What is a business? - Unit 1.1
What is the main purpose of a business?
To produce goods and services that satisfy needs and wants.
(If you have another answer, classmates will evaluate if it's acceptable or not)
What is a sole trader?
A business owned and run by one individual with unlimited liability.
What does SMART stand for?
Specific, Measurable, Achievable, Relevant, Time-bound.
Who are internal stakeholders? Name one example.
Internal stakeholders are within the business, like employees, managers, shareholders.
What does MNC stand for?
Multinational Corporation / Multinational Companies
Name 2 basic inputs in the business process
Land, labor (employees), raw materials, capital, enterprise.
Name one advantage of a partnership.
Easy to form, shared responsibilities, more capital than a sole trader.
What is the difference between aims and objectives?
Aims = long-term goals (become market leader). Objectives = short-term measurable targets.
Who are external stakeholders? Name one example.
External stakeholders are outside the business, like, customers, suppliers, government.
Give one reason why a business might want to grow.
To increase market share, achieve economies of scale, or reduce risk.
Explain the difference between goods and services
Goods are tangible products (a car); services are intangible (banking).
Explain the difference between public limited (PLC) and private limited (Ltd) companies.
PLC shares can be sold to the public; Ltd shares are privately held and not publicly traded.
Define tactical objectives with an example.
Tactical objectives are short-term and support strategies (increase sales by 5% in six months).
Explain with an example one possible conflict of interest between shareholders and employees.
Shareholders want maximum profits; employees want higher wages and job security. These may conflict.
What is horizontal integration? Give an example.
Horizontal integration = merging with a business in the same industry at the same stage (two airlines merging).
Why do business need to adapt to changes in consumer needs?
Because consumer preferences change over time; failure to adapt can lead to loss of competitiveness.
(If you have another answer, classmates will evaluate if it's acceptable or not)
What is a cooperative, and how does it differ from a charity?
Cooperative: owned and run by members for mutual benefit. Charity: non-profit focused on social causes.
Why might a business need to change its objectives over time?
Businesses may face changes in environment (technology, competition, consumer needs) that require adapting objectives.
How can customers influence a business’s decisions?
Customers influence through purchasing choices, feedback, boycotts, or loyalty.
Explain one positive and one negative effect of MNCs on host countries.
Positive: jobs, infrastructure, technology transfer. Negative: environmental damage, exploitation, crowding out local firms.
Evaluate: To what extent do all businesses create value in the same way?
Businesses create value differently: some by lowering costs (Walmart), others by innovation (Apple). Not all businesses create value in the same way.
(If you have another answer, classmates will evaluate if it's acceptable or not)
Evaluate: Why might NGOs be more trusted by the public than corporations?
NGOs may be trusted more because they prioritize social goals over profit, unlike corporations that may face criticism for exploitation.
(If you have another answer, classmates will evaluate if it's acceptable or not)
Evaluate: Are mission statements more important for employees or for customers?
For employees, mission statements give direction and motivation; for customers, they show company values. Importance depends on perspective.
(If you have another answer, classmates will evaluate if it's acceptable or not)
Evaluate: Which stakeholder group has the most power in a multinational company?
Shareholders may have financial power, but governments and consumers can also strongly influence MNC decisions. It depends on the situation.
(If you have another answer, classmates will evaluate if it's acceptable or not)
Evaluate: Is globalization more beneficial to businesses or to societies?
Businesses benefit through markets and efficiency; societies may gain jobs/wealth but also face inequality and cultural loss.
(If you have another answer, classmates will evaluate if it's acceptable or not)