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SingaporeBusiness ManagementQuick questions
The Business Environment
Quick questions on Nature of business and business objectives explained: H2 Management of Business
7short Q&A pairs drawn directly from our worked dot-point answer. For full context and worked exam questions, read the parent dot-point page.
What is the purpose of business?Show answer
A business takes inputs (raw materials, labour, capital, enterprise) and transforms them into outputs (goods or services) that satisfy customer needs and wants. The reason this is worth doing is added value: the difference between the price customers pay and the cost of the bought-in inputs.
What are objectives as the yardstick for decisions?Show answer
An objective is a target the business sets itself, ideally specific and measurable. Objectives matter because they convert a vague purpose into a decision rule: faced with a choice, managers ask which option best advances the agreed objective. The main categories:
What is objectives change over the business life cycle?Show answer
The dominant objective shifts with circumstances. A start-up typically prioritises survival, then growth. An established firm in a stable market may focus on profit and shareholder returns. A firm in decline or recession returns to survival.
What is hierarchy?Show answer
Objectives sit in a hierarchy. A broad mission (the firm's overall purpose) leads to corporate objectives (firm-wide targets like a profit or growth figure), which cascade into functional objectives for marketing, operations, HR and finance, and then into day-to-day tactics. Alignment down this chain is what makes a strategy coherent.
What is q1?Show answer
Distinguish between added value and profit for a manufacturing firm. [3 marks]
What is q2?Show answer
Explain why a newly launched business is likely to prioritise survival over profit. [4 marks]
What is q3?Show answer
Analyse how a shift from a profit objective to a social-and-environmental objective might change a clothing retailer's decisions. [6 marks]
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