Disadvantages of business as public limited. [8]

IGCSE /AS Business Students can answer the 8 Marks Analysis question with the given possible structure. The current question states the Disadvantages of business as public limited company. Please note, the answer is just a sample and may not be used as a standard but is shared for generation of idea only. The following question is referred from 0450_s21_in_22 and 0450_s21_qp_22 (Answer to the questions).

Disadvantage 1:

Leads to Dis-economies of Scale; The performance of business deteriorates with the greater size of it.


With the increasing sizes, there are greater chances of wastage, spillage, lack of coordination and communication issues. Such dis-economies will lead to lower performance /efficiency. [An] Even though the production method of TT would be cost effective but there may be a limited demand of the products in Country Z as the high earning groups with potential demand of toys would be less than 10% of the whole population [App]. In case of competitors entrance in market, this issue will further escalate.  [An+]

Disadvantage 2:

Lesser control of ownership; as the shares are openly floated in stock exchanges.


As anyone can buy shares from the stock exchange there are chances of hostile takeovers or at-least the a greater chunk of shares may be bought by another company. [An] In such case, the decision will be influenced by that company, leading to deviation from the core objectives of TT for example the current objective of expansion may be replaced /influenced with the profit earning objective. [An+]  TT has developed a brand image over the years with possible affiliation with the brand, in case of hostile takeover it may be a setback for Tandeep of loosing his business control. [App]

Do you know?

Sir Afzal Shad offers; Online Classes of A Level Business, IGCSE Business, IGCSE Accounting (Cambridge & Edexcel) for International Students.

Face 2 Face classes are being offered at The Benchmark Academy, GT Road, Rawalpindi & The Benchmark Academy, Harley Street, Rawalpindi.

Sessions are offered for May/June & Oct/Nov Sessions with Full Course completion, Teacher’s Notes, Video Lessons, Past Papers Practice & Examiner Feedback Sessions.

You can book 1 FREE Session Today! – WhatsApp Now!

Important points to remember:

While attempting Paper 2 Style Questions or the questions with Case Study as a background, there is a requirement to “Apply” the analysis according to the given scenario of the question. For example in this question Disadvantages of business as pubic limited, you can see both styles of [App] in explanation, one give at the end and another given during the analysis. You are free to use any style as far as application is there.

If you are looking for sample answers to the IGCSE Business Studies, O Level Business Studies, AS Level Business and A Level Business subjects; Feel free to use our Student Forums to ask and discuss the questions.

Relevant Articles: