1: Introduction to business

Question 1

Name three differences that exist between different organisations

Answer 1

Ownership
Control
Activity
Profit or not-for profit
Size
Legal status
Access to finance
Technology

Question 2

What is the primary objective of a profit orientated orginisation?

Answer 2

To maximise profits / dividends / wealth

Question 3

What is the primary objective of a not-for-profit organisation

Answer 3

The provision of goods / services

Question 4

Who are the primary stakeholders of an organisation?

Answer 4

The shareholders or owners

Question 5

Give an example of a secondary stakeholder of an organisation

Answer 5

Employees
Customers
Government
Suppliers
Lenders

Question 6

“Secondary objectives support the primary objective” - True or false?

Answer 6

True

Question 7

Name an example of both a primary objective and a secondary objective?

Answer 7

Examples of primary objectives:
- Maximise shareholder wealth for profit orientated organisations
- Maximise the benefit to the target stakeholder for NFP organisations

Examples of secondary objectives:
- Product development
- Market position (grow sales, achieve market share)

Question 8

What is profit satisficing

Answer 8

To achieve a satisfactory profit

Question 9

Objectives are quantitative operational goals. Objectives should be SMART.

What does SMART stand for

Answer 9

Specific
Measurable
Achievable
Relevant
Timed

Specific - clear statement, easy to understand
Measurable - success or failure can be quantified
Achievable - it is pointless setting unachievable objectives
Relevant - approproate to the mission and stakeholders
Timed - have a timed period for achievement

Question 10

___ state what should be done to achieve the operational objectives

What word is missing?

Answer 10

Plans

Mission –> Vision –> Goals –> Objectives –> Plans

Question 11

What does SEE stand for in relation to sustainability?

Answer 11

Social
Environmental
Economic