Business 7115 · O Level · Enterprise, business growth and size
Enterprise, business growth and size — practice question
PKN produces glass. Supporting sustainable development matters to the business. PKN runs factories in 30 countries and employs 27 000 people. The Managing Director recognises that globalisation has helped PKN. She intends to enlarge the business through external growth. Retained profit is one finance source that a business may use to pay for expansion. Some of PKN’s directors are worried that diseconomies of scale may emerge as the business becomes larger.
(a)[2]
Identify two methods of external growth that a business could use.
(b)[2]
Identify two causes of globalisation.
(c)[4]
Outline two methods by which PKN could support sustainable development.
(d)[6]
Explain two diseconomies of scale that might affect PKN as it grows.
(e)[6]
Do you think the advantages of using retained profits to finance business expansion are greater than the disadvantages? 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: “merger” …