Page 88 - Cambridge IGCSE Business Studies

Cambridge IGCSE Business Studies Section 2 People in business

ACTIVITY 6.8

Muzmed Footwear Company (MFC) is a manufacturer of ladies’ fashion shoes in India. The company employs 200, mainly
female, workers. Each worker is skilled in one part of the production process; for example ten workers cut out the shape of
the soles for shoes from sheets of leather or rubber. All workers involved in the production of shoes are paid using the piece-
rate system.
Recently another footwear manufacturer has opened a factory in the same area as MFC. This factory is very modern and

offers workers better working conditions than those offered by MFC. They pay workers an hourly rate, plus a performance-
related bonus.
Some workers have already left MFC to work for this new competitor. The owner of MFC is worried that he is going to lose

more of his skilled workers to this new competitor company.
1 What is meant by ‘working conditions’?
2 What is meant by ‘performance-related bonus’?
3 Identify and explain one advantage and one disadvantage to MFC of its workers being skilled in one part of the
production process.
4 Identify and explain two reasons why workers might be leaving MFC to work for the new competitor?
5 The owner of MFC is considering changing the way he pays his workers. Do you think this is a good idea? Justify
your answer.

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