OTHM Level 3

What is the main difference between a business and an organization?

• A business aims to make a profit, while an organisation may not

• A business is always large, while an organization is always small

• An organisation only operates in the public sector

• A business cannot have stakeholders

Which of the following is NOT a legal business structure?

• Sole Proprietorship

• Partnership

• Limited Liability Company (LLC)

• Cooperative Corporation

What is the primary purpose of a non-profit organisation?

• To maximize profit for shareholders

• To provide goods and services for free

• To serve a social cause without the goal of profit

• To avoid paying taxes

What is the key characteristic of a public sector business?

• It is owned and controlled by private individuals

• It is always focused on generating profits

• It is funded and operated by the government

• It is focused only on international markets

Which stakeholder is most concerned about business profitability?

• Customers

• Employees

• Government

• Shareholders

How does a flat organizational structure differ from a hierarchical one?

• A flat structure has more management levels

• A hierarchical structure has fewer levels of management

• A flat structure has fewer management levels and promotes open communication

• A hierarchical structure does not have any managers

What does the PESTLE framework help businesses analyze?

• Internal business strengths

• External business environment factors

• Employee productivity

• Customer satisfaction

Which of the following is an internal business factor?

• Economic recession

• Technological advancements

• Organizational culture

• Government regulations

How do businesses respond to macro-environmental changes?

• By ignoring them and continuing with their strategies

• By adapting their strategies to stay competitive

• By reducing all operational costs immediately

• By only focusing on internal factors

Why might a business change its legal structure over time?

• To comply with new government regulations

• To increase tax liabilities

• To reduce employee wages

• To eliminate stakeholder involvement