Business objectives and the role of stakeholders

Question 1

What is a business objective?

Answer 1

the results you are aiming to achieve in order to accomplish your longer-term company vision

Question 2

What is satisficing?

Answer 2

an alternative business objective to maximising profits. It means a business is making enough profit to keep shareholders happy

Question 3

Identify two ways that a business might achieve sales growth.

Answer 3

-raising prices
-merging with competitors
-sell in different markets

Question 4

Which types of business are likely to set ‘survival’ as their objective?

Answer 4

A small business

Question 5

What is the link between growth and profit?

Answer 5

An increase in retained earnings leads to an increase in investment and consequently to further expansion. That is, profit is the important source of finance for expansion

Question 6

How are service and profit interrelated?
Interrelate= to relate or connect to each other

Answer 6

Profit and growth are stimulated primarily by customer loyalty.

Question 7

Identify two ways that a business can offer good customer service.

Answer 7

Listening, understanding your customer’s needs, thanking the customer and promoting a positive, helpful and friendly environment

Question 8

Outline why customers and shareholders might conflict as stakeholders.

Answer 8

owners generally seek high profits and so may be reluctant to see the business pay high wages to staff. a business decision to move production overseas may reduce staff costs

Question 9

How can a stakeholder be defined?

Answer 9

a person, group or organization with a vested interest, or stake, in the decision-making and activities of a business, organization or project

Question 10

Identify four stakeholders of Marks and Spencer’s PLC

Answer 10

Investors, employees, customers and suppliers