Understanding business activity

Question 1

Explain business objectives

Answer 1

They are the aims and target that a business work toward to help it run successful

Question 2

Benefit of setting business objectives

Answer 2

(i)increase motivation
(ii)Easier and faster decision making
(iii)Unite the business

Question 3

List the difference business objectives

Answer 3

(i)Survival-primary
(ii)Profit-investment and payment of return(dividend)
(iii)Growth-lead to greater job security,salaries

Question 4

Explain why business objectives could change?

Answer 4

(i)when survival has achieved,they are toward high profit
(ii)when high market share is achieved,they are toward higher return to stakeholders
(iii)business may set survival as short-term objectives

Question 5

Explain stakeholders

Answer 5

It is any person/group with a different interest in performance and activities of business
They can be internal/external

Question 6

List and explain their main features and mostly likely objectives

Answer 6

(i)Stakeholder group
Owner(internal)
Main features
Risk takers,investors,lose of money
Most likely objective
Profit,return on capital,growth
(ii)Stakeholder group
worker(internal)
Main features
Employees,get training,may get redundanct
Most likely objective
High salaries,job security and satisfaction
(iii)Stakeholder group
Customer(internal)
Main features
Important for business,lead to failure,dissatisfaction
Mostly likely objective
Safe production,high quantity,value for money

Question 7

Explain the objective of public sector business

Answer 7

(i)Financial
- low profit motive
-meet need of society
(ii)service
-To provide good quality service to community
(iii)social
-To provide employment
-provide good quality and affordable product

Question 8

Explain the conflict of stakeholders’ objectives

Answer 8

Stakeholders have unique goals,potentially leading to conflicts of interest. A business’s effort to meet one stakeholder’s objectives may result in the unfulfilled of another’s