An organisation is a social arrangement which pursues collective........................................, which
controls its own performance and which has a boundary separating it from its environment.’
Which of the following words best completes this sentence?
C Rationale: Collective goals or aims are a feature of organisations.
Pitfalls: Watch out for closely related terminology like ‘goals’ and ‘tactics’. You might have
thought ‘tactics’ would fit here, but they are the lower level plans of functions: they may not be
shared by the organisation as a whole.
Ways in: If you didn’t know the definition, you could have got to the answer by ruling out the
other options. Stakeholders doesn’t fit ‘pursues’; profits are not the objective of all organisations;
and tactics are at a lower level than goals.
What is the term given to the idea that the combined output of a number of individuals working together
will exceed that of the same individuals working separately?
C Rationale: Synergy is the 2 + 2 = 5 factor, and is one of the key reasons for the formation of
teams and organisations.
Pitfalls: You need to read all the options carefully, especially if they look similar and all ‘sound’
Ways in: You should be able to define the other options, to confirm that they do not fit the
Which one of the following statements is true?
B Rationale: In a limited company, the owners (shareholders) are separate from the managers of
the concern (board of directors).
Pitfalls: Some options look plausible because of the wording. ‘Limited’ doesn’t mean ‘only being
allowed to trade up to’ – but looks as if it might. The second half of the statement about
partnerships is true – but this doesn’t mean that the first half is also true.
Ways in: You should have been able to rule out A (no company’s turnover is limited), C (sole
traders do have personal liability for debts: they do not have ‘limited liability’) and D (ordinary
partnerships are different from limited companies).
An organisation is owned and run by central government agencies. The organisation is best described as
which of the following statements?
C Rationale: Such an organisation is part of the public sector. The voluntary sector comprises
charities and other organisations whose members are volunteers. Private sector comprises nongovernmental
organisations, such as limited companies.
Pitfalls: Watch out for ‘public’ and ‘private’ sector terms – and be able to distinguish clearly
Which of the following groups may be considered to be stakeholders in the activities of a nuclear power
(i) The government
(ii) Environmental pressure groups
(iv) Local residents
B Rationale: All these groups have a legitimate stake in the enterprise: the government, as a
regulator; employees, as participants in the business; and environmental pressure group and local
residents, because of potential impacts.
Pitfalls: Don’t forget external stakeholders!
Secondary stakeholders is another term for which group of stakeholders?
C Rationale: Primary stakeholders are those who have a contractual relationship with the
organisation, including some internal and connected stakeholders. Secondary stakeholders are
therefore external stakeholders.
ADB is a business which is owned by its workers. The workers share the profits and they each have a
vote on how the business is run.
Which of the following best describes ADB?
D Rationale: A co-operative is a business which is owned by its workers or customers, who share
the profits. Others features include open membership, democratic control, distribution of surplus
in proportion to purchases and promotion of education.
What is an acronym used to describe the key elements of an organisation’s external environment?
C Rationale: PEST stands for Political, Economic, Socio-cultural and Technological.
Pitfalls: SWOT (Strengths, Weaknesses, Opportunities, Threats) is a related exercise, as PEST
data is fed into the O/T part of the business appraisal.
Ways in: You could eliminate as many distractors as you could identify: SMART (Specific,
Measurable, Attainable, Relevant, Time-bounded) refers to objective-setting.
Which of the following is not a legitimate method of influencing government policy in the interests of a
C Rationale: This would be interpreted as corruption. The other options are usually legitimate
methods of influence. Although B may be questionable in some parts of the world, in others like
the UK it is perfectly legitimate.
........................................ is an analysis of statistics on birth and death rates, age structures of people and ethnic groups within a community.
Which word correctly completes the sentence?
D Rationale: The statement defines demographics. Ergonomics is a study of the interaction of
humans and their environments (used in design of office equipment and furniture, for example).
Psychographics is the study of psychological factors (used in selection testing, for example).
Ways in: You could eliminate as many distractors as you could define in other ways.