BTF.

1 Organisations can be defined or described in various ways. Which three of the following are

the key characteristics that are shared by all organisations?

• Synergy

• Social arrangement

• Collective goals

• Specialisation

• Controlled performance

What are the primary objectives of profit-oriented and non-profit oriented organisations?

Profit-oriented organisation /Non-profit oriented organisation

• Output of goods/services / Minimise costs

• Output of goods/services /Provision of goods/services

• Maximisation of wealth

  Minimise costs

• Maximisation of wealth

  Provision of goods/services

At the Annual General Meeting (AGM) of Vortex plc, a major shareholder claimed that the

company was suffering from the symptoms of 'satisficing'. In the context of corporate

objectives, 'satisficing' means that

• managers seek to make satisfactory profits rather than maximise wealth

• managers seek to keep all stakeholders satisfied

• C owners seek to meet a satisfactory level of corporate responsibility obligations

• owners seek to make satisfactory profits

Joe, the Managing Director of Gargoyle Ltd, has set a primary objective of growth in profits

for the company. He aims to concentrate on product development to support this objective.

Identify whether the following will be suitable secondary objectives to achieve the growth in

profits via product development.

1 Bringing in new products

2 Reducing labour turnover

3 Investing in research and development

• 1 and 2 only

• 2 and 3 only

• 1 and 3 only

• 1,2 and 3

Maximising the wealth of its shareholders is the stated goal of Avernanche plc. The

company's objectives have been expressed as a hierarchy of primary and secondary

objectives. Identify which of the following is most likely to be Avernanche plc's primary

business objective.

• To increase the annual profit after tax by 125% in the next 10 years

• To introduce an average of two new products each year for the next six years

• To double the share price within the next 10 years

• To become the market leader in four market segments within the next 10 years

A major shareholder has stated that for three years the directors of Barrington plc have run

the company in a manner designed solely to increase their prestige in the business

community. According to William Baumol, this is most likely to be shown in the directors'

aim to:

• maximise wealth

• maximise sales revenue

• minimise costs

• minimise social impact

To establish whether a particular organisation should be classified as a business or not, it is

necessary to enquire about the nature of its:

• primary objective

• mission

• vision

• secondary objective

The primary objective of ABC Car Rental Ltd is as follows: "We aim to be the fastest growing

company with the highest profit margin in the global vehicle rental and leasing business."

One of its secondary objectives is: "To increase our market share for global family car

rentals to 20% within three years."

Which three components of the SMART acronym are present in the company's secondary objective?

• S

• M

• A

• R

• T

For a business, which two of the following would be classified as secondary objectives?

• The business's market share target for next year

• The business's productivity improvement target for next year

• The business's mission statement

• The business's financial objective of shareholder wealth maximisation

• The business's vision

A major airline, FlotAir plc, has been drawing up a mission statement.

Which three of the following items could be expected in it?

• We will double profits in three years

• We will encourage diversity in the workplace

• We intend to be the best airline in the world

• We aim to give excellent customer service

• We intend to take over Lufthansa