UNIT 1 - Business and its environment

Question 1

What are the 6 ways to measure a business?

Answer 1

• Revenue
• Market share
• Business-specific measures
• Market capitalization (total issued shares)
• Number of employees
• Capital employed

Question 2

What are 4 reasons for business failure?

Answer 2

• Lack of capital
• Poor management skills
• lack of record keeping
• changes in the business environment

Question 3

What does a memorandum of association tell us?

Answer 3

• name of the company
• Where they can be contacted (head office)
• Max share capital
• declared aims of the business

Question 4

What do articles of association tell us?

Answer 4

• Internal workings of a company and control eg. names of directors and meeting procedures

Question 5

example of internal growth

Answer 5

• Opening of new shops, factories or branches

Question 6

examples of external growth

Answer 6

• merges
• take-overs

Question 7

What are some common corporate/business objectives

Answer 7

• growth
• increase market share
• survival
• CSR
• Maximising short term sales/revenue
• Profit maximisation
• Maximising stakeholder value

Question 8

What is included on the hierarchy of objectives? (6)

Answer 8

• corporate aim
• mission statement
• corporate objectives
• Divisional objectives
• departmental objectives
• individual objectives

Question 9

What may be used to deal with conflicts between different stakeholder groups’ objectives?

Answer 9

Compromise