Revision Theme 3 Topic 3.1 Business growth

3.1.1 Sizes and types of firms Write down reasons why some firms tend to remain small and others grow What is “the significance of the divorce of ownership from control: the principal-agent problem” ? What is the difference between public and private sector organisations? What is the difference between profit and not-for-profit organisations?

3.1.2 Business growth: mind map Your mind map should include: How businesses grow: organic growth; forward and backward vertical integration; horizontal integration and conglomerate integration Advantages and disadvantages of: organic growth; vertical integration; horizontal integration and conglomerate integration Constraints on business growth: size of the market; access to finance; owner objectives; regulation

3.1.3 Demergers What are the reasons for demergers? What is the impact of demergers on : businesses, workers and consumers?

Short answer video https://www.tutor2u.net/economics/reference/short-answers-principal-agent-problem