Chapter 5

Question 1

What are the business objectives of private sectors?

Answer 1

1. Survival - short term objective
2. Profit - long term objective
3. Growth - Expand size of business
4. Increase in market share - easier to sell products
5. Corparate social responsibility (CSR) - Without CSR will affect reputition, sales, revenue, and profits of business

Question 2

Define Stakeholders

Answer 2

An individual or group which has an interest in a business because they are affected by its decisions or activities.

Question 3

Objectives of internal shareholders

Answer 3

1.Owner/shareholders
- Receive high returns/dividends for risking in the business
- Receive benefit from increase share value

2.Managers
- Receive high salary and bonuses
- Have job satisfication and status

3.Employee/worker
- Have Job security
- Receive fair wage that reflects business success

Question 4

Objectives of external shareholders

Answer 4

1.Lenders
- Receive interest payment when due
- Borrowing repaid by due

2.Suppliers
- Receive prompt payment for credit payment
- Treated fairly, not force to reduce price

3.Customers
- Recive quality goods
- Charged fair price

4.Government
- Paid correct taxes on time
- Minimal spending on unemployment benefits

5.Local Community
- Receive benefits for local economy
- Avoid negative impact of business activities