Business 7115 · O Level · Business objectives and stakeholder objectives
Business objectives and stakeholder objectives — practice question
KTF produces building materials such as cement and bricks. In the previous year, KTF recorded sales of $25bn. Since it was founded 60 years ago, KTF’s objectives have frequently altered. The Managing Director wants KTF to grow. KTF is going to acquire one of its key rivals. The enlarged business will have total sales of $40bn. The Managing Director said: ‘Many stakeholder groups will be affected by this decision.’ She understands that many external influences shape business activity, including the business cycle, interest rates and laws that safeguard the environment.
(a)[2]
Define the term ‘business cycle’.
(b)[2]
Identify two reasons why a business may alter its objectives.
(c)[4]
Outline one benefit and one drawback to KTF from taking over the other business.
(d)[6]
Explain how two external stakeholder groups could be affected by the takeover.
(e)[6]
Do you think businesses will be more affected by new legal controls to protect the environment than by an increase in interest rates? 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: “Ups and downs in economic activity experienced by an economy over time” …