ZIMSEC A Level · Business Studies · Form 5
The purpose of business
To combine factors of production to create goods and services that satisfy needs and wants, adding value along the way.
Sectors and ownership
Primary, secondary and tertiary sectors; private sector (sole traders, partnerships, private and public limited companies, cooperatives) and public sector (state-owned enterprises such as ZESA and NRZ). The informal sector is a large part of Zimbabwe's economy.
Objectives
Survival, profit, growth, market share, social and environmental objectives. Good objectives are SMART: specific, measurable, achievable, realistic and time-bound. The mission statement sets out the purpose; objectives and strategies follow from it.
Stakeholders
Groups with an interest in the business: owners, employees, customers, suppliers, lenders, government, the local community and the environment.
- Stakeholder conflict: shareholders want high dividends; employees want higher wages; the community wants less pollution.
- Stakeholder mapping (power–interest grid) helps managers prioritise.
Corporate social responsibility
Acting ethically and considering the impact on society and the environment beyond legal requirements. Benefits include reputation and staff loyalty; costs may reduce short-term profit.
Check yourself
- What does SMART stand for?
- Give an example of conflict between two stakeholder groups.
- State two benefits of corporate social responsibility.
Show answers
- Specific, measurable, achievable, realistic, time-bound.
- e.g. shareholders want lower costs and higher dividends while employees want higher wages.
- Any two: better reputation, customer loyalty, attracting staff, investor confidence, fewer legal problems.
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