Pearson LCCI Level 2 Certifi Cate In Business Fundamentals
L2PearsonLCCI Level 2 Certificate inBusiness Fundamentals(ASE20300)SPECIFICATIONFirst teaching from January 2019
Edexcel, BTEC and LCCI qualificationsEdexcel, BTEC and LCCI qualifications are awarded by Pearson, the UK’s largest awarding body offeringacademic and vocational qualifications that are globally recognised and benchmarked.For further information, please visit our qualifications website at qualifications.pearson.com.Alternatively, you can get in touch with us using the details on our contact us page atqualifications.pearson.com/contactusAbout PearsonPearson is the world's leading learning company, with 35,000 employees in more than 70 countriesworking to help people of all ages to make measurable progress in their lives through learning. We putthe learner at the centre of everything we do, because wherever learning flourishes, so do people. Findout more about how we can help you and your learners at qualifications.pearson.comAcknowledgementsThis specification has been produced by Pearson on the basis of consultation with teachers, examiners,consultants and other interested parties. Pearson would like to thank all those who contributed theirtime and expertise to the specification’s development.References to third-party material made in this specification are made in good faith. Pearson does notendorse, approve or accept responsibility for the content of materials, which may be subject to change, orany opinions expressed therein. (Material may include textbooks, journals, magazines and other publicationsand websites.)All information in this specification is correct at time of publication.ISBN 978 1 446 95676 2All the material in this publication is copyright Pearson Education Limited 2018
IntroductionLCCI qualificationsLCCI qualifications are widely regarded by employers as preparing students for keyfunctions of modern international business. Employers, universities and professionalbodies recognise them across the world.This new and engaging range of qualifications has been developed in collaborationwith professional bodies, employers and customers. To ensure that the qualificationsdevelop the breadth and depth of knowledge, skills and understanding that studentsneed to be effective employees and that they support progression pathways, we havecarried out in-depth, independent consultation.Pearson offers a wide range of LCCI qualifications; they are available at Levels 1 to 4across the following subject areas: Business English Language Financial and Quantitative Marketing.This specification is part of the Business suite of LCCI qualifications.This qualification replaces the Pearson LCCI Level 2 Certificate in BusinessAdministration (ASE20071) and the Pearson LCCI Level 2 Certificate in BusinessPrinciples and Practice (ASE20073).
Purpose of the specificationThis specification sets out: the objectives of the qualification any other qualification(s) that a student must have completed before takingthe qualification any prior knowledge and skills that the student is required to have before takingthe qualification any other requirements that a student must satisfy before they will be assessed orbefore the qualification will be awarded the knowledge, understanding and skills that will be assessed as part of thequalification the method of assessment and any associated requirements relating to it the criteria against which a student’s level of attainment will be measured.
RationaleThe Pearson LCCI Level 2 Certificate in Business Fundamentals meets the followingpurpose.It is for students who want to start a career in business or who have been in abusiness entry-level position for up to six months and are looking to develop theirskills, or are in the general field of business and need to know the basics of theenvironment in which businesses operate.
Qualification aimThe Pearson LCCI Level 2 Certificate in Business Fundamentals has been developed inconsultation with professional bodies, employers and centres.It is an ideal qualification for students intending to progress to direct employmentin business.This qualification gives students the knowledge, understanding, skills and behavioursexpected by employers in the business sector. This gives students the bestopportunity to be successful in applying for work in entry-level positions.The areas that students will cover include: the business environment communications and the customer management information systems and business documentation business policies personal skills and performance.
ContentsSpecification at a glance1Knowledge, skills and understanding2ContentDelivery guidanceAssessment21718Assessment summary18Assessment objectives19Performance descriptors20Entry and assessment information21Student entry21Combinations of entry21Age21Resitting the qualification21Awarding and reporting21Access arrangements, reasonable adjustments and special consideration 22Access arrangements22Reasonable adjustments22Special consideration23Further information23Equality Act 2010 and Pearson equality policy23Candidate malpractice24Staff/centre malpractice24Language of assessment24Other information25Total Qualification Time (TQT) and Guided Learning Hours (GLH)25Student recruitment25Prior learning and other ort, training and resources27
Appendices29Appendix 1: Glossary of International Accounting Standards (IAS)terminology31Appendix 2: Key words typically used in assessment33
Specification at a glanceThe Pearson LCCI Level 2 Certificate in Business Fundamentals (ASE20300) consists ofone externally-examined paper.Title: Pearson LCCI Level 2 Certificate in Business Fundamentals Externally assessed.100% of thetotalqualificationOverview of content The business environment Communication and the customer Management information systems and business documentation Business policies Personal skills and performanceOverview of assessment One written, externally-set and marked paper, contributing 100% of the overallgrade of the qualification. The examination will be 3 hours. The examination will consist of 100 marks. There will be five questions. Students should answer all questions. Questions comprise of multiple-choice, short open-response and extendedopen-response questions. Students will be graded Pass/Merit/Distinction. A result of Fail will be recordedwhere students do not achieve the required marks for a Pass.Pearson LCCI Level 2 Certificate in Business Fundamentals (ASE20300)Specification – Issue 1 – February 2018 Pearson Education Limited 20181
Knowledge, skills and understandingContentTo prepare students for the final assessment of this qualification, the followingcontent must be covered.1. The business environmentSubject contentWhat students need to learn1.1 The purpose ofbusiness activityUnderstand how businesses operate to meet the demandsof the consumer and achieve business objectives. 2The purpose of business activity:ocombine factors of production (labour, land, capital,enterprise/entrepreneurship)oadd value to productsosatisfy consumer demandosatisfy customer needsomeet business objectives.The main features of a competitive market:obuyersosellersoprofit motive.The role, risks and rewards of the entrepreneur:oidentifies market opportunitiesocombines together the factors of productionoloss of capitaloresponse of competitorsomake a profitopersonal satisfactionosocial and ethical responsibility.Pearson LCCI Level 2 Certificate in Business Fundamentals (ASE20300)Specification – Issue 1 – February 2018 Pearson Education Limited 2018
Subject contentWhat students need to learn 1.2 Types of businessorganisationMain business objectives:oprofitsosales revenueomarket shareocost control (reduction of waste, increasedproductivity/efficiency).Know the key features, differences between, and advantagesand disadvantages of the main types of businessorganisation. Private and public sectors. Sole traders, partnerships, private limited companies(Ltd), public limited companies (Plc):o 1.3 Businessdepartmentsunlimited and limited liability and the implications forbusiness owners.Public corporations and public services.Understand how businesses are organised and how themain departments contribute to business objectives. Organisation charts:opurpose (shows the structure, communicationchannels and hierarchy)ofeatures (shows job roles and span of control).The functions of the main departments in a business:omarketing (market research, advertising, salespromotion, branding, packaging design, methods ofdistribution)oproduction (manufacturing, production schedules,inventory/stock control, productivity, quality controland assurance)ofinance (bookkeeping, preparing financial statements,budget setting, payroll, petty cash, monitoring cashflow)ohuman resources (workforce planning, recruitment,training, pay and rewards, motivation, health and safety,employee welfare, employment issues, disciplinary andgrievance procedure, dismissal and redundancy).Pearson LCCI Level 2 Certificate in Business Fundamentals (ASE20300)Specification – Issue 1 – February 2018 Pearson Education Limited 20183
Subject contentWhat students need to learn1.4 BusinessstakeholdersUnderstand the main business stakeholders and theirinfluence on a business, and how corporate socialresponsibility initiatives can contribute towards meetingthe needs and interests of different stakeholder groups. 1.5 Business planningand performanceointernal (owners/shareholders, employees)oexternal (customers, creditors, community,government)Impact of corporate social responsibility (CSR).Understand the purpose of business planning, a businessplan and how the performance of a business can bemeasured. 4Business stakeholders:The main features of business planning:oSWOT analysis (strengths, weaknesses,opportunities and threats)obusiness objectivesoidentifying risks.The main components of a business plan:oname of businessoproduct (goods and services) offeredomarket researchocosts, revenue and profitoperformance targetsocontingency planning.Financial performance measures:osales revenueogross profitoprofit for yearoaverage cost of production.Pearson LCCI Level 2 Certificate in Business Fundamentals (ASE20300)Specification – Issue 1 – February 2018 Pearson Education Limited 2018
Subject contentWhat students need to learn 1.6 The influence oftechnology onbusiness1.7 Business financeNon-financial performance measures:oproduction/productivityomarket shareocustomer satisfactionobrand recognition.Understand the advantages and disadvantages forbusinesses of using technology to achieve their objectives. Internet (email, intranet, websites, social media,e-commerce). Business software packages (databases, wordprocessing, spreadsheets, presentation software,teleconferencing, management information systems(MIS)).Understand why a business requires finance, the mainsources of business finance and the financial statementsproduced by a business. The need for finance:ostart-up financeoshort-term needsolong-term needsofinance for expansion.Internal sources of finance:opersonal savingsoretained earningsoselling assets.External sources of finance:ooverdraft and trade payablesoloan capital, share capital, including stock marketfloatation (public limited companies)oventure capitalocrowdfunding.Pearson LCCI Level 2 Certificate in Business Fundamentals (ASE20300)Specification – Issue 1 – February 2018 Pearson Education Limited 20185
Subject contentWhat students need to learn The reasons for keeping financial records:oto record financial transactionsofor tax/legal complianceoto monitor cash flowoto ensure financial obligations are metoto monitor financial targetsoto present information to shareholdersoto produce financial statements.The information contained within the main financialstatements:ostatement of comprehensive income: gross profit other operating expenses profit for the year retained earnings distributed profitostatement of financial position: assets liabilities equity.1.8 GlobalisationUnderstand the influence of globalisation to a business. Features of globalisation:o Advantages and disadvantages of globalisation:o6international – markets, multinationals, mobility ofthe factors of production, currencies,communication systems, trading blocs.new markets, outsourcing, labour recruitment fromother countries, competition, costs, trading blocs.Pearson LCCI Level 2 Certificate in Business Fundamentals (ASE20300)Specification – Issue 1 – February 2018 Pearson Education Limited 2018
2. Communication and the customerSubject contentWhat students need to learn2.1 BusinesscommunicationUnderstand the importance of business communicationand the advantages and disadvantages of differentmethods of business communication. 2.2 Customer serviceThe importance of business communication inrelation to:othe management of employeesocompany ethosohouse styleocorporate imageocreating a brandocommunicating with customers and otherstakeholdersomaintaining records.Different types of communication used in business:owritten (letter, email, newsletter, noticeboard)overbal (telephone, web conferencing, meetings, oneto one, presentations).The difference between formal and informal businesscommunication.Understand the importance of customer service inmeeting business objectives. The difference between internal and externalcustomers. Types of customer service provision:ocustomer service agentsotelephone helplinesointernet chat linesowritten advice and guidance on productsoafter-sales services, including repairs and return offaulty goodso24/7 ordering facilities.Pearson LCCI Level 2 Certificate in Business Fundamentals (ASE20300)Specification – Issue 1 – February 2018 Pearson Education Limited 20187
Subject contentWhat students need to learn 8How businesses obtain customer feedback:oquestionnairesosurveysoonline reviewsosuggestion boxesofocus groups.The impact of customer feedback on the business:ochanges to business practicesoquality improvements.Features of effective business communication withcustomers:ouse of languageotone of voiceoempathy.Pearson LCCI Level 2 Certificate in Business Fundamentals (ASE20300)Specification – Issue 1 – February 2018 Pearson Education Limited 2018
3. Management information systems and business documentationSubject contentWhat students need to learn3.1 Managementinformation systemsand business risksUnderstand why businesses require managementinformation and how it can be used to support decisionmaking and reduce risks in the main departments. The main features of a management informationsystem (MIS):ointegrated computer network (intranet)oelectronic data storageodata processing and data analysisoreport generationodocument transmission.Disadvantages to businesses of using MIS:oequipment costorequirements for employee trainingosoftware and equipment updatingosystem reliabilityosystem securityotechnical support.Business risks and their impact on a business:oincreased costsoincreased competitionopoor-quality productsoshortages in factors of production (raw materials,components, labour)oreduction in demand/revenue/profitsolack of financeodisruption in suppliesopoor publicityolegal action resulting in fines.Pearson LCCI Level 2 Certificate in Business Fundamentals (ASE20300)Specification – Issue 1 – February 2018 Pearson Education Limited 20189
Subject contentWhat students need to learn 3.2 Sales andpurchasingdocumentsopolitical – change in laws/regulationsoeconomic – change in tax/interest ratesosocial – lifestyle changesotechnological – automation/robotics.Advantages to the main departments of using amanagement information system (MIS) to controlbusiness risks:omarketing (market research, customer feedback)oproduction (monitoring the quality of factor inputsand output)ohuman resources (workforce planning,personnel policies)ofinance (budget setting, monitoring and control ofcosts and revenue streams).Understand the purpose and preparation of sales andpurchasing documents, checking their accuracy,highlighting errors and making amendments as needed. 10The external factors affecting business risks anddecisions:Sales and purchasing documentation:oquotationoinvoiceocredit noteodebit noteogoods received noteogoods returned noteopurchase requisition noteopurchase orderodelivery advice note.Pearson LCCI Level 2 Certificate in Business Fundamentals (ASE20300)Specification – Issue 1 – February 2018 Pearson Education Limited 2018
4. Business policiesSubject contentWhat students need to learn4.1 The need forbusiness policiesUnderstand why it is important for a business to establishbusiness policies and the advantages and disadvantages ofthe methods used to communicate them to its employees. 4.2 The classificationof business policiesThe case for establishing business policies to:okeep within the lawosupport business proceduresoregulate the behaviour of employeesoestablish a company ethos.How businesses formally communicate their policies toemployees:oinductionoemployee handbooksointranetotrainingonewsletter.Understand the difference between compulsory (statutory)and voluntary (non-statutory) policies and theirimplications on a business. The legal requirements of statutory policies on abusiness:ohealth and safety (published policy, health andsafety officer, employee training, provision ofprotective equipment and clothing, riskassessments, regular fire drills)odata protection (secure storage, confidentiality,rules regarding disclosure, access arrangements)oconsumer protection (products should be safe andfit for purpose, rules regarding refunds, advertisingmust not be false, interest charges for goods sold oncredit must be disclosed)oemployment legislation (equal opportunities,minimum wage, contract of employment – pay,working hours, holiday entitlement).Pearson LCCI Level 2 Certificate in Business Fundamentals (ASE20300)Specification – Issue 1 – February 2018 Pearson Education Limited 201811
Subject content4.3 Theresponsibilities ofdirectors andbusiness managersWhat students need to learn Reasons why businesses create non-statutory policiesand their advantages and disadvantages. The consequences for the business of breaches instatutory policies:legal actionofinancial (fines)oimprisonment (in some countries)oconsumer responseocorporate image.Understand the responsibilities and implications for theboard of directors and its managers in relation to theestablishment and monitoring of business policies. 12oThe role and responsibilities of the board of directors:odetermine the mission and policies of the businessoset strategy and organisational structure withinwhich the policies will operateotake into account the interests of shareholders(including legal responsibilities of the business,business performance, profits, dividends) andensure the business is operating within the lawodelegate duties to managers and monitor theimplementation of policies within the business.The role and responsibilities of managers:oin charge of specific teams, departments or activitiesin the businessoensure that policies agreed by the board of directorsare implementedoensure that policies are communicated andunderstood by their employeesoaddress any instances where policies are notfollowed by individual employeesoprovide data and reports that help to evaluate theeffectiveness of policiesoprovide specialist advice on the content ofbusiness policies.Pearson LCCI Level 2 Certificate in Business Fundamentals (ASE20300)Specification – Issue 1 – February 2018 Pearson Education Limited 2018
Subject contentWhat students need to learn4.4 BusinessmeetingsUnderstand the purpose and structure of businessmeetings and their role in monitoring the implementationand effectiveness of business policies. The purpose of meetings:ocommunicationomonitoring policiesoparticipation and problem solvingogiving adviceogenerating new ideasomaking recommendations.The struct
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