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MK Pty Ltd is a successful chain of frozen yoghurt stores with low gearing - HSC - SSCE Business Studies - Question 22 - 2013 - Paper 1
Question 22
MK Pty Ltd is a successful chain of frozen yoghurt stores with low gearing. The owners are planning to take over a smaller chain which has poor human resource manage... show full transcript
Worked Solution & Example Answer:MK Pty Ltd is a successful chain of frozen yoghurt stores with low gearing - HSC - SSCE Business Studies - Question 22 - 2013 - Paper 1
Step 1
Outline TWO indicators MK Pty Ltd could use to assess the effectiveness of human resource management after the takeover.
Answer
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Staff Turnover: MK Pty Ltd could monitor staff turnover rates, which indicate the rate at which employees leave the organization. A reduction in staff turnover may suggest improved job satisfaction and effective human resource strategies.
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Absenteeism: Another indicator to assess human resource management is absenteeism, which refers to employee absences on average days. High levels of absenteeism may indicate dissatisfaction among employees and could point to poor human resource management practices within MK Pty Ltd.
Step 2
Discuss ONE source of finance to fund the takeover.
Answer
One potential source of finance for MK Pty Ltd to fund the takeover could be debt financing. This method allows the business to borrow funds, which need to be repaid over time, usually with interest. Given MK Pty Ltd's low gearing, utilizing debt finance may allow for an investment that promotes growth while managing repayment responsibilities. However, the company needs to ensure that the increased debt will not adversely affect overall financial stability, especially as repayments may become a burden if the business does not see anticipated growth immediately.