Page 69 - Cambridge IGCSE Business Studies
P. 69
5: Business objectives and stakeholder objectives
Revision checklist Exam practice questions
● It is important for every 1 Aisha is a qualifi ed hairdresser. She opened her own salon, as a sole
business to set SMART trader, fi ve years ago. At fi rst business was very slow due to competition
objectives. from other salons and the fact that Aisha was unknown in the area. Aisha
● The main objectives of private knew that the fi rst year was going to be about survival.
sector businesses are survival,
Aisha survived her fi rst six months and within a year she was
profit, growth and market
making profi t.
share and these objectives
may change in importance Aisha wants to grow her business. She thinks that adding beauty
over time.
treatments to the services she offers will be a profi table option. She has
● A social enterprise is a private a friend, Christine, who is a trained beauty therapist. She is thinking of
sector business that makes asking Christine to become a partner in the expanded business.
profit, not for the owners or
investors, but to benefit local a Other than sole trader, identify two forms of business
communities and reinvest to
organisation. [2]
grow the business.
b What is meant by a ‘stakeholder’? [2]
● All businesses have internal
and external stakeholders. c Identify and explain two benefi ts to Aisha of setting objectives. [4]
These are individuals or
groups who have an interest d Identify and explain two advantages to Aisha of operating as
in the activities of a business. a sole trader. [6]
Each stakeholder group will
e Aisha thinks there are more advantages than disadvantages of
have their own objectives
and these might conflict expanding her business as a partnership. Do you agree? 67
with the objectives of other Justify your answer. [6]
stakeholder groups, or with
the objectives of the business. 2 Company Z is a private limited company in the secondary sector of
● Public sector organisations the economy. It manufactures components used in the computer
might have profit as an industry. They employ 80 production workers and ten management
objective, but social and administrative staff. The company has just made record profi ts.
objectives will be more
The shareholders are very pleased because they expect to receive high
important.
dividends as their share of profi ts. The workers’ trade union thinks that
their members should get a big pay rise. The directors of Company Z
are considering each of these options.
Over the past two years the company’s profi ts have increased by 15%
each year.
a Identify any two of Company Z’s stakeholders [2]
b What is meant by ‘secondary sector’? [2]
c Identify and explain two features of a private limited company. [4]
d Identify and explain two ways the objectives of a private sector
business like Company Z are different from public sector
organisations. [6]
e Do you think the directors should use the profi ts to
reward shareholders or to reward workers? Justify your answer. [6]
Total available marks 40
