Exam Question p. 3

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"Q1: To what extent do businesses only exist to make a profit?" (10 marks)

This all depends on the business and its objectives - most businesses do exist to make a profit, and they have to make a profit or break even to survive. This especially applies to the private sector - if a business doesn't make enough money to survive it could go bankrupt and have to close down. In the public sector, things are a bit more complicated. Organisations like the army, the police, hospitals and state schools aren't there to make money - they merely provide a service to the community. Charities are another exception. As well as making a profit, businesses may have other objectives such as offering the highest quality goods and services possible, increasing their market share, giving good customer service, having a good image and reputation and trying to limit their impact on the environment. Businesses might give up some profit to help the meet other objectives, but most business owner are ultimately only interested in profit. Everything else comes after.