Cambridge IGCSE · Business Studies (0450)

Business objectives and stakeholder objectives: Practice Questions

5 multiple-choice questions marked as you go, and 5 written questions with worked solutions. All on Business objectives and stakeholder objectives.

10 questions27 marksFree, no account

Question 1

1 mark

In business planning, what is the main difference between an aim and an objective?

Question 2

1 mark

Which of the following best describes the primary objective of a lender, such as a bank, when dealing with a business enterprise?

Question 3

1 mark

An enterprise identifies a cash flow deficit of \(-\$2,000\) and decides to resolve this by demanding immediate payment from its credit customers while simultaneously delaying payments to its raw material providers. Which pair of stakeholders is most likely to experience a direct conflict with the enterprise’s objective in this scenario?

Question 4

1 mark

Which of the following stakeholder groups is considered an internal stakeholder of a business enterprise?

Question 5

1 mark

An enterprise decides to prioritise legal compliance by investing \( \$10,000 \) in new safety equipment. Which stakeholder group is most likely to experience a conflict if this expenditure reduces the amount of profit available for the owners?

Question 6

2 marks

Identify two internal stakeholders that would be interested in the performance of a local retail business.

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Question 7

3 marks

Explain how the objective of ethical production, such as using only fair trade materials, might conflict with the objective of profit maximisation.

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Question 8

6 marks

A manufacturing firm decides to relocate its factory to a country with lower labor costs to increase profitability. Analyze the likely conflict this creates between the objectives of the owners and the local community.

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Question 9

5 marks

A large manufacturing company has decided to relocate its factory to a country where labor costs are lower to achieve its objective of profit maximisation.

a) Identify two stakeholder groups that would be negatively affected by this decision.
b) Explain the likely conflict between the objectives of the shareholders and the local community in the country where the factory is currently located.

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Question 10

6 marks

An entrepreneur is starting a social enterprise that employs disabled individuals to manufacture recycled paper products.

a) Explain the 'triple bottom line' objectives that a social enterprise typically follows.
b) Discuss why this social enterprise might find it more difficult to achieve business growth compared to a traditional private limited company.

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