A-AS Level (CIE) Business Studies Paper-1: Specimen Questions with Answers 31 - 32 of 50

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Question 31

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Describe in Detail

Essay▾

Analyze the advantage and disadvantage of domestic business

Explanation

The economic transactions which occur within the geographical boundaries of the country is known as Domestic Business. It refers to the business entity whose commercial activities are performed within a nation. It is also known as home trade. Producer and the customer both reside in the same country and the laws and customs are followed of the same country.

Advantages of Domestic Business Are

  • Low transportation cost
  • It encourages small scale and medium scale enterprises
  • The transaction cost in case of domestic business is low
  • Less time is involved in between production of goods and sale of goods

Disadvantages of Domestic Business Are

  • Greater impact is caused on business due to cyclical fluctuations
  • Size of the market is limited in case of domestic business as the target market is in the home country only.
  • Domestic business has limited access to materials and labor.

Question 32

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Describe in Detail

Essay▾

Explain the concept of corporate governance.

Explanation

Companies in the recent times can access to new and larger markets around the world as well as to acquire more business around the world. But with this expansion there is a greater need to adopt and sustain with good corporate governance to create value and build corporations of the future. Corporate structure has no unique style or design.

Corporate governance is a system through which the companies work on a code of good practice to promote:

  • Fairness
  • Transparency
  • Accountability

Improper application of corporate governance may adversely affect the relationship among other participants of the system. Employees and other stake holders play an important role in contributing to the long-term success of the corporation. Thus, it should be applied in a right manner to ensure better growth of the company

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