Comprehensive
Assessment Resource:
AQA A Level Business
(7132) Paper 1 – 2026
Examination Series
1. Executive Intelligence: Strategic Context
and Assessment Framework
1.1 Report Scope and Pedagogical Objectives
This document serves as a definitive strategic resource for candidates and educators preparing
for the AQA A Level Business Paper 1 (7132/1) in the 2026 examination series. Unlike standard
revision guides, this report is structured as an exhaustive "Master Assessment Bank,"
comprising 75 high-quality questions designed to rigorously test every facet of the specification.
The objective is to move beyond rote learning, facilitating a deep, nuanced understanding of
business strategy, analysis, and evaluation. The analysis contained herein synthesizes historical
examiner feedback, current economic forecasting, and advanced theoretical frameworks to
provide a resource that mirrors the complexity of the live examination.
The 2026 examination series represents a mature phase of the current specification. Historical
analysis of examiner reports from 2019 through 2025 indicates a progressive shift in
assessment style. While early papers focused heavily on definition recall, recent trends
demonstrate a demand for "synoptic" reasoning—the ability to connect disparate topics, such as
linking financial gearing ratios to human resource planning or operational efficiency. This report
addresses this by ensuring that questions are not isolated data points but rather interconnected
case studies that require holistic business thinking.
1.2 The Macroeconomic Landscape of 2026: Application and
Context
A critical differentiator for high-performing candidates (A/A* grades) is the ability to apply
business theory to the prevailing external environment (AO2). The "context" for 2026 is distinct
from the volatile post-pandemic years, characterized instead by a "stabilized stagnation" which
,presents unique strategic challenges.
Economic Stagnation and Strategic Response Forecasts for the UK economy in 2026
suggest a period of sluggish growth, with GDP expansion projected at approximately 1.1% to
1.2%. This low-growth environment fundamentally alters the strategic calculus for major
corporations. In a booming economy, businesses can rely on a "rising tide" to lift sales; in 2026,
growth must be achieved through aggressive market share acquisition or diversification,
strategies that carry inherently higher risk. Consequently, questions in this report dealing with
Ansoff’s Matrix or Porter’s Generic Strategies are framed within this zero-sum context, where
one firm’s gain is explicitly another’s loss.
Inflationary Pressures and Cost Management While headline inflation is projected to stabilize
near the Bank of England's 2% target by late 2026, the cost base for businesses remains
elevated due to structural supply chain realignments. This persistent cost pressure forces a
renewed focus on operational efficiency and lean production methods. Candidates must
understand that "efficiency" in 2026 is not merely about cost-cutting but about survival in a
margin-squeezed landscape. The interplay between high input costs and price-sensitive
consumers—whose real incomes have only marginally recovered—will be a recurring theme in
the pricing and operational questions.
The Labour Market Paradox Unemployment is forecast to remain relatively low at 4.6%
throughout the forecast period. This creates a paradox: despite sluggish growth, the labour
market remains tight, particularly for skilled roles. This environment elevates the importance of
"Soft HRM" strategies. Retention becomes cheaper than recruitment, making theories like
Herzberg’s Two-Factor Theory and Hackman & Oldham’s Job Characteristics Model critical for
explaining how firms maintain productivity without excessive wage inflation.
Technological Integration and AI The operational backdrop of 2026 is defined by the maturity
of Artificial Intelligence integration. No longer a buzzword, AI is assumed to be part of the
operational fabric, driving inventory management, customer relationship management (CRM),
and dynamic pricing. Questions in this report reflect this by moving beyond "digital marketing" to
explore how technology alters critical path analysis, capacity utilization, and supply chain
rationalization.
2. Part I: Section A – The Objective Test Bank
(Questions 1–45)
This section constitutes the foundational knowledge assessment. In a live AQA Paper 1, Section
A contains 15 multiple-choice questions (MCQs). This expanded bank of 45 questions covers
the entire syllabus (Themes 1–10) and is calibrated to expose common misconceptions
identified in examiner reports. Each entry provides the question, the correct answer, and an
extensive analytical narrative detailing the theory, the reason for the answer, and the specific
traps set by the distractors.
Theme 1: What is Business?
Q1. A public limited company (PLC) faces pressure from institutional shareholders to
maximize short-term dividends. This financial objective is most likely to result in a
strategic conflict with which stakeholder group? A. Suppliers seeking shorter payment
terms. B. Government agencies collecting corporation tax. C. Long-term customers seeking
, investment in product innovation. D. Short-term creditors seeking liquidity assurance.
Answer: C Examiner’s Commentary and Strategic Analysis: The correct answer is C. This
question tests the candidate's understanding of stakeholder conflict, a core concept in Theme 1.
Institutional shareholders demanding immediate dividends force the business to prioritize
short-term cash extraction over long-term reinvestment. Product innovation requires retained
profits to fund Research and Development (R&D). Therefore, a strategy of maximizing
immediate payouts is diametrically opposed to the interests of customers who rely on the firm’s
long-term product evolution.
● Distractor Analysis: Option A (Suppliers) might be conflicted if cash is tight, but paying
dividends doesn't inherently mean delaying supplier payments, whereas it does inherently
reduce retained profit for R&D. Option B (Government) benefits from higher profits (tax),
so their interests align with profit maximization. Option D (Creditors) might worry about
cash outflow, but C is the most direct strategic conflict regarding the use of profit.
Q2. Under the Companies Act 2006, which of the following is a specific legal requirement
for a Public Limited Company (PLC) that does not apply to a Private Limited Company
(LTD)? A. The requirement to register with Companies House. B. The requirement to have at
least one director. C. The requirement to obtain a Trading Certificate before commencing
business. D. The liability of shareholders being limited to the value of their shares.
Answer: C Examiner’s Commentary and Strategic Analysis: The correct answer is C. While
both PLCs and LTDs must register with Companies House (A) and have limited liability (D), the
PLC structure is subject to stricter regulation due to its ability to raise capital from the general
public. A PLC cannot legally trade until it has been issued a Trading Certificate, confirming it
meets the minimum share capital requirement (£50,000).
● Theory Refresher: Candidates often confuse the ability to trade shares with the regulatory
hurdles to do so. The PLC structure is distinct not just in scale but in legal initiation. This
question separates those who know the general definition from those who understand the
legal mechanics.
Q3. A "social enterprise" is best defined as a business that: A. Is owned and operated by
the government for the public good. B. Is a charity that relies solely on donations. C. Trades for
social/environmental purposes but reinvests the majority of profits. D. Maximizes shareholder
value while donating a small percentage to charity.
Answer: C Examiner’s Commentary and Strategic Analysis: The correct answer is C. The
distinction between a charity, a public sector body, and a social enterprise is frequently
misunderstood. A social enterprise acts commercially—selling goods and services—but its
primary "mission" is social. Crucially, unlike a charity (B), it aims to be self-sustaining through
trade. Unlike the public sector (A), it is privately owned.
● Examiner Tip: In 2026 questions, look for social enterprises being used as examples of
"mission-driven" strategy. They are not "non-profits" in the sense of not making a profit;
they are "for-purpose" businesses where profit is a means to an end, not the end itself.
Theme 2: Managers, Leadership, and
Decision Making
Q4. A manager plotted at (1,9) on the Blake Mouton Grid is characterized as focusing on:
A. Impoverished Management. B. Country Club Management. C. Team Management. D.
Authority-Compliance Management.
Assessment Resource:
AQA A Level Business
(7132) Paper 1 – 2026
Examination Series
1. Executive Intelligence: Strategic Context
and Assessment Framework
1.1 Report Scope and Pedagogical Objectives
This document serves as a definitive strategic resource for candidates and educators preparing
for the AQA A Level Business Paper 1 (7132/1) in the 2026 examination series. Unlike standard
revision guides, this report is structured as an exhaustive "Master Assessment Bank,"
comprising 75 high-quality questions designed to rigorously test every facet of the specification.
The objective is to move beyond rote learning, facilitating a deep, nuanced understanding of
business strategy, analysis, and evaluation. The analysis contained herein synthesizes historical
examiner feedback, current economic forecasting, and advanced theoretical frameworks to
provide a resource that mirrors the complexity of the live examination.
The 2026 examination series represents a mature phase of the current specification. Historical
analysis of examiner reports from 2019 through 2025 indicates a progressive shift in
assessment style. While early papers focused heavily on definition recall, recent trends
demonstrate a demand for "synoptic" reasoning—the ability to connect disparate topics, such as
linking financial gearing ratios to human resource planning or operational efficiency. This report
addresses this by ensuring that questions are not isolated data points but rather interconnected
case studies that require holistic business thinking.
1.2 The Macroeconomic Landscape of 2026: Application and
Context
A critical differentiator for high-performing candidates (A/A* grades) is the ability to apply
business theory to the prevailing external environment (AO2). The "context" for 2026 is distinct
from the volatile post-pandemic years, characterized instead by a "stabilized stagnation" which
,presents unique strategic challenges.
Economic Stagnation and Strategic Response Forecasts for the UK economy in 2026
suggest a period of sluggish growth, with GDP expansion projected at approximately 1.1% to
1.2%. This low-growth environment fundamentally alters the strategic calculus for major
corporations. In a booming economy, businesses can rely on a "rising tide" to lift sales; in 2026,
growth must be achieved through aggressive market share acquisition or diversification,
strategies that carry inherently higher risk. Consequently, questions in this report dealing with
Ansoff’s Matrix or Porter’s Generic Strategies are framed within this zero-sum context, where
one firm’s gain is explicitly another’s loss.
Inflationary Pressures and Cost Management While headline inflation is projected to stabilize
near the Bank of England's 2% target by late 2026, the cost base for businesses remains
elevated due to structural supply chain realignments. This persistent cost pressure forces a
renewed focus on operational efficiency and lean production methods. Candidates must
understand that "efficiency" in 2026 is not merely about cost-cutting but about survival in a
margin-squeezed landscape. The interplay between high input costs and price-sensitive
consumers—whose real incomes have only marginally recovered—will be a recurring theme in
the pricing and operational questions.
The Labour Market Paradox Unemployment is forecast to remain relatively low at 4.6%
throughout the forecast period. This creates a paradox: despite sluggish growth, the labour
market remains tight, particularly for skilled roles. This environment elevates the importance of
"Soft HRM" strategies. Retention becomes cheaper than recruitment, making theories like
Herzberg’s Two-Factor Theory and Hackman & Oldham’s Job Characteristics Model critical for
explaining how firms maintain productivity without excessive wage inflation.
Technological Integration and AI The operational backdrop of 2026 is defined by the maturity
of Artificial Intelligence integration. No longer a buzzword, AI is assumed to be part of the
operational fabric, driving inventory management, customer relationship management (CRM),
and dynamic pricing. Questions in this report reflect this by moving beyond "digital marketing" to
explore how technology alters critical path analysis, capacity utilization, and supply chain
rationalization.
2. Part I: Section A – The Objective Test Bank
(Questions 1–45)
This section constitutes the foundational knowledge assessment. In a live AQA Paper 1, Section
A contains 15 multiple-choice questions (MCQs). This expanded bank of 45 questions covers
the entire syllabus (Themes 1–10) and is calibrated to expose common misconceptions
identified in examiner reports. Each entry provides the question, the correct answer, and an
extensive analytical narrative detailing the theory, the reason for the answer, and the specific
traps set by the distractors.
Theme 1: What is Business?
Q1. A public limited company (PLC) faces pressure from institutional shareholders to
maximize short-term dividends. This financial objective is most likely to result in a
strategic conflict with which stakeholder group? A. Suppliers seeking shorter payment
terms. B. Government agencies collecting corporation tax. C. Long-term customers seeking
, investment in product innovation. D. Short-term creditors seeking liquidity assurance.
Answer: C Examiner’s Commentary and Strategic Analysis: The correct answer is C. This
question tests the candidate's understanding of stakeholder conflict, a core concept in Theme 1.
Institutional shareholders demanding immediate dividends force the business to prioritize
short-term cash extraction over long-term reinvestment. Product innovation requires retained
profits to fund Research and Development (R&D). Therefore, a strategy of maximizing
immediate payouts is diametrically opposed to the interests of customers who rely on the firm’s
long-term product evolution.
● Distractor Analysis: Option A (Suppliers) might be conflicted if cash is tight, but paying
dividends doesn't inherently mean delaying supplier payments, whereas it does inherently
reduce retained profit for R&D. Option B (Government) benefits from higher profits (tax),
so their interests align with profit maximization. Option D (Creditors) might worry about
cash outflow, but C is the most direct strategic conflict regarding the use of profit.
Q2. Under the Companies Act 2006, which of the following is a specific legal requirement
for a Public Limited Company (PLC) that does not apply to a Private Limited Company
(LTD)? A. The requirement to register with Companies House. B. The requirement to have at
least one director. C. The requirement to obtain a Trading Certificate before commencing
business. D. The liability of shareholders being limited to the value of their shares.
Answer: C Examiner’s Commentary and Strategic Analysis: The correct answer is C. While
both PLCs and LTDs must register with Companies House (A) and have limited liability (D), the
PLC structure is subject to stricter regulation due to its ability to raise capital from the general
public. A PLC cannot legally trade until it has been issued a Trading Certificate, confirming it
meets the minimum share capital requirement (£50,000).
● Theory Refresher: Candidates often confuse the ability to trade shares with the regulatory
hurdles to do so. The PLC structure is distinct not just in scale but in legal initiation. This
question separates those who know the general definition from those who understand the
legal mechanics.
Q3. A "social enterprise" is best defined as a business that: A. Is owned and operated by
the government for the public good. B. Is a charity that relies solely on donations. C. Trades for
social/environmental purposes but reinvests the majority of profits. D. Maximizes shareholder
value while donating a small percentage to charity.
Answer: C Examiner’s Commentary and Strategic Analysis: The correct answer is C. The
distinction between a charity, a public sector body, and a social enterprise is frequently
misunderstood. A social enterprise acts commercially—selling goods and services—but its
primary "mission" is social. Crucially, unlike a charity (B), it aims to be self-sustaining through
trade. Unlike the public sector (A), it is privately owned.
● Examiner Tip: In 2026 questions, look for social enterprises being used as examples of
"mission-driven" strategy. They are not "non-profits" in the sense of not making a profit;
they are "for-purpose" businesses where profit is a means to an end, not the end itself.
Theme 2: Managers, Leadership, and
Decision Making
Q4. A manager plotted at (1,9) on the Blake Mouton Grid is characterized as focusing on:
A. Impoverished Management. B. Country Club Management. C. Team Management. D.
Authority-Compliance Management.
