Business 0450 · IGCSE · Enterprise, business growth and size
Enterprise, business growth and size — practice question
BKH is a major public limited company. It has 2,000 employees working at 18 locations. BKH sells a variety of insurance products, including house and car insurance. BKH’s shareholders want the business to raise profit. The Managing Director understands that higher profit can conflict with the aims of other stakeholder groups. She stated: ‘Private sector businesses have different objectives to public sector organisations.’ BKH is also planning to grow by taking over another insurance company.
(a)[2]
Define the term ‘public sector’.
(b)[2]
Define the term ‘profit’.
(c)[4]
Identify four methods that can be used to measure the size of a business.
(d)[6]
Explain one way each stakeholder’s objectives might clash with BKH’s objective of increasing profit.
Customers objective:
How this objective might conflict:
Employees objective:
How this objective might conflict:
(e)[6]
Do you think economies of scale are the most important reason for taking over another business? Justify your answer.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Businesses and organisations owned by the government or state” …