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Business Structure

1.(d) Evaluate the likely impacts on the local community if FN changes from a co-operative to a public limited company. [11] Summer 2019 Paper 23

A PLC can sell shares so FN can gain more capital. It could use the capital to open more local farm shops and provide more educational programmes. It can afford to employ more people from the local community and living standards would rise. If shops are nearby then this will be more convenient for local people who will buy their daily foods more easily which will reduce travelling costs A PLC’s main business objective is profit maximization. FN may may cut costs by using lower quality seeds. To increase profits, prices may go up or lower quality products offered. The rise in the price of products will impact the local community, especially the poorest, as they will be unable to buy as much and food is a necessity. The impact on the local community will be negative as they will not be offered programmes to increase their skill levels and employability. At the same time, will face lower living standards as there is a greater impact on income, from paying higher prices for a necessity.