People In Business

Question 1

Describe ONE example of a co-operative relationship and ONE example of a source of conflict that could arise between the following stakeholders:
(i) Investor and Entrepreneur
(ii) Supplier and Purchasing Manager
(20 marks)

Answer 1

(i) Investor and Entrepreneur
CO-OPERATIVE- Here both parties are working together for their mutual benefit. E.G. An entrepreneur has a well thought out business plan and AIB bank provides them with a loan to start their business.

COMPETITIVE- Here one or both parties are pursuing their own objectives to the detriment of the other. E.G. Due to the recession a business is unable to pay the same rate of dividends to its shareholders.

(ii) Supplier and Purchasing Manager
CO-OPERATIVE- Here both parties are working together for their mutual benefit. E.G Suppliers are delivering on time and the purchasing manager has paid on time.

COMPETITIVE- Here on or both parties are pursuing their own objectives to the detriment of the other. E.G. The purchasing manager threatens to switch to a different supplier unless receiving a bigger discount.

Question 2

Describe the role of any TWO ‘Interest Groups’ in business (15 Marks)

Answer 2

INTEREST GROUPS- These are pressure groups that lobby decision makers at local national and EU level for the benefit of their members. They are not part of the accepted political structure.

IBEC- The Irish Business and Employees Confederation represents large businesses. They have lobbied the government to reduce the rate of corporation tax for entrepreneurs to 10%.

ICTU- The Irish Congress of Trade Unions represents employees. They are lobbying the government to increase the minimum wage rate in the budget in order to give low paid workers a better standard of living.

Question 3

Outline using examples the relationship that can exist between ‘Investors’ and ‘Entrepreneurs’ in business.
(15Marks)

Answer 3

INVESTORS AND ENTREPRENEURS- Investors provide funds to entrepreneurs to start businesses E.G AIB bank. Entrepreneurs take the risk and initiative in setting up a new business. E.G. Richard Branson.

CO-OPERATIVE RELATIONSHIP- Here both parties are working together to their mutual benefit. E.G. An entrepreneur has a well thought out business plan and AIB Bank provides them with a loan.

COMPETITIVE RELATIONSHIP- Here one or both parties are pursuing their own objectives to the detriment of the other. E.G Due to the recession a business is unable to pay a good rate of dividends to its shareholders.

Question 4

Describe how consumers may benefit from the existence of a competitive relationship between producers.
(15 marks)

Answer 4

LOWER PRICES- Competition between firms puts downward pressure in prices E.G Aldi and Tesco competing for market share.

PRODUCT IMPROVEMENT- Due to competition businesses will look to enhance existing products or introduce new products for the benefit of consumers E.G Apple adding new features to its iPhone.

GIMMICKS- Businesses use discounts, special offers loyalty cards etc in order to capture consumers from competitors E.G tesco loyalty cards gives money back.

Question 5

Describe a competitive relationship and a Co-operative relationship between producers in the same line of business. Use appropriate examples to support your answer.
(15 Marks)

Answer 5

CO-OPERATIVE- here both parties are working together for their mutual benefit. E.G. Aldi and Lidl buying stock together in order to avail of a bigger discount.

COMPETITIVE- here one or both parties are pursuing their own objectives to the detriment of the other. E.G. Aldi reducing the price of some of its stock to capture consumers from Lidl.

Question 6

Describe important aspects of the relationship between producers and consumers in Business.
(15 Marks)

Answer 6

PRODUCERS AND CONSUMERS- A producer supplies the marketplace with finished and partly finishes goods. E.G Aldi.
A consumer purchases goods/services for their own private use.

CO-OPERATIVE- Both parties work together to their mutual benefit E.G. Aldi supplies consumers with a wide variety of products and consumers are loyal and pay on time.

COMPETITIVE- One or both parties pursue their own objective is to the detriment of the other.

Question 7

Describe the role of any two stakeholders in business (10 Marks)

Answer 7

EMPLOYER-hires a person to perform a task in return for pay for example AIB bank.

EMPLOYEE-is contracted to perform tasks in return for a wage or salary for example bank clerk at AIB.