Business management guide

First assessment 2016

Business management guide
First assessment 2016
 Diploma Programme
Business management guide

Published February 2014

Updated August 2015
Updated November 2015

Published on behalf of the International Baccalaureate Organization, a not-for-profit

educational foundation of 15 Route des Morillons, 1218 Le Grand-Saconnex, Geneva,
Switzerland by the

International Baccalaureate Organization (UK) Ltd

Peterson House, Malthouse Avenue, Cardiff Gate
Cardiff, Wales CF23 8GL
United Kingdom
Website: www.ibo.org

International Baccalaureate Organization 2014

The International Baccalaureate Organization (known as the IB) offers four high-quality
and challenging educational programmes for a worldwide community of schools, aiming
to create a better, more peaceful world. This publication is one of a range of materials
produced to support these programmes.

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3130
 IB mission statement
The International Baccalaureate aims to develop inquiring, knowledgeable and caring young people who
help to create a better and more peaceful world through intercultural understanding and respect.

To this end the organization works with schools, governments and international organizations to develop
challenging programmes of international education and rigorous assessment.

These programmes encourage students across the world to become active, compassionate and lifelong
learners who understand that other people, with their differences, can also be right.
Contents

Introduction1
Purpose of this document 1
The Diploma Programme 2
Nature of the subject 6
Approaches to teaching and learning business management 11
Aims17
Assessment objectives 18
Assessment objectives in practice 19

Syllabus22
Syllabus outline 22
Syllabus content 24

Assessment51
Assessment in the Diploma Programme 51
Assessment outlineSL 53
Assessment outlineHL 54
External assessment 56
Internal assessment 71

Appendices87
Formulae87
Glossary of command terms 92

Business management guide

Introduction

Purpose of this document

This publication is intended to guide the planning, teaching and assessment of the subject in schools.
Subject teachers are the primary audience, although it is expected that teachers will use the guide to inform
students and parents about the subject.

This guide can be found on the subject page of the online curriculum centre (OCC) at http://occ.ibo.org, a
password-protected IB website designed to support IB teachers. It can also be purchased from the IB store
at http://store.ibo.org.

Additional resources
Additional publications such as specimen papers and markschemes, teacher support materials, subject
reports and grade descriptors can also be found on the OCC. Past examination papers as well as
markschemes can be purchased from the IB store.

Teachers are encouraged to check the OCC for additional resources created or used by other teachers.
Teachers can provide details of useful resources, for example: websites, books, videos, journals or teaching
ideas.

Acknowledgment
The IB wishes to thank the educators and associated schools for generously contributing time and resources
to the production of this guide.

First assessment 2016

Business management guide 1

Introduction

The Diploma Programme

The Diploma Programme is a rigorous pre-university course of study designed for students in the 16to19
age range. It is a broad-based two-year course that aims to encourage students to be knowledgeable and
inquiring, but also caring and compassionate. There is a strong emphasis on encouraging students to
develop intercultural understanding, open-mindedness, and the attitudes necessary for them to respect
and evaluate a range of points of view.

The Diploma Programme model

The course is presented as six academic areas enclosing a central core (see figure 1). It encourages the
concurrent study of a broad range of academic areas. Students study two modern languages (or a modern
language and a classical language), a humanities or social science subject, an experimental science,
mathematics and one of the creative arts. It is this comprehensive range of subjects that makes the Diploma
Programme a demanding course of study designed to prepare students effectively for university entrance.
In each of the academic areas students have flexibility in making their choices, which means they can
choose subjects that particularly interest them and that they may wish to study further at university.

Figure 1
Diploma Programme model

2 Business management guide

 The Diploma Programme

Choosing the right combination

Students are required to choose one subject from each of the six academic areas, although they can, instead
of an arts subject, choose two subjects from another area. Normally, three subjects (and not more than
four) are taken at higher level (HL), and the others are taken at standard level (SL). The IB recommends 240
teaching hours for HL subjects and 150 hours for SL. Subjects at HL are studied in greater depth and breadth
than at SL.

At both levels, many skills are developed, especially those of critical thinking and analysis. At the end of
the course, students abilities are measured by means of external assessment. Many subjects contain some
element of coursework assessed by teachers.

The core of the Diploma Programme model

All Diploma Programme students participate in the three course elements that make up the core of the
model.

Theory of knowledge (TOK) is a course that is fundamentally about critical thinking and inquiry into the
process of knowing rather than about learning a specific body of knowledge. The TOK course examines the
nature of knowledge and how we know what we claim to know. It does this by encouraging students to
analyse knowledge claims and explore questions about the construction of knowledge. The task of TOK is to
emphasize connections between areas of shared knowledge and link them to personal knowledge in such
a way that an individual becomes more aware of his/her own perspectives and how they might differ from
others.

Creativity, action, service (CAS) is at the heart of the Diploma Programme. The emphasis in CAS is on helping
students to develop their own identities, in accordance with the ethical principles embodied in the IB
mission statement and the IB learner profile. It involves students in a range of activities alongside their
academic studies throughout the Diploma Programme. The three strands of CAS are Creativity (arts, and
other experiences that involve creative thinking), Action (physical exertion contributing to a healthy lifestyle)
and Service (an unpaid and voluntary exchange that has a learning benefit for the student). Possibly, more
than any other component in the Diploma Programme, CAS contributes to the IBs mission to create a better
and more peaceful world through intercultural understanding and respect.

The extended essay, including the world studies extended essay, offers the opportunity for IB students to
investigate a topic of special interest, in the form of a 4,000 word piece of independent research. The area of
research undertaken is chosen from one of the students six Diploma Programme subjects, or in the case of
the inter-disciplinary world studies essay, two subjects, and acquaints them with the independent research
and writing skills expected at university. This leads to a major piece of formally presented, structured
writing, in which ideas and findings are communicated in a reasoned and coherent manner, appropriate to
the subject or subjects chosen. It is intended to promote high-level research and writing skills, intellectual
discovery and creativity. An authentic learning experience it provides students with an opportunity to
engage in personal research on a topic of choice, under the guidance of a supervisor.

Business management guide 3

The Diploma Programme

Approaches to teaching and approaches to learning

Approaches to teaching and learning across the Diploma Programme refers to deliberate strategies,
skills and attitudes which permeate the teaching and learning environment. These approaches and
tools, intrinsically linked with the learner profile attributes, enhance student learning and assist student
preparation for the Diploma Programme assessment and beyond. The aims of approaches to teaching and
learning in the Diploma Programme are to:

empower teachers as teachers of learners as well as teachers of content

empower teachers to create clearer strategies for facilitating learning experiences in which students
are more meaningfully engaged in structured inquiry and greater critical and creative thinking
promote both the aims of individual subjects (making them more than course aspirations) and linking
previously isolated knowledge (concurrency of learning)
encourage students to develop an explicit variety of skills that will equip them to continue to be
actively engaged in learning after they leave school, and to help them not only obtain university
admission through better grades but also prepare for success during tertiary education and beyond
enhance further the coherence and relevance of the students Diploma Programme experience
allow schools to identify the distinctive nature of an IB Diploma Programme education, with its blend
of idealism and practicality.
The five approaches to learning (developing thinking skills, social skills, communication skills, self-
management skills and research skills) along with the six approaches to teaching (teaching that is inquiry-
based, conceptually focused, contextualised, collaborative, differentiated and informed by assessment)
encompass the key values and principles that underpin IB pedagogy.

The IB mission statement and the IB learner profile

The Diploma Programme aims to develop in students the knowledge, skills and attitudes they will need
to fulfill the aims of the IB, as expressed in the organizations mission statement and the learner profile.
Teaching and learning in the Diploma Programme represent the reality in daily practice of the organizations
educational philosophy.

Academic honesty
Academic honesty in the Diploma Programme is a set of values and behaviours informed by the attributes
of the learner profile. In teaching, learning and assessment, academic honesty serves to promote personal
integrity, engender respect for the integrity of others and their work, and ensure that all students have an
equal opportunity to demonstrate the knowledge and skills they acquire during their studies.

All courseworkincluding work submitted for assessmentis to be authentic, based on the students
individual and original ideas with the ideas and work of others fully acknowledged. Assessment tasks that
require teachers to provide guidance to students or that require students to work collaboratively must be
completed in full compliance with the detailed guidelines provided by the IB for the relevant subjects.

For further information on academic honesty in the IB and the Diploma Programme, please consult the IB
publications Academic honesty, The Diploma Programme: From principles into practice and General regulations:
Diploma Programme. Specific information regarding academic honesty as it pertains to external and internal
assessment components of this Diploma Programme subject can be found in this guide.

4 Business management guide

 The Diploma Programme

Acknowledging the ideas or work of another person

Coordinators and teachers are reminded that candidates must acknowledge all sources used in work
submitted for assessment. The following is intended as a clarification of this requirement.

Diploma Programme candidates submit work for assessment in a variety of media that may include audio/
visual material, text, graphs, images and/or data published in print or electronic sources. If a candidate uses
the work or ideas of another person the candidate must acknowledge the source using a standard style of
referencing in a consistent manner. A candidates failure to acknowledge a source will be investigated by the
IB as a potential breach of regulations that may result in a penalty imposed by the IB final award committee.

The IB does not prescribe which style(s) of referencing or in-text citation should be used by candidates; this
is left to the discretion of appropriate faculty/staff in the candidates school. The wide range of subjects,
three response languages and the diversity of referencing styles make it impractical and restrictive to insist
on particular styles. In practice, certain styles may prove most commonly used, but schools are free to
choose a style that is appropriate for the subject concerned and the language in which candidates work is
written. Regardless of the reference style adopted by the school for a given subject, it is expected that the
minimum information given includes: name of author, date of publication, title of source, and page numbers
as applicable.

Candidates are expected to use a standard style and use it consistently so that credit is given to all sources
used, including sources that have been paraphrased or summarized. When writing text a candidate must
clearly distinguish between their words and those of others by the use of quotation marks (or other method
like indentation) followed by an appropriate citation that denotes an entry in the bibliography. If an electronic
source is cited, the date of access must be indicated. Candidates are not expected to show faultless expertise
in referencing, but are expected to demonstrate that all sources have been acknowledged. Candidates must
be advised that audio/visual material, text, graphs, images and/or data published in print or in electronic
sources that is not their own must also attribute the source. Again, an appropriate style of referencing/
citation must be used.

Learning diversity and learning support

requirements
Schools must ensure that equal access arrangements and reasonable adjustments are provided to
candidates with learning support requirements that are in line with the IB documents Candidates with
assessment access requirements and Learning diversity in the International Baccalaureate programmes: Special
educational needs within the International Baccalaureate programmes.

Business management guide 5

Introduction

Nature of the subject

Business management
Business management is a rigorous, challenging and dynamic discipline in the individuals and societies
subject group. The role of businesses, as distinct from other organizations and actors in a society, is to
produce and sell goods and services that meet human needs and wants by organizing resources. Profit-
making, risk-taking and operating in a competitive environment characterize most business organizations.

Although business management shares many skills and areas of knowledge with other humanities and
social sciences, it is distinct in a number of ways. For example business management is the study of decision-
making within an organization, whereas economics is the study of scarcity and resource allocation, both on
micro and macro levels. Business management examines the use of information technology in business
contexts, whereas information technology in a global society (ITGS) critically examines its impact on other
fields, such as health and government.

Business management studies business functions, management processes and decision-making in

contemporary contexts of strategic uncertainty. It examines how business decisions are influenced by
factors internal and external to an organization, and how these decisions impact upon its stakeholders,
both internally and externally. Business management also explores how individuals and groups interact
within an organization, how they may be successfully managed and how they can ethically optimize the
use of resources in a world with increasing scarcity and concern for sustainability. Business management is,
therefore, perfectly placed within the individuals and societies subject area: aiming to develop in students
an appreciation both for our individuality and our collective purposes.

The Diploma Programme business management course is designed to develop students knowledge
and understanding of business management theories, as well as their ability to apply a range of tools
and techniques. Students learn to analyse, discuss and evaluate business activities at local, national and
international levels. The course covers a range of organizations from all sectors, as well as the socio-cultural
and economic contexts in which those organizations operate.

Emphasis is placed on strategic decision-making and the operational business functions of human resource
management, finance and accounts, marketing and operations management. Links between the topics are
central to the course, as this integration promotes a holistic overview of business management. Through
the exploration of six concepts underpinning the subject (change, culture, ethics, globalization, innovation
and strategy), the business management course allows students to develop their understanding of
interdisciplinary concepts from a business management perspective.

The course encourages the appreciation of ethical concerns, as well as issues of corporate social
responsibility (CSR), at both a local and global level. Through the study of topics such as human resource
management, organizational growth and business strategy, the course aims to develop transferable
skills relevant to todays students. These include the ability to: think critically; make ethically sound and
well-informed decisions; appreciate the pace, nature and significance of change; think strategically; and
undertake long term planning, analysis and evaluation. The course also develops subject-specific skills,
such as financial analysis.

6 Business management guide

 Nature of the subject

Distinction between SL & HL

The HL course in business management differs from the SL course in business management in terms of the:

recommended hours devoted to teaching (240 hours for HL compared to 150 hours for SL)
extra depth and breadth required (extension units for HL)
nature of the internal assessment task
nature of the examination questions.

Business management and the core

From the perspective of the Diploma Programme core, the value of individuals and societies subjects is
that they allow students to reach beyond the classroom and their immediate school community to build
intellectual and practical connections to the wider society. In business management, the particular category
of actors students learn about, interact with and reflect on is businesses. The all-pervasive and dynamic
nature of business organizations means that there are many opportunities for teachers and students to link
the course with TOK, CAS and the extended essay.

Theory of knowledge
Students in this subject group explore the interactions between humans and their environment in time and
place. As a result, these subjects are often known collectively as the humanities or social sciences.

As with other subject areas, knowledge in individuals and societies subjects can be gained in a variety of
ways. For example, archival evidence, data collection, experimentation, observation, and inductive and
deductive reasoning can all be used to help explain patterns of behaviour that lead to knowledge claims.
Students in individuals and societies subjects are required to evaluate these knowledge claims by exploring
concepts such as validity, reliability, credibility, certainty and individual as well as cultural perspectives
through knowledge questions.

The relationship between individuals and societies subjects and TOK is of crucial importance and fundamental
to the Diploma Programme. Having followed a course of study in individuals and societies, students should
be able to reflect critically on the various ways of knowing and methods used in human sciences, and in
doing so, become inquiring, knowledgeable and caring young people (IB mission statement).

During the business management course, a number of issues will arise that highlight the relationships
between TOK and business management. Some of the questions that could be considered during the
course are identified below in relation to the six concepts that underpin the course as well as within the
syllabus. Teachers and their students are encouraged to explore further questions of their own.

Knowledge questions in business management

A knowledge question in business management challenges a statement, assertion or assumption about
the subject that students believe to be true or take for granted. From a TOK perspective, students need to
question these claims and how they are justified. Knowledge questions are not about business management
per se but about how knowledge in business managementand more widely, in social sciencesis
constructed and viewed.

Some knowledge questions that could be considered during the course are identified below. These are
presented in relation to the concepts of change, culture, ethics, globalization, innovation and strategy that
underpin the course and so reflect more overarching questions. Suggested links to TOK are also identified
at the end of each unit.

Business management guide 7

Nature of the subject

Concept Possible knowledge questions

How do changes in the world bring about changes in knowledge?

How do human scientists decide between competing knowledge claims, or
between the views of experts, when they disagree?
What is the role of individuals in bringing about major changes in the theory and
Change practice of business management? How does this compare with individuals role
in bringing about change in other areas of knowledge?
To what extent have views on whether humans act rationally when making
economic decisions changed over time? What is the relationship between
reason and other ways of knowing in business management?

To what extent does our culture determine or shape what we believe or know?
To what extent are we aware of the impact of culture on what we believe or know?
Culture Is it possible to objectively evaluate how a culture impacts on our beliefs and
knowledge?
Are there any knowledge claims about business that are true across cultures?

What is the role of intuition in ethical decision-making?

To what extent might lack of knowledge be an excuse for unethical conduct?
If moral claims often conflict, does it follow that there are no justifiable concepts
Ethics
of right or wrong?
What are the justifications for, and implications of, claiming that there are universal
standards for morality, or that there are only individual standards of morality?

Does globalization unify our values, beliefs and knowledge or lead to their
greater fragmentation?
Are some ways of knowing more useful than others when trying to understand
the process of globalization and its effects?
To what extent is our knowledge and understanding of complex phenomena
Globalization
such as globalization dependent on our particular perspective?
Business management uses case studies, a research method most commonly
associated with the human sciences. What are the benefits and drawbacks
of this in a globalized world? How else does the methodology of the human
sciences differ from the methodology of other areas of knowledge?

What is the relationship between imagination and other ways of knowing in

bringing about innovation?
What are the strengths and weaknesses of using imagination and emotion as a
basis for knowledge in the human sciences?
Innovation
Concepts such as innovation are difficult to define. Can we have shared
knowledge of concepts that are so difficult to express through language?
What is the relationship between advances in technology and innovation? Does
technology control what is possible to know?

What is strategy based on? Reason, intuition or something else?

Can we speak of facts in business management or only opinions?
Strategic decisions are supported by evidence. How can we evaluate the
Strategy
usefulness of evidence? How can we decide between seemingly conflicting
evidence?
How powerful is language in shaping our interpretation of decisions and events?

8 Business management guide

 Nature of the subject

Creativity, action, service

In exploring the interactions between humans and their environment, students reflect on their own identity
and potential roles in society. They are encouraged to start seeing how they can contribute to positive
change in their communities. Business organizations are one category of community actors.

In addition to helping students learn more about active and responsible citizenship, students of business
management acquire skills supportive of their CAS activities. They learn about strategic thinking and setting
objectives, acquire planning skills and develop an appreciation for different cultural perspectives within
organizations. These skills will help them choose significant CAS activities and gain much from them.

Many business organizations have social or environmental objectives. These can be primary, (as in the case
of social enterprises or non-profit organizations) or secondary (as in the case of CSR programs). Students in
the business management course learn of such organizations and programs through examples, case studies
and their internal assessment work. This may give them ideas and contacts for entrepreneurial service
learning projects. Similarly, service activities with a business affiliation may get students interested in a
particular organization or industry, which they would then explore further in their business management
course. Teachers are encouraged to help students identify such opportunities.

Extended essay
The world of business management offers much potential for creative extended essays. Living in an
increasingly globalized world, students are involved as actors in what businesses do, from being consumers
of goods and services to being campaigners for increased social responsibility. Fascinating decision-making
takes place within business organizations in areas such as human resource management, production and
marketing. Students have a genuine interest in many aspects of business management and thus may wish
to explore them in more depth through their own independent research.

Although students are expected to base their extended essay on secondary resources, there are
opportunities for primary research as well, to be applied where appropriate. Students may wish to use
secondary material such as company data, which is often accessible due to the reporting requirements
of businesses. The use of interviews and surveys with managers and other stakeholders may also be
undertaken and these present students with opportunities to explore the real-world application of business
tools, techniques and theories.

The breadth and depth of the business management course facilitates students researching topics that allow for
meaningful and relevant links to be made between the syllabus and the requirements of the extended essay.

The interdisciplinary, issue-based approach of the world studies extended essay also offers a wealth of
opportunities for independent research that draws on the discipline of business management, in addition
to at least one other discipline. Students could examine the role of businesses decision-making processes
in terms of their effects on the environment or the way in which international standards relating to work
practices and human rights manifest themselves at a local level. Students who choose to undertake a world
studies extended essay should be encouraged to think about their essays in relation to global themes. This
may be an opportunity for students to make use of the six concepts that underpin the business management
course in their extended essay work.

Business management and international-mindedness

Developing international-mindedness is at the heart of the Diploma Programme business management
course. Of all organizations and actors in society, businesses are among those most affected by and affecting
the forces of globalization. Many businesses operate across national borders, and even seemingly local
businesses are influenced by international competition. The business management course helps students
understand and evaluate the implications of business activity in an interconnected, global market.

Business management guide 9

Nature of the subject

The course encourages the use of contemporary examples and case studies at a variety of levels, from
the local to the global, as well as from smaller-scale businesses to multinational ones. Throughout the
course, teachers have the opportunity to choose case studies that reflect the cultural context in which they
are teaching as well as case studies that allow for comparisons across cultural contexts. The six concepts
underpinning the course create a framework for these discussions. The course is designed to give students
an international perspective and to encourage their appreciation of cultural diversity among different types
of business organizations, and individuals and groups within them.

The course promotes the ideals of international cooperation and responsible citizenship. Students
are encouraged to make sense of the forces and circumstances that drive and restrain change in an
interdependent and multicultural world. Thus, the Diploma Programme business management course
contributes to students developments as critical and effective participants in local, national and world
affairsbusiness and otherwise.

10 Business management guide

Introduction

Approaches to teaching and learning of business

management

Like all IB courses, the Diploma Programme business management course is influenced by a number
of underlying pedagogical principles. Especially important strategies for business management are
conceptually focused teaching and contextualized teaching through the use of case studies and examples.
The ability to research is a key skill for students studying the course.

The relationship between concepts, the contexts and content of the discipline of business management
can be illustrated with a triangular diagram. Concepts are anchored in the tools, techniques and theories of
the subject and come alive through case studies and examples. Together, these help students to acquire a
holistic and integrated understanding of business management.

Concepts
(change, culture, ethics,
globalization, innovation,
strategy)

Contexts Content
(case studies and examples) (business management tools,
techniques and theories
in the syllabus)

Figure 2
The integrated relationships of concepts, content and contexts in business management

The following section, as well as the teacher support material available on the OCC, contains more specific
guidance and suggestions on approaching the teaching and learning of the Diploma Programme business
management course. This guidance is not exhaustive, and through their own planning, teachers should
explore a range of teaching and learning experiences.

Conceptually focused teaching in business

management
The following six concepts underpin the Diploma Programme business management course:

Change
Culture
Ethics

Business management guide 11

Approaches to teaching and learning of business management

Globalization
Innovation
Strategy.
Some teachers may choose to teach the business management course in a linear way, topic-by-topic. Other
teachers may prefer to organize the syllabus content around the six key concepts. Regardless, all teachers
should explicitly integrate a conceptual approach to their current practice.

A conceptually focused teaching approach has several advantages. Concepts:

facilitate disciplinary and interdisciplinary learning and allow for connections with other subjects.
deepen students understanding of todays complex and dynamic business environments.
allow teachers to frame the most important ideas that have relevance for the subject but also transcend
it. Consequently, students learn to analyse and evaluate individual and collective behaviours and
topical phenomena not only in business contexts but in the society at large.
allow students to integrate new content into already existing understandings.
Working with a conceptual approach prepares students for a part of their assessment. The six concepts are a
part of the formal assessment of the course at both SL and HL. In one of their examination papers, students
are asked to use two of the six concepts to discuss the situation and issues faced by real-world organizations
they have studied during the course, making use of business management tools, techniques and theories.

The following table provides brief understandings of the six concepts and offers some suggestions as to
how they may be explored through specific subject content. The examples are in no way prescriptive, and
in their planning, teachers should identify and map areas of the syllabus, and suitable case studies and
examples that will allow them to explore these concepts with their students.

Concept Understanding in relation to the Examples of content that allows for

course the exploration of concepts (this list is
not prescriptive)

Change Competition, new technologies and 1.3 Organizational objectives

markets, and trends in consumer
2.1 Functions and evolution of human
behaviour lead business organizations
resource management
to adapt their objectives, strategies and
operations. 2.2 Organizational structure

Success emerges from the ability to 3.1 Sources of finance

research and respond to signals in both 3.7 Cash flow
the internal and external environment.
4.2 Marketing planning
4.3 Sales forecasting (HL only)
4.4 Market research
5.6 Research and development (HL
only)
5.7 Crisis management and
contingency planning (HL only)

12 Business management guide

 Approaches to teaching and learning of business management

Concept Understanding in relation to the Examples of content that allows for

course the exploration of concepts (this list is
not prescriptive)

Culture Every organization operates in a range 1.2 Types of organization

of environments in which its role
1.6 Growth and evolution
may be interpreted differently. These
expectations affect planning, decision- 2.3 Leadership and management
making and strategy implementation. 2.4 Motivation
Within an organization, values and 2.5 Organizational culture (HL only)
backgrounds influence what stakeholders
focus on and how they work. 2.6 Industrial relations (HL only)
4.2 Marketing planning
4.7 International marketing (HL only)
5.3 Lean production and managing
quality (HL only)
5.4 Location

Ethics Every business decision has moral 1.1 Introduction to business

implications. management
These consequences can be significant 1.2 Types of organization
for internal and external stakeholders
1.3 Organizational objectives
and the natural environment.
1.4 Stakeholders
1.5 External environment
2.3 Leadership and management
3.4 Final accounts
4.1 The role of marketing
5.1 The role of operations management

Globalization A wide range of international forces 1.4 Stakeholders

(such as the increasing social, cultural,
1.5 External environment
technological and economic integration)
influence business organizations. In 1.6 Growth and evolution
turn, business organizations shape these 2.1 Functions and evolution of human
forces. resource management
Many business organizations operate 2.2 Organizational structure
across national boundaries. Even local
businesses and consumers are influenced 2.5 Organizational culture (HL only)
by global forces. 4.7 International marketing (HL only)
4.8 E-commerce
5.4 Location

Business management guide 13

Approaches to teaching and learning of business management

Concept Understanding in relation to the Examples of content that allows for

course the exploration of concepts (this list is
not prescriptive)

Innovation Incremental or radical improvements to 1.5 External environment

a business idea, or the generation of new
1.6 Growth and evolution
ideas in relation to a final product, service
or process, are the result of internal or 2.3 Leadership and management
external influences. 2.5 Organizational culture (HL only)
For many business organizations, a key 3.1 Sources of finance
challenge is bringing in the new and
managing the process of improvement in 3.8 Investment appraisal
a sustainable way. 4.4 Market research
5.3 Lean production and managing
quality (HL only)
5.6 Research and development (HL
only)

Strategy Strategy refers to the significant 1.3 Organizational objectives

long-term planning decisions that
1.6 Growth and evolution
organizations make in order to meet the
needs and wants of their stakeholders. 1.7 Organizational planning tools (HL
only)
Strategy is about asking questions: what,
why, when, how, where and who? 2.2 Organizational structure
2.3 Leadership and management
3.4 Final accounts
3.8 Investment appraisal
4.4 Market research
5.1 The role of operations management
5.6 Research and development (HL
only)

A teachers own carefully designed scheme of work will explore the relationships between these concepts,
the tools, techniques and theories of business management, and appropriate examples and case studies.
The Business management teacher support material provides further guidance on teaching through concepts.

Contextualized teaching through case studies and

examples
The teaching of business management content should be supported through case studies and examples
from news articles and other real-world resources, such as annual reports, industry-level materials, non-
governmental organization (NGO) publications and consumer opinion. The case studies and examples
should be selected to help develop students understanding of the six concepts and the tools, techniques
and theories used in business management.

14 Business management guide

 Approaches to teaching and learning of business management

The resources may cover a wide range of contemporary business issues, such as globalization, new business
models centred on social and environmental issues, CSR, the role of product quality or the changing nature
of marketing. Please note that these are suggestions and the choice of issues should be of interest to
students and reflect current debates in the business world.

The following approach is helpful when teaching through case studies and examples.

Identify the context and issues raised by the case study or example.
Explain how these issues relate to different areas of the syllabus and the six concepts.
Apply the business tools, techniques and theories that might be appropriate for understanding the
issues raised in the case study or example.
Discuss and, if appropriate, recommend alternatives to the issues raised.
Students are able to use their work with case studies and examples in their assessment. Familiarity with
the case study approach is important for a successful treatment of the pre-seen case study and of stimulus
materials given in the examination papers. Moreover, in the conceptual examination questions, students
are asked to use two of the six concepts to discuss the context, situation and issues faced by real-world
organizations they have studied during the course. Finally, for their internal assessment at both SL and HL,
students have to focus on a problem, issue or decision faced by a real-world organization.

The Business management teacher support material provides further guidance on teaching through case
studies and examples.

Research skills
Potential extended essay work in business management, the internal assessment at both SL and HL, and
their preparation for the conceptual examination questions provide opportunities for students to explore
and develop their research skills. These include the identification of relevant materials, the design of data
collection techniques, the collection and analysis of data, and the ability to evaluate and draw conclusions
from data. Teachers are encouraged to discuss appropriate research methods with students. The Business
management teacher support material provides further guidance on research skills.

While conceptually focused teaching, contextual teaching and research skills are highlighted as particularly
relevant approaches to teaching and learning in business management, the course offers opportunities for
teachers and students to explore a range of teaching and learning experiences. Teachers are encouraged to
discuss their strategies on the OCC.

Prior learning
No particular background in terms of specific subjects for national or international qualifications is expected
or required, and no prior knowledge of business management is necessary for students to undertake a
course of study based on this specification. However, a familiarity with business concepts would be an
advantage, as would completing the individuals and societies course in the Middle Years Programme (MYP).

Links to the Middle Years Programme

The MYP individuals and societies subject group involves inquiry into historical, contemporary, political,
social, economic, cultural, technological and environmental contexts that impact on, and are influenced
by, individuals and societies. This is a very useful foundation for students who go on to study the Diploma
Programme business management course.

Business management guide 15

Approaches to teaching and learning of business management

Students coming from the MYP are familiar with a conceptual approach to learning. Among their key
and related concepts in the individuals and societies subject group, they will have studied the concepts
of change, culture, ethics, globalization, innovation and strategy, which will be further developed in the
Diploma Programme business management course. Conceptual analysis in the business management
course is expected to have an increasing degree of sophistication and disciplinary specificity.

The development of certain skills in the MYP individuals and societies subject group is also excellent
preparation for a Diploma Programme course in business management, which requires the student to
undertake research, demonstrate understanding and knowledge of content and concepts, and exhibit the
capacity to think critically.

For example, the following specific skills, which are identified and developed in the MYP individuals and
societies subject group, are encouraged in the Diploma Programme business management course:

the ability to use sources such as graphs and tables in a critical manner
the ability to analyse and interpret information from a wide range of sources
the ability to communicate information and ideas using an appropriate style for the intended audience
and purpose
the ability to analyse concepts, events, issues and arguments
the ability to make well-substantiated decisions and to relate them to real-world contexts.

16 Business management guide

Introduction

Aims

The aims of all subjects in the individuals and societies are to:

1. encourage the systematic and critical study of: human experience and behaviour; physical, economic
and social environments; the history and development of social and cultural institutions
2. develop in the student the capacity to identify, analyse critically and evaluate theories, concepts and
arguments about the nature and activities of the individual and society
3. enable the student to collect, describe and analyse data used in studies of society, and to test
hypotheses and interpret complex data and source material
4. promote the appreciation of the way in which learning is relevant to both the culture in which the
student lives and the cultures of other societies
5. develop an awareness in the student that human attitudes and opinions are widely diverse and that a
study of society requires an appreciation of such diversity
6. enable the student to recognize that the content and methodologies of the individuals and societies
subjects are contestable and that their study requires the tolerance of uncertainty.
The aims of the business management course at HL and SL are to:

1. encourage a holistic view of the world of business

2. empower students to think critically and strategically about individual and organizational behaviour
3. promote the importance of exploring business issues from different cultural perspectives
4. enable the student to appreciate the nature and significance of change in a local, regional and global
context
5. promote awareness of the importance of environmental, social and ethical factors in the actions of
individuals and organizations
6. develop an understanding of the importance of innovation in a business environment.

Business management guide 17

Introduction

Assessment objectives

By the end of the business management course, students are expected to reach the following assessment
objectives.

1. Demonstrate knowledge and understanding of:

the business management tools, techniques and theories specified in the syllabus content
the six concepts that underpin the subject
real-world business problems, issues and decisions
the HL extension topics (HL only).
2. Demonstrate application and analysis of:
knowledge and skills to a variety of real-world and fictional business situations
business decisions by explaining the issue(s) at stake, selecting and interpreting data, and
applying appropriate tools, techniques, theories and concepts
the HL extension topics (HL only).
3. Demonstrate synthesis and evaluation of:
business strategies and practices, showing evidence of critical thinking
business decisions, formulating recommendations
the HL extension topics (HL only).
4. Demonstrate a variety of appropriate skills to:
produce well-structured written material using business terminology
select and use quantitative and qualitative business tools, techniques and methods
select and use business material, from a range of primary and secondary sources.

18 Business management guide

Introduction

Assessment objectives in practice

Assessment objective Which component addresses How is the assessment

this assessment objective? objective addressed?

1. Demonstrate knowledge External assessment External assessment

and understanding Internal assessment Paper 1 (SL and HL): all
sections
Paper 2 (SL and HL): all
sections
Internal assessment: all of
written commentary (SL) and
research project (HL)

2. Demonstrate application External assessment External assessment

and analysis Internal assessment Paper 1 (SL and HL): all
sections
Paper 2 (SL and HL): all
sections
Internal assessment
SL: emphasized in criteria
B and C
HL: emphasized in criteria
C and D

3. Demonstrate synthesis External assessment External assessment

and evaluation Internal assessment Paper 1: section B (SL and
HL) and section C (HL)
Paper 2 (SL and HL): all
sections
Internal assessment
SL: emphasized in criteria
D and E
HL: emphasized in criteria
D, E, F and I

Business management guide 19

Assessment objectives in practice

Assessment objective Which component addresses How is the assessment

this assessment objective? objective addressed?

4. Demonstrate a variety of External assessment External assessment

appropriate skills Internal assessment Paper 1 (SL and HL): all
sections
Paper 2 (SL and HL): all
sections, emphasized in
section A
Internal assessment
SL: emphasized in criteria
A, B, C, F and G
HL: emphasized in criteria
A, B, C, G and H

Command terms
Command terms are used both in the syllabus content and in examination questions to indicate depth of
treatment. They are classified below according to the assessment objective (AO) levels.

AO1Demonstrate knowledge and understanding

AO2Demonstrate application and analysis

AO3Demonstrate synthesis and evaluation

AO4Demonstrate a variety of appropriate skills

Cognitive demands progress from AO1 to AO3, while AO4 terms are specific to particular skills. Teachers
and students must be familiar with the assessment objective levels and the command terms in order to
understand the depth of treatment required in teaching and in examination questions.

In the syllabus content, the assessment objective levels are specified instead of particular command terms.
This gives teachers flexibility to work with the most relevant command terms at the given assessment
objective level.

For use of command terms in examination questions, please refer to the assessment section of this guide.

The command terms within each assessment objective level are listed in alphabetical order in the following
table. Definitions of the terms are listed in the Glossary of command terms in the appendix to this guide.

Assessment objective Key command term Depth

1. Demonstrate knowledge Define These terms require students

and understanding to learn and comprehend the
Describe
meaning of information.
Outline
State

20 Business management guide

 Assessment objectives in practice

Assessment objective Key command term Depth

2. Demonstrate application Analyse These terms require students to

and analysis of knowledge use their knowledge and skills to
Apply
and understanding break down ideas into simpler
Comment parts and to see how the parts
Demonstrate relate.

Distinguish
Explain
Suggest

3. Demonstrate synthesis Compare These terms require students

and evaluation to rearrange component ideas
Compare and contrast
into a new whole and make
Contrast judgments based on evidence
Discuss or a set of criteria.

Evaluate
Examine
Justify
Recommend
To what extent

4. Demonstrate a variety of Annotate These terms require students to

appropriate skills demonstrate the selection and
Calculate
use of subject-specific skills and
Complete techniques.
Construct
Determine
Draw
Identify
Label
Plot
Prepare

Business management guide 21

Syllabus

Syllabus outline

Teaching hours
Syllabus component
SL HL

Unit 1: Business organization and environment 40 50

1.1 Introduction to business management
1.2 Types of organizations
1.3 Organizational objectives
1.4 Stakeholders
1.5 External environment
1.6 Growth and evolution
1.7 Organizational planning tools (HL only)

Unit 2: Human resource management 15 30

2.1 Functions and evolution of human resource management
2.2 Organizational structure
2.3 Leadership and management
2.4 Motivation
2.5 Organizational (corporate) culture (HL only)
2.6 Industrial/employee relations (HL only)

Unit 3: Finance and accounts 35 50

3.1 Sources of finance
3.2 Costs and revenues
3.3 Break-even analysis
3.4 Final accounts (some HL only)
3.5 Profitability and liquidity ratio analysis
3.6 Efficiency ratio analysis (HL only)
3.7 Cash flow
3.8 Investment appraisal (some HL only)
3.9 Budgets (HL only)

22 Business management guide

 Syllabus outline

Teaching hours
Syllabus component
SL HL

Unit 4: Marketing 35 50
4.1 The role of marketing
4.2 Marketing planning (including introduction to the four Ps)
4.3 Sales forecasting (HL only)
4.4 Market research
4.5 The four Ps (product, price, promotion, place)
4.6 The extended marketing mix of seven Ps (HL only)
4.7 International marketing (HL only)
4.8 E-commerce

Unit 5: Operations management 10 30

5.1 The role of operations management
5.2 Production methods
5.3 Lean production and quality management (HL only)
5.4 Location
5.5 Production planning (HL only)
5.6 Research and development (HL only)
5.7 Crisis management and contingency planning (HL only)

Internal assessment 15 30
Total teaching hours 150 240

The recommended teaching time is 240 hours to complete HL courses and 150 hours to complete SL courses
as stated in the document General regulations: Diploma Programme (page 4, article 8.2).

The curriculum model for Diploma Programme business management is a core curriculum for HL and SL
consisting of five obligatory units with common content and learning outcomes. In addition to the core,
HL students are expected to complete extension areas of study in all five units, adding depth and breadth
to the course. The above teaching hours are suggestions only, and teachers may choose to allocate their
teaching time between the units differently.

Business management guide 23

Syllabus

Syllabus content

Unit 1: Business organization and environment

In this first introductory unit, business management is set in context: students learn to analyse organizations
internal environment (for example, stakeholders, strategic objectives and CSR) and external environment
(for example, the impact of technological change and globalization). Unit 1 covers traditional business
areas such as the different types of organization and the idea of economies of scale, but it also includes
more contemporary topics such as the features of social enterprises, the nature of business activity in the
quaternary sector and the distinction between entrepreneurship and intrapreneurship.

Both SL and HL students learn to apply fundamental strategy models such as social, technological,
economic, environmental, political, legal and ethical (STEEPLE) analysis as well as the strengths, weaknesses,
opportunities and threats (SWOT) analysis; HL students also learn to apply and evaluate more specific tools
such as fishbone diagrams, decision-trees and force field analysis. However, given the importance of the
overarching business themes introduced in unit 1, most content is common to both levels.

As this unit provides students with an overview of business management both as a topic of study (what
the subject covers overall) and as a professional practice (what business managers do), it lends itself to
many TOK considerations. On the one hand, students may inquire into how and why a particular model
becomes established as a mainstream strategy model. On the other hand, they may ask on what basis
business managers make decisions in the real world. Unit 1 is also an open invitation to consider a range of
international examples, especially in relation to issues of globalization, and to address businesses ethical,
social or environmental obligations, which fits well with the IB learner profile in terms of developing
principled thinkers. It may also provide the impetus for entrepreneurial service learning projects in the local
community as part of students CAS requirement.

SL/HL content Depth of HL only Depth of

teaching teaching

1.1 Introduction to business management

The role of businesses in combining AO2

human, physical and financial
resources to create goods and
services

The main business functions and AO2

their roles:
human resources
finance and accounts
marketing
operations

Primary, secondary, tertiary and AO2

quaternary sectors

24 Business management guide

 Syllabus content

SL/HL content Depth of HL only Depth of

teaching teaching

The nature of business activity AO2

in each sector and the impact of
sectoral change on business activity

The role of entrepreneurship (and AO3

entrepreneur) and intrapreneurship
(and intrapreneur) in overall business
activity

Reasons for starting up a business or AO2

an enterprise

Common steps in the process AO2

of starting up a business or an
enterprise

Problems that a new business or AO2

enterprise may face

The elements of a business plan AO2

1.2 Types of organizations

Distinction between the private and AO2

the public sectors

The main features of the following AO3

types of for-profit (commercial)
organizations:
sole traders
partnerships
companies/corporations

The main features of the following AO3

types of for-profit social enterprises:
cooperatives
microfinance providers
public-private partnerships
(PPP)

The main features of the following AO3

types of non-profit social enterprises:
non-governmental
organizations (NGOs)
charities

Business management guide 25

Syllabus content

SL/HL content Depth of HL only Depth of

teaching teaching

1.3 Organizational objectives

Vision statement and mission AO2

statement

Aims, objectives, strategies and AO3

tactics, and their relationships

The need for organizations to change AO3

objectives and innovate in response
to changes in internal and external
environments

Ethical objectives and corporate AO1

social responsibility (CSR)

The reasons why organizations set AO3

ethical objectives and the impact of
implementing them

The evolving role and nature of CSR AO3

SWOT analysis of a given organization AO3, AO4

Ansoff matrix for different growth AO3, AO4

strategies of a given organization

1.4 Stakeholders

The interests of internal stakeholders AO2

The interests of external stakeholders AO2

Possible areas of mutual benefit AO3

and conflict between stakeholders
interests

1.5 External environment

STEEPLE analysis of a given AO2, AO4

organization

Consequences of a change in any of AO3

the STEEPLE factors for a businesss
objectives and strategy

1.6 Growth and evolution

Economies and diseconomies of scale AO2

The merits of small versus large AO3

organizations

26 Business management guide

 Syllabus content

SL/HL content Depth of HL only Depth of

teaching teaching

The difference between internal and AO2

external growth

The following external growth AO3

methods:
mergers and acquisitions
(M&As) and takeovers
joint ventures
strategic alliances
franchising

The role and impact of globalization AO3

on the growth and evolution of
businesses

Reasons for the growth of AO3

multinational companies (MNCs)

The impact of MNCs on the host AO3

countries

1.7 Organizational planning tools (HL only)

The following planning tools in a AO2, AO4

given situation:
fishbone diagram
decision tree
force field analysis
Gantt chart

The value to an organization of these AO3

planning tools

Business management guide 27

Syllabus content

Theory of knowledgesuggested links

How do assumptions about what a business is and how a business works vary by industry and
location, and what implications does this have for business actors?
To what extent are the language and customs of business management based on the English
language and Western tradition, and what implications does this have for business cultures
around the world?
To what extent do intuition, imagination and reason factor into the decision to set up a new
business?
Is business decision-making art or science?
Do we have self-evident beliefs about what the objectives of a business are or how a business
operates? If so, which ones and how could we challenge them?
What needs to be true for ethical objectives to contribute to good strategy? What needs to be
true for business strategy to be ethically laudable?
Most businesses desire to expand. What motivates the growth of a social organization like
business?
How can we evaluate the benefits and drawbacks of globalization, given the multitude of
stakeholders it influences?

28 Business management guide

 Syllabus content

Unit 2: Human resource management

In this unit, students explore how businesses recruit, organize, develop and lead their arguably most
important resourcetheir people. In unit 2, students also learn what motivates individuals to perform
well at work. Given the pace of change in modern business, the unit looks at how structural changes and
changes in the business environment or in key people impact on human resource management. Ethical
considerations and cross-cultural understanding are particularly relevant for unit 2, and especially in
examining global corporations that have a multinational workforce and diverse stakeholder groups.

Although cultural issues are addressed throughout this unit, HL students also examine organizational
(corporate) culture as well as industrial/employee relations. This gives them more tools to analyse the
relationship between different stakeholder groups as well as the role of individuals in a business.

While unit 2 focuses primarily on people issues, these also form part of the discussions in other units of the
course. For example: in unit 1, social and demographic changes are discussed as drivers of strategy; in unit 4,
customers are in focus; while in unit 5, innovation is examined.

As the unit deals with the interactions between humans and their environments, students have an
opportunity to reflect critically and creatively on many TOK considerations. Students may ask how knowledge
is generated individually and collectively within an organization, how it is internally and externally validated,
and how it may or may not be questioned. Similarly, topics such as persuasion (essential for leadership and
collective bargaining) and the consequences of actions and decisions (for instance, in relation to recruiting
or dismissing staff) can be examined. In terms of the IB learner profile, it may be interesting to study to what
extent the characteristics of the profile are present (and valued) in business contexts.

SL/HL content Depth of HL only Depth of

teaching teaching

2.1 Functions and evolution of human resource management

Human resource planning (workforce AO1

planning)

Labour turnover AO2

Internal and external factors that AO3

influence human resource planning
(such as demographic change,
change in labour mobility, new
communication technologies)

Common steps in the process of AO2

recruitment

The following types of training: AO2

on the job (including induction
and mentoring)
off the job
cognitive
behavioural

Business management guide 29

Syllabus content

SL/HL content Depth of HL only Depth of

teaching teaching

The following types of appraisal: AO2

formative
summative
360-degree feedback
self-appraisal

Common steps in the processes of AO1

dismissal and redundancy

How work patterns, practices and AO2

preferences change and how they
affect the employer and employees
(such as teleworking, flexitime,
migration for work)

Outsourcing, offshoring and re- AO3

shoring as human resource strategies

How innovation, ethical AO3

considerations and cultural
differences may influence human
resource practices and strategies in
an organization

2.2 Organizational structure

The following terminology to AO1

facilitate understanding of different
types of organizational structures:
delegation
span of control
levels of hierarchy
chain of command
bureaucracy
centralization
decentralization
de-layering

The following types of organization AO2, AO4

charts:
flat/horizontal
tall/vertical
hierarchical
by product
by function
by region

30 Business management guide

 Syllabus content

SL/HL content Depth of HL only Depth of

teaching teaching

Changes in organizational structures AO2

(such as project-based organization,
Handys Shamrock Organization)

How cultural differences and AO3

innovation in communication
technologies may impact on
communication in an organization

2.3 Leadership and management

The key functions of management AO2

Management versus leadership AO2

The following leadership styles: AO3

autocratic
paternalistic
democratic
laissez-faire
situational

How ethical considerations and AO3

cultural differences may influence
leadership and management styles in
an organization

2.4 Motivation

The following motivation theories: AO3

Taylor
Maslow
Herzberg (motivationhygiene
theory)
Adams (equity theory)
Pink

The following types of financial AO2

rewards:
salary
wages (time and piece rates)
commission
profit-related pay
performance-related pay (PRP)
employee share ownership
schemes
fringe payments (perks)

Business management guide 31

Syllabus content

SL/HL content Depth of HL only Depth of

teaching teaching

The following types of non-financial AO2

rewards:
job enrichment
job rotation
job enlargement
empowerment
purpose/the opportunity to
make a difference
teamwork

How financial and non-financial AO2

rewards may affect job satisfaction,
motivation and productivity in
different cultures

2.5 Organizational (corporate) culture (HL only)

Organizational culture AO1

Elements of organizational culture AO2

Types of organizational culture AO2

The reasons for, and consequences of, AO3

cultural clashes within organizations
when they grow, merge and when
leadership styles change

How individuals influence AO3

organizational culture and how
organizational culture influences
individuals

2.6 Industrial/employee relations (HL only)

The role and responsibility AO2

of employee and employer
representatives

The following industrial/employee AO3

relations methods used by:
employees: collective
bargaining, slowdowns/go-
slows, work-to-rule, overtime
bans and strike action
employers: collective
bargaining, threats of
redundancies, changes of
contract, closure and lock-outs

32 Business management guide

 Syllabus content

SL/HL content Depth of HL only Depth of

teaching teaching

Sources of conflict in the workplace AO2

The following approaches to conflict AO3

resolution:
conciliation and arbitration
employee participation and
industrial democracy
no-strike agreement
single-union agreement

Reasons for resistance to change in AO2

the workplace (such as self-interest,
low tolerance, misinformation and
interpretation of circumstances)

Human resource strategies for AO3

reducing the impact of change
and resistance to change (such as
getting agreement/ownership,
planning and timing the change and
communicating the change)

How innovation, ethical AO3

considerations and cultural
differences may influence employer
employee relations in an organization

Theory of knowledgesuggested links

The pace of change in modern business is high and what is important to know is not static.
How do individuals and organizations cope with change and new demands?
Knowledge is power. If this saying is true, how does it affect different stakeholders ability to
contribute to business decision-making?
In large businesses, many stakeholders are far from the centre of decision-making. What
challenges does an organizational or a geographical distance create for understanding the
concerns of individual and stakeholder groups?
Each individual and stakeholder group in a business has its own interests. Does this mean that
a genuine shared strategy is impossible?
How can a good leader use the different ways of knowing for effective communication and
interaction with employees?
Can individual motivation only emerge internally or can it be created externally? Is there such a
thing as collective motivation?
What types of knowledge, skills and attitudes might future business leaders and employees
need?

Business management guide 33

Syllabus content

Unit 3: Finance and accounts

Irrespective of their size, scope and sector, all organizations need robust accounting systems, making finance
a core business function. In unit 3, students examine finance and accounts through both quantitative and
qualitative methods. They learn how businesses represent themselves numerically through accounts; they
also learn how to construct basic balance sheets and profit and loss accounts themselves. By the end of the
unit, they will be able to explain the meaning of these accounts by calculating ratios (for example, gross
profit margin, net profit margin and return on capital employed (ROCE)) and interpreting the results.

HL students explore aspects of finance and accounts in more depth through the study of further efficiency
ratios, investment appraisals and budgets.

Finance transcends mere numbers and connects to the six concepts underpinning the course. The
profitability and financial health of an organization may significantly influence its strategy, ethics, and need
and willingness to changeand vice versa. The challenge of accounting is for an organization to represent
itself through the common language of financial statements, which raises many TOK considerations,
for example in relation to the truth that may or may not be found in numbers. Unit 3 also provides
opportunities for students to think about the attributes of the IB learner profile. They may inquire which
characteristics of the learner profile are and, in their view, ought to be valued in accounting and, more
broadly, in the financial markets.

SL/HL content Depth of HL only Depth of

teaching teaching

3.1 Sources of finance

Role of finance for businesses: AO2

capital expenditure
revenue expenditure

The following internal sources of AO2

finance:
personal funds (for sole traders)
retained profit
sale of assets

The following external sources of AO2

finance:
share capital
loan capital
overdrafts
trade credit
grants
subsidies
debt factoring
leasing
venture capital
business angels

34 Business management guide

 Syllabus content

SL/HL content Depth of HL only Depth of

teaching teaching

Short, medium and long-term finance AO1

The appropriateness, advantages and AO3

disadvantages of sources of finance
for a given situation

3.2 Costs and revenues

The following types of cost, using AO2

examples:
fixed
variable
semi-variable
direct
indirect/overhead

Total revenue and revenue streams, AO2

using examples

3.3 Break-even analysis

Total contribution versus contribution AO2

per unit

A break-even chart and the following AO2, AO4

aspects of break-even analysis:
break-even quantity/point
profit or loss
margin of safety
target profit output
target profit
target price

The effects of changes in price or cost AO2, AO4

on the break-even quantity, profit
and margin of safety, using graphical
and quantitative methods

The benefits and limitations of break- AO3

even analysis

Business management guide 35

Syllabus content

SL/HL content Depth of HL only Depth of

teaching teaching

3.4 Final accounts (some HL only)

The purpose of accounts to different AO3

stakeholders

The principles and ethics of AO3

accounting practice

Final accounts: AO2, AO4

profit and loss account
balance sheet

Different types of intangible assets AO1

Depreciation using the following AO2, AO4

methds:
straight line method
reducing/declining balance
method

The strengths and weaknesses of AO2

each method

3.5 Profitability and liquidity ratio analysis

The following profitability and AO2, AO4

efficiency ratios:
gross profit margin
net profit margin
ROCE

Possible strategies to improve these AO3

ratios

The following liquidity ratios: AO2, AO4

current
acid-test/quick

Possible strategies to improve these AO3

ratios

36 Business management guide

 Syllabus content

SL/HL content Depth of HL only Depth of

teaching teaching

3.6 Efficiency ratio analysis (HL only)

The following further efficiency AO2, AO4

ratios:
inventory/stock turnover
debtor days
creditor days
gearing ratio

Possible strategies to improve these AO3

ratios

3.7 Cash flow

The difference between profit and AO2

cash flow

The working capital cycle AO2

Cash flow forecasts AO2, AO4

The relationship between investment, AO2

profit and cash flow

The following strategies for dealing AO3

with cash flow problems:
reducing cash outflow
improving cash inflows
looking for additional finance

3.8 Investment appraisal (some HL only)

Investment opportunities using AO3, AO4

payback period and average rate of
return (ARR)

Investment opportunities using net AO3, AO4

present value (NPV)

Business management guide 37

Syllabus content

SL/HL content Depth of HL only Depth of

teaching teaching

3.9 Budgets (HL only)

The importance of budgets for AO2

organizations

The difference between cost and AO1

profit centres

The roles of cost and profit centres AO2

Variances AO2, AO4

The role of budgets and variances in AO2

strategic planning

Theory of knowledgesuggested links

Do financial statements reflect the truth about a business?
Many businesses are introducing metrics about their environmental, social or ethical
performance on the side of financial information. Can well-being, or other social variables, be
measured?
How certain is the information we get from financial statements? For example, could we know
in advance if an investment will be successful?
What is the role of interpretation in accounting? For example, could we compare businesses by
just looking at their financial statements?
Often, financial information is presented to the wider audience in a graphical or summary
form. Do such simplifying presentations limit our knowledge of accounts?
Does the accounting process allow for imagination?
Accounting practices vary from country to country. Is this necessary, or is it possible to have the
same accounting practices everywhere?

38 Business management guide

 Syllabus content

Unit 4: Marketing
Marketing is an essential business function: it creates a bridge between an organization and its customers.
In our everyday speech, the word marketing is often associated with advertisements and finding innovative
ways of getting people to buy a product or service. However, unit 4 shows students that marketing is much
more than that. Effective marketing requires consideration of everything from product quality to consumer
perceptions and increasingly, engagement with peoples everyday lives to uncover needs that customers
may not even be aware of themselves.

Both SL and HL students learn the marketing mix of the four Psthe essential ingredients of marketing
planning: product, price, promotion and place (distribution). At HL, this model is expanded to the seven
Ps: students also explore how people, processes and physical evidence can be applied to the marketing of
services. HL students also examine international marketing in greater depth. This gives them an appreciation
for how marketing strategies and practices are both a reflection of and an influence on the culture in which
they are applied.

Given the strategic nature of marketing, unit 4 is closely linked to the other business functions students study
in the business management course. For instance, market research may lead to new strategic objectives
(unit 1) that impact on production (unit 5), human resource planning (unit 2) and profitability (unit 3).

Unit 4 provides an ideal opportunity for teachers and students to explore case studies and examples that
are contemporary, relevant and of direct interest to students. Marketing also allows students to develop
their conceptual understanding. The unit ties to all concepts underpinning the course: marketing decisions
are strategic and have ethical and cultural implications. Here, the degree to which marketing is globalized
can be examined. Innovating and being aware or even ahead of social changes are essential elements
of effective marketing. Thus, students learn to discuss and evaluate marketing decisions from a range of
perspectives, combining inquiry, critical thinking and cross-cultural understanding.

SL/HL content Depth of HL only Depth of

teaching teaching

4.1 The role of marketing

Marketing and its relationship with AO1

other business functions

The differences between marketing AO2

of goods and marketing of services

Market orientation versus product AO2

orientation

The difference between commercial AO2

marketing and social marketing

Characteristics of the market in which AO1

an organization operates

Market share AO4

The importance of market share and AO3

market leadership

The marketing objectives of for- AO3

profit organizations and non-profit
organizations

Business management guide 39

Syllabus content

SL/HL content Depth of HL only Depth of

teaching teaching

How marketing strategies evolve as AO3

a response to changes in customer
preferences

How innovation, ethical AO3

considerations and cultural
differences may influence marketing
practices and strategies in an
organization

4.2 Marketing planning (including introduction to the four Ps)

The elements of a marketing plan AO1

The role of marketing planning AO2

The four Ps of the marketing mix AO2

An appropriate marketing mix for a AO2, AO4

particular product or business

The effectiveness of a marketing mix AO3

in achieving marketing objectives

The difference between target AO2

markets and market segments

Possible target markets and market AO4

segments in a given situation

The difference between niche market AO2

and mass market

How organizations target and AO2

segment their market and create
consumer profiles

A product position map/perception AO2, AO4

map

The importance of having a unique AO2

selling point/proposition (USP)

How organizations can differentiate AO3

themselves and their products from
competitors

40 Business management guide

 Syllabus content

SL/HL content Depth of HL only Depth of

teaching teaching

4.3 Sales forecasting (HL only)

Up to four-part moving average, AO4

sales trends and forecast (including
seasonal, cyclical and random
variation) using given data

The benefits and limitations of sales AO3

forecasting

4.4 Market research

Why and how organizations carry out AO2

market research

The following methods/techniques of AO2

primary market research:
surveys
interviews
focus groups
observations

The following methods/techniques of AO2

secondary market research:
market analyses
academic journals
government publications
media articles

Ethical considerations of market AO3

research

The difference between qualitative AO2

and quantitative research

The following methods of sampling: AO2

quota
random
stratified
cluster
snowballing
convenience

Results from data collection AO2

Business management guide 41

Syllabus content

SL/HL content Depth of HL only Depth of

teaching teaching

4.5 The four Ps (product, price, promotion, place)

Product

The product life cycle AO4

The relationship between the AO2

product life cycle and the marketing
mix

Extension strategies AO3

The relationship between the AO2

product life cycle, investment, profit
and cash flow

Boston Consulting Group (BCG) AO3, AO4

matrix on an organizations products

The following aspects of branding: AO2

awareness
development
loyalty
value

The importance of branding AO3

The importance of packaging AO3

Price

The appropriateness of the following AO3

pricing strategies:
cost-plus (mark-up)
penetration
skimming
psychological
loss leader
price discrimination
price leadership
predatory

42 Business management guide

 Syllabus content

SL/HL content Depth of HL only Depth of

teaching teaching

Promotion

The following aspects of promotion: AO2

above the line promotion
below the line promotion
promotional mix

The impact of changing technology AO3

on promotional strategies (such
as viral marketing, social media
marketing and social networking)

Guerrilla marketing and its AO3

effectiveness as a promotional
method

Place

The importance of place in the AO2

marketing mix

The effectiveness of different types of AO3

distribution channels

4.6 The extended marketing mix of seven Ps (HL only)

People

The importance of employee AO3

customer relationships in marketing a
service and cultural variation in these
relationships

Processes

The importance of delivery processes AO3

in marketing mix a service and
changes in these processes

Physical evidence

The importance of tangible physical AO3

evidence in marketing a service

The seven Ps model in a service- AO2

based market

Business management guide 43

Syllabus content

SL/HL content Depth of HL only Depth of

teaching teaching

4.7 International marketing (HL only)

Methods of entry into international AO2

markets

The opportunities and threats posed AO3

by entry into international markets

The strategic and operational AO3

implications of international
marketing

The role of cultural differences in AO3

international marketing

The implications of globalization on AO3

international marketing

4.8 E-commerce

Features of e-commerce AO1

The effects of changing technology AO2

and e-commerce on the marketing
mix

The difference between the following AO2

types of e-commerce:
business to business (B2B)
business to consumer (B2C)
consumer to consumer (C2C)

The costs and benefits of AO3

e-commerce to firms and consumers

44 Business management guide

 Syllabus content

Theory of knowledgesuggested links

The four Ps and seven Ps frameworks suggest that marketing has four or seven aspects, all
of which can be described with a word that starts with a P. How helpful are such analytical
frameworks to you as a knowledge-seeker?
Many ads use scientific language. What does this tell us about the hierarchy of different areas
of knowledge?
The observer effect is a common problem in the social sciences whereby knowledge of being
researched influences how people answer questions and behave. What problems does the
observer effect create for market research?
In market research, how might the language used in polls and questionnaires influence
consumers and businesses conclusions?
Is it possible to measure brand loyalty?
To what extent is consumer behaviour rational?
Is the decision to develop CSR objectives solely a marketing strategy?
To what extent are marketing practices a reflection of the values of a given time and culture?

Business management guide 45

Syllabus content

Unit 5: Operations management

In this unit, students return to the fundamental rationale of business management: to make goods and
services that meet consumers needs and wants. Without efficient operations leading to products and
experiences customers are satisfied with, success in the other business functions is unsustainable. In unit 5,
students learn how organizations manage their operations, whether in terms of achieving an optimal cost
quality ratio or the shortest supply chain; using the most ethical means or the latest innovative techniques;
or applying the highest levels of quality assurance.

Unit 5 is the part of the business management course where the relative weight of the HL material is
greatest. Both SL and HL students look at different production methods and their implications as well as
different ways of organizing production. At HL, students explore additional areas such as lean production,
quality management, and research and development.

Operations management is the how to of business management. Still, it ties intimately to the what
question of an organizations objectives (unit 1): a new strategic direction means adjustments in operations.
Good human resource management at all levels in an organization, in turn, is a pre-requisite of successful
operations (unit 2). Cooperation between marketing, with the closest relation to customers, and operations,
which put new ideas into practice, is also significant (unit 4).

Unit 5 can be taught through case studies in a variety of settings; visits to factories or service businesses are
a good way to make the topic come alive. This unit has a very concrete dimension that invites students to
explore and understand the importance of manufacturing and other types of operations, bringing the other
units of the course together in a dynamic way. The nature of operations is varied and rapidly evolving across
industries and locations, and thus there are plenty of opportunities to explore the concepts of change,
culture, ethics, globalization and innovation.

SL/HL content Depth of HL only Depth of

teaching teaching

5.1 The role of operations management

Operations management and its AO1

relationship with other business
functions

Operations management in AO2

organizations producing goods
and/or services

Operations management AO3

strategies and practices for
ecological, social (human
resource) and economic
sustainability

46 Business management guide

 Syllabus content

SL/HL content Depth of HL only Depth of

teaching teaching

5.2 Production methods

The following production AO2

methods:
job/customized
production
batch production
mass/flow/process
production
cellular manufacturing

The most appropriate method of AO3

production for a given situation

5.3 Lean production and quality management (HL only)

The following features of lean AO1

production:

less waste
greater efficiency

The following methods of lean AO2

production:
continuous improvement
(kaizen)
just-in-time (JIT)
kanban
andon

Features of cradle to cradle AO2

design and manufacturing

Features of quality control and AO1

quality assurance

The following methods of AO2

managing quality:
quality circle
benchmarking
total quality management
(TQM)

The impact of lean production AO3

and TQM on an organization

The importance of national and AO2

international quality standards

Business management guide 47

Syllabus content

SL/HL content Depth of HL only Depth of

teaching teaching

5.4 Location

The reasons for a specific AO2

location of production

The following ways of re- AO3

organizing production, both
nationally and internationally:
outsourcing/
subcontracting
offshoring
insourcing

5.5 Production planning (HL only)

The supply chain process AO2

The difference between JIT and AO2

just-in-case (JIC)

Stock control charts based on AO2, AO4

the following:
lead time
buffer stock
re-order level
re-order quantity

Capacity utilization rate AO2, AO4

Productivity rate AO2, AO4

Cost to buy (CTB) AO2, AO4

Cost to make (CTM) AO2, AO4

5.6 Research and Development (HL only)

The importance of research and AO3

development for a business

The importance of developing AO2

goods and services that address
customers unmet needs (of
which the customers may or
may not be aware)

48 Business management guide

 Syllabus content

SL/HL content Depth of HL only Depth of

teaching teaching

The following types of AO2

innovation:
product
process
positioning
paradigm

The difference between adaptive AO2

creativity (adapting something
that exists) and innovative
creativity (creating something
new)

How pace of change in an AO3

industry, organizational culture
and ethical considerations
may influence research and
development practices and
strategies in an organization

5.7 Crisis management and contingency planning (HL only)

The difference between crisis AO2

management and contingency
planning

The following factors that affect AO2

effective crisis management:
Transparency
Communication
Speed
Control

The following advantages and AO2

disadvantages of contingency
planning for a given
organization or situation:
Cost
Time
Risks
Safety

Business management guide 49

Syllabus content

Theory of knowledgesuggested links

Is there a difference between a product that consumers perceive to be of good quality and one
that businesses know is? What ethical dilemmas does the information advantage businesses
have over consumers pose?
Is a quality product always more expensive to manufacture or buy than a mediocre product?
How does time perspective affect our assessment of such statements?
Is there such a thing as an optimal production method? What evidence and whose experiences
could business leaders look at to decide on this?
Environmental costs of production are often referred to as externalities as they harm third
parties. How does our formulation of problems affect our sense of responsibility for solving
them?
What ways of knowing do you think business leaders use in deciding where to locate their
production?
What is the role of creativity, imagination and emotion in a business context?
Can one make an argument that the more peoples needs and wants are met, the more difficult
innovation is?
Can a business plan for a crisis?

50 Business management guide

Assessment

Assessment in the Diploma Programme

General
Assessment is an integral part of teaching and learning. The most important aims of assessment in the
Diploma Programme are that it should support curricular goals and encourage appropriate student
learning. Both external and internal assessments are used in the Diploma Programme. IBexaminers mark
work produced for external assessment, while work produced for internal assessment is marked by teachers
and externally moderated by theIB.

There are two types of assessment identified by the IB.

Formative assessment informs both teaching and learning. It is concerned with providing accurate
and helpful feedback to students and teachers on the kind of learning taking place and the nature of
students strengths and weaknesses in order to help develop students understanding and capabilities.
Formative assessment can also help to improve teaching quality, as it can provide information to
monitor progress towards meeting the course aims and objectives.
Summative assessment gives an overview of previous learning and is concerned with measuring
student achievement.
The Diploma Programme primarily focuses on summative assessment designed to record student
achievement at, or towards the end of, the course of study. However, many of the assessment instruments
can also be used formatively during the course of teaching and learning, and teachers are encouraged to
do this. A comprehensive assessment plan is viewed as being integral with teaching, learning and course
organization. For further information, see the IB Programme standards and practices document.

The approach to assessment used by the IB is criterion-related, not norm-referenced. This approach to
assessment judges students work by their performance in relation to identified levels of attainment, and
not in relation to the work of other students. For further information on assessment within the Diploma
Programme please refer to the publication Diploma Programme assessment: Principles and practice.

To support teachers in the planning, delivery and assessment of the Diploma Programme courses, a variety
of resources can be found on the OCC or purchased from the IBstore (http://store.ibo.org). Additional
publications such as specimen papers and markschemes, teacher support materials, subject reports and
grade descriptors can be found on the OCC. Past examination papers as well as markschemes can be
purchased from the IBstore.

Methods of assessment
The IB uses several methods to assess work produced by students.

Assessment criteria
Assessment criteria are used when the assessment task is open-ended. Each criterion concentrates on
a particular skill that students are expected to demonstrate. An assessment objective describes what
students should be able to do, and assessment criteria describe how well they should be able to do it. Using
assessment criteria allows discrimination between different answers and encourages a variety of responses.

Business management guide 51

Assessment in the Diploma Programme

Each criterion comprises a set of hierarchically ordered level descriptors. Each level descriptor is worth one
or more marks. Each criterion is applied independently using a best-fit model. The maximum marks for each
criterion may differ according to the criterions importance. The marks awarded for each criterion are added
together to give the total mark for the piece of work.

Markbands
Markbands are a comprehensive statement of expected performance against which responses are judged.
They represent a single holistic criterion divided into level descriptors. Each level descriptor corresponds
to a range of marks to differentiate student performance. A best-fit approach is used to ascertain which
particular mark to use from the possible range for each level descriptor.

Analytic markschemes
Analytic markschemes are prepared for those examination questions that expect a particular kind of
response and/or a given final answer from students. They give detailed instructions to examiners on how to
break down the total mark for each question for different parts of the response.

Marking notes
For some assessment components marked using assessment criteria, marking notes are provided. Marking
notes give guidance on how to apply assessment criteria to the particular requirements of a question.

Inclusive assessment arrangements

Inclusive assessment arrangements are available for candidates with assessment access requirements.
These arrangements enable candidates with diverse needs to access the examinations and demonstrate
their knowledge and understanding of the constructs being assessed.

The IB document Candidates with assessment access requirements provides details on all the inclusive
assessment arrangements available to candidates with learning support requirements. The IB document
Learning diversity in the International Baccalaureate programmes: Special educational needs within the
International Baccalaureate programmes outlines the position of the IB with regard to candidates with diverse
learning needs in the IB programmes. For candidates affected by adverse circumstances, the IB documents
General regulations: Diploma Programme and the Handbook of procedures for the Diploma Programme provide
details on access consideration.

Responsibilities of the school

The school is required to ensure that equal access arrangements and reasonable adjustments are provided
to candidates with learning support requirements that are in line with the IB documents Candidates with
special assessment needs and Learning diversity in the International Baccalaureate programmes: Special
educational needs within the International Baccalaureate programmes

52 Business management guide

Assessment

Assessment outlineSL

First assessment 2016

Assessment component Weighting

External assessment (3 hours) 75%

Paper 1 (1 hour and 15 minutes) 30%
Based on a case study issued in advance, with additional unseen material for
section B.
Assessment objectives 1, 2, 3, 4 (40 marks)
Section A
Syllabus content: Units 15
Students answer two of three structured questions based on the pre-seen case
study. (10 marks per question)
Section B
Syllabus content: Units 15
Students answer one compulsory structured question primarily based on the
additional stimulus material. (20 marks)

Paper 2 (1 hour and 45 minutes) 45%

Assessment objectives 1, 2, 3, 4 (50 marks)
Section A
Syllabus content: Units 15
Students answer one of two structured questions based on stimulus material with
a quantitative focus. (10 marks)
Section B
Syllabus content: Units 15
Students answer one of three structured questions based on stimulus material.
(20 marks)
Section C
Syllabus content: Units 15
Students answer one of three extended response questions primarily based on
two concepts that underpin the course. (20 marks).

Internal assessment (15 teaching hours) 25%

This component is internally assessed by the teacher and externally moderated by
the IB at the end of the course.
Written commentary
Students produce a written commentary based on three to five supporting
documents about a real issue or problem facing a particular organization.
Maximum 1500 words. (25 marks)

Business management guide 53

Assessment

Assessment outlineHL

First assessment 2016

Assessment component Weighting

External assessment (4 hours and 30 minutes) 75%

Paper 1 (2 hour and 15 minutes) 35%
Based on a case study issued in advance, with additional unseen material for
sections B and C.
Assessment objectives 1, 2, 3, 4 (60 marks)
Section A
Syllabus content: Units 15 including HL extension topics
Students answer two of three structured questions based on the pre-seen case
study. (10 marks per question)
Section B
Syllabus content: Units 15 including HL extension topics
Students answer one compulsory structured question primarily based on the
additional stimulus material. (20 marks)
Section C
Syllabus content: Units 15 including HL extension topics
Students answer one compulsory extended response question primarily based on
the additional stimulus material. (20 marks)

Paper 2 (2 hour and 15 minutes) 40%

Assessment objectives 1, 2, 3, 4 (70 marks)
Section A
Syllabus content: Units 15 including HL extension topics
Students answer one of two structured questions based on stimulus material with
a quantitative focus. (10 marks)
Section B
Syllabus content: Units 15 including HL extension topics
Students answer two of three structured questions based on stimulus material.
(20 marks per question)
Section C
Syllabus content: Units 15 including HL extension topics
Students answer one of three extended response questions primarily based on
two concepts that underpin the course. (20 marks)

54 Business management guide

 Assessment outlineHL

Assessment component Weighting

Internal assessment (30 teaching hours) 25%

This component is internally assessed by the teacher and externally moderated by
the IB at the end of the course.

Research project
Student s research and rep or t on an issue f acing an organiz ation or
a decision to be made by an organiz ation (or several organiz ations).
Maximum 2000 words. (25 marks)

Business management guide 55

Assessment

External assessment

Three different methods are used to assess students.

Analytic markschemes
Markbands
Assessment criteria (for paper 1 and paper 2 extended response questions)
For both examination papers, there are analytic markschemes, markbands and assessment criteria.

The markbands and assessment criteria are related to the assessment objectives established for the business
management course and the individuals and societies grade descriptors, and are published in this guide.
The analytic markschemes are specific to each examination and are published separately in a markscheme
document.

Written papers
The external assessment of the Diploma Programme business management course consists of two
examination papers at SL and at HL that are externally set and externally marked. They are designed to
allow students to demonstrate their competencies in relation to the business management assessment
objectives. All questions on the examination papers are based on specifications in this guide.

The external components contribute 75% to the final assessment at both SL and HL.

In common with all Diploma Programme examination papers, students at SL and HL are given five minutes
of reading time before they begin answering the papers.

Pre-seen case study (paper 1)

The pre-seen case study is provided by the IB three months before the examination session. The pre-
seen case study describes a fictitious case study organization and its business situation. Teachers are
advised to spend no more than three weeks on the pre-seen case study. The teacher support material
gives further guidance on appropriate preparatory work with the pre-seen case study. Section A
questions of paper 1 are based on the pre-seen case study.
The pre-seen case study is the same for SL and HL students, although different questions could be set
for each level.
Additional stimulus material is provided on the day of the examination, giving students more
information on the situation of the case study organization and decisions it is facing. Section B and
section C (HL only) questions of paper 1 are primarily based on the additional stimulus material,
although students are expected to draw on the pre-seen material where relevant. The additional
stimulus material may be the same as, similar to, or different for SL and HL students, and some
additional stimulus material is given for HL students only.
The purpose of the pre-seen case study is to assess, in depth and across a number of topics, the
students ability to apply business management knowledge to a given situation.

56 Business management guide

 External assessment

Command terms
Teachers and students must be familiar with the command terms used at each assessment objective level
to understand the depth of treatment required in examination questions. Cognitive demands progress from
AO1 to AO3, while AO4 terms are specific to particular skills.

Examination questions may use any command term from the assessment objective level specified in the
Syllabus content section or a less demanding command term from a lower level. For example, if the
assessment objective level for a topic is AO2, an examination question could contain any of the command
terms for AO2, such as explain, distinguish, interpret and so forth. Alternatively, the examination
question could contain a command term from AO1, such as describe. However, a more demanding
command term, such as evaluate, from a higher level (AO3 in this case), cannot be used.

The command terms used in each question or part thereof indicate the depth required. The command terms
are organized by assessment objective level in the Assessment objectives section earlier in the guide and
defined in the Glossary of command terms in the appendix.

Use of examples and case studies

In order to be awarded marks in the higher markbands and levels of assessment criteria, students are
expected, where appropriate, to refer to the stimulus material provided in examinations, use case studies
and illustrate their answers with examples. This way, they highlight their understanding of how business
management tools, techniques and theories operate in practice. Where the stimulus material, case studies
and examples are referred to, students should not simply state the information, but rather offer some
explanation of how it relates to the question asked.

Use of business management terms

Students are expected to demonstrate the ability to appropriately define, use and apply the business
management terms included in the Syllabus content section.

Use of calculators
While all questions requiring a calculator can be answered fully using a four-function (plus, minus, multiply,
divide) calculator, graphic display calculators (GDCs) are allowed during the examination.

Teachers and schools must adhere to the regulations regarding the use of electronic calculators in
examinations, and students must be made aware of these. This information can be found in the relevant
section of the Handbook of procedures for the Diploma Programme.

Business management guide 57

External assessment

External assessment detailsSL

Paper 1
Duration: 1 hour 15 minutes
Weighting: 30%
This paper is divided into two sections. Section A questions are based on the IB prescribed pre-seen case
study issued to students three months before the examination. Section B questions are primarily based on
the additional stimulus material given on the day of the examination, although students are expected to
draw on the pre-seen material where relevant. Questions may be the same, similar or different for SL and HL
students.

Students are expected to demonstrate the following assessment objectives.

Assessment objective Section A Section B

1. Demonstrate knowledge X X
and understanding

2. Demonstrate application X X
and analysis

3. Demonstrate synthesis X
and evaluation

4. Demonstrate a variety of X X
appropriate skills

Section A
Questions in this section are drawn from units 1 to 5 of the syllabus and refer to the prescribed pre-
seen case study.
Students answer two structured questions in total from a choice of three.
The questions are each subdivided into parts.
The command terms used in each part indicate the depth required.
The questions may require: knowledge and understanding; application and analysis; and a variety of
appropriate skills.
The marks available for each part are indicated on the examination paper.
Each question is worth 10 marks.
Section A is worth a total of 20 marks.

Section B
The questions in this section are drawn from units 1 to 5 of the syllabus and are primarily based on the
additional stimulus material given on the day of the examination.
Students answer one compulsory structured question.
The question is subdivided into parts.
The command terms used in each part indicate the depth required.
The questions may require: knowledge and understanding; application and analysis; synthesis and
evaluation; and a variety of appropriate skills.

58 Business management guide

 External assessment

The marks available for each part are indicated on the examination paper.
Section B is worth a total of 20 marks.
Marks are allocated using a combination of an analytic markscheme and markbands.

Overall, the maximum for paper 1 is 40 marks.

Paper 2
Duration: 1 hour and 45 minutes
Weighting: 45%
This paper is divided into three sections. The structure of this paper is the same as HL paper 2. However,
questions may be the same as, similar to, or different from, those used for the HL paper. SL students answer
fewer questions.

Students are expected to demonstrate the following assessment objectives.

Assessment objective Section A Section B Section C

1. Demonstrate X X X
knowledge and
understanding

2. Demonstrate X X X
application and
analysis

3. Demonstrate X X
synthesis and
evaluation

4. Demonstrate X X X
a variety of
appropriate skills

Section A
The questions in this section are drawn from units 1 to 5.
The questions have a quantitative focus.
Students answer one structured question based on unseen stimulus material from a choice of two.
The questions are subdivided into parts.
The command terms used in each part indicate the depth required.
The questions may require: knowledge and understanding; application and analysis; and a variety of
appropriate skills
The marks available for each part are indicated on the examination paper.
Each question is worth 10 marks.
Section A is worth a total of 10 marks.

Section B
The questions in this section are drawn from units 1 to 5 of the syllabus.
Students answer one structured question based on unseen stimulus material from a choice of three.

Business management guide 59

External assessment

The question is subdivided into parts.

The command terms used in each part indicate the depth required.
The questions may require: knowledge and understanding; application and analysis; synthesis and
evaluation; and a variety of appropriate skills.
The marks available for each part are indicated on the examination paper.
Each question is worth 20 marks.
Section B is worth a total of 20 marks.
For sections A and B, marks are allocated using a combination of an analytic markscheme and markbands.

Section C
The principal focus of questions in this section is on the concepts of change, culture, ethics,
globalization, innovation and strategy that underpin the business management course.
While the principal focus for each question is on two of the concepts, students need to draw on their
knowledge of other relevant topics in the syllabus.
There is no stimulus material provided for the questions.
Students are required to address the question in relation to at least one real-world organization but
may use information from a range of sources, which may include real-world case studies examined in
class and IA research. The real-world organization that students use in their responses must not be the
case study organization featured in paper 1.
The response should consider the perspectives of individuals and societies on which the real-world
organization impacts.
Students answer one extended response question from a choice of three.
Assessment objective level 3 (AO3) command terms are used in the questions.
The questions require: knowledge and understanding; application and analysis; synthesis and
evaluation; and a variety of appropriate skills.
Each question is worth 20 marks.
Section C is worth a total of 20 marks.
For section C, marks are allocated using assessment criteria. Marking notes included in the markscheme
give additional guidance on how to apply the assessment criteria.

Overall, the maximum for paper 2 is 50 marks.

External assessment detailsHL

Paper 1
Duration: 2 hours 15 minutes
Weighting: 35%
This paper is divided into three sections. Section A questions are based on the IB prescribed pre-seen case
study issued to students three months before the examination. Section B and C questions are based mainly
on the additional stimulus material given on the day of the examination, although students are expected to
draw on the pre-seen material where relevant. Section A and section B questions may be the same, similar
or different for SL and HL students.

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Students are expected to demonstrate the following assessment objectives.

Assessment objective Section A Section B Section C

1. Demonstrate X X X
knowledge and
understanding

2. Demonstrate X X X
application and
analysis

3. Demonstrate X X
synthesis and
evaluation

4. Demonstrate X X X
a variety of
appropriate skills

Section A
Questions in this section are drawn from units 1 to 5, which could include the HL extension of the
syllabus, and refer to the prescribed pre-seen case study.
Students answer two structured questions in total from a choice of three.
Each question is subdivided into parts.
The command terms used in each question indicate the depth required.
The questions may require: knowledge and understanding; application and analysis; and a variety of
appropriate skills.
The marks available for each part are indicated on the examination paper.
Each question is worth 10 marks.
Section A is worth a total of 20 marks.

Section B
The questions in this section are drawn from units 1 to 5 and HL extension of the syllabus and are
primarily based on the additional stimulus material given on the day of the examination.
Students answer one compulsory structured question.
The question is subdivided into parts.
The command terms used in each part indicate the depth required.
The questions may require: knowledge and understanding; application and analysis; synthesis and
evaluation; and a variety of appropriate skills.
The marks available for each part are indicated on the examination paper.
Section B question is worth a total of 20 marks.

For sections A and B, marks are allocated using a combination of an analytic markscheme and markbands.

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Section C
The question in this section is drawn from units 1 to 5 and HL extension of the syllabus and is primarily
based on the additional stimulus material given on the day of the examination.
The response should consider the perspectives of individuals and societies that the organization in
the prescribed case study impacts upon.
Students answer one compulsory extended response question.
Assessment objective level three (AO3) command terms are used in the questions.
The questions require: knowledge and understanding; application and analysis; synthesis and
evaluation; and a variety of appropriate skills.
Each question is worth 20 marks.
Section C is worth a total of 20 marks.
For section C, marks are allocated using assessment criteria. Marking notes included in the markscheme
give additional guidance on how to apply the assessment criteria.

Overall, the maximum for paper 1 is 60 marks.

Paper 2
Duration: 2 hours 15 minutes
Weighting: 40%
This paper is divided into three sections. The structure of this paper is the same as SL paper 2. However,
questions may be the same as, similar to, or different from, those used for the SL paper. HL students answer
more questions.

Students are expected to demonstrate the following assessment objectives.

Assessment objective Section A Section B Section C

1. Demonstrate X X X
knowledge and
understanding

2. Demonstrate X X X
application and
analysis

3. Demonstrate X X
synthesis and
evaluation

4. Demonstrate X X X
a variety of
appropriate skills

Section A
The questions in this section are drawn from units 1 to 5 and HL extension of the syllabus.
The questions have a quantitative focus.
Students answer one structured question based on unseen stimulus material from a choice of two.
The question is subdivided into parts.

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The command terms used in each part indicate the depth required.
The questions may require: knowledge and understanding; application and analysis; and a variety of
appropriate skills.
The marks available for each part are indicated on the examination paper.
Each question is worth 10 marks.
Section A is worth a total of 10 marks.

Section B
The questions in this section are drawn from units 1 to 5 and HL extension of the syllabus.
Students answer two structured questions based on stimulus material from a choice of three.
The questions are each subdivided into parts.
The command terms used in each part indicate the depth required.
The questions may require: knowledge and understanding; application and analysis; synthesis and
evaluation and a variety of appropriate skills.
The marks available for each part are indicated on the examination paper.
Each question is worth 20 marks.
Section B is worth a total of 40 marks.
For sections A and B, marks are allocated using a combination of an analytic markscheme and markbands.

Section C
The principal focus of questions in this section is on the concepts of change, culture, ethics,
globalization, innovation and strategy that underpin the business management course.
While the principal focus for each question is on two of the concepts, students need to draw on their
knowledge of other relevant topics in the syllabus, including the HL extension.
There is no stimulus material provided for the questions.
Students are required to address the question in relation to one real-world organization but may use
information from a range of sources, which may include real-world case studies examined in class
and IA research. The real-world organization that students use in their response must not be the case
study organization featured in paper 1.
The response should consider the perspectives of individuals and societies upon which the real-world
organization impacts.
Students answer one extended response question from a choice of three.
Assessment objective level 3 (AO3) command terms are used in each question.
Each question requires: knowledge and understanding; application and analysis; synthesis and
evaluation; and a variety of appropriate skills.
Each question is worth 20 marks.
Section C is worth a total of 20 marks.
For section C, marks are allocated using assessment criteria. Marking notes included in the markscheme
give additional guidance on how to apply the assessment criteria.

Overall, the maximum for paper 2 is 70 marks.

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External assessment markbandsSL and HL

In addition to an analytic markscheme specific to the question paper, markbands are used to allocate marks
in sections A and B for questions where a larger number of marks are available. Markbands are used in:

paper 1 (SL/HL), sections A and B

paper 2 (SL/HL), section B.

SL and HL Paper 1, Section A

Marks Level descriptor

0 The work does not reach a standard described by the descriptors below.

12 Little knowledge and understanding of relevant issues and business management

tools (where applicable), techniques and theories.
Little use of business management terminology.
Little reference to the stimulus material.

34 A description or partial analysis of some relevant issues with some use of business
management tools (where applicable), techniques and theories.
Some use of appropriate terminology.
Some reference to the stimulus material that goes beyond the name of a person(s)
and/or the name of the organization.
At the lower end of the markband, responses are mainly theoretical.

56 An analysis of the relevant issues with good use of business management tools
(where applicable), techniques and theories.
Use of appropriate terminology throughout the response.
Effective use of the stimulus material.

SL and HL Paper 1 and 2, Section B

Marks Level descriptor

0 The work does not reach a standard described by the descriptors below.

12 Little understanding of the demands of the question.

Few business management tools (where applicable), techniques and theories are
explained or applied, and business management terminology is lacking.
Little reference to the stimulus material.

34 Some understanding of the demands of the question.

Some relevant business management tools (where applicable), techniques and
theories are explained or applied, and some appropriate terminology is used.
Some reference to the stimulus material but often not going beyond the name of a
person(s) and/or the name of the organization.

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Marks Level descriptor

56 Understanding of most of the demands of the question.

Relevant business management tools (where applicable), techniques and theories
are explained and applied, and appropriate terminology is used most of the time.
Some reference to the stimulus material that goes beyond the name of a person(s)
and/or the name of the organization.
Some evidence of a balanced response.
Some judgments are relevant but not substantiated.

78 Good understanding of the demands of the question.

Relevant business management tools (where applicable), techniques and theories
are explained and applied well, and appropriate terminology is used.
Good reference to the stimulus material.
Good evidence of a balanced response.
The judgments are relevant but not always well substantiated.

910 Good understanding of the demands of the question, including implications, where
relevant.
Relevant business management tools (where applicable), techniques and theories
are explained clearly and applied purposefully, and appropriate terminology is used
throughout the response.
Effective use of the stimulus material in a way that significantly strengthens the
response.
Evidence of balance is consistent throughout the response.
The judgments are relevant and well substantiated.

External assessment criteriaSL and HL

Assessment criteria are used to allocate marks for extended response questions in:

HL paper 1, section C
SL paper 2, section C
HL paper 2, section C.

HL paper 1, section C
There are five assessment criteria for this question type.

Criterion A: Knowledge and understanding of tools, techniques and theories

Criterion B: Application
Criterion C: Reasoned arguments
Criterion D: Structure

Criterion E: Individual and societies.

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Criterion A: Knowledge and understanding of tools, techniques and theories

This criterion addresses the extent to which the student demonstrates knowledge and understanding of
relevant business management tools, techniques and theories as stated and/or implied by the question.
This includes using appropriate business management terminology.

Marks Level descriptor

0 The work does not reach a standard described by the descriptors below.

1 Superficial knowledge of relevant tools, techniques and theory is demonstrated.

2 Satisfactory knowledge and understanding of relevant tools, techniques and theories is

demonstrated.

3 Good knowledge and understanding of relevant tools, techniques and theories is

generally demonstrated, though the explanation may lack some depth or breadth.

4 Good knowledge and understanding of relevant tools, techniques and theories is

demonstrated.

Criterion B: Application
This criterion addresses the extent to which the student is able to apply the relevant business management
tools, techniques and theories to the case study organization.

Marks Level descriptor

0 The work does not reach a standard described by the descriptors below.

1 The relevant business management tools, techniques and theories are connected to the
case study organization, but this connection is inappropriate or superficial.

2 The relevant business management tools, techniques and theories are appropriately
connected to the case study organization, but this connection is not developed.

3 The relevant business management tools, techniques and theories are generally well
applied to explain the situation and issues of the case study organization, though the
explanation may lack some depth or breadth. Examples are provided.

4 The relevant business management tools, techniques and theories are well applied to
explain the situation and issues of the case study organization. Examples are appropriate
and illustrative.

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Criterion C: Reasoned arguments

This criterion assesses the extent to which the student makes reasoned arguments. This includes making
relevant and balanced arguments by, for example, exploring different practices, weighing up their strengths
and weaknesses, comparing and contrasting them or considering their implications, depending on the
requirements of the question. It also includes justifying the arguments by presenting evidence for the
claims made.

Marks Level descriptor

0 The work does not reach a standard described by the descriptors below.

1 Statements are made but these are superficial.

2 Relevant arguments are made but these are mostly unjustified.

3 Relevant arguments are made and these are mostly justified.

4 Relevant, balanced arguments are made and these are well justified.

Criterion D: Structure
This criterion assesses the extent to which the student organizes his or her ideas with clarity, and presents a
structured piece of writing comprised of:

an introduction
a body
a conclusion
fit-for-purpose paragraphs.

Marks Level descriptor

0 The work does not reach a standard described by the descriptors below.

1 Two or fewer of the structural elements are present, and few ideas are clearly organized.

2 Three of the structural elements are present, or most ideas are clearly organized.

3 Three or four of the structural elements are present, and most ideas are clearly organized.

4 All of the structural elements are present, and ideas are clearly organized.

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Criterion E: Individuals and societies

This criterion assesses the extent to which the student is able to give balanced consideration to the
perspectives of a range of relevant stakeholders, including individuals and groups internal and external to
the organization.

Marks Level descriptor

0 The work does not reach a standard described by the descriptors below.

1 One individual or group perspective is considered superficially or inappropriately.

2 One relevant individual or group perspective is considered appropriately, or two relevant

individual or group perspectives are considered superficially or inappropriately.

3 At least two relevant individual or group perspectives are considered appropriately.

4 Balanced consideration is given to relevant individual and group perspectives.

SL and HL paper 2, section C

There are five assessment criteria for this question type.

Criterion A: Knowledge and conceptual understanding

Criterion B: Application
Criterion C: Reasoned arguments
Criterion D: Structure
Criterion E: Individuals and societies

Criterion A: Knowledge and conceptual understanding

This criterion addresses the extent to which the student demonstrates knowledge and understanding of the
given concepts and relevant business management content (theories, techniques or tools, depending on
the requirements of the question).

Marks Level descriptor

0 The work does not reach a standard described by the descriptors below.

1 Superficial knowledge of the given concepts is demonstrated. Business management

content is not selected or the content selected is irrelevant.

2 Satisfactory understanding of one or both of the given concepts is demonstrated. Some

business management content selected is relevant. The relevant content is satisfactorily
explained.

3 Good understanding of one or both of the given concepts is demonstrated. The business
management content selected is relevant, though it may not be sufficient. The relevant
content is generally well explained, though the explanation may lack some depth or
breadth.

4 Good understanding of both of the given concepts is demonstrated. The business

management content selected is relevant, sufficient and well explained.

Criterion B: Application

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This criterion addresses the extent to which the student is able to apply the given concepts and the relevant
business management content (theories, techniques or tools, depending on the requirements of the
question) to his or her chosen real-world organization(s). The real-world organization(s) must not be the
organization featured in the prescribed case study for paper 1.

Marks Level descriptor

0 The work does not reach a standard described by the descriptors below.

1 The given concepts and/or any relevant business management content are connected to
the real-world organization(s), but this connection is inappropriate or superficial.

2 The given concepts and/or relevant business management content are connected
appropriately to the real-world organization(s), but this connection is not developed.

3 The given concepts and relevant business management content are generally well
applied to explain the situation and issues of the real-world organization(s), though the
explanation may lack some depth or breadth. Examples are provided.

4 The given concepts and relevant business management content are well applied
to explain the situation and issues of the real-world organization(s). Examples are
appropriate and illustrative.

Criterion C: Reasoned arguments

This criterion assesses the extent to which the student makes reasoned arguments. This includes making
relevant and balanced arguments by, for example, exploring different practices, weighing up their strengths
and weaknesses, comparing and contrasting them or considering their implications, depending on the
requirements of the question. It also includes justifying the arguments by presenting reasonable evidence
or other support for the claims made.

Marks Level descriptor

0 The work does not reach a standard described by the descriptors below.

1 Statements are made but these are superficial.

2 Relevant arguments are made but these are mostly unjustified.

3 Relevant arguments are made and these are mostly justified.

4 Relevant, balanced arguments are made and these are well justified.

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Criterion D: Structure
This criterion assesses the extent to which the student organizes his or her ideas with clarity, and presents a
structured piece of writing comprised of:

an introduction
a body
a conclusion
fit-for-purpose paragraphs.

Marks Level descriptor

0 The work does not reach a standard described by the descriptors below.

1 Two or fewer of the structural elements are present, and few ideas are clearly organized.

2 Three of the structural elements are present, or most ideas are clearly organized.

3 Three or four of the structural elements are present, and most ideas are clearly organized.

4 All of the structural elements are present, and ideas are clearly organized.

Criterion E: Individuals and societies

This criterion assesses the extent to which the student is able to give balanced consideration to the
perspectives of a range of relevant stakeholders, including individuals and groups internal and external to
the organization.

Marks Level descriptor

0 The work does not reach a standard described by the descriptors below.

1 One individual or group perspective is considered superficially or inappropriately.

2 One relevant individual or group perspective is considered appropriately, or two relevant

individual or group perspectives are considered superficially or inappropriately.

3 At least two relevant individual or group perspectives are considered appropriately.

4 Balanced consideration is given to relevant individual and group perspectives.

Please see marking notes in markschemes for further support in assessing these questions.

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Internal assessment

Purpose of internal assessment

Internal assessment is an integral part of the course and is compulsory for both SL and HL students. It
enables students to demonstrate the application of their skills and knowledge, and to pursue their personal
interests, without the time limitations and other constraints that are associated with written examinations.
The internal assessment should, as far as possible, be woven into normal classroom teaching and not be a
separate activity conducted after a course has been taught.

The internal assessment requirements at SL and at HL are different for the business management course.
The SL internal assessment is a written commentary and the HL internal assessment is a research project.

Guidance and authenticity

The written commentary (SL) and research project (HL) submitted for internal assessment must be the
students own work. However, it is not the intention that students should decide upon a title or topic and
be left to work on the internal assessment component without any further support from the teacher. The
teacher should play an important role during both the planning stage and the period when the student is
working on the internally assessed work. It is the responsibility of the teacher to ensure that students are
familiar with:

the requirements of the type of work to be internally assessed

the assessment criteria; students must understand that the work submitted for assessment must
address these criteria effectively.
Teachers and students must discuss the internally assessed work. Students should be encouraged to initiate
discussions with the teacher to obtain advice and information, and students must not be penalized for
seeking guidance. As part of the learning process, teachers should read and give advice to students on one
draft of the work. The teacher should provide oral or written advice on how the work could be improved,
but must not edit the draft. The next version handed to the teacher must be the final version for submission.

It is the responsibility of teachers to ensure that all students understand the basic meaning and significance
of concepts that relate to academic honesty, especially authenticity and intellectual property. Teachers
must ensure that all student work for assessment is prepared according to the requirements and must
explain clearly to students that the internally assessed work must be entirely their own. Where collaboration
between students is permitted, it must be clear to all students what the difference is between collaboration
and collusion.

All work submitted to the IB for moderation or assessment must be authenticated by a teacher, and must
not include any known instances of suspected or confirmed malpractice. Each student must confirm that
the work is his or her authentic work and constitutes the final version of that work. Once a student has
officially submitted the final version of the work it cannot be retracted. The requirement to confirm the
authenticity of work applies to the work of all students, not just the sample work that will be submitted to
the IB for the purpose of moderation. For further details refer to the IB publication Academic honesty, The
Diploma Programme: From principles into practice and the relevant articles in the General regulations: Diploma
Programme.

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Authenticity may be checked by discussion with the student on the content of the work, and scrutiny of one
or more of the following:

the students initial proposal

the first draft of the written work
the references cited
the style of writing compared with work known to be that of the student
the analysis of the work by a web-based plagiarism detection service such as turnitin.com.
The same piece of work cannot be submitted to meet the requirements of both the internal assessment and
the extended essay.

Time allocation
Internal assessment is an integral part of the business management course, contributing 25% to the final
assessment in the SL and the HL courses. This weighting should be reflected in the time that is allocated to
teaching the knowledge, skills and understanding required to undertake the work, as well as the total time
allocated to carry out the work.

It is recommended that a total of approximately 15 hours (SL) and 30 hours (HL) of teaching time should be
allocated to the work. This should include:

time for the teacher to explain to students the requirements of the internal assessment
class time for students to work on the internal assessment component and ask questions
time for consultation between the teacher and each student
time to review and monitor progress, and to check authenticity.

Requirements and recommendations

It is important for the integrity of the moderation process that the internal assessment by the teacher is
based on the same evidence as that available to the moderator. When there is more than one teacher
teaching students in this component, internal standardization must take place.

Using assessment criteria for internal assessment

For internal assessment, a number of assessment criteria have been identified. Each assessment criterion has
level descriptors describing specific achievement levels, together with an appropriate range of marks. The
level descriptors concentrate on positive achievement, although for the lower levels failure to achieve may
be included in the description.

Teachers must judge the internally assessed work at SL and at HL against the criteria using the level descriptors.

Different assessment criteria are provided for SL and HL.

The aim is to find, for each criterion, the descriptor that conveys most accurately the level attained
by the student, using the best-fit model. A best-fit approach means that compensation should be
made when a piece of work matches different aspects of a criterion at different levels. The mark
awarded should be one that most fairly reflects the balance of achievement against the criterion. It is
not necessary for every single aspect of a level descriptor to be met for that mark to be awarded.

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When assessing a students work, teachers should read the level descriptors for each criterion until
they reach a descriptor that most appropriately describes the level of the work being assessed. If a
piece of work seems to fall between two descriptors, both descriptors should be read again and the
one that more appropriately describes the students work should be chosen.
Where there are two or more marks available within a level, teachers should award the upper marks
if the students work demonstrates the qualities described to a great extent; the work may be close
to achieving marks in the level above. Teachers should award the lower marks if the students work
demonstrates the qualities described to a lesser extent; the work may be close to achieving marks in
the level below.
Only whole numbers should be recorded; partial marks, (fractions and decimals) are not acceptable.
Teachers should not think in terms of a pass or fail boundary, but should concentrate on identifying
the appropriate descriptor for each assessment criterion.
The highest level descriptors do not imply faultless performance but should be achievable by a
student. Teachers should not hesitate to use the extremes if they are appropriate descriptions of the
work being assessed.
A student who attains a high achievement level in relation to one criterion will not necessarily
attain high achievement levels in relation to the other criteria. Similarly, a student who attains a low
achievement level for one criterion will not necessarily attain low achievement levels for the other
criteria. Teachers should not assume that the overall assessment of the students will produce any
particular distribution of marks.
It is recommended that the assessment criteria be made available to students.

Internal assessment detailsSL

Written commentary
Duration: 15 hours
Weighting: 25%
Introduction
The SL internal assessment is a written commentary that allows students to demonstrate the application of
business management tools, techniques and theories to a business issue or problem.

Requirements
SL students are required to:

select a real business issue or problem for their written commentary that must relate to the SL syllabus.
refer directly to a single business organization, but may consider industry-wide issues that impact on
that organization.
base their written commentary on secondary research, selected for its suitability, depth and breadth.
Primary research may be used as support.
provide a title for the commentary that, to give focus and direction, must be framed as a question.
produce a written commentary that does not exceed 1,500 words.
attach to the commentary three to five supporting documents from which the majority of the
information for the commentary has been obtained.
fully reference all supporting documents and additional sources and include them in a bibliography.

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Role of teachers guidance

With the teachers support, students should choose an issue or problem for investigation, and develop a
title in the form of a question.

The teacher should approve the students questions before work is started, to ensure that they are suitable
for investigation and allow access to all levels of the assessment criteria. It is highly advisable that every
student is supplied with a copy of the assessment criteria.

The teacher should also guide students in the selection of appropriate supporting documents.

Throughout the internal assessment process, students and the teacher should engage in dialogue
supportive of the students work. The teacher should comment on students work plans and first draft of the
commentary as part of the learning process.

If more than one student chooses the same organization for their research, it is the responsibility of the
teacher to ensure that the written commentaries reflect the students own individual research, interpretation
and analysis.

If a student also writes an extended essay in business management, it is the responsibility of the teacher to
ensure that students do not build their internal assessment and extended essay in business management
on the same syllabus content. Also, given different requirements and assessment criteria, students should
choose different organizations for these different tasks.

Examples of appropriate questions

Examples of appropriate questions for the written commentary might be:

Can airline X successfully target segment Y? The commentary could then examine business
management topics such as market segmentation, consumer profiling, promotion, and measure of
financial success.
Should company Y outsource its manufacturing? The commentary could then examine areas within
business management such as operations management and human resource management.

Supporting documents
The selection of supporting documents is very important. To achieve the highest levels of each assessment
criterion, it is strongly recommended that the supporting documents present a range of ideas and views.
For example, the selection of three to five documents published by a single company, or three to five
surveys of similar populations, would not provide balance or objectivity.

The supporting documents must be of a contemporary nature and written within a maximum of three years
prior to the submission of the written commentary to the IB. Submission of the written commentary occurs
in April or November of the final year of the course, depending on the examination session of the school.

A maximum of one of the supporting documents may be a transcript of video/audio material. The transcript
must summarize the essential points of the video/audio file used for the purposes of the commentary.
Only video/audio material published by a reliable organization (such as the business organization itself, an
organization commissioned by the business or an NGO) should be used. Particular attention needs to be
paid to referencing the original video/audio file so that this may be traced.

The commentary must be based on secondary sources and may include primary data.

Examples of secondary sources include:

articles from the local, national or international press

business accounts
business plans

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extracts from company websites

transcripts of a relevant audio-visual file
financial reports
government and other statistics
journal publications
market research surveys
mission statements
web-based surveys.
Examples of primary sources include:

responses to questionnaires (students should include a blank copy of the questionnaire and a tally/
summary of results)
results of surveys
transcripts of interviews and discussions with focus groups.
Students must select their own supporting documents, which must not be provided to the student by the
teacher.

Students must highlight the parts of each supporting document that relate directly to their commentary.
Any highlighted parts of supporting documents that are not in the language for which the student is
registered must be translated.

Students should label each supporting document clearly, such as Supporting document 1, Supporting
document 2 and so on. This will help with referencing in the commentary.

It is expected that students will include in-text citations/references of the supporting documents and a
bibliography, which should be formatted in an appropriate way.

Any additional sources such as textbooks and class notes must be referenced but will not be accepted as
supporting documents.

Written commentary
Although there is no required format for the written commentary, it should nonetheless be a structured
piece of well-presented writing. An introduction that sets the scene, presentation, analysis and discussion
of findings, and a conclusion that answers the commentary question provides an effective structure for
the commentary. Good presentation additionally requires a title page, an accurate table of contents page,
appropriate headings and sub-headings, consistent referencing, a complete bibliography and numbered
pages.

The introduction should briefly demonstrate some background information about the business organization,
to give a clear outline of the issue or problem under investigation and to explain the methodology used to
investigate this issue or problem.

In the body of the commentary, findings from the supporting documents should be presented and
analysed with the help of relevant business tools, techniques and theories. The findings should also be
interpreted: what main themes emerge from the analysis of the supporting documents, and why and how
are they helpful (or not) to answering the commentary question? An evaluative approach to this discussion
of findings should be pursued: for example, what are the strengths and weaknesses of the various positions
on the issue or problem and what are their implications?

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In the conclusion, the commentary question should be explicitly answered. The conclusion should not
introduce facts or arguments that have not been discussed in previous sections of the commentary. Rather,
it is good practice to include those aspects of the commentary question that have not been fully answered
in the commentary or that might need further investigation in order to be judged more effectively.

For presentation of references and bibliography, please see the information on acknowledging the ideas
and work of another person in the The Diploma Programme section of this subject guide.

Word count
The written commentary must not exceed 1,500 words. A word count must be included as part of the
commentary. If the word limit is exceeded, the teachers assessment must be based on the first 1,500 words.

Note: Moderators will not read beyond 1,500 words for the commentary.

The following are not included in the word count:

acknowledgments
contents page
tables of statistical data
diagrams or figures
equations, formulae and calculations
citations (which, if used, must be in the body of the commentary)
references (which, if used, must be in the footnotes/endnotes)
bibliography.
Please note that footnotes/endnotes may be used for references only. Definitions of business management
terms and quotations, if used, must be in the body of the work and are included in the word count. Please
note that citation is a shorthand method of making a reference in the body of the commentary, which is
then linked to the full reference in the bibliography.

Internal assessment criteriaSL

The SL business management written commentary is assessed against seven criteria that are related to the
assessment objectives for the business management course.

When the work to be assessed has been read, the descriptors for each criterion should be studied until a
descriptor is reached that most appropriately describes the achievement level. If a piece of work seems to
fall between two descriptors, both descriptors should be read again and the one that more appropriately
describes the students work chosen.

There are seven assessment criteria for the written commentary.

Criterion A: Supporting documents

Criterion B: Choice and application of business tools, techniques and theories
Criterion C: Choice and analysis of data and integration of ideas
Criterion D: Conclusions

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Criterion E: Evaluation
Criterion F: Structure
Criterion G: Presentation

Criterion A: Supporting documents

This criterion assesses the extent to which the student selects three to five relevant supporting documents
that address the issue or problem selected for commentary in appropriate depth and breadth. The criterion
also assesses whether the students choice and presentation of the supporting documents meets formal
requirements.

Marks Level descriptor

0 The work does not reach a standard described by the descriptors below.

1 There are only one or two, or more than five, supporting documents, or they are of
marginal relevance.

2 The supporting documents are generally relevant but some lack depth, or they were
published more than three years prior to the submission of the IA to the IB, or they are not
all translated in the language of submission.

3 The supporting documents are relevant and sufficiently in-depth.

4 The supporting documents are relevant, sufficiently in-depth and provide a range of
ideas and views.

Criterion B: Choice and application of tools, techniques and theories

This criterion assesses the extent to which the student chooses business management tools, techniques
and theories that are relevant to the issue or problem and applies these so that a greater insight into the
situation of the organization ensues.

Marks Level descriptor

0 The work does not reach a standard described by the descriptors below.

1 There is a limited selection of business management tools, techniques and theories, and
these are not applied.

2 There is a limited selection of business management tools, techniques and theories, and
these are superficially applied.

3 There is an appropriate selection of business management tools, techniques and theories,

but these are superficially applied.

4 There is an appropriate selection of business management tools, techniques and theories,

and these are suitably applied.

5 There is an appropriate selection of business management tools, techniques and theories,

and these are skillfully applied.

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Internal assessment

Criterion C: Choice and analysis of data and integration of ideas

This criterion assesses the extent to which the student uses data from the supporting documents effectively
in order to understand and explain the issue or problem and is able to integrate ideas coherently.

Marks Level descriptor

0 The work does not reach a standard described by the descriptors below.

1 There is a limited selection of data from the supporting documents but no analysis.

2 There is a limited selection of data from the supporting documents with superficial
analysis.

3 There is an appropriate selection of data from the supporting documents with

satisfactory analysis.

4 There is an appropriate selection of data from the supporting documents with good
analysis and some integration of ideas.

5 There is an appropriate selection of data from the supporting documents with skillful
analysis and a coherent integration of ideas.

Criterion D: Conclusions
This criterion assesses the extent to which the student is able to draw relevant conclusions based on the
analysis of the supporting documents and answer the commentary question.

Marks Level descriptor

0 The work does not reach a standard described by the descriptors below.

1 Conclusions are inconsistent with the evidence presented, or conclusions are superficial.

2 Some conclusions are consistent with the evidence presented.

3 Conclusions are consistent with the evidence presented and explicitly answer the
commentary question.

Criterion E: Evaluation
This criterion assesses the extent to which the student evaluates his or her arguments and makes judgments
that are well substantiated.

Marks Level descriptor

0 The work does not reach a standard described by the descriptors below.

1 There is limited evidence of evaluation.

2 There is evidence of evaluation, and some judgments are substantiated.

3 There is evidence of evaluation, and judgments are substantiated.

4 There is thorough evidence of evaluation, and judgments are well substantiated.

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Criterion F: Structure
This criterion assesses the extent to which the student organizes his or her ideas into a structured
commentary with an argument that is easy to follow.

Marks Level descriptor

0 The work does not reach a standard described by the descriptors below.

1 Limited structure.

2 Appropriate structure.

Criterion G: Presentation
This criterion assesses the extent to which the student presents the written commentary well. This involves
a title page, an accurate table of contents, appropriate headings and sub-headings, consistent referencing, a
complete bibliography and numbered pages.

Marks Level descriptor

0 The work does not reach a standard described by the descriptors below.

1 One or more of the above elements of a well presented commentary is missing.

2 All of the above elements of a well presented commentary are included.

Internal assessment detailsHL

Research project
Duration: 30 hours
Weighting: 25%
Introduction
The HL internal assessment is a research project that allows students to demonstrate the application of their
skills and knowledge to business issues or decision-making.

Requirements
HL students are required to:

design and undertake research that either addresses an issue facing a business organization or a
range of organizations or analyses a decision to be made by a business organization or range of
organizations
select a real business organization or a range of organizations and a real issue or decision under
investigation
base their research project on primary research they gather from the organization investigated
(secondary research may be used as support)
provide a title for the research project that, to give focus and direction, must be framed as a question
produce a research proposal (of maximum 500 words), including an action plan, to be used as the
primary planning document

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Internal assessment

produce a written report that does not exceed 2,000 words

write the report in a style and format of a useful working document for management.

Choice of research topic and organization

Students should, with the teachers guidance, choose their own topic and organization that they find
interesting and motivating.

The teacher should approve each topic before work is started, and ensure that it complies with the
requirements for internal assessment.

The research question should be forward-looking, targeted at an issue or a decision still relevant for
the business organization(s) rather than descriptive of something already finished, and should require
the student to make recommendations for further action. Guidance from the teacher in formulating an
appropriate research question is important.

For a variety of reasons not apparent at the start of the project, such as confidentiality, some organizations
fail to provide data, which will undermine the quality of the final report. Students must therefore confirm
before starting their investigations that they will be able to obtain the necessary data from the chosen
organization.

Students must be aware of ethical considerations when undertaking any research. There is a need for tact,
sensitivity to other people and respect for confidentiality.

If more than one student chooses the same organization for their research, it is the responsibility of the
teacher to ensure that the written commentaries reflect the students own individual research, interpretation
and analysis.

If a student also writes an extended essay in business management, it is the responsibility of the teachers to
ensure that students do not build their internal assessment and extended essay in business management
on the same syllabus content. Also, given different requirements and assessment criteria, students should
choose different organizations for these different tasks.

Research proposal
The internal assessment must start with a research proposal. This will become the primary planning
document, giving direction to the research project. The maximum length of the research proposal is 500
words. The word count must be stated on the submitted work. If the word limit is exceeded, the teachers
assessment must be based on the first 500 words of the proposal.

Note: Moderators will not read beyond 500 words for the research proposal.

The research proposal has a required format consisting of four components.

Research question
Proposed methodology, including:
the rationale for study
areas of the syllabus to be covered
possible sources of information
organizations and individuals to be approached
methods to be used to collect and analyse data, and the reason for choosing them
the order of activities and timescale of the project

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Anticipated difficulties, such as limited or biased sources

Action plan
Students should use the research proposal as their primary planning document, reviewing it regularly with
the teacher and modifying or rewriting it as necessary, should circumstances change.

The maximum achievement level for criterion A, research proposal, is 3 marks (see Internal assessment
criteriaHL). Students who fail to produce a research proposal will be awarded 0 marks for this criterion.

Written report
The written report, which follows the research proposal, is the second part of the research project. This will
document the main findings of the research.

The report must follow acceptable practice in report presentation, reflected in the required format for the
written report shown below.

The written report must consist of the following sections.

Title page: The title page should give a clear indication of the content of the research project, including
the name of the student, the title of the project, the intended audience and the word count.
Acknowledgements: The acknowledgements should recognize any individual and/or organization
that made the production of the report possible.
Contents page: The contents page should include the major headings in the report, beginning with
the executive summary. Page numbers should be clearly indicated.
Executive summary (abstract): The executive summary should be a concise, clear and explicit
summary of the document, including the recommendations and conclusions. The research question
and executive summary should guide the reader to the substance of the report. The maximum length
of the executive summary is 200 words, and this is not included in the word count.
Introduction: The introduction should demonstrate some background knowledge about the
organization(s) and give a clear outline of the issue or decision under investigation.
Research question
Methodology employed: The methodology section should be a summary of the primary (and, where
relevant, secondary) research undertaken and the business tools, techniques and theories applied.
It should also include an assessment of the validity and reliability of the data collected (for example,
partiality and scope) and the methods employed. Any changes made as the work progressed should
be explained.
Main results and findings: The main results and findings section should clarify what the raw data has
revealed. This should include a summary of the data collected and of the findings made, and should,
where appropriate, be supported by tables, graphs and statistics.
Analysis and discussion: In the analysis and discussion section, the results and findings should be
analysed with the help of relevant business tools, techniques and theories. They should also be
interpreted: what main issues emerge from the research, and why and how are they helpful (or not)
to answering the research question? An evaluative approach to the discussion of findings should be
pursued: for example, what are the strengths and weaknesses of the various positions on the issue or
decision under investigation and what are their implications?
Conclusion(s) and recommendation(s): The conclusions should follow on from the analysis and
discussion; new facts or arguments should not be presented. Recommendations should be precise,
answer the research question and be practical proposals for action that stem from the conclusions.
If the results of the research are inconclusive, further research should be recommended. To be of
practical value to management, the report should be forward-looking and support the organizations
decision-making process.

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Internal assessment

References and bibliography: For presentation of references and bibliography, please see the section
on acknowledging the ideas and work of another person in the The Diploma Programme section of
this subject guide.
Appendices: The appendices should contain only information or data that is required to support of the
text and should be clearly referred to where relevant. The appendices will typically include examples
of photographs, documents, questionnaires, numerical raw data in tables and statistical calculations.
The teacher should comment on students first drafts of the written report as part of the learning process.

Word count
The written report must not exceed 2,000 words. A word count must be included as part of the written
report. If the word limit is exceeded, the teachers assessment must be based on the first 2,000 words of the
report.

Note: Moderators will not read beyond 2,000 words for the written report.

The following are not included in the 2,000-word count:

title page
acknowledgments
contents page
executive summary (abstract)
tables of statistical data
diagrams or figures
equations, formulae and calculations
citations (which, if used, must be in the body of the commentary)
references (which, if used, must be in the footnotes/endnotes)
bibliography
appendices.
Please note that footnotes/endnotes may be used for references only. Definitions of business management
terms and quotations, if used, must be in the body of the work and are included in the word count. Please
note that citation is a shorthand method of making a reference in the body of the commentary, which is
then linked to the full reference in the bibliography.

Internal assessment criteriaHL

The HL business management research project is assessed against nine criteria that are related to the
assessment objectives for the business management course. Criterion A refers to the research proposal,
while criteria BI are used to assess the written report.

When the work to be assessed has been read, the descriptors for each criterion should be studied until a
descriptor is reached that most appropriately describes the achievement level. If a piece of work seems to
fall between two descriptors, both descriptors should be read again and the one that more appropriately
describes the students work chosen.

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 Internal assessment

There are nine assessment criteria for the research project.

Criterion A: Research proposal

Criterion B: Sources and data
Criterion C: Use of tools, techniques and theories
Criterion D: Analysis and evaluation
Criterion E: Conclusions
Criterion F: Recommendations
Criterion G: Structure
Criterion H: Presentation
Criterion I: Reflective thinking

Criterion A: Research proposal

Please note: Criterion A should be used to assess the research proposal only.

This criterion assesses the extent to which the student presents a research proposal that gives an effective
direction for the project, with all the required elements.

Marks Level descriptor

0 The work does not reach a standard described by the descriptors below.

1 The research proposal is presented but is generally inappropriate, or two or more

elements are missing.

2 The research proposal is generally appropriate but some elements lack clarity, detail and
focus, or one element is missing.

3 The research proposal with all the required elements is appropriate, detailed, clear and
focused.

Criterion B: Sources and data (written report)

This criterion assesses the extent to which the student selects primary sources and collects data which
address an issue or a decision to be made by an organization or a range of organizations in appropriate
depth and breadth.

Marks Level descriptor

0 The work does not reach a standard described by the descriptors below.

1 Some of the primary sources selected or the data collected are appropriate.

2 The primary sources selected and the data collected are appropriate, but are not varied
and sufficient.

3 The primary sources selected and the data collected are appropriate, varied and
sufficient.

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Internal assessment

Criterion C: Use of tools, techniques and theories (written report)

This criterion assesses the extent to which the student understands and applies relevant business
management tools, techniques and theories so that a greater insight into the situation of the organization
ensues.

Marks Level descriptor

0 The work does not reach a standard described by the descriptors below.

1 There is a limited understanding of business management tools, techniques and theories,

and these are not applied or are superficially applied.

2 There is a satisfactory understanding of relevant business management tools, techniques

and theories, and these are suitably applied.

3 There is a good understanding of relevant business management tools, techniques and

theories, and these are skillfully applied.

Criterion D: Analysis and evaluation (written report)

This criterion assesses the extent to which the student uses his or her results and findings effectively in
order to explain the issue or decision to be made and is able to integrate his or her ideas coherently. This
criterion also assesses the extent to which the student evaluates his or her arguments and makes judgments
that are well substantiated.

Marks Level descriptor

0 The work does not reach a standard described by the descriptors below.

1 The results and findings are limited, and no analysis of them is provided.

2 The results and findings are limited, and a superficial analysis of them is provided.

3 There is a satisfactory analysis of the results and findings and some integration of ideas.

4 There is a satisfactory analysis of the results and findings, a satisfactory integration of

ideas and some evidence of evaluation.

5 There is a good analysis of the results and findings, a good integration of ideas and
evidence of substantiated evaluation.

6 There is a skillful analysis of the results and findings, a coherent integration of ideas and
consistent evidence of substantiated evaluation.

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 Internal assessment

Criterion E: Conclusions (written report)

This criterion assesses the extent to which the student is able to draw relevant conclusions based on the
analysis of the report.

Marks Level descriptor

0 The work does not reach a standard described by the descriptors below.

1 There are some conclusions, but they are unsubstantiated and/or inconsistent with the
evidence presented in the main body of the report.

2 Conclusions are substantiated and consistent with the evidence presented in the main
body of the report. Areas for further study have been identified, if appropriate.

Criterion F: Recommendations (written report)

This criterion assesses the extent to which the student is able to make substantiated recommendations that
are consistent with the conclusions made and answer the research question.

Marks Level descriptor

0 The work does not reach a standard described by the descriptors below.

1 There are recommendations, but they are unsubstantiated and/or inconsistent with the
conclusions, or they do not answer the research question.

2 The recommendations are substantiated and consistent with the conclusions, and they
answer the research question.

Criterion G: Structure (written report)

This criterion assesses the extent to which the student organizes his or her ideas into a structured report
with an argument that is easy to follow.

Marks Level descriptor

0 The work does not reach a standard described by the descriptors below.

1 Limited structure.

2 Appropriate structure.

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Internal assessment

Criterion H: Presentation (written report)

This criterion assesses the extent to which the student presents all the required components of the written
report in the correct order and format.

Marks Level descriptor

0 The work does not reach a standard described by the descriptors below.

1 The report is missing one or more of the required components, or the components are
not in the correct order or format.

2 The report includes all of the required components in the correct order and format.

Criterion I: Reflective thinking (written report)

This criterion assesses the extent to which the student is able to reflect critically on their own work.

Marks Level descriptor

0 The work does not reach a standard described by the descriptors below.

1 The report includes limited or superficial reflective thinking on the approach taken in this
piece of research and its limitations.

2 The report includes appropriate evidence of reflective thinking on the approach taken in
this piece of research and its limitations.

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 Appendices

Formulae

The following formulae will be used in business management external assessment. A copy of the formulae
will be provided to students for the examination.

Formulae for ratio analysis (SL/HL)

Profitability ratios (SL/HL)
gross profit
=
Gross profit margin 100
sales revenue

net profit before interest and tax

=
Net profit margin 100
sales revenue

Liquidity ratios (SL/HL)

current assets
Current ratio =
current liabilities

current assets stock

Acid test (quick) ratio =
current liabilities

Efficiency ratios (SL/HL)

net profit before interest and tax
=
Return on capital employed (ROCE) 100
capital employed

=
where capital employed loan capital (or long-term liabilities) + share capital + retained profit

Efficiency ratios (HL only)

cost of goods sold
Stock turnover (number of times) =
average stock

or

average stock
Stock turnover =
(number of days) 365
cost of goods sold

where cost of goods sold is an approximation of total credit purchases

opening stock + closing stock

and average stock =
2

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 Formulae

debtors
Debtor days ratio=
(number of days) 365
total sales revenue

where total sales revenue is an approximation of total credit sales

creditors
Creditor days ratio =
(number of days) 365
cost of goods sold

where cost of goods sold is an approximation of total credit purchases

loan capital
=
Gearing ratio 100
capital employed

=
where capital employed loan capital (or long-term liabilities) + share capital + retained profit

Other formulae (SL/HL)

Investment appraisal
SL/HL
=
Average rate of return (ARR)
( total returns capital cost ) years of use 100
capital cost

HL only
=
Net present value (NPV) present values of return original cost

Capacity utilization and productivity (HL only)

actual output
=
Capacity utilization rate 100
productive capacity

total output
=
Productivity rate 100
total input

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 Formulae

Discount tables (HL only)

A discount table will be provided for students within the examination paper when required to answer the
question.

Years Discount rate

4% 6% 8% 10% 20%

1 0.9615 0.9434 0.9259 0.9091 0.8333

2 0.9246 0.8900 0.8573 0.8264 0.6944

3 0.8890 0.8396 0.7938 0.7513 0.5787

4 0.8548 0.7921 0.7350 0.6830 0.4823

5 0.8219 0.7473 0.6806 0.6209 0.4019

6 0.7903 0.7050 0.6302 0.5645 0.3349

7 0.7599 0.6651 0.5835 0.5132 0.2791

8 0.7307 0.6271 0.5403 0.4665 0.2326

9 0.7026 0.5919 0.5002 0.4241 0.1938

10 0.6756 0.5584 0.4632 0.3855 0.1615

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Formulae

Presentation of balance sheet and profit and loss

account (SL/HL)
Where balance sheets and profit and loss accounts are given in case studies or examination questions, they
will be presented in the format shown below. Students should be familiar with these layouts. Please note
that while profit and loss account is also known as income statement, the term profit and loss account will
be used in assessment.

ABC Ltd

Balance sheet as of 31 May 20**

$m $m

Fixed assets

Fixed assets 500

Accumulated depreciation 20

Net fixed assets 480

Current assets

Cash 10

Debtors 12

Stock 35

Total current assets 57

Current liabilities

Overdraft 5

Creditors 15

Short term loans 22

Total current liabilities 42

Net current assets (Working capital) 15

Total assets less current liabilities 495

Long-term liabilities (debt) 300

Net assets 195

Financed by:

share capital 110

accumulated retained profit 85

Equity 195

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 Glossary of command terms

ABC Ltd

Profit and loss account for ABC Ltd for the year
ended 31 May 20**

$m

Sales revenue 700

Cost of goods sold 350

Gross profit 350

Expenses 200

Net profit before interest and tax 150

Interest 10

Net profit before tax 140

Tax 25

Net profit after interest and tax 115

Dividends 35

Retained profit 80

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Appendices

Glossary of command terms

Students should be familiar with the following key terms and phrases used in syllabus content and in
examination questions, which are to be understood as described below. Although these terms will be used
frequently in examination questions, other terms may be used to direct students to present an argument in
a specific way.

Command term Assessment Definition Business management

objective level example

Analyse AO2 Break down in order to bring Analyse the impact of external
out the essential elements or opportunities and threats
structure. on the business strategy of
company A.

Annotate AO4 Add brief notes to a diagram Copy and annotate the
or graph. product life cycle.

Apply AO2 Use an idea, equation, Apply the concept of

principle, theory or law in diseconomies of scale to
relation to a given problem company X in 2014 compared
or issue. to 2012.

Calculate AO4 Obtain a numerical answer Calculate the acid test ratio for
showing the relevant stages company X in 2013.
in the working.

Comment AO2 Give a judgment based on a Comment on the profitability,

given statement or result of liquidity and efficiency ratios
a calculation. of company X.

Compare AO3 Give an account of the Compare the leadership style

similarities between two (or of manager A with that of
more) items or situations, manager B.
referring to both (all) of them
throughout.

Compare and AO3 Give an account of Compare and contrast how

contrast similarities and differences managers use different
between two (or more) planning tools to make
items or situations, referring changes to their strategies.
to both (all) of them
throughout.

Complete AO4 Add missing information/ Copy and complete the profit
data. and loss account provided
below.

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 Glossary of command terms

Command term Assessment Definition Business management

objective level example

Construct AO4 Display information in a Based on the information

diagrammatic or logical given, construct a break-even
form. chart for company X.

Contrast AO3 Give an account of the Contrast the marketing

differences between two (or objectives of for-profit
more) items or situations, organization X and non-profit
referring to both (all) of them organization Y.
throughout.

Define AO1 Give the precise meaning of Define the term economies of
a word, phrase, concept or scale.
physical quantity.

Demonstrate AO2 Make clear by reasoning Demonstrate why company

or evidence, illustrating X has decided to offshore to
with examples or practical country Y.
application.

Describe AO1 Give a detailed account. Describe one method

of primary research that
company X could use.

Determine AO4 Obtain the only possible Determine the break-even

answer. point for product X.

Discuss AO3 Offer a considered and Discuss how company X can

balanced review that differentiate itself from its
includes a range of main competitor.
arguments, factors or
hypotheses. Opinions or
conclusions should be
presented clearly and
supported by appropriate
evidence.

Distinguish AO2 Make clear the differences Distinguish between

between two or more leadership and management.
concepts or items.

Draw AO4 Represent by means of a Draw a break-even chart for

labelled, accurate diagram company X.
or graph, using a pencil. A
ruler (straight edge) should
be used for straight lines.
Diagrams should be drawn
to scale. Graphs should have
points correctly plotted (if
appropriate) and joined in
a straight line or smooth
curve.

Business management guide 93

Glossary of command terms

Command term Assessment Definition Business management

objective level example

Evaluate AO3 Make an appraisal by Evaluate the investment

weighing up the strengths opportunities using net
and limitations. present value (NPV).

Examine AO3 Consider an argument Examine the importance of

or concept in a way that branding for company X.
uncovers the assumptions
and interrelationships of the
issue.

Explain AO2 Give a detailed account Explain why company X has

including reasons or causes. changed its pricing strategy.

Identify AO4 Provide an answer from a Identify two reasons why the
number of possibilities. owner has chosen a particular
method of investment
appraisal.

Justify AO3 Give valid reasons or Justify the reason(s) why

evidence to support an company X has decided to
answer or conclusion. merge with company Y.

Label AO4 Add labels to a diagram. Label the margin of safety on

the break-even chart that you
have constructed.

Outline AO1 Give a brief account or Outline two advantages and

summary. two disadvantages of working
from home.

Recommend AO3 Present an advisable course Recommend a suitable growth

of action with appropriate strategy for company X.
supporting evidence/
reason in relation to a given
situation, problem or issue.

Plot AO4 Mark the position of points Plot the position of company
on a diagram. X on the position map drawn
in your answer to part (b).

Prepare AO4 Put given data or Prepare a cash flow forecast

information from a stimulus/ for company X for January,
source into a suitable format. February and March 2015.

State AO1 Give a specific name, State one reason why

value or other brief answer company X has decided to
without explanation or outsource the production of Y
calculation. to country Z.

Suggest AO2 Propose a solution, Suggest a suitable method of

hypothesis or other possible appraisal for employee group
answer. Y in company Z.

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 Glossary of command terms

Command term Assessment Definition Business management

objective level example

To what extent AO3 Consider the merits or To what extent has

otherwise of an argument outsourcing the production
or concept. Opinions of X been unsuccessful for
and conclusions should company Y?
be presented clearly and
supported with appropriate
evidence and sound
argument.

Business management guide 95