1.1 The purpose and nature of businesses

• Businesses create value for customers, employees, and owners.


  True
• Businesses aim to make a profit by selling goods or services.

  True
• Businesses may balance profit maximization with social responsibility.


  True
• What is the primary purpose of businesses?

  To create value
• Match the business type with its characteristic:

  Sole Proprietorship ↔️ Single owner, unlimited liability

  Partnership ↔️ Two or more owners, unlimited liability

  Private Limited Company (Ltd) ↔️ Shareholders, limited liability

  Public Limited Company (PLC) ↔️ Publicly traded shares, limited liability
• The core functions of a business work together to generate profits.


  True
• What is the primary goal of profit maximization as a business objective?

  Financial surplus
• Match the stakeholder group with their key interests:

  Customers ↔️ Affordable, high-quality products

  Employees ↔️ Job security, good pay

  Shareholders ↔️ Profitability and business growth

  Suppliers ↔️ Reliable business relationships
• The business environment includes factors such as economic, political, and social forces
• Order the elements of the business environment from most to least impactful:

  1️⃣ Economic

  2️⃣ Political/Legal

  3️⃣ Technological

  4️⃣ Social/Cultural

  5️⃣ Environmental
• One main purpose of a business is to generate revenue and make a financial surplus
• A sole proprietorship involves a single owner with unlimited liability
• Match the business objective with its description:

  Profit Maximization ↔️ Generating the highest possible financial surplus

  Growth ↔️ Expanding the size and market share

  Survival ↔️ Ensuring long-term viability

  Social Responsibility ↔️ Considering impact on society
• The key differences between business types lie in their ownership, liability, and scale
• A public limited company (PLC) has publicly traded shares and limited liability for its shareholders.


  True
• The finance function manages the financial resources and accounting for the business
• Businesses often balance multiple objectives, such as profitability and social responsibility.


  True
• Balancing the needs of diverse stakeholders is crucial for long-term business success.


  True
• Technological advancements can disrupt entire industries and force businesses to adapt.

  True
• What is a business defined as in this study material?

  An organization that produces and sells goods or services to make a profit
• Match the business type with its ownership structure:

  Sole Proprietorship ↔️ Single owner

  Partnership ↔️ Two or more owners

  Private Limited Company ↔️ Shareholders with limited liability

  Public Limited Company ↔️ Publicly traded shares
• Which business function is responsible for the production and delivery of goods/services?

  Operations
• What is one of the main purposes of a business according to this study material?

  Profit-making
• A sole proprietorship has a single owner with unlimited liability
• Which business function is responsible for the production and delivery of goods/services?

  Operations
• Order the core functions of a business:

  1️⃣ Operations

  2️⃣ Finance

  3️⃣ Marketing

  4️⃣ Human Resources
• Ensuring the long-term viability of a business is called survival
• What is a key interest of the local community as a stakeholder group?

  Environmental impact
• How can changes in interest rates affect a business?

  Affects profitability