MASE Business Notes 2024/2025
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Questions and Answers

What is one potential problem linked to business expansion?

  • Easier communication
  • Improved product quality
  • Difficulty in controlling larger operations (correct)
  • Greater market share

    • Which method can help overcome the challenge of poor communication in a growing business?

  • Using traditional communication methods
  • Operating in a single unit
  • Leveraging latest IT equipment (correct)
  • Reducing employee numbers

    • What is a common risk faced by new entrepreneurs?

  • Guaranteed success
  • Capital investment required (correct)
  • Instant market recognition
  • Unlimited financial backing

    • How can a larger business manage diseconomies of scale effectively?

    <p>By decentralizing operations into smaller units</p> Signup and view all the answers

    What should entrepreneurs focus on to avoid high failure rates in business?

    <p>Good planning and strategy</p> Signup and view all the answers

    What is a key advantage of a sole trader's business structure?

    <p>Complete control over decisions</p> Signup and view all the answers

    Which of the following is a disadvantage of a partnership?

    <p>Unlimited liability</p> Signup and view all the answers

    What does a partnership agreement typically outline?

    <p>The tasks and capital contributions of each partner</p> Signup and view all the answers

    What is a major drawback for a sole trader regarding business identity?

    <p>No separate legal identity</p> Signup and view all the answers

    Which of the following is an advantage of forming a partnership?

    <p>Sharing of losses</p> Signup and view all the answers

    How do partnerships typically benefit from having multiple partners?

    <p>By utilizing individual specialties</p> Signup and view all the answers

    What is a potential result of having a partnership without an agreement?

    <p>Increased likelihood of disputes</p> Signup and view all the answers

    Which of the following characteristics is not associated with an unincorporated business?

    <p>Limited liability for owners</p> Signup and view all the answers

    Which of these groups would find it beneficial to compare the size of businesses?

    <p>Competitors</p> Signup and view all the answers

    What is one advantage of measuring business size by the number of employees?

    <p>It is easy to understand</p> Signup and view all the answers

    Which method is commonly used to compare businesses within the same industry?

    <p>Value of output</p> Signup and view all the answers

    What is a potential problem when measuring business size by the value of sales?

    <p>It may ignore product quality differences</p> Signup and view all the answers

    What does measuring business size by capital employed focus on?

    <p>Total value of investments made into the business</p> Signup and view all the answers

    Why might a firm with fewer employees have higher output levels?

    <p>It is a capital-intensive firm with advanced technology</p> Signup and view all the answers

    What is one reason businesses seek to expand?

    <p>To achieve economies of scale</p> Signup and view all the answers

    Which of the following is NOT a typical reason to measure business size?

    <p>To set employee salary levels</p> Signup and view all the answers

    What is the main advantage of a company having a separate legal identity from its owners?

    <p>It protects owners from being personally liable for company debts.</p> Signup and view all the answers

    Which of the following is a characteristic of a private limited company (Ltd)?

    <p>Ownership is often limited to family members.</p> Signup and view all the answers

    What happens if a shareholder sells their shares in a private limited company?

    <p>Shareholders must get consent from all partners.</p> Signup and view all the answers

    What is a disadvantage of operating as a private limited company?

    <p>Risk of losing control by the owners.</p> Signup and view all the answers

    What is the purpose of dividends in a company?

    <p>To return profits to shareholders after tax.</p> Signup and view all the answers

    Which of the following indicates a limitation on capital in certain partnerships?

    <p>A fixed maximum of partners allowed.</p> Signup and view all the answers

    How does a private limited company ensure continuity?

    <p>By existing independently of the owners' status.</p> Signup and view all the answers

    What is a key reason why a company can enter into contracts independently of its owners?

    <p>The company has a separate legal status.</p> Signup and view all the answers

    What is a benefit of increasing market share for a business?

    <p>More influence when dealing with suppliers</p> Signup and view all the answers

    Which type of growth occurs when a business expands its existing operations?

    <p>Internal growth</p> Signup and view all the answers

    What is a horizontal merger?

    <p>A firm merging with another in the same industry at the same production stage</p> Signup and view all the answers

    Which is a characteristic of forward vertical integration?

    <p>Creates a guaranteed market outlet for products</p> Signup and view all the answers

    What is an example of a backward vertical integration?

    <p>A soft drink company merging with a sugar supplier</p> Signup and view all the answers

    What is a reason a company might pursue conglomerate integration?

    <p>To diversify its operations into completely different industries</p> Signup and view all the answers

    Which of the following is NOT a benefit of horizontal integration?

    <p>Increased market surveillance</p> Signup and view all the answers

    What happens when one business takes over another business?

    <p>The latter becomes part of the former business</p> Signup and view all the answers

    What is one method a company can use to increase its influence over its market share?

    <p>Increasing company sales</p> Signup and view all the answers

    How can managers discourage shareholders from selling their shares?

    <p>By setting high prices to increase returns</p> Signup and view all the answers

    Which objective is NOT typically associated with a social enterprise?

    <p>Maximizing shareholder profit</p> Signup and view all the answers

    What is a financial objective of public sector businesses?

    <p>To meet profit targets set by the government</p> Signup and view all the answers

    Which of the following best describes a social enterprise's approach to profits?

    <p>Profits are typically reinvested back into social work</p> Signup and view all the answers

    In terms of customers, how might a business increase its influence over pricing?

    <p>By setting higher prices</p> Signup and view all the answers

    Which objective aligns with the purpose of a social enterprise?

    <p>To support job creation for marginalized populations</p> Signup and view all the answers

    What is a key responsibility of public sector businesses regarding service provision?

    <p>To provide high quality services</p> Signup and view all the answers

    Study Notes

    Course Outline

    • The course is titled "MASE BUSINESS NOTES" for the academic year 2024/2025
    • The course is taught by Mrs Shahinda Samih Abo Al Kheir
    • The course covers several units and chapters related to business

    Unit 1: Economy and You

    • Chapters:
      • Chapter 1: Basic economic concepts
      • Chapter 2: Understanding business activity

    Unit 2: Owning and Operating a Business

    • Chapters:
      • Chapter 3: Types of business ownership
      • Chapter 4: Entrepreneurship and small business
      • Chapter 5: Business ownership and operation

    Unit 3: Human Resources

    • Chapters:
      • Chapter 6: Human resources management
      • Chapter 7: Business Management
      • Chapter 8: Leadership in Management

    Unit 4: Marketing

    • Chapter:
      • Chapter 9: Marketing in today's world

    Unit 5: Finance

    • Chapter:
      • Chapter 10: Managing business finance

    Unit 6: Influences on Business

    • Chapters:
      • Chapter 11: Business in the Global economy
      • Chapter 12: Business ethics and social responsibility

    Chapter 1: Business Activity

    • Purpose of Business Activity: Satisfying societal needs and wants using scarce resources.
    • Needs vs. Wants: Needs are essential for survival (e.g., food); wants are not.
    • Economic Problem: Unlimited wants clash with limited resources.
    • Scarcity: Insufficient resources to produce desired goods and services.
    • Factors of Production:
      • Land: Natural resources (e.g., oil, gas)
      • Labour: Human effort (e.g., engineer)
      • Capital: Man-made resources (e.g., machinery)
      • Enterprise: Risk-taking, decision-making (e.g., owner)
    • Opportunity Cost: Value of the next best alternative sacrificed.

    Chapter 2: Classification of Businesses

    • Sectors of Production:
      • Primary: Extracting raw materials (e.g., agriculture, mining)
      • Secondary: Manufacturing goods (e.g., oil refining)
      • Tertiary: Providing services (e.g., banking)

    Chapter 3: Types of Business Ownership

    • Sole Trader: One person owns and runs the business.
      • Advantages: Little capital needed, few legal formalities, complete control.
      • Disadvantages: Limited capital, unlimited liability, no continuity.
    • Partnership: Two or more people jointly own and operate a business.
      • Advantages: More capital available, shared responsibilities, new ideas.
      • Disadvantages: Unlimited liability, disagreements, lack of continuity.
    • Limited Company (Ltd): A company with separate legal identity from its owners.
      • Advantages: Limited liability, continuity, ease of raising capital.
      • Disadvantages: More complex setup, legal requirements, loss of control to the public
    • Public Limited Company (PLC): A company that can sell shares to the general public.
      • Advantages: Raise large sums of capital, continuity, easier share buying/selling
      • Disadvantages: More complex organization, more controls/regulations.
      • Details of PLC's: National stock exchange trading
    • Franchises: Using established business name and systems to operate.
      • Advantages: Reduced risk, brand recognition
      • Disadvantages: Less independence, restrictions on operations

    Chapter 4: Entrepreneurship and Small Business

    • Comparing Business Size: Different ways to measure, include number of employees, value of output, capital employed, and value of sales
    • Business Growth: Internal (expanding existing operations), external (mergers, takeovers, or acquisitions)
      • Mergers and Takeover strategies to expand
      • Horizontal integration: Merging with companies or businesses in the same industry and stage of production
      • Vertical integration: Combining with a business at a different stage of production (e.g., from raw materials suppliers to retail outlets)
      • Conglomerate merger: Merging with a business completely unrelated in its product offering and operation

    Chapter 5: Business Ownership and Operation

    • Business Objectives: Aims and targets of a business.
    • Importance of Setting Objectives: Motivation, decision-making, performance measurement.
    • Common Business Objectives: Survival, profit, return on investment, growth, market share, service to community

    Chapter 6 (Business Ethics and Social Responsibility):

    -Global Economy: Discusses the international aspect of business operations -Ethics and Social Responsibility: Discussion on ethical practices for businesses and how businesses can use ethical means to generate social good.

    Key Concepts

    • Capital: Money invested in a business
    • Profit: Revenue exceeding total costs
    • Liquidity: Ability of the business to meet its short-term obligations
    • Over-expand: Growth too rapidly, leading to problems managing operations and finance
    • Stakeholders: People in any way invested in the business (owners, workers, customers, government, community)
    • Stakeholder Objectives: The needs and goals of different stakeholders involved in a business (workers, owners, customers, banks)

    Additional Topics (from later chapters):

    • Advantages and Disadvantages of small business and Reasons for business failure
    • Importance of Business Plans
    • Government support for businesses and why they might not support business
    • Financial Information, Business Strategies, and future outlook

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    Related Documents

    Business Notes 2024/2025 PDF

    Description

    Test your knowledge of essential business concepts covered in the MASE Business Notes for the academic year 2024/2025. This quiz includes questions from various units such as economy, business ownership, human resources, marketing, finance, and global influences on business.

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