Lesson 2.16.1
2.16.1 Conflicts in business decision making Quiz: OCR Business, Unit 2
20 questions
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Lesson 2.16.1, Conflicts in business decision making: 20 multiple choice questions for the OCR Business (H431), Unit 2: Business objectives and strategy, written with Revision Ninja.
Host it live on the board and students join with a game code on their own devices, or revise alone with Free Play. The answers are revealed in the game.
The 20 questions
-
Which stakeholder conflict occurs when shareholders demand higher dividends while employees request pay rises?
- Managers versus lenders
- Shareholders versus suppliers
- Shareholders versus employees
- Customers versus suppliers
-
What is the principal-agent problem in business decision making?
- Loss of control
- Shortage of liquidity
- Failure of communication
- Conflict of interest
-
Which corporate objective often conflicts directly with maintaining high short-term profit margins?
- Tax avoidance
- Market share growth
- Cost minimisation
- Dividend payout
-
Overtrading occurs when a business attempts to grow too quickly without sufficient what?
- Working capital
- Share capital
- Brand equity
- Fixed assets
-
What financial tradeoff occurs when a firm decides to retain profits rather than pay dividends?
- Revenue versus turnover
- Investment versus income
- Assets versus liabilities
- Debt versus equity
-
A business cuts unit costs by relocating production abroad. Which stakeholder group suffers directly?
- Domestic workforce
- Overseas customers
- Company directors
- Institutional shareholders
-
Holding large cash reserves improves liquidity but directly reduces which key performance metric?
- Tax liability
- Solvency
- Profitability
- Gearing
-
Which strategic conflict arises when a firm issues new shares to fund massive expansion?
- Dilution of control
- Higher interest burden
- Increase in gearing
- Immediate insolvency
-
Why might ethical sourcing of raw materials create a conflict for financial managers?
- Lower customer loyalty
- Decreased product quality
- Reduced brand equity
- Higher unit costs
-
Short-termism in business decision making prioritises immediate financial returns over which strategic activity?
- Research and development
- Cost reduction
- Dividend payments
- Asset sales
-
A manufacturer sells directly online, causing conflict with its existing independent retailers. What is this?
- Horizontal alliance
- Market penetration
- Vertical integration
- Channel conflict
-
Forcing suppliers to accept longer payment terms improves buyer cash flow but risks what?
- Higher interest rates
- Increased tax liability
- Supplier insolvency
- Dilution of shares
-
Which strategic model contrasts shareholder wealth maximisation with meeting broader social needs?
- Porter generic strategies
- Boston matrix
- Stakeholder theory
- Ansoff matrix
-
Increasing product quality through premium materials creates a trade-off with which business goal?
- Brand reputation
- Market standing
- Cost minimisation
- Customer satisfaction
-
A firm uses price skimming for a new product. What target group is initially excluded?
- Early adopters
- High-income consumers
- Price-sensitive customers
- Competitors
-
Decentralising decision making improves local responsiveness but increases the risk of what issue?
- Higher transport costs
- Lower employee motivation
- Slower local responses
- Loss of consistency
-
Which major drawback is typically associated with choosing organic growth instead of external growth?
- Cultural clashes
- Slower expansion
- Reduced ownership
- Higher gearing
-
A firm adopts lean production to cut inventory costs. Which operational risk increases as a result?
- Supply disruption
- Excessive storage costs
- Product obsolescence
- High holding fees
-
Which financial metric increases when a business raises long-term funds via debt rather than equity?
- Liquidity ratio
- Gearing ratio
- Profit margin
- Asset turnover
-
A haulage firm introduces night deliveries. Which stakeholder group is most likely to complain about noise?
- Shareholders
- Customers
- Local community
- Lenders
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