1.5.5. Business Choices

Question 1

What is an opportunity cost?

Answer 1

Opportunity cost refers to a benefit that a person could have received, but gave up, to take another course of action.

Question 2

Example objectives of a marketing department?

Answer 2

Have a dedicated, well trained and highly motivated sales team & achieve or exceed their monthly or weekly sales targets.

Question 3

Example objectives of a production department?

Answer 3

Sustain efficiency by having the most up to date machinery & have a highly motivated production team.

Question 4

Example objectives of a human resources department?

Answer 4

Employ the right people for the jobs available & foster and maintain good industrial relations.

Question 5

Example objectives of a finance department?

Answer 5

Maintain a positive cash flow for the business & manage the business’s finances efficiently.

Question 6

What is a ‘trade off?’

Answer 6

When some department objectives are discarded in order to fully realise the goals of the company.

Question 7

Possible positive consequences of investing in the marketing department?

Answer 7

• increase in team size
• increased motivation
• possible sales increase
• improved training

Question 8

Possible positive consequences of investing in the production department?

Answer 8

• additional workers
• new machinery
• increased motivation
• increased output

Question 9

Possible positive consequences of investing in the human resources department?

Answer 9

• better staff management
• increased motivation
• additional workers
• better selection procedure

Question 10

Possible positive consequences of investing in the finance department?

Answer 10

• additional workers
• equipment upgrade
• increased motivation
• better cash management

Question 11

Possible negative consequences of investing in the marketing department?

Answer 11

• demotivation of other depts
• less efficient production
• poorer human resource mgt
• possible cash flow problems

Question 12

Possible negative consequences of investing in the production department?

Answer 12

• demotivation of other depts
• possible loss of sales
• poorer human resource mgmt
• possible cash flow problem

Question 13

Possible negative consequences of investing in the human resources department?

Answer 13

• demotivation of other depts
• fewer new sales
• poorer financial management
• less efficient production

Question 14

Possible negative consequences of investing in the finance department?

Answer 14

• demotivation of other depts
• poorer sales
• ineffective selection process
• inefficient production