Ch 2 Business Objectives

Why do businesses need to have clear objectives?

• To increase the number of employees

• To motivate employees and owners

• To reduce the number of competitors

• To increase the price of products

Answer explanation

Businesses need clear objectives to motivate employees and owners, aligning everyone towards common goals and driving performance.

What is one of the financial objectives of a business at the beginning?

• Profit

• Sales

• Survival

• Expansion

Answer explanation

One of the financial objectives of a business at the beginning is survival, ensuring the business can sustain itself before focusing on profit, sales, or expansion.

Why do most businesses aim to make a profit?

• To increase the number of employees

• To gain a financial return for owners

• To reduce competition

• To expand their market share

Answer explanation

Most businesses aim to make a profit to gain a financial return for owners, which is a primary goal of business operations.

What is the meaning of market share?

• Total sales of a company

• Total sales of a sector

• Sales of Company A divided by total sales of the sector

• Sales of Company A multiplied by total sales of the sector

Answer explanation

Market share is calculated by dividing the sales of a specific company (Company A) by the total sales of the entire sector. It represents the portion of total sales that a company holds in the market.

What is one advantage of a business having a large market share?

• It is easier to hire employees.

• It is possible to charge higher prices.

• It reduces the need for marketing.

• It decreases the competition.

Answer explanation

Having a large market share allows a business to have more pricing power, enabling them to charge higher prices due to reduced competition.

What is "Profit satisficing"?

• Making just enough profit to survive.

• Making enough profit to give financial security.

• Making maximum profit possible.

• Making no profit at all.

Answer explanation

Making enough profit to give financial security.

Which sector owns businesses that concern social objectives?

• Private sector

• Public sector

• Non-profit sector

• International sector

Answer explanation

The correct sector that owns businesses concerning social objectives is the Public sector.

What is one example of a social objective mentioned in the text?

• Increasing market share

• National Defence

• Financial security

• Personal satisfaction

Answer explanation

One example of a social objective mentioned in the text is National Defence.

What motivates some people to start a business according to section 3.3?

• Financial security

• Social objectives

• Challenges

• Independence

Answer explanation

According to section 3.3, some people are motivated to start a business by the challenges it presents.

Why do some people want to be their own boss?

• To achieve financial security

• To have independence and control

• To increase market share

• To meet social objectives

Answer explanation

Some people want to be their own boss to have independence and control over their work and decisions, allowing them to shape their own path and direction.