (2 marks)
Explain one extension strategy for a product in the maturity stage. (3 marks)
A firm has revenue of £400,000, cost of sales of £240,000 and expenses of £80,000. Calculate the gross and net profit margins. (4 marks)
Distinguish between cash flow and profit. (3 marks)
Explain one financial and one non-financial method of motivation. (4 marks)
A factory makes 10,000 units with 25 workers. Calculate labour productivity. (2 marks)
Explain one benefit and one drawback of just-in-time (JIT) stock control. (4 marks)
Explain one internal economy of scale. (3 marks)

Solutions

Q1: Product, price, place and promotion (the 4Ps).
Q2: For example, adding new features or flavours, finding new markets or uses, repackaging/rebranding, changing the price or increasing promotion - any one, explained as lifting sales during maturity.
Q3: Gross profit = 400,000 - 240,000 = £160,000; gross margin = (160,000 / 400,000) x 100 = 40%. Net profit = 160,000 - 80,000 = £80,000; net margin = (80,000 / 400,000) x 100 = 20%.
Q4: Cash flow is the timing of money flowing into and out of a business; profit is revenue minus costs over a period. A profitable business can still run out of cash if, for example, customers pay late.
Q5: Financial: performance-related pay or a bonus links reward to effort (Taylor). Non-financial: job enrichment, recognition or responsibility raises satisfaction (Herzberg's motivators, Maslow's higher needs).
Q6: Labour productivity = output / workers = 10,000 / 25 = 400 units per worker.
Q7: Benefit: JIT minimises stock, cutting storage costs and waste and freeing cash. Drawback: with little buffer stock, any supply disruption halts production, so it depends on reliable suppliers.
Q8: For example, purchasing (bulk-buying) economies - buying inputs in large quantities at a discount, lowering unit cost - or technical, managerial or financial economies. Any one, explained.