AQA GCSE Business: Setting business aims and objectives and Stakeholders (8132) – Practice Questions

These are original questions written for Marlbridge, for revision and practice on this content. They are not reproduced past-paper questions, and they do not replicate the exam’s exact structure, question count or mark tariffs – examination boards hold copyright in their own papers. Use these alongside the official past papers from your board or school.

These questions cover sections 3.1.3 (Setting business aims and objectives) and 3.1.4 (Stakeholders) of the AQA GCSE Business (8132) specification, for first teaching from September 2017. Learn the content first from the study guide and the revision notes. More practice on the wider topic is in the topic practice questions. Course links: AQA GCSE Business hub and printable checklist. To find weak spots first, try the free diagnostics.

All businesses and figures below are invented. Show your working in calculations and use the business in the stem when you answer.

Questions

1. Identify the business objective shown in each statement.

(a) “We want to be the first choice for buyers in our region, with a bigger slice of sales than any rival.” [1] (b) “We only buy cotton from suppliers who pay their farmers a fair price.” [1] (c) “Our aim for this winter is simply to keep trading and pay every bill.” [1]

2. Define the term stakeholder. [2]

3. Bramleigh Audio makes speakers. Last year its sales were £450,000 in a market worth £5,000,000.

(a) Calculate Bramleigh Audio’s market share. [2] (b) The owner sets an objective of 12% market share. Assuming the market stays at £5,000,000, calculate the percentage increase in sales needed to reach this objective. [3]

4. Explain two reasons why the objectives of a new start-up may differ from the objectives of a large established business. [4]

5. Ravenshaw Foods has 600,000 shares. Its profit after tax is £360,000 and it pays 60% of this as dividends. Maria owns 90,000 shares.

(a) Calculate the dividend per share, in pence. [3] (b) Calculate the total dividend Maria receives. [1]

6. Merrow Down Hospice is a charity that cares for patients. Explain why profit is not the best way to judge its success, and state one other way its success could be measured. [4]

7. Ravenshaw Foods plans to open a new factory on the edge of a village. Explain two ways the local community could be affected by this decision. [4]

8. Corrie Vale Outdoors sells walking clothing. The owners want to build a larger distribution centre on farmland near a village. The owners want higher dividends from expected growth. The 85 employees want a pay rise this year. Villagers are worried about lorries and loss of green space.

Analyse the conflicts between the stakeholders of Corrie Vale Outdoors. [6]

9. Explain three ways in which setting objectives helps a business to run. [3]

10. Bramleigh Audio has had a good year. A customer survey found that 71% of buyers were satisfied, and many complained of late deliveries. The owner is choosing between two plans.

Plan A: spend £120,000 on a sales team to enter two overseas markets, an international growth objective. The extra sales are uncertain. Plan B: spend the same money improving delivery and after-sales service at home, to raise customer satisfaction.

Evaluate which plan Bramleigh Audio should follow. [9]

11. Ravenshaw Foods pays its employees a total of £800,000 a year in wages. The employees ask for a 4% pay rise. Assume the whole extra cost reduces profit after tax of £360,000, that 60% of profit after tax is still paid as dividends, and that there are still 600,000 shares.

(a) Calculate the new dividend per share, in pence. [4] (b) Justify whether Ravenshaw Foods should agree to the pay rise. [6]

Answers

1. (a) Market share [1]. (b) Social and ethical objectives [1]. (c) Survival [1]. [3] Examiner insight: Match the objective to the wording of the statement. Answers such as “growth” for part (a) are close but do not name what the statement measures, which is a share of sales.

2. A stakeholder is a person or group [1] with an interest in a business, because it affects them or they affect it [1]. [2] Examiner insight: A full definition needs both the idea of an interest and the two-way link. Listing examples such as owners and employees does not by itself define the term.

3. (a) Market share = sales / market sales x 100 [1] = 450,000 / 5,000,000 x 100 = 9% [1]. (b) Sales needed = 12% x 5,000,000 = £600,000 [1]. Increase = 600,000 - 450,000 = £150,000 [1]. Percentage increase = 150,000 / 450,000 x 100 = 33.3% [1]. [5] Examiner insight: Show the formula and the substitution. In part (b) the common slip is to give the 3 percentage-point gap between 9% and 12% instead of the percentage rise in sales.

4. A start-up is small, so its priority is survival [1]: it must cover costs and attract its first customers before it can aim higher [1]. A large established business can afford to aim for objectives such as dominating the market or international expansion [1], and it is under pressure from shareholders to increase shareholder value and from the public over ethical and environmental matters [1]. [4] Examiner insight: Each reason needs a developed link: say what the small business needs, then contrast what the large business can do. Two bare statements about size usually earn less than two linked explanations.

5. (a) Total dividend = 60% x 360,000 = £216,000 [1]. Dividend per share = 216,000 / 600,000 = £0.36 [1] = 36p [1]. (b) 90,000 x £0.36 = £32,400 [1]. [4] Examiner insight: The question asks for pence, so give the unit. Dividing profit by shares without first taking 60% gives 60p, which is a different measure.

6. A charity exists to help people, not to make profit for owners [1]. Its purpose is social, so success is judged by the care it provides [1]. It must still cover its costs to survive [1]. Another measure is the number of patients cared for (or money raised for the hospice, or patient and family satisfaction) [1]. [4] Examiner insight: Link the answer to the type of organisation in the stem. Saying “profit is not important” with no reason loses the explanation marks, because charities still need enough income to survive.

7. Benefit: the factory creates local jobs [1] and spending by workers supports local shops [1]. Cost: lorries and workers’ cars increase traffic and noise in the village [1], and the factory may affect the environment through pollution or loss of open land [1]. (Any two developed impacts.) [4] Examiner insight: Two impacts, each with a reason or consequence, are enough. Choosing one positive and one negative impact is allowed, but each must be explained for the village in the stem, not for communities in general.

8. Owners and employees: both want a share of the extra income [1]. A pay rise raises costs and cuts the profit available for dividends [1]. Owners and community: the distribution centre helps growth and dividends [1], but lorries and loss of green space affect villagers [1]. Employees and community: employees may want the larger site for job security, while villagers want to limit development [1]. Judgement: the owners have most influence over the decision, but villagers could object to the plans and delay them, so the business may need to compromise [1]. [6] Examiner insight: Analysis means following a chain: decision, effect on one group, effect on the other. Marks are lost when answers list the groups’ wants without saying why one group’s gain is another’s cost.

9. Any three of these points, each with a reason: they give direction so all managers work towards the same target [1]; they help decision making because choices can be tested against them [1]; they motivate employees who have clear targets [1] (a fourth valid point: success can be judged by comparing results with the target). [3] Examiner insight: Three distinct points are needed. Saying “objectives help the business succeed” repeats the question and does not explain how.

10. For Plan A: international growth can raise sales and market share over time [1]; the business would reach new customers and so depend less on the home market [1]. Against Plan A: the £120,000 is spent on uncertain sales [1]; with 71% satisfaction and delivery complaints, expanding could spread a weak service into new markets [1]. For Plan B: it targets a clear problem, late deliveries [1]; satisfied customers return and recommend the speakers, which supports later growth [1]. Against Plan B: benefits are slower to see and may not increase sales much if satisfaction is already adequate [1]. Judgement: Plan B should come first [1], because fixing delivery protects the reputation that any later overseas growth would rely on; Plan A may follow once service is reliable and the business has evidence about overseas demand [1]. [9] Examiner insight: Evaluate answers need reasoning on both sides and a decision that says what it depends on. A conclusion that simply repeats “both have advantages” does not gain the judgement mark.

11. (a) Extra wages = 4% x 800,000 = £32,000 [1]. New profit after tax = 360,000 - 32,000 = £328,000 [1]. Dividends = 60% x 328,000 = £196,800 [1]. Dividend per share = 196,800 / 600,000 x 100 = 32.8p [1]. (b) Reasons to agree: the pay rise meets the employees’ aim of maximising pay [1]; it may improve motivation and reduce staff leaving [1]. Reasons against: dividend per share falls from 36p to 32.8p, a fall of 3.2p [1]; Maria’s 90,000 shares would lose £2,880 a year, so owners may be unhappy [1]. Judgement: agree, or agree to a smaller rise [1], because the fall is small compared with the dividend and well-paid, stable staff protect long-term profit; the owners’ reaction should be managed by explaining the reason for the decision [1]. [10] Examiner insight: Use your part (a) figure in part (b) and say what it means for a named stakeholder. A justification needs a reason for the chosen option, not only a run of advantages and disadvantages.

Where marks are usually lost

• Naming an objective without matching it to the wording in the stem.
• Defining a stakeholder with a list of examples only.
• Writing market share as a sales figure, without a percentage.
• Confusing a percentage-point gap with a percentage change.
• Forgetting the unit (pence or pounds) on dividend answers.
• Giving the same objectives for a start-up and a large firm.
• Saying the community “does not matter” instead of weighing its influence.
• Describing what stakeholders want without explaining the conflict.
• Finishing an evaluate or justify answer with no judgement.

Next steps

• Re-read the revision notes for anything you missed.
• Review the explanations in the study guide.
• Visit the AQA GCSE Business hub and tick off sections in the checklist.
• Take the free 10-minute diagnostics.
• Book a free trial class.

Frequently asked questions

Which sections of AQA GCSE Business (8132) do these questions cover? Section 3.1.3 Setting business aims and objectives and section 3.1.4 Stakeholders. All businesses and figures are invented.

How do you calculate dividend per share? Divide the total dividend paid by the number of shares, not the total profit. Give the unit, pence or pounds, with your answer.

What is the difference between a percentage-point gap and a percentage change? A percentage-point gap is the simple difference between two percentages, such as 9% to 12%. A percentage change compares the change with the starting figure; confusing the two is a common error.

How do I analyse a conflict between stakeholders? Name the two groups, say what each wants, explain why one decision cannot satisfy both, and use details from the case. Describing what each group wants without explaining the conflict limits the marks.

Official syllabus

AQA GCSE Business (8132) specification, for first teaching from September 2017, published by AQA: sections 3.1.3 Setting business aims and objectives and 3.1.4 Stakeholders.