Size of business: Practice Questions

Which of the following is a commonly used method for measuring the size of a business that can be applied across different industries?

Which method of measuring business size is most likely to be affected by a firm's decision to switch from labor-intensive production to a fully automated, capital-intensive process, while maintaining the same level of output?

A successful boutique clothing manufacturer decides to merge with a large fabric supplier. What is the most likely strategic objective for this backward vertical integration?

A government body is evaluating businesses to determine their eligibility for a small-business tax relief scheme. Why might using market capitalization as the sole measure of business size be considered inappropriate for this task?

A hostile takeover occurs when a bidding company goes directly to the target company's shareholders. Why might the objectives of the board of directors conflict with the objectives of the shareholders in this situation?

Identify two ways in which the size of a business can be measured, other than by its number of employees.

A business group expands through conglomerate diversification into three entirely unrelated industrial sectors. Explain why using market share as a measure of the total group's size is theoretically flawed, whereas capital employed remains a valid metric.

A digital media company is evaluating a potential acquisition of a traditional printing firm. Explain why using number of employees as the sole metric for comparing the size of these two businesses would likely result in a flawed strategic conclusion.