Photo AI
Assess the extent to which the problems of rapid growth may have been managed by Tended Ltd - Edexcel - A-Level Business - Question 1 - 2022 - Paper 2
Question 1
Assess the extent to which the problems of rapid growth may have been managed by Tended Ltd. Tended Ltd is a fast-growing technology start-up company based in Linco... show full transcript
Worked Solution & Example Answer:Assess the extent to which the problems of rapid growth may have been managed by Tended Ltd - Edexcel - A-Level Business - Question 1 - 2022 - Paper 2
Step 1
Knowledge of problems of rapid growth
Answer
Rapid growth can often lead to several issues, such as diseconomies of scale, communication breakdowns, and problems related to overtrading. Diseconomies of scale may arise when the company grows too quickly, leading to inefficiencies. Communication issues can occur due to an expanded workforce that may struggle to coordinate effectively.
Step 2
Ways in which the problems have been managed
Answer
Tended Ltd managed its problems of rapid growth in several ways:
-
Leadership and Teamwork: Effective leadership has encouraged the team to collaborate, helping to mitigate some communication difficulties by pulling employees together for collective problem-solving.
-
Financial Support: Tended Ltd tackled overtrading issues by securing additional finance of £50,000 from Enterprise Loans, which provided the necessary capital to stabilize operations during rapid expansion.
-
Innovation and Development: The company addressed development challenges by continuously innovating and creating new products, such as smartwatches, which cater to emerging market trends.
Step 3
Possible counterbalance
Answer
Despite these management strategies, challenges remain:
- Communication issues may still persist, especially in the short term, as the workforce expanded from 1 to 10 employees within a few months.
- Even with additional finance, Tended Ltd might face difficulties managing rapid growth effectively, particularly regarding financial issues.
- Longer-term development plans may be jeopardized if the company struggles to find suppliers for new products.
Step 4
Potential judgement
Answer
While Tended Ltd has survived and adapted to some challenges of rapid growth through innovative strategies, the extent of management success remains uncertain. The young founder, Leo Scott Smith, may lack sufficient experience to fully handle the complexities of managing a larger workforce effectively.