Question 2May/Jun 20269609/338 marks
Analyse one advantage and one disadvantage for RR of Reeta’s leadership. [8 marks]
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Case studies and questions retyped from the original Cambridge material; Paper 3 mark schemes are cropped from the official mark scheme PDFs, Paper 4 mark schemes are retyped as text. A few 2020–2022 Paper 3 case studies were recovered by OCR from a damaged source file — those are marked where it applies.
About Leadership
Questions on leadership: the qualities of effective leaders, leadership styles and theories, and the four competencies of emotional intelligence.
6 past paper questions on this topic since 2023, across 6 exam sessions.
How often it comes up
| Year | Paper 3 | Paper 4 | Total | Chart |
|---|---|---|---|---|
| 2026 | 1 | 0 | 1 | |
| 2025 | 1 | 1 | 2 | |
| 2024 | 1 | 0 | 1 | |
| 2023 | 1 | 1 | 2 |
Every 2025–2026 question on Leadership
The whole topic on one page, with answers and mark schemes. Printing this page prints just this list.
Paper 3 · Business decision-making (case study) (2)
Case study: Reeta Roy (RR)
RR is a manufacturer and retailer of luxury beauty products. Reeta Roy started RR in 2016 after managing several small enterprises with limited success.
Using her creativity, Reeta produced the first batch of soap in her kitchen. Reeta used fresh ingredients from her home region of country X. Customer feedback was positive and Reeta decided to form a private limited company. RR rented a local factory to start production. The location of the factory was important as Reeta’s business plan was to work with local farmers who could supply fresh ingredients. RR decided not to use machines and instead recruited skilled workers to hand-make its products.
Reeta believes the culture of RR is essential in creating a luxury product. Reeta expects employees to share her pride in RR’s products whether they work in manufacturing or have face-to-face contact with the final consumer.
RR’s first retail store opened in 2017 selling only RR products. By 2026, RR had opened 22 retail stores in country X, with more planned.
Reeta’s leadership
Though employees admire Reeta’s determination, energy and charisma, RR has a high labour turnover of graduate level managers due to limited promotion opportunities and training. Reeta believes that leaders are born with the traits and abilities to lead.
Supply issues
The success of RR’s brand is built on using local ingredients. Sourcing quality ingredients to meet demand is a constant problem. RR occasionally has to accept a variation in the standard of ingredients. Some of RR’s products made using these ingredients have to be rejected after quality control. The operations manager has suggested that RR should introduce lean production.
Country X’s economic performance
Since 2016, there has been rapid economic growth in country X, see Table 1.1.
Table 1.1 Country X economic data
International expansion
RR plans to expand internationally. Reeta wants RR to expand by opening retail units in other countries. However, the marketing team believes that RR should start selling its products using information technology (IT), for example, by using RR’s website and social media. Reeta believes that selling online will have a negative impact on RR’s luxury brand. Reeta thinks that the consumer’s positive interaction with the retail staff is important.
Table 1.2 shows some information about the sales of luxury beauty products in country X.
Table 1.2 Sales of luxury beauty products in country X ($m)
A survey of RR’s consumers found that 60% said visiting an RR store was a key factor in their purchase decisions and that 45% would consider buying RR products online.
The marketing team has produced an investment appraisal for its IT proposal, see Table 1.3.
Table 1.3 Investment appraisal for the marketing team’s IT proposal
FSA
FSA is a multinational company and the market leader in beauty products. FSA is aiming to add to its portfolio of luxury brands. RR’s growing reputation has come to the attention of FSA’s Chief Executive, Gabriel Laurent. Gabriel met with Reeta to discuss purchasing 20% of RR’s share capital. Gabriel was impressed by Reeta’s vision for RR and her leadership values. Reeta has placed a high financial value on RR’s shares which is far greater than shown by RR’s latest published accounts. FSA’s Chief Financial Officer (CFO) is concerned by RR’s lack of detailed accounting data including financial ratios. However, Gabriel is convinced that buying 20% of RR’s shares at the value proposed by Reeta is a unique investment opportunity for FSA.
Case study: Pedro’s Perfect Pies (PPP)
Pedro left school without any formal qualifications. Pedro was given the opportunity to work in a pie factory. This was owned by an entrepreneur who wanted to help unqualified young people.
Pedro spent six years working at the factory. He was quickly promoted because he was conscientious and showed initiative. When the business owner retired, she offered Pedro the chance to buy the business. Pedro raised capital from his savings, friends and family and bought the business. PPP became a private limited company, with Pedro as Managing Director. PPP is based in country A.
PPP manufactures a wide range of pies in its factory. The pies are sold to retailers in country A and other countries in the region.
Growth
PPP has grown steadily over the last few years. Its revenue and profits have increased by an average of 8% per year. Production capacity has been increased to keep up with demand. Growth has been financed by retained earnings and bank loans. Recent accounting data is shown in Table 1.1.
Table 1.1: Accounting data
External influences
Real incomes in country A and other countries in the region have been falling due to high inflation and low economic growth. Trade between country A and other countries in the region has become more difficult, due to country A leaving an international trade agreement. Consumers are changing their eating habits, and many people are eating less meat.
Marketing
When Pedro bought the business, he identified an opportunity to develop a premium product. Pedro asked the marketing team to carry out market research. The results of this established that there was a market for high quality, higher priced pies. Pedro discussed this new product development with all of his marketing team because he valued their opinions.
Once the premium pies were launched, PPP branded its products as either classic or premium pies. Most pies PPP produces still contain meat. However, a newly developed premium no‑meat vegan pie has started to sell very well. PPP is also planning to launch a new classic pie with a cheese filling especially for the export market.
Elasticity
Due to higher production costs PPP has increased its prices. Pedro has analysed some elasticity data for one type of classic pie and one type of premium pie, see Table 1.2.
Table 1.2: Elasticity data
Human resources
Pedro has always been a self‑confident innovator, both in terms of new product ideas and the way that PPP is organised and led. He is known for his social skills and is respected and trusted by his employees.
Pedro is also keen to help young unemployed people, in the same way as he was helped. PPP offers training apprenticeships in all areas of the factory. Trainees attend local colleges one day each week and are supervised by the department managers.
Pedro thinks employees are PPP’s greatest asset. As well as training apprentices, he offers competitive wages and all employees have opportunities for career development and promotion within PPP. Pedro is also socially aware as he rewards employees for good ideas from weekly kaizen group discussions. Many employees have been with the company for more than five years.
Process innovation
PPP’s current production process is labour intensive and pies are produced using batch production. All employees accept responsibility for product quality and are trained in quality assurance methods.
Pedro is considering investing in a new computer‑controlled pie‑making machine, see Table 1.3. This would increase production capacity in the factory. Factory employees would still need to complete the production process by adding the PPP pastry logo to the pies.
Table 1.3: Forecast net cash flow data for the proposed new machine
Pedro is undecided about increasing the use of machinery, especially as PPP will have to borrow the finance to purchase it.
Question 5Oct/Nov 20259609/3112 marks
Evaluate the importance of emotional intelligence to Pedro’s leadership of PPP. [12 marks]
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Paper 4 · Business strategy (case study) (1)
Case study: Daniel & Carl for Education (DCE)
Daniel and Carl started a company for online teaching, Daniel & Carl for Education (DCE). DCE provides online tutors who work with students to help them pass their examinations.
Timeline of DCE
2019DCE sets up as a private limited company with Daniel as the Managing Director and Carl as the Marketing Director. Carl creates a website and social media accounts. DCE’s marketing objective is to provide a premium quality service. This allows it to use price skimming.2020Revenue grows and employee numbers rise. Daniel outlines DCE’s approach to quality (see Appendix 1). Social media subscribers increase rapidly. DCE relies on word-of-mouth promotion.2021Competition increases when new businesses enter the online teaching market. Dynamic pricing is used by DCE.2022Revenue declines as students find more affordable options. Carl recommends changes to DCE’s promotion (see Appendix 2). DCE revises its marketing objectives (see Appendix 3).2023Daniel and Carl collect market research data (see Appendix 4).2024DCE offers face-to-face revision workshops in response to a fall in revenue from online tutoring.What is next for DCE?
Competition is increasing but Daniel and Carl do not want to compromise on the quality of the service the business provides. However, they are both aware that DCE needs to change if it is to survive. Carl thinks that transformational leadership is the key to survival, but Daniel remains uncertain.
Appendix 1: DCE’s approach to quality in 2020
As a service-based business, DCE believes its employees are central to its success. All tutors are qualified teachers with at least three years teaching experience.
Students are encouraged to provide feedback which is used to adapt the service offered. In 2020, 86% of students stated that they would recommend DCE to a friend.
Appendix 2: proposed changes to DCE’s promotion in 2022
Artificial intelligence (AI) to be used to:
- analyse customer searches
- optimise digital promotion
- target social media messages to students and parents.
Sales promotion:
- DCE loyalty scheme to reward returning customers
- one free lesson for every friend referred.
Appendix 3: DCE’s revised marketing objectives in 2022
1. Develop new services to increase revenue by 10% by the end of 2024 2. Maintain a strong brand identity
Appendix 4: Summary of market research data in 2023
Question 2Feb/Mar 20259609/4220 marks
Advise Daniel on the importance of transformational leadership to ensure the survival of DCE. [20 marks]
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AO1 Knowledge and understanding
Transformational leadership: the leader works with teams to identify the need for change, creates a vision to inspire people to accept change and implements change with the cooperation of the team.
Knowledge can be awarded for any relevant business knowledge about leadership and/or transformational leadership.
Do not reward repetition of the contents of the case. Any explanation of the contents is rewardable.
- Leadership – motivating a group of people towards business objectives/common goal
- the purpose of leadership
- the qualities of a good leader
- Transformational leadership – change culture of organisation to achieve improved performance during a time where significant change is needed for the business to survive.
- Charisma, inspiring, offers new challenges to employees, understands individual needs of each team member
- Any leadership theories – trait, behavioural, contingency, power and influence and transformational Award for any explanation of relevant business knowledge, up to a max of 2 marks.
AO2 Application
Application (max 2 marks) can be awarded for applying knowledge, analysis or evaluation of (transformational) leadership to DCE between 2019 and 2024.
- Private Limited Company – limited liability
- Social media accounts to promote the business
- Social media subscribers increase rapidly
- If transformational leadership is used employees can be focused and follow targets which mean DCE can achieve their goals of brand identity and higher revenue
- Any information used from the market research results
- Change may create a culture of demotivated employees and this was a concern of Carl’s
- Use of AI
- Any use of information from the case in context of discussion about leadership styles/theories.
AO3 Analysis ( and and )
Analysis is likely to be based on the how transformational leadership can help the extension strategy succeed.
- If transformational leadership is used employees can be focused and follow targets which mean DCE can achieve their goals of brand identity and higher revenue increasing profits however, this also means that if employees underperform they will get punished which may create a culture of demotivated employees lowering performance and this was a concern of Carl’s
- Daniel can also help Carl achieve his goal in the marketing strategy which means that DCE will understand customers well and utilise their USP giving them a competitive advantage increasing revenue and profits. However, this will cost the business a lot of money and thus can reduce profit.
- Contingency leadership may work for DCE as it adapts to different situations and allows different approaches which means employees can have a varied environment that will support different types of employees thus increasing motivation, better services and higher revenue.
- The market research has shown that DCE can help students in many ways such as self -confidence and revision. This will boost the company’s main business of teaching, and this will lead to word of mouth which will increase customers and profits. However, this depends on the coaching skills provided to students and how they respond to the tools.
AO4 Evaluation ( and and ).
Evaluation will depend upon which element/s that have been discussed previously.
- Judgement on whether transformational leadership theory will be helpful in the success of DCE in this business context
- Whether this is dependent on different factors,.
- Transformational leadership will allow every member of the business to be challenged with a new culture concentrating on needs of employees especially as a service business this leads to better customer service allowing to achieve the new objectives of maintaining a strong brand identity and 10% increase in revenue.
- Transformational leadership is very important to the success of DCE as if good decisions were made, such as how to fund the business, and add value to the current products or develop new services then DCE would be able to gain revenue again and achieve its new goals. Furthermore this will allow DCE to beat the incoming competition and gain back lost customers, revenue and profits. However, this depends on how Carl responds to the leadership style along with the employees.
- Transformational leadership is not important to the success of DCE as there are other factors that DCE need to address here to make sure that the objectives are achieved. They need to ensure that the force field analysis is explored correctly along with other strategy analyses to ensure that all factors have been discovered such as technological, social etc. This will ensure the success of DCE allowing revenues to increase again. However, this depends on how research is made and the accuracy of the information gained along with the implementation.
Accept all valid responses.
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A Level Business questions by topic
Each topic opens this practice tool with only that topic’s questions, plus how often it comes up and every question on it in one list.
- Unit 1Business and its environment
- Ch 3Size of business
- Ch 4Business objectives
- Ch 6External influences on business activity
- Ch 7External economic influences on business activity
- Ch 8Business strategy
- Ch 9Corporate planning and implementation
- Unit 2Human resource management
- Ch 10Human resource management
- Ch 13Organisational structure
- Ch 14Business communication
- Ch 15Leadership
- Ch 16Human resource management strategy
- Unit 3Marketing
- Ch 19The marketing mix – product and price
- Ch 20The marketing mix – promotion and place
- Ch 21Marketing analysis
- Ch 22Marketing strategy
- Unit 4Operations management
- Ch 25Capacity utilisation and outsourcing
- Ch 26Location and scale
- Ch 27Quality management
- Ch 28Operations strategy
- Unit 5Finance and accounting
- Ch 31Costs
- Ch 33Financial statements
- Ch 34Analysis of published accounts
- Ch 35Investment appraisal
- Ch 36Finance and accounting strategy