Test questions

• What is the main difference between a public limited company (PLC) and a private limited company (Ltd) regarding share sales?

  A PLC can sell shares to anyone through the stock market, while a Ltd can only sell shares to private individuals they know.
• What does limited liability mean for owners of a PLC and a Ltd?

  Owners are only at risk of losing their investment and not their personal possessions.
• Who controls both a PLC and a Ltd company?

  Both are controlled by a board of directors.
• What are some advantages of setting up an organization as a social enterprise?


  Social enterprises can attract customers who appreciate their social cause and good-quality staff who want to make a difference.
• How does a social enterprise benefit from an asset lock?

  In case of bankruptcy, the sale of assets goes to their good cause.
• What is a key advantage of franchising for the franchiser?

  The franchiser is able to grow with minimal risk.
• What is a disadvantage of franchising for the franchiser?

  If one franchise gets a bad reputation, it affects the whole brand.
• What characterizes a multinational organization?

  A multinational organization has operations in more than one country.
• What is a feature of a multinational organization's head office?

  It usually bases its head office in its home country.
• How can a multinational organization influence governments?

  It can influence governments and receive grants for creating jobs.
• What are some methods of internal (organic) growth an organization can use?

  Launching new products, opening new branches, and introducing e-commerce.
• What is a benefit of opening new physical branches for a business?

  It allows the business to reach new markets and more customers.
• What is a key advantage of outsourcing for a business?

  Outsourcing allows a business to concentrate on core activities.
• What is a disadvantage of outsourcing?


  Communication between businesses needs to be very clear to meet specifications.
• What is one way a business can achieve growth through mergers?

  A business could agree to join with another business to increase market share.
• What is a disadvantage of a takeover?

  A disadvantage is that takeovers are often hostile, leading to a bad public image.
• What is the difference between a decentralized and a centralized management structure?

  A decentralized structure delegates decision-making to individual departments, while a centralized structure retains decision-making at head office.
• What is a potential disadvantage of a decentralized management structure?

  It can result in the organization losing an overall corporate image if each department operates differently.
• How can interest rates affect an organization?

  Higher interest rates can mean customers have less disposable income to spend on goods and services.
• What happens when interest rates decrease?


  Customers are less likely to save and therefore will spend more on an organization's products.
• What are some advantages of using a SWOT analysis?

  It identifies strengths, weaknesses, threats, and opportunities for a business.
• What is a disadvantage of using a SWOT analysis?

  A SWOT analysis can be very time-consuming, which may slow down decision-making.
• What are the main roles of a manager in an organization?

  Planning, commanding, coordinating, controlling, and delegating.
• How can technology aid decision-making in an organization?

  Technology can improve accuracy, speed, and communication in decision-making processes.
• What are some costs of downsizing to an organization?

  Valuable skills and knowledge will be lost, remaining staff may feel threatened, and redundancy payments will need to be made.
• What is a potential effect of remaining staff feeling threatened after downsizing?

  The quality of their work may suffer due to demotivation.
• What is the significance of having a strong corporate culture for an organization?

  A strong corporate culture can enhance employee motivation and align the workforce with the organization's goals.
• What factors can affect quality decisions being made in an organization?

  Factors include available information, time constraints, and the decision-making process used.
• What are the benefits of a matrix structure in an organization?

  A matrix structure can enhance flexibility, improve communication, and facilitate collaboration across departments.
• What are the advantages and disadvantages of grouping by location?

  Advantages include better local market understanding, while disadvantages may involve duplication of resources.
• How does customer grouping differ from product grouping?

  Customer grouping focuses on the needs of different customer segments, while product grouping focuses on the characteristics of products.
• What is the difference between strategic and operational decisions?

  Strategic decisions are long-term and affect the overall direction of the organization, while operational decisions are short-term and focus on day-to-day operations.
• What is the purpose of using a structured decision-making model like SWOT analysis?

  A structured decision-making model helps identify strengths, weaknesses, opportunities, and threats to inform better decision-making.
• What is the role of a manager in planning?


  A manager looks ahead, sees potential opportunities or problems, and sets targets and strategies.
• How does a manager coordinate resources in an organization?

  A manager brings together the resources of the business to achieve overall objectives.
• What does a manager do in the control role?

  A manager measures and corrects activities in the organization, checking what is being done against expectations.
• What is the significance of delegation in management?


  Delegation helps lessen a manager's workload and motivates staff by giving them authority to carry out tasks.
• How can technology improve decision-making accuracy?

  Spreadsheets can perform 'What if' statements to calculate projected outcomes of decisions.
• How can databases aid in decision-making speed?


  Databases make it easy to search for information quickly using queries and sort functions.
• What is the benefit of using email in decision-making?

  Email can communicate information regarding decisions to many employees at once, reducing printing costs.