Organisational Structure ( People in business)

Question 1

What is growth

Answer 1

The increase in the size & status of the business

Question 2

Why do businesses want to grow

Answer 2

• ECONOMIES OF SCALE (buying in bulk)
• To expand the company and reach more people
• Gain popularity
• There is a demand for the product or service
• Increase market share
• To maximise profits

Question 3

Inorganic

Answer 3

Takeover someone else OR merge with someone else

Question 4

Organic

Answer 4

Built the business by themselves

Question 5

4 types of integration

Answer 5

1) Backwards vertical
2) Horizontal (similar)
3) Forward vertical
4) Diversification

Question 6

Monopoly power

Disadvantage of a Merger

Answer 6

monopoly is a business entity that has significant market power, which can lead to higher costs

Question 7

Advantages of a Merger

Answer 7

Economies of scale bigger

More profit enable more research and development

Struggling firms can benefit from new management

Question 8

Disadvantages of a Merger

Answer 8

Increased market share leads to higher prices for consumers because of monopoly power

Larger firms may experience Diseconomies of scale internally is lack of communication, which van be inefficient

Question 9

Advantages of takeover

Answer 9

Increase in sales and sales or revenue

Go into new businesses and markets

Increase market share

Decrease competition

Question 10

Disadvantages of takeover

Answer 10

Conflict with new management

Could be job cuts

Cultural clashes can cause employees to be less efficient