The 10 most evaded questions about Big Business
Quiz
Q1: Why is it that from a poll of 500 major firms only 1
in 10 regard global warming as a priority? a) It is the job of central governments to take the lead role in
tackling climate change; business is only one facet.b) Even less than 10% do any business in the Arctic Circle.c) There is no money in it.
Q2: Why has big business bought up the ethical market? a) Ethical brands swallowed by larger companies do not by dint of that
acquisition suddenly become less ethical and the brand name will stay.b) Only big players have the economy of scale to negotiate with the big
supermarkets who control 76% of grocery shopping.c) A successful small ethical brand is a niche market high margin
player, just what big businesses want and they know that their blood
money is eventually irresistible
Q3: Why are big corporations waiting on the sidelines of
alternative energy technology? a) They are not, or at any rate, are not any longer with for example
General Electric planning to sell $6bn worth of wind turbines in 2008.b) It makes economic sense to take a me-too approach once the
ex-University enthusiasts have dabbled and gone bust but when the
technology is then proven.c) The best strategy is to wait until central governments are desperate
and taxpayers’ money is made available.
Q4: Why is the maximisation of short-term profits still
the most important corporate principle? a) Profit is translated as earnings per share which builds shareholders’
value and the share price is the fulcrum of success.b) The greedy maxim that all things are short-term has to be fed and
especially in relation to products, technology, incentive plans, share
options and executive life-span.c) Today is what matters, at any rate it represents as much as can be
handled; the next lot can look after the tomorrows.
Q5: Why is the ownership of just about every aspect of
the UK economy in foreign hands including public utilities, airports and
seaports, steel manufacture, vehicle production and financial services? a) To think of foreign ownership is xenophobic since we all live in a
global marketplace with open borders that includes share trading and
ownership.b) It does not matter who owns a business but rather whether it is run
efficiently, competes globally and is at the forefront of technological
innovation.c) Overseas companies put a higher value on our core industries than we
do ourselves and furthermore they are prepared to ratchet up debt levels
so that interest charges absorb the profit that otherwise would have
been taxed by our Inland Revenue service.
Q6: Why can’t big business cooperate more and share
scarce resources rather than compete for competitions sake?
Any single business is a microcosm of the free-enterprise capital
wealth-creation system and by definition is a stand-alone economic unit.b) Due largely to the increase in the price of diesel oil and petrol,
some early-stage sharing of truck journeys is starting to occur although
mainly by supermarkets whose journeys could be cut drastically anyway if
they were really serious about local sourcing of product.c) It is down to mindset: cooperation and competition make poor
bedfellows.
Q7: Why does the opinion of the Chief Executive
invariably carry the majority of the Board? a) As the senior executive director, he carries ultimate responsibility
and can balance the views expressed by partisan interests on the Board.b) It follows that by getting to be Chief Executive, he/she has the
biggest brain.c) Given the size of your mortgage and the school fees, are you about to
cross the boss?
Q8: Why has the remuneration of top managers risen so steeply in
recent years? a) We compete in a global marketplace and salaries had to rise to USA
levels or talent would drain away.b) Recognition has dawned that life at the top is short and the
sacrifices made ought to be properly compensated.c) There are seven deadly sins, avarice is only one of them.
Q9: Why is the Chief Executive of a FTSE 100 company
increasingly an accountant by profession? a) A thorough grounding in finance is now appreciated as best able to
balance the views of the risk takers against the traditionalists because
ultimately decisions turn on hard cash.b) Twenty years ago the engineers ruled the roost, then for the next
decade the marketeers held sway, and look what a mess those two made of
things, now is the time of the number crunchers to see if they can do
any better.c) One can always tell when things are really bad; the money men get to
the top.
Q10: Why is failure at Board level rewarded with a
massive pay-off? a) Top executives are paid to take risky decisions, sometimes a decision
does not work out.b) Senior management need to be contractually bound to the company and
contracts work both ways.c) Next time around you could be working for him/her and we are all in
this together.
* The Double your Money Phantom
Share Portfolio Club Try your hand at answering
the top 10 Questions people always ask about the world of big
business! It's a multi choice quiz and free to enter. - If
you score a full 30 points you will be allocated a named UK equity
share (that is, given the name of a company listed on the UK stock
exchange). This share will be placed in the phantom portfolio with
the aim of its price doubling by the end of one year. - If the
doubling target is achieved, the entrant will receive a set of the
published books of John G Smith absolutely free.
Finally, for
your chance to win the prize please enter your Name and Email
* Please note we will not
disclose your details to third parties nor use them for any purposes
other than in connection with this topic.
