1.1 The purpose and nature of businesses

• One of the primary purposes of a business is to generate profit
• What are three common types of businesses?

  Sole traders, partnerships, corporations
• What are stakeholders in a business?

  Individuals or groups with interest
• Shareholders are interested in receiving dividend payments
• Order the main purposes of a business according to the study material

  1️⃣ Profit Generation

  2️⃣ Customer Satisfaction

  3️⃣ Market Expansion

  4️⃣ Value Creation
• Stakeholders can be divided into internal and external stakeholders
• Customers are external stakeholders interested in quality products and affordable prices
• The tertiary sector provides services to support the primary and secondary sectors
• Match the business structure with its characteristic:

  Sole Trader ↔️ Unlimited liability

  Partnership ↔️ Shared responsibilities

  Corporation ↔️ Limited liability
• Businesses create value by transforming resources into goods or services.

  True
• The main purpose of a business is to earn money by exceeding costs
• Employees are internal stakeholders interested in job security and fair wages
• Understanding the interests of different stakeholder groups is crucial for business success
• What is an interest of shareholders in a business?

  Dividend payments
• What is the government's primary interest in a business?

  Compliance with regulations
• Match the business structure with its advantage:

  Sole Trader ↔️ Simple to set up

  Partnership ↔️ More capital available

  Corporation ↔️ Limited liability
• Order the types of business growth from most controlled to most rapid:

  1️⃣ Organic Growth

  2️⃣ Mergers

  3️⃣ Acquisitions
• What is a business defined as?

  An organization or enterprise
• Order the main purposes of a business according to the study material

  1️⃣ Profit Generation

  2️⃣ Customer Satisfaction

  3️⃣ Market Expansion

  4️⃣ Value Creation
• Customer satisfaction is achieved by meeting their needs and desires
• What are the two categories of stakeholders?

  Internal and external
• Customer satisfaction is achieved by meeting their needs and desires


  True
• Who are stakeholders in a business?

  Individuals or groups
• What are the interests of employees as stakeholders?

  Job security, fair wages
• What is the primary activity of the primary sector?

  Extracting natural resources
• What is a sole trader business structure?

  Owned by one individual
• Customer satisfaction is a primary purpose of a business
• Which business type has limited liability?

  Corporation
• What are the two categories of stakeholders in a business?

  Internal and external
• What are stakeholders in a business context?

  Individuals or groups with interest
• Match the stakeholder group with their primary interest:

  Employees ↔️ Job security

  Shareholders ↔️ Return on investment

  Customers ↔️ Quality products
• Suppliers are interested in stable contracts, timely payments, and fair terms
• The secondary sector transforms raw materials into finished products


  True
• Sustainability involves meeting current needs without compromising future resources


  True
• Customer satisfaction is a key purpose of a business

  True
• Generating a surplus is the same as generating a loss

  False
• Match the stakeholder group with their interests:

  Employees ↔️ Job security and fair wages

  Shareholders ↔️ Return on investment

  Customers ↔️ Quality products at affordable prices

  Government ↔️ Compliance with regulations
• What type of stakeholder is the local community?

  External
• Match the stakeholder group with their interests:

  Customers ↔️ Quality products at affordable prices

  Suppliers ↔️ Stable contracts and fair terms

  Community ↔️ Environmental responsibility and job creation
• Understanding stakeholder interests is crucial for business success.

  True