Business Studies AS Level. Chap. 5 Revision Questions With 100% Correct Answers 2023 Update

Distinguish between the shareholder concept and the stakeholder concept. - ANS-a) Shareholder Concept: An individual (also known as stockholder) that legally owns a share/stock in a public corporation. They are also owners of a limited company. They buy shares which represent part of a company. b) Stakeholder Concept The view that businesses and their managers have responsibilities to a wide range of groups, not just shareholders. Explain why a business might experience lower profits by meeting stakeholder objectives - ANS-Mostly because it's what the stakeholder wants and is not always what the consumer wants. Generally stakeholders want stability without much risk. Explain why a business might experience higher profits by meeting stakeholder objectives - ANS-Increasing their shareholder value as well as meeting their social standards over a period of time, will qualify them to raise their profits. If the company's reputation improves, they will be able to increase their sales & profits as well, which also can add opportunities that are long and broad. Outline the responsibilities a business in the oil industry might have to two stakeholder groups. - ANS-a) Customers: The business should keep reasonable prices on their products as customers will not buy from them as much if the price is too high. b) Local Community: Have to maintain a clean atmosphere due to the fact that oil spills have a severe impact on the environment if anything occurs. Outline the responsibilities a business in a tertiary industry might have to two stakeholder groups. - ANS-a) Employees: To ensure that the finished products are above board (as good as they claim to be). b) Government: The government (honestly in my answer) should stay out of everyone's business due to the fact that they cause too much trouble as it is. Explain the difference between a business acting legally and a business acting socially responsible. - ANS-A business acting legally is basically a business following the law (unlike drug dealing businesses), whereas a business acting socially responsible is in Continues...