Skip to content

ACCA Applied Knowledge · Business and Technology · The purpose and types of business organisation

Zeta plc is a listed company whose board says it will balance the interests of shareholders, employees, customers and the local community when setting objectives, even where this reduces short-term profit. Which approach to organisational purpose is Zeta plc adopting?

Zeta plc is adopting a stakeholder approach. It balances the interests of several groups, including employees, customers and the community, even at the cost of short-term profit. Shareholder primacy would put owners first, satisficing is about accepting adequate results, and management by objectives is a goal-setting technique.

  1. AShareholder primacy approach
  2. BStakeholder approachCorrect
  3. CSatisficing approach
  4. DManagement by objectives

Explanation

A stakeholder approach recognises that the organisation has obligations to several groups and balances their interests. Shareholder primacy would put owners first and ignore trading off profit. Satisficing means accepting an adequate rather than maximum outcome, and MBO is a technique for setting and agreeing objectives, so neither matches the board's statement.

Did you get it right without looking?

One question tells you little. A timed set on The purpose and types of business organisation shows your real accuracy, how long you take and where you lose marks.

Practise The purpose and types of business organisationFree diagnostic mock

More The purpose and types of business organisation questions