Sac 1 Revision - 4

Question 1

To increase market share

Answer 1

Market share is a business’s proportion of total sales in a market or an industry. In most industries, market share is usually an objective for large businesses.

Question 2

To make a profit

Answer 2

Making a profit is an objective that is central to many businesses. Profit is what is left after business expenses have been deducted from money earned from sales (revenue). A loss occurs when the expenses exceed the revenue.

Question 3

To fulfil a market need

Answer 3

For many businesses, their purpose is to fulfil some sort of market need. In most circumstances, it might be easier for small businesses to meet specific market needs more efficiently. A business may have other objectives to help fulfil a market need, for example: quality, price and convenience.

Question 4

To fulfil a social need

Answer 4

This objective involves the production or selling of goods and services for the purpose of making the world a better place. A business with this focus may generate income, but its primary purpose is the common good.

Question 5

To meet shareholder expectations

Answer 5

Making a profit is the primary objective of many businesses. This is particularly important for investors in a company - it’s shareholders. Shareholders expect to make a return on their investment. They expect that the business they invest in to make a profit as they received a proportion of the profits (dividends).

Question 6

Strategies

Answer 6

Are the actions that a business takes to achieve specific objectives

Question 7

Effectiveness

Answer 7

Is the degree to which a business has achieved its stated objective

Question 8

Efficiency

Answer 8

Refers to how well a business uses resources to achieve objectives

Question 9

Owners

Answer 9

A business may be owned by a sole trader, by partners or by a number of shareholders. The extent to which the owner is involved in the management or daily operations of the business will affect his or her vested interest in its activities.

Question 10

Shareholders

Answer 10

Shareholders purchase shares in a company, so they are partial owners of businesses. Despite not usually being involved in the day-to-day operations of a business, shareholders do have a say in how the business runs.

Question 11

Directors

Answer 11

The directors of the company are the people who have overall responsibility for managing the companies business activities

Question 12

Management

Answer 12

Management are the people who have the responsibility for successfully achieving the objectives of the business.

Question 13

Employees

Answer 13

Employees are the people who work for the business and who expect to be paid fairly, trained properly and treated ethically in return for their contributions to production.

Question 14

Government

Answer 14

Government is the group of people with the authority to govern a community. In Australia, this exists at 3 levels (federal, state and local)

Question 15

Interest Groups

Answer 15

Interest groups are organisations who attempt to directly influence or persuade a business to adopt or change particular activities, processes or policies.