Chapter No.

1 Nature of Business
An intangible offering of businesses a business organization that cannot be touched, held
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or stored, we can give it a term like and
A Business plans C Services
B Intellectual property D Idea
The RACI acronym stands for though some organizations also include
2 Support (which forms the RASCI Model). These roles must be assigned to specific team
members in order for a project or process to be accomplished.
A Reactions, Accountable, Consulted, Informed,
B Responsible, Accountable, Consulted, Informed,
C Responsible, Accountable, Counseled, Informed,
D Reasonable, Auditable, Consulted, Informed,
Z PLC has a large number of shareholders. The largest is Worm House (WH)- a pension
company. WH owns 40% of A’s share capital, while no other shareholders own more
3 than 8%. However, WH has stated that it is satisfied with the direction of Z PLC and
has no plans to intervene in the company’s affairs unless its dividends fall. If Z PLC
prepare Mendelow’s matrix, which quadrant would WH fall into?
A Minimal effort
B Keep satisfied
C Keep informed
D Fully consider the stakeholder i.e., key player
Mr. Saleem as employees of CFE might be in a position of power within the
organization, perhaps because of special management and organizational expertise that
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they possess. Their position of power in CFE may result in a risk for a business. Can be
termed as and as well.
A Consultant risk C Banker risk
B Key person risk D Brain drain risk
5 Creditors will lend funds to a firm only if they believe and
A The business will be able to generate sufficient profits to make the interest and principal
payments of the loan.
B The borrower should be able to repay the debt, with interest, on schedule.
C It has right according to constitution of 1973.
D None of the above
Creditor needs to be ensured that the firm will perform well enough to pay the interest
6 on the loans and the principal (amount borrowed) in the future. Means that the main
concerns of lenders are clear they might
A Companies might issue bonds C Company might issue debentures
B Companies issue file of plots D Company can issue T-bills
7 When a firm is initially created, it incurs expenses before it starts
A Costs associated with selling a good or service in the beginning
B Its costs incurred may exceed its revenue
C It’s the situation facing the introductory phase of product life cycle
D All of the above
8 The stakeholders in a business organization, whether internal or external, are those
A Who exercise the least influence C Who exercise moderate influence
B Who exercise the great influence D All of these
Which of the following might be included in the areas of public interest and concern
9 related with business organization like Z plc? Given a list which of the activities on
which stakeholders become active?
 A Z plc is planning to monopolization of a market by one or a small number of companies.
B Z plc takes care of protection of the environment; ensure reduction pollution, and creating
'sustainable businesses.

C Z plc is exploiting the consumer through mis-selling and misleading descriptions of

goods.
D Z plc. is running a business in ethical concern by Z plc

Executive directors are involved in the management of the company. Which of the
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following statement is true with respect to their interest?
A Their interest is similar to the interest of non-executive directors, as both have position on
the board of the directors.
B Their interest is similar to the interest of senior executive, who do not have a position on
the board of directors
C Executive directors take up internal leadership roles. They manage the company's
activities and engage in high-level responsibility.
D Non-executive directors assist in monitoring aspects of business activities and provide
objective insights for decision-making.
11 Given are statement related with the shareholders in the company, which one is wrong?
A People who have purchased company's debentures
B People, who have purchased company's shares
C People who receive dividend from company
D People who are owner of the company
Among the given Which one of the most important stakeholders of the business, has a
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direct stake in the company and can significantly affect the performance of the business?
A Government C Bankers
B Suppliers D Employees
13 Who are referred to as stakeholders?
A Those who have interest in the company. C Those who can influence the
B Those who are affected by the business. D company.
All of the above
Ozon-Ozon is an online consumer product seller in America and Europe, following two
statements are given regarding
1) To be Earth's most customer-centric company, where customers can find and discover
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anything they might want to buy online.
2) We strive to offer our customers the lowest possible prices, the best available
selection, and the utmost convenience.
A 1 is mission and 2 is vision C Both are the vision statements
B 1 is vision and 2 mission D Both are the mission statements
are democratically controlled by their member-owners, and unlike a
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traditional business each member gets a voice in how the business is run.
A Private limited company C Mutual fund
B Partnership D Cooperatives
16 Which of the following factor following factor is involved in entrepreneurship?
A The creation of business ideas. C Making decision by consensus
B Willingness to accept risk D Both A and B
Entrepreneurs are the people who combine the inputs of natural resources, labor,
17 and capital to produce goods or services
 A With the intention of making a profit or accomplishing a not-for-profit goal
B With the intention of making a profit
C Put resources are the inputs used to produce output by generating ideas
D All of the above
Human resources are the people who are able to perform work for a business. They may
contribute to production and Alternatively, they may
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contribute by using their mental abilities, such as proposing a change in the existing
production process or motivating other workers.
A By using their physical abilities, such as working in a factory to construct a product.
B By using their mental abilities alone, such as proposing a change in the existing
production process or motivating other workers.
C By using their mental abilities, such as proposing a change in the existing production
process or motivating other workers.
D By using their mental abilities & psychometric abilities such as proposing a change in
the existing production process or motivating other workers.
remains the most obvious natural resource that is commonly used by businesses
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to produce goods and services.
A Land C Natural labor
B Natural capital D Entrepreneur
Human resource manager of Zafar Textile express human resources as the people who
20 are able to perform work for a business. They may contribute to production by using
their physical abilities. Which of the following may be considered their physical ability?
A Motivating factory workers C Preparing long term plans
B Working in a factory to construct a product D None of the above.
Khanani & Kalia Ltd company has been facing customer complaints which may become
obstacle in their business. They have decided to plan the 'objectives' to deal with this
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problem. Which of the following would be the objective of the company to manage
customer care?
A To inspire and impact the world with dream, purpose, and style.
B Reducing customer complaints by 30% and improving resolution time by one day.
C Reply to customer complaints within 2 business days
D Offering customers, the very best product selection, quality, and value.
A well-written should be short, simple, specific to the business, leave
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nothing open to interpretation
A Mission statement
B Vision statement
C Both mission and vision statement are descriptive.
D None of the above
A vision statement has more to do with the and really describe what an
organization plan. This is more of an inspirational or motivational statement that is
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meant to drive employees and also clearly demonstrate an to stakeholders
(customers, investors, etc.).
A Future C Organizations’ goals
B Past D Organizational focus
Business organizations also buy goods and services from their suppliers. Suppliers will
24 usually agree to allow their customers some credit (time to pay) but their main interests
are that
A A customer will pay what is owed and will not become a bad debt
B Customers will continue to buy from them
C Customers will treat them fairly, and deal with them in an ethical way.
 D All of the above
refers to an individual or entity purchasing products from manufacturers
25 and then selling them directly to customers. By contrast, is a person or business
that provides raw materials, parts, and machines to manufacturing units.
A A vendor C An indenter
B A supplier D A stockholder
Major suppliers could exert influence by controlling the supply of a key resource to the
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organization. This results in a for a business.
A Employee strikes risk C A supplier risks
B A distributor risk D Creditor risk
Objectives are derived from the goals of an entity, and are aims expressed in a form that
can be measured, and there should be a specific time by which the objectives should be
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achieved. The objectives should be SMART: Specific/stated clearly M stands for
and R stands for
A Measurable C Reliable
B Maintainable D Realistic
Vision is related with and mission is related with . A mission statement is
where you are and why you do it, a vision statement is where you are going to be and
28 how you want to get there. While these may seem like soft topics it can be very important
to ensure that the mission and vision of an organization or company's leadership is
clearly conveyed to the people who need to know it.
A Future C Current Up
B Past D coming
A vital feature of managing business like Ever Shine Pvt. Textile Limited is creating
29 'purpose and providing clear messaging to stakeholders. This can be done by creation of
?
A Sending formal letter to all stakeholder C Updating shareholder on daily basis
B Creation of mission and vision D Sending annual statement of accounts
statement
Organizational goals are that executives set for the company. They
input and define the expected output. These goals outline these objectives,
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targets, and results they want to achieve in a given period. They guide operations and
inform business decisions over time.
A General targets C Guide the public
B Guide employee D Specific milestones
On which of the following basis the standard of living among different countries is
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compared? Choose any two?
A Quality of goods which is the priority of the customers
B Factors of production that are the building blocks of business
C Goods and services people can buy with the money they have
D The total value of new goods and services produced within a country's borders
32 A business organization like Anwar plus Bila. Which of the following hierarchy should
have
A Goals and objectives hierarchy C Aims and plans hierarchy
B Management hierarchy D All of the above
Not all companies earn profits, but that is the risk of being in business. There is indirect
33 relationship between risks and profit, the greater the risk is associated with .
Choose two
A The lower will be the profit C More profit
B Optimum profit D Greater profit
 If a business is not achieving its goals even may incur a loss by not achieving its goals?
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Which of the reasons you think, out of the given
A Employing over qualified human resources
B Inefficient use of resources
C Use of expensive raw material.
D Lack of synergy
is used to classify relevant stakeholders based on their power or influence
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and level of interest in a project or entity or organization.
A Power-interest matrix C Power-influence matrix
B Interest-powerful matrix D Authority-Power matrix
36 Which of the following stakeholders have high power and high Interest?
A Investors C Shareholders
B Executive directors D Employees
Non-executive directors bring experience and knowledge to the board that they have
37 gained outside the company, and which executive directors often do not have.
A They are external stakeholders, not involves in day-to-day management
B They are internal stakeholders involves in day-to-day management

C The non-executive directors usually receive a flat fee for their services,
and are engaged under a contract for service
D They are full time employees like executive directors
Shareholders do not participate in company management and operational issues matter
is related with . They leave the management to the BOD. However, they influence
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the decisions of BOD when they feel their interests are threatened and matter is related
with .
A Payments to suppliers
B Falling profits and share price
C A proposal to invest in a major project where risk is low
D Separation of ownership from governance
Employees are stakeholders because business decisions often affect them and how they
operate the business. For example, if a business moves to another city or business is
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closed, this can directly affect employees who either need to move with the business
organization or find another job to stay closer to home.
A Employees are significant stakeholders because business decisions often directly affect
B them Employees are important internal stakeholders
C A vested interest in the performance of the business.
D All of the above
Shareholders are stakeholders of the company and are usually investors, seeking to earn
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a return on their investment in the form of and their liability is
A Interest C Limited liability
B Dividend D Unlimited liability

Solution

1 2 3 4 5 6 7 8 9 10
C&D B B B&D A&B A&C D D A&C B&C
 11 12 13 14 15 16 17 18 19 20
A D D B D D D A&C A B
21 22 23 24 25 26 27 28 29 30
B&C B A&C D A&C C A&D A&C B A&B
31 32 33 34 35 36 37 38 39 40
C&D D C&D B&D A B A&C B&D D B&C