Nature and Purpose of Business
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Questions and Answers

Which factor is NOT typically considered part of the external environment influencing business operations?

  • Technological advancements
  • Organizational structure (correct)
  • Political regulations
  • Social trends

What is the primary goal of a for-profit business entity?

  • Providing free services
  • Earning a profit (correct)
  • Maximizing social welfare
  • Ensuring complete market saturation

Which form of business organization is characterized by ease of formation and dissolution?

  • Partnership
  • Cooperative Society
  • Company
  • Sole Proprietorship (correct)

What is a key feature of a partnership?

<p>Shared profits and losses (B)</p> Signup and view all the answers

Which business structure is governed by Hindu Law?

<p>Hindu Undivided Family (HUF) (B)</p> Signup and view all the answers

What is the main principle behind the operation of Cooperative Societies?

<p>Mutual help and cooperation (C)</p> Signup and view all the answers

Which form of business organization provides shareholders with limited liability?

<p>Company (C)</p> Signup and view all the answers

A business prioritizes ethical conduct, environmental sustainability, and community engagement alongside profit-making. Which concept does this exemplify?

<p>Corporate Social Responsibility (C)</p> Signup and view all the answers

A business initially established as a sole proprietorship experiences rapid growth, requiring significant capital investment and expanded management expertise. Which organizational transformation would be MOST suitable to accommodate these changes?

<p>Incorporation as a private limited company (B)</p> Signup and view all the answers

In a complex multinational corporation, the board of directors discovers that a senior executive has been consistently making decisions that prioritize short-term profits at the expense of long-term sustainability and ethical considerations. Which of the following actions BEST reflects the principles of effective corporate governance?

<p>Conducting an internal investigation, implementing stricter ethical guidelines, and potentially removing the executive from their position. (D)</p> Signup and view all the answers

Which of the following is the primary objective of a private sector enterprise?

<p>Earning profit and serving the interests of the owners (A)</p> Signup and view all the answers

Which sector is typically responsible for providing essential services to the public and promoting social welfare?

<p>Public sector (C)</p> Signup and view all the answers

What is a key characteristic of global enterprises (multinational corporations)?

<p>Operating in multiple countries with a centralized management system (A)</p> Signup and view all the answers

Which of the following best describes a Public-Private Partnership (PPP)?

<p>Collaboration between the government and private sector to provide public services (D)</p> Signup and view all the answers

Which business service involves the storage of goods until they are needed for sale or use?

<p>Warehousing services (A)</p> Signup and view all the answers

What does 'outsourcing' primarily involve in the context of business operations?

<p>Contracting out non-core business activities to external providers (A)</p> Signup and view all the answers

Which of the following is NOT typically considered a benefit of e-business?

<p>Reduced competition (C)</p> Signup and view all the answers

What is a key consideration when transitioning to e-business from a traditional business model?

<p>Ensuring security and privacy of online transactions (B)</p> Signup and view all the answers

A company decides to implement stricter environmental protection measures, even though it will initially reduce their profitability. Which argument for social responsibility aligns with this decision?

<p>Long-term sustainability (C)</p> Signup and view all the answers

A multinational corporation discovers that a supplier in a developing country is using child labor. The corporation immediately terminates the contract, even though it will incur significant financial losses and disrupt its supply chain. Which element of business ethics does this action most directly reflect?

<p>Integrity (A)</p> Signup and view all the answers

Flashcards

Business Studies

The study of functions, elements, and issues in running a company.

Business

An organization involved in commercial, industrial, or professional activities, typically aimed at earning profit.

Role of Businesses

Generating employment, contributing to national income and promoting innovation.

Sole Proprietorship

A business owned and controlled by one person, who receives all profits and bears all losses.

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Partnership

A business owned and controlled by two or more people, who agree to share profits or losses.

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Hindu Undivided Family (HUF)

A business owned by members of a Hindu Undivided Family, governed by Hindu Law.

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Cooperative Society

A voluntary association of persons who join together to protect their economic interests through mutual help.

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Company

An association of persons who contribute money to a common stock for a common purpose.

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Unlimited Liability

The owner is personally liable for all business debts and obligations.

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Limited Liability

Owners are only responsible for business debts up to the amount of their investment

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Private Sector Enterprises

Enterprises owned, managed, and controlled by private individuals or groups with the main objective to earn a profit.

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Public Sector Enterprises

Enterprises owned, managed and controlled by the government, with the main objective to provide essential services to the public and promote social welfare.

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Global Enterprises

Businesses that operate in multiple countries with a centralized management system, foreign investments, advanced technology and large-scale operations.

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Joint Ventures

An agreement between two or more firms to form a new entity to pursue a specific objective, sharing resources, risks, and expertise.

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Public-Private Partnerships (PPP)

Collaboration between the government and the private sector to provide public services or infrastructure, combining resources and expertise of both.

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Business Services

Services that support businesses to facilitate their operations, including banking, insurance, transportation, warehousing and communication.

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Outsourcing

Contracting out non-core business activities to external providers to focus on core competencies and reduce costs.

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Social Responsibility

The obligation of businesses to consider the interests of society in their decision-making, including environmental protection and fair labor practices.

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Business Ethics

The moral principles and values that guide business behavior, including honesty, integrity, and fairness.

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Explore the essence and goals of businesses, covering for-profit and non-profit models. Learn about their crucial function in economic growth through job creation and national income contributions. Businesses operate in a complex environment influenced by many factors.

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