✦ 1.5 Paper 1 · 0450 Difficulty: Medium

Unit 1: Business and its Environment
Business Objectives & Stakeholder Objectives

Free topical past-paper practice on business objectives, social enterprises, stakeholders, and how objectives change as a business grows.

7Papers

2–6Marks per Q

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Examiner tip — link every objective to the business situation

For stakeholder and objective questions, name the group or objective clearly, then explain why it matters in the case study. For 6-mark questions, give one developed explanation for each part of the question.

Key Concepts to Revise

Business Objectives

Targets a business sets to guide decisions, such as survival, profit, growth, market share, or providing a service.

Objectives often change as a business becomes more established.

New Business Objectives

New businesses often focus on survival, gaining customers, cash flow, and building a reputation.

Once established, objectives may shift toward profit, expansion, or market share.

Stakeholders

Groups affected by business activity, such as owners, employees, customers, suppliers, government, banks, and the local community.

Each stakeholder group has different objectives.

Stakeholder Objectives

Employees may want job security and high wages.

Customers may want low prices, good quality, and reliable service.

Social Enterprise

A business with social or environmental objectives as well as financial objectives.

It aims to benefit society, but still needs enough revenue to continue operating.

Changing Objectives

Objectives can change because of growth, competition, new owners, economic conditions, or changes in customer demand.

Always explain the reason in the context of the case study.

Past Paper Questions

7 papers

Select Paper

0450/12/M/J/2025

Unit 1.5 · Business Objectives and Stakeholder Objectives

Case Study

Hal wants to be a successful entrepreneur. He plans to leave his job to start up a bakery. The bakery will operate in the private sector. The business will have many stakeholder groups. Hal has been told it is important for a new business to select an appropriate source of start-up capital. He also knows new businesses are at a greater risk of failure.

(c)

Identify four stakeholder groups a business might have.

[4]

Stakeholder 1:

Stakeholder 2:

Stakeholder 3:

Stakeholder 4:

0450/12/F/M/2025

Unit 1.5 · Business Objectives and Stakeholder Objectives

Case Study

SEP operates in the tertiary sector. As a social enterprise, SEP has many objectives. It collects old books from libraries and schools and sells them to customers at a low price. SEP provides training for its 10 part-time employees. SEP’s manager wants to know how the introduction of a legal minimum wage might affect a business.

(b)

Identify two objectives a social enterprise might have.

[2]

Objective 1:

Objective 2:

0450/11/O/N/2024

Unit 1.5 · Business Objectives and Stakeholder Objectives

Case Study

FSW is a multinational company with operations in 6 countries. It manufactures steel for use in the construction industry. Quality assurance is used to ensure quality production. FSW has many stakeholder groups who are interested in its activities. The Managing Director knows FSW’s business creates external costs. She is aware that pressure groups try to influence business decisions.

(b)

Identify one objective each of the following stakeholder groups might have:

[2]

Employees:

Customers:

0450/12/M/J/2024

Unit 1.5 · Business Objectives and Stakeholder Objectives

Case Study

Nicky wants to be a successful entrepreneur. She plans to start up a travel business specialising in walking holidays. Nicky will be operating in a niche market. She is preparing a business plan to help with her decision-making. Nicky has been told government support is available for business start-ups. She knows building customer relationships will be important.

(d)

Explain one way each of the following sections in the business plan might be helpful to Nicky.

[6]

Business objectives:

Explanation:

Data about the market:

Explanation:

0450/11/M/J/2024

Unit 1.5 · Business Objectives and Stakeholder Objectives

Case Study

CFG is a social enterprise. It buys cocoa beans from local farmers and then uses the beans to make chocolate. Being ethical is important to the business. CFG has developed a new chocolate bar. The Marketing Manager plans to use skimming as its pricing method, and retailers as its distribution channel for the new product. He knows there are many legal controls over marketing that might affect a business.

(a)

Define ‘social enterprise’.

[2]

0450/12/F/M/2024

Unit 1.5 · Business Objectives and Stakeholder Objectives

Case Study

TCH is a small bakery producing pastries and cakes. It operates in the secondary sector. The added value of TCH’s products has increased since it opened 3 years ago. TCH uses non-financial methods to motivate its 6 employees. TCH’s business objectives have changed since it started up. One of its new objectives is to expand. Many businesses use external recruitment when they expand.

(c)

Outline two reasons why TCH’s business objectives might have changed.

[4]

Reason 1:

Reason 2:

0450/11/O/N/2023

Unit 1.5 · Business Objectives and Stakeholder Objectives

Case Study

Desmond wants to be a successful entrepreneur. He has decided to leave his office job to start up a gardening business cutting grass and planting flowers. It will be an unincorporated business. Desmond is aware that a new business is at greater risk of failure than an established business. He has identified his business objectives for the first year. Desmond has calculated he will need $750 for his start-up capital.

(b)

Identify two objectives a new business might have.

[2]

Objective 1:

Objective 2: