Business Studies A level AQA Test 1
How and why does a company's mission link to its objectives? - ANS - - Objectives allow
companies to reach the aims in their mission statement
- A company must understand its mission / overall goals to form objectives
\How do financial resources impact corporate decision making? - ANS - If a company is unable
to generate sufficient financial resources, this will affect its decision making. For example, if a
company wishes to grow or diversify, it will need or have access to sufficient funds to support
those developments.
Limited financial resources will mean a business will have to work towards other things, such as
the improvement of their marketing activities or the quality of their production facilities.
\How do human resources impact corporate decision making? - ANS - The availability of human
resources will influence a company's decision making - for example, if enough trained people
are available within a company or whether enough trained people are interested in applying for
jobs. This influences the ability of a business to pursue developments.
For example, if a company wants to introduce a particularly complex piece of computer code,
they would need to have or train staff to make it.
\How do physical resources impact corporate decision making? - ANS - If a business is
considering expansion into another area, much will depend on the availability of suitable sites at
an affordable price.
\How do we answer a 16 marker? (To what extent... / decide whether...) - ANS - PECANPIE
PE: Point Explained
CAN: Contextualised Analysis
- logical chain or argument
PIE: Point Included Evaluation
- Explore the limitations of the point being argued
\How do we structure an 8 mark analysis question? - ANS - PECAn
Point
Explain
Context
Analysis
\How do you calculate an index number? - ANS - Index number in Year Y = (Data value in Year
Y / Base Year value) x 100
\How do you calculate Market Capitalisation? - ANS - Market Capitalisation:
Number of originally issued shares * The new share price
\How do you calculate Share Capital? - ANS - Share Capital:
The number of ordinary shares (originally issued shares) * The price they were issued for
, \How does ethics impact corporate decision making? - ANS - A decision made on ethical
grounds might reject the most profitable solution in favour of one that provides a greater benefit
to society as a whole, or particular stakeholder groups).
Despite this, a company may adopt a more ethical position because its more popular with
customers and would likely lead to increased sales, meaning it's hard to tell if a company is
actually being ethical or just wants to increase PR, brand loyalty and sales.
\How is profit calculated? - ANS - total revenue - total cost
(money in - money out)
\If the base year's house price is £200,000, what is the index number in a year where the price
is £230,000? - ANS - 115
() x 100
\In which legal business structure can the public buy shares? - ANS - In PLCs
\What are some characteristics of a Democratic leadership style? - ANS - Decisions are always
made by a majority consensus
Acts on advice & opinions of subordinates
Good for morale building and can lead to better decisions if others have experience you do not
\What are some characteristics of a Laissez Faire leadership style? - ANS - Minimal input from
leader ; staff essentially run the business
Lacks coordination, often viewed as weak
- effectiveness depends on staff (useful if staff are experienced and skilled)
\What are some characteristics of a Paternalistic leadership style? - ANS - Parent-child
relationship
Wants respect & opinions of subordinates but will make own decisions
Workers are closely supervised, no delegation
Leaders try to look after the needs of workers
Motivational because workers feel their needs are being considered
\What are some Pros and Cons of a PLC? - ANS - Pros: Bigger overall company, greater growth
/ profits
Cons: - Legally requires transparency in financial records (since it's public)
- At risk of a hostile takeover (where an individual / individuals obtain 51% or more of the total
overall shares)
- Less percentage of the profit goes to the original owner
\What are some Pros and Cons of an LTD? - ANS - Pros: Less risk because you're not liable,
less risk than a PLC because it's not public, so no risk of a takeover, even more increased
growth
Cons: Less percentage of the profit goes to the original owner
\What are some Pros and Cons of being a Sole Trader? - ANS - Pros: You get all the profit
Cons: There's much more risk, possessions can be repossessed, you have to rely on yourself /
external corporations if you have any problems
\What are some Pros and Cons of being in a Partnership? - ANS - Pros: Distributes risk,
increases growth which means increased profits, increased budget
Cons: The company is still liable
\What are the 3 kinds of resources? - ANS - Financial, Human and Physical
How and why does a company's mission link to its objectives? - ANS - - Objectives allow
companies to reach the aims in their mission statement
- A company must understand its mission / overall goals to form objectives
\How do financial resources impact corporate decision making? - ANS - If a company is unable
to generate sufficient financial resources, this will affect its decision making. For example, if a
company wishes to grow or diversify, it will need or have access to sufficient funds to support
those developments.
Limited financial resources will mean a business will have to work towards other things, such as
the improvement of their marketing activities or the quality of their production facilities.
\How do human resources impact corporate decision making? - ANS - The availability of human
resources will influence a company's decision making - for example, if enough trained people
are available within a company or whether enough trained people are interested in applying for
jobs. This influences the ability of a business to pursue developments.
For example, if a company wants to introduce a particularly complex piece of computer code,
they would need to have or train staff to make it.
\How do physical resources impact corporate decision making? - ANS - If a business is
considering expansion into another area, much will depend on the availability of suitable sites at
an affordable price.
\How do we answer a 16 marker? (To what extent... / decide whether...) - ANS - PECANPIE
PE: Point Explained
CAN: Contextualised Analysis
- logical chain or argument
PIE: Point Included Evaluation
- Explore the limitations of the point being argued
\How do we structure an 8 mark analysis question? - ANS - PECAn
Point
Explain
Context
Analysis
\How do you calculate an index number? - ANS - Index number in Year Y = (Data value in Year
Y / Base Year value) x 100
\How do you calculate Market Capitalisation? - ANS - Market Capitalisation:
Number of originally issued shares * The new share price
\How do you calculate Share Capital? - ANS - Share Capital:
The number of ordinary shares (originally issued shares) * The price they were issued for
, \How does ethics impact corporate decision making? - ANS - A decision made on ethical
grounds might reject the most profitable solution in favour of one that provides a greater benefit
to society as a whole, or particular stakeholder groups).
Despite this, a company may adopt a more ethical position because its more popular with
customers and would likely lead to increased sales, meaning it's hard to tell if a company is
actually being ethical or just wants to increase PR, brand loyalty and sales.
\How is profit calculated? - ANS - total revenue - total cost
(money in - money out)
\If the base year's house price is £200,000, what is the index number in a year where the price
is £230,000? - ANS - 115
() x 100
\In which legal business structure can the public buy shares? - ANS - In PLCs
\What are some characteristics of a Democratic leadership style? - ANS - Decisions are always
made by a majority consensus
Acts on advice & opinions of subordinates
Good for morale building and can lead to better decisions if others have experience you do not
\What are some characteristics of a Laissez Faire leadership style? - ANS - Minimal input from
leader ; staff essentially run the business
Lacks coordination, often viewed as weak
- effectiveness depends on staff (useful if staff are experienced and skilled)
\What are some characteristics of a Paternalistic leadership style? - ANS - Parent-child
relationship
Wants respect & opinions of subordinates but will make own decisions
Workers are closely supervised, no delegation
Leaders try to look after the needs of workers
Motivational because workers feel their needs are being considered
\What are some Pros and Cons of a PLC? - ANS - Pros: Bigger overall company, greater growth
/ profits
Cons: - Legally requires transparency in financial records (since it's public)
- At risk of a hostile takeover (where an individual / individuals obtain 51% or more of the total
overall shares)
- Less percentage of the profit goes to the original owner
\What are some Pros and Cons of an LTD? - ANS - Pros: Less risk because you're not liable,
less risk than a PLC because it's not public, so no risk of a takeover, even more increased
growth
Cons: Less percentage of the profit goes to the original owner
\What are some Pros and Cons of being a Sole Trader? - ANS - Pros: You get all the profit
Cons: There's much more risk, possessions can be repossessed, you have to rely on yourself /
external corporations if you have any problems
\What are some Pros and Cons of being in a Partnership? - ANS - Pros: Distributes risk,
increases growth which means increased profits, increased budget
Cons: The company is still liable
\What are the 3 kinds of resources? - ANS - Financial, Human and Physical
