Business management guide
First assessment 2024
Business management guide
First assessment 2024
Published February 2022
Updated May 2022
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Diploma Programme
Business management guide
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IB mission statement
The International Baccalaureate aims to develop inquiring, knowledgeable and caring young people who
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To this end the organization works with schools, governments and international organizations to develop
challenging programmes of international education and rigorous assessment.
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profile IB learner p
arner profile IB lea
ile IB learner profi
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er profile IB learne
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The IB learner prole represents 10 attributes valued by IB World Schools. We believe these attributes, and others
like them, can help individuals and groups become responsible members of local, national and global communities.
We nurture our curiosity, developing skills for inquiry and
research. We know how to learn independently and with others.
We learn with enthusiasm and sustain our love of learning
throughout life.
We develop and use conceptual understanding, exploring
knowledge across a range of disciplines. We engage with issues
and ideas that have local and global signicance.
We use critical and creative thinking skills to analyse and take
responsible action on complex problems. We exercise initiative in
making reasoned, ethical decisions.
We express ourselves condently and creatively in more than one
language and in many ways. We collaborate eectively, listening
carefully to the perspectives of other individuals and groups.
We act with integrity and honesty, with a strong sense of
fairness and justice, and with respect for the dignity and rights
of people everywhere. We take responsibility for our actions
and their consequences.
We critically appreciate our own cultures and personal histories,
as well as the values and traditions of others. We seek and evaluate
a range of points of view, and we are willing to grow from the
experience.
We show empathy, compassion and respect. We have a
commitment to service, and we act to make a positive dierence
in the lives of others and in the world around us.
We understand the importance of balancing dierent aspects of
our lives—intellectual, physical, and emotional—to achieve
well-being for ourselves and others. We recognize our interde-
pendence with other people and with the world in which we live.
We thoughtfully consider the world and our own ideas and expe-
rience. We work to understand our strengths and weaknesses in
order to support our learning and personal development.
We approach uncertainty with forethought and determination;
we work independently and cooperatively to explore new ideas
and innovative strategies. We are resourceful and resilient in the
face of challenges and change.
IB learner profile
The aim of all IB programmes is to develop internationally minded people who, recognizing their common
humanity and shared guardianship of the planet, help to create a better and more peaceful world.
As IB learners we strive to be:
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Introduction 1
Purpose of this document 1
The Diploma Programme 2
Nature of the subject 6
Approaches to the teaching and learning in business management 11
Aims 17
Assessment objectives 18
Assessment objectives in practice 19
Syllabus 21
Syllabus outline 21
Syllabus content 23
Assessment 37
Assessment in the Diploma Programme and Career-related Programme 37
Assessment outline—SL 39
Assessment outline—HL 40
External assessment 41
Internal assessment 51
Appendices 59
Presentation of nancial statements 59
Formulae 64
Discount tables (HL only) 66
Glossary of command terms 67
Glossary of subject-specic terms 69
Bibliography 70
Contents
Business management guide
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 programme resource centre at resources.ibo.org, a
password-protected IB website designed to support IB teachers. It can also be purchased from the IB store
at 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 programme resource centre. Past examination
papers as well as markschemes can be purchased from the IB store.
Teachers are encouraged to check the programme resource centre 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 2024
Introduction
Purpose of this document
1Business management guide
The Diploma Programme (DP) is a rigorous pre-university course of study designed for students in the
16 to 19 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
Introduction
The Diploma Programme
2 Business management guide
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 DP students participate in the three course elements that make up the core of the model.
The theory of knowledge (TOK) course engages students in reflection on the nature of knowledge and on
how we know what we claim to know. It encourages students to become more aware of their own
perspectives, and to reflect critically on their own beliefs and assumptions.
In TOK, students explore the means of producing knowledge within the core theme of “knowledge and the
knower” as well as within various optional themes (knowledge and technology, knowledge and politics,
knowledge and language, knowledge and religion, and knowledge and indigenous societies) and areas of
knowledge (the arts, natural sciences, human sciences, history, and mathematics). The course also
encourages students to make comparisons between different areas of knowledge and reflect on how
knowledge is arrived at in the various disciplines, what the disciplines have in common, and the differences
between them.
Creativity, activity, service (CAS) is at the heart of the DP. 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 DP. The three strands of CAS are creativity (arts, and other experiences that involve
creative thinking), activity (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 DP, CAS contributes to the IB’s mission to create a better and more peaceful world through
intercultural understanding and respect.
The extended essay (EE), including the world studies EE, 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 DP subjects, or in the case of the interdisciplinary world
studies essay, two subjects. The essay also acquaints students 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.
Approaches to teaching and approaches to
learning
Approaches to teaching and approaches to learning across the DP 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
The Diploma Programme
3Business management guide
• 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’ DP 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, contextualized, collaborative, differentiated and informed by assessment)
encompass the key values and principles that underpin IB pedagogy.
Further details can be found on the DP Approaches to teaching and learning website on the programme
resource centre.
The IB mission statement and the IB learner profile
The DP aims to develop in students the knowledge, skills and attitudes they will need to fulfill the aims of
the IB, as expressed in the organization’s mission statement and the learner profile. Teaching and learning
in the DP represent the reality in daily practice of the organization’s educational philosophy.
Academic integrity
Academic integrity 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 integrity 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 coursework—including work submitted for assessment—is to be authentic, based on the student’s
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 integrity in the IB and the DP, please consult the IB publications
Academic integrity, Effective citing and referencing, Diploma Programme: From principles into practice and the
relevant articles in the “General regulations: Diploma Programme” section in Diploma Programme
Assessment procedures. Specific information regarding academic integrity as it pertains to external and
internal assessment components of this DP subject can be found in this guide.
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 candidate’s 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 Diploma Programme
4 Business management guide
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 candidate’s 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 candidates must
clearly distinguish between their words and those of others by the use of quotation marks (or other
method, such as 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 Access and inclusion
policy and Learning diversity and inclusion in IB programmes: Removing barriers to learning.
The documents Meeting student learning diversity in the classroom and The IB guide to inclusive education: a
resource for whole school development are available to support schools in the ongoing process of increasing
access and engagement by removing barriers to learning.
The Diploma Programme
5Business management guide
Figure 2
Overview of the curriculum model
The business management course is designed to meet the current and future needs of students who want
to develop their knowledge of business content, concepts and tools to assist with business decision-
making. Future employees, business leaders, entrepreneurs or social entrepreneurs need to be confident,
creative and compassionate as change agents for business in an increasingly interconnected global
marketplace. The business management course is designed to encourage the development of these
attributes.
Through the exploration of four interdisciplinary concepts—creativity, change, ethics and sustainability
—this course empowers students to explore these concepts from a business perspective. Business
management focuses on business functions, management processes and decision-making in contemporary
contexts of strategic uncertainty.
Students examine how business decisions are influenced by factors that are internal and external to an
organization and how these decisions impact upon a range of internal and external stakeholders. Emphasis
is placed on strategic decision-making and the operational business functions of human resource
management, finance and accounts, marketing, and operations management.
Introduction
Nature of the subject
6 Business management guide
The business management course encourages the application of local, national and global examples to
content and concepts; the internal assessment (IA) for both SL and HL is an individual business research
project that allows greater analysis and evaluation of content, concepts and context. Students can develop
a deeper understanding of an organization by studying its processes through the lenses of creativity,
change, ethics and sustainability.
For the external assessment (paper 1 SL and HL), students will be assessed on their knowledge of important
contemporary business topics through their analysis of a fictitious business. Paper 2 (SL and HL) has a
greater focus on developing students’ analytical and financial quantitative skills. This will allow students to
combine their qualitative writing as business communicators with deeper financial analysis. In paper 3 (HL
only) students apply their knowledge of business tools and content through an innovative and potentially
disruptive social enterprise. This paper will allow business students to demonstrate their empathetic,
creative, analytical and evaluative skills. It will allow students to make ethical strategic decisions for their
stakeholders on a disruptive good or service; in the process, changing the lives of their stakeholders for the
better.
Business management is a challenging and dynamic discipline that more than meets the needs of our
students growing and developing in a complex business environment. This course prepares students to be
global citizens ready to face up to the challenges and opportunities awaiting them in our ever-changing
world.
Distinction between SL and HL
The SL course in business management differs from the HL course in terms of the:
• recommended hours devoted to teaching (150 hours for SL compared to 240 hours for HL)
• extra depth and breadth required (extension material for HL only)
• nature of the examination questions in papers 2 and 3.
◦ Paper 2 for both SL and HL focuses on developing quantitative skills; however, HL students will
need to develop these further in greater depth.
◦ Paper 3 is an HL-only paper based on a social enterprise, where students identify and describe a
human need and the potential organizational challenges facing the social entrepreneur. Further
to this, students are required to write a decision-making document that includes a business
recommendation.
Business management and the core
Business management and theory of knowledge
Theory of knowledge (TOK) explores questions about knowledge and the process of knowing. TOK
emphasizes comparisons and connections between areas of knowledge and encourages students to
become more aware of their perspectives and the perspectives of others.
There are potential TOK connections throughout the business management syllabus. For example, there is
a particularly strong synergy between the business management topic of management information
systems and the optional TOK theme of “knowledge and technology”. Both consider the impact of today's
“information age”, its scope and ethical considerations concerning innovations such as artificial intelligence
and data mining.
In TOK, students study a core theme, optional themes and areas of knowledge using a tool called the
“knowledge framework”. This framework consists of four elements: scope, perspectives, methods and tools,
and ethics. The links between business management and the TOK knowledge framework elements are
explored briefly under the following headings.
Nature of the subject
7Business management guide
Scope
How do we decide whether a particular discipline should be regarded as a human science? Do the
disciplines in the human sciences diverge from each other more fundamentally than disciplines in other
areas of knowledge? Are some types of knowledge more useful than others?
This element explores how the discipline and practice of business management fits within the totality of
human knowledge. It encourages discussion of how business management relates to other academic
disciplines, and how the human sciences compare and contrast with other areas of knowledge. Students
could also reflect on how business organizations support almost every aspect of human endeavour from
public universities and private pharmaceutical companies working together to develop new vaccines, to
non-government organizations (NGOs) providing primary education to the rural poor in developing
countries. The scope of business organizations to develop knowledge and ideas is only limited by
entrepreneurs' collective imaginations. Discussions of scope also allow students to explore the limitations
and potential applications of new knowledge that is generated by business organizations.
Perspectives
Are some types of knowledge less open to interpretation than others? Why do facts sometimes not change
our minds? How can we decide between the views of experts when they disagree with each other?
This element focuses on the importance of context and different perspectives. Perspectives are a crucial
aspect of all IB courses—the IB mission statement closes with the aim of developing “… learners who
understand that other people, with their differences, can also be right”. There are many ways to make
exciting and compelling links to perspectives in the business management course. For example, a recurring
topic throughout the business management syllabus is stakeholders, their differing viewpoints, conflicting
objectives and how they are affected by change. Considering the differing perspectives of stakeholder
groups allows students to gain a greater understanding of issues as diverse as financial accounts and
workforce participation. Linking to TOK discussions about perspectives can help students to deepen
understanding of their own perspectives as well as making them more aware of the perspectives of others.
Methods and tools
To what extent are the methods used in the human sciences “scientific”? To what extent can human
scientists use mathematical techniques to make accurate predictions? How can we judge when evidence is
adequate?
This element focuses on exploring the methods, tools and practices that we use to produce knowledge.
Woven into every unit is the business management toolkit. This suite of decision-making tools is designed
to help business leaders assess their current situation and implement strategies for the future. To evaluate
these tools, students must consider the reliability of the data fed into these tools and the subjectivity of
their outcomes. This evaluative approach also fits with the fourth aim of the business management course,
which helps students to engage with decision-making as a process and a skill.
Ethics
In what ways do ethical judgments differ from other kinds of decisions? To what extent are the methods of
the human sciences limited by the ethical considerations involved in studying human beings? Does all
knowledge impose moral obligations on those who know it?
Ethics is both part of the TOK knowledge framework and one of the concepts in business management. The
first aim of this course is “to develop as confident, creative and compassionate business leaders,
entrepreneurs, social entrepreneurs, and as change agents”. Students can consider ethical decision-making
within every unit, whether it be privacy issues relating to big data and consumer profiling or the moral
objectives of social enterprises. When making links to TOK and ethics, the focus should be clearly on ethics
concerning knowledge. So, for example, rather than merely debating whether a controversial issue is right
or wrong, in TOK, students would consider what criteria we could use to make such judgments, who
decides, or where our values and moral beliefs come from.
Nature of the subject
8 Business management guide
The DP business management course has multiple opportunities for teachers and students to explore TOK
connections and the nature of knowledge. Sample questions in each unit are included to ignite classroom
discussion and student interest.
Note: These suggestions are not prescriptive, and teachers are encouraged to follow their interests and
those of their class.
Business management and the extended essay
An extended essay (EE) in business management provides students with an opportunity to undertake in-
depth research in a certain area or topic in the subject. The world of business management offers potential
for creative EEs. Students have a diverse range of areas to conduct their independent research from human
resource management, to finance, to operations, to marketing.
While undertaking the business management course, students develop essential skills that can enable them
to produce a well-balanced EE. Although students are expected to base their EE on secondary resources,
primary research can be used as well, where appropriate. Students may wish to use secondary material such
as company data, which is often accessible due to the reporting requirements of businesses.
To develop and support their arguments, students should apply relevant business theory and conduct
through analysis and evaluation in an effort to answer the research question.
The EE in business management is not an extension of the internal assessment (IA) task for the subject.
Students must have a clear understanding of the distinction between the IA and the EE.
For more information refer to the “Business management: Subject-specific guidance” section of the EE
website, found on the programme resource centre.
Business management and creativity, activity, service
In the business management course students explore interactions between humans and their environment
in their own context and learn to reflect on their own identity, and potential roles in society. They are
encouraged to contribute to positive change in their communities. Students develop awareness and
knowledge of how certain businesses work, through in-depth research of case studies, including an IA
component that deepens their understanding of the complexities in business.
This knowledge is extended through creativity, activity, service (CAS), where students are motivated to act
as responsible global citizens. By acquiring skills, they learn about strategic thinking and setting objectives,
acquire planning skills and develop an appreciation for different cultural perspectives within organizations.
These skills support their CAS activities and help the students to choose CAS activities with significance or
meaning for their communities.
Business management and the IB learner profile
The business management course helps to meet the demands of the IB mission statement that “aims to
develop inquiring, knowledgeable and caring young people who help to create a better and more peaceful
world through intercultural understanding and respect” (IB mission statement). This mission is further
delineated through the attributes of the IB learner profile, and the business management curriculum allows
students opportunities to demonstrate and develop these attributes through the implicit and explicit
content of the course.
IB learners are: Business management students will:
inquirers undertake independent and collaborative investigations into real-world business case
studies, for example, through the IA research project where they develop overarching
concept-driven questions and gather relevant data to address these.
knowledgeable utilize business concepts, theories and models with confidence to gain a more
sophisticated understanding of current strategic decision-making even under
conditions of uncertainty.
Nature of the subject
9Business management guide
IB learners are: Business management students will:
thinkers synthesize and evaluate business information and data to draw conclusions and
develop balanced, well-supported arguments including recommending suitable
courses of action.
communicators compose clear and concise analytical responses utilizing the terminology and tools of
business, especially in the written assessments.
principled act with integrity, critically evaluating statistical data and evidence, understanding that
the possession of knowledge carries with it an ethical responsibility.
open-minded understand that decision-making involves the consideration of different causes, effects
and perspectives and therefore the need to offer a range of solutions to business
problems/issues.
caring appreciate that business management is a social science that has a human impact,
influencing the well-being of individuals and societies.
risk-takers utilize business knowledge and understanding to develop and present creative
business conclusions/recommendations for real-world organizations in local, national
and global contexts
balanced understand the importance of considering different perspectives when making
business decisions, including evaluating their impact on various stakeholders
reflective acknowledge their own inherent bias when making decisions with an awareness of
their own strengths and weaknesses; hence, seek out new further sources of
information to ensure that solutions are as effective as they can be given prevailing
strategic uncertainty.
Business management and international-
mindedness
Developing international-mindedness is essential to the business management course. Many businesses
operate across national borders and even seemingly local businesses are influenced by international
competition. The business management course helps students to understand and evaluate the implications
of business activity in an interconnected, global market.
The course encourages the use of inquiries, 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 can choose case studies that reflect the context that they are teaching as well as case
studies that allow for comparisons across contexts. The four key 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.
Nature of the subject
10 Business management guide
Conceptually focused and contextualized teaching and learning is important for business management.
Case studies and real-world examples help to keep the right focus within the course.
Figure 3
The relationship between inquiries, concepts, content and contexts in business management
As indicated in figure 3, the three components of concepts, content and contexts are of equal relevance
and teachers may choose any one as a starting point for their teaching. Concepts are anchored in the
content of business management—its tools and theories—and are given context through the study of
case studies and real-world examples. Together these components help students to acquire a holistic and
integrated understanding of business management as a discipline.
The business management course is focused on inquiry-based teaching and learning, where students are
given the opportunity to explore business tools and theories using case studies and create their own
questions and formulate their own solutions to problems or issues facing an organization. This inquiry
approach can be used, for example, in paper 1 and the concept-based business research project IA for both
SL and HL. The teaching of the business management content should, therefore, be supported by focusing
on case studies and applying real-world examples. In some of the assessments, students will be expected to
demonstrate their understanding of business management through the lens of a case study rather than the
response being purely theoretical. In doing this, the students will go beyond their comprehension of just
theory and clearly analyse or evaluate the situation highlighted in the different case studies.
While inquiry permeates the whole course, the assessment objective 3 (AO3) topics that require more
depth are considered areas that lend themselves particularly well to this approach. However, it is important
that teachers know that inquiry as a teaching and learning strategy is not only applicable to AO3 topics.
Introduction
Approaches to the teaching and learning in business
management
11Business management guide
Teachers need to see the value of this approach in terms of allowing students to develop and demonstrate
higher-order thinking skills. It is important to highlight that inquiry needs to be taking place to ensure
students are actively involved in researching business issues. This inquiry approach will aid students in
developing critical thinking and problem-solving skills, an appreciation of different viewpoints,
collaboration and reflective discussion.
Business skills are important to the study of business management and reflect the subject’s distinctive
approach. The teaching and learning of these skills enriches the students’ understanding of business and
enables them to apply these to various business theories and tools. It is essential that the skills should be
covered throughout the course and that they are introduced and integrated where appropriate in relation
to the concepts, content and contexts at both SL and HL. Students are expected to demonstrate
competence in the use of business skills in both the external assessment and internal assessment.
Formative assessment, as a central part of learning and teaching, helps students to build up the primary
and secondary skills required to reach their learning objectives in the subject and beyond.
Primary skills refer to those key constructs that we want to assess and are usually stated explicitly in the
learning objectives or the assessment objectives of the final assessment components. For example,
students’ abilities to apply business management tools and theories in case studies.
Secondary skills, however, are not explicit in the key learning objectives or assessment objectives in that
subject but are necessary skills for the students to perform effectively in the subject and beyond. These are
usually implicit skills that are transdisciplinary and transferrable to other subjects. For example, research
skills, reading comprehension skills, summarizing and synthesis skills.
These skills are further explored in the Business management teacher support material (TSM).
The four concepts that underpin the business management course (change, creativity, ethics and
sustainability) are integrated into the conceptual understandings of all the units to ensure that a
conceptual thread is woven throughout the course.
Conceptually focused teaching helps learners to:
• organize new information by categorizing groups of facts, ideas, theories and tools according to
patterns of similarity or difference
• deepen their understanding of the complex and dynamic business world
• approach concepts and content in different ways through multiple perspectives
• make connections with other subjects to enhance interdisciplinary learning
• design overarching inquiry questions or statements that link concepts to content and to contexts.
Conceptual understanding therefore enhances the student’s overall understanding of the course, making
the subject more meaningful. This understanding assists students in showing clear evidence of synthesis
and evaluation in their responses to questions asked in the external assessment (even though the questions
may not be explicitly concept based). In the internal assessment, however, students must use a concept as a
lens through which to analyse their research project.
The definition, relative importance and relationship to the subject of business management of each of the
four key concepts may be the subject of debate. Teachers should explore how these concepts may be
understood and applied differently in different contexts. Figure 4 provides brief understandings of how the
key concepts may be initially understood in relation to the course.
Figure 4
The relationship between the key concepts and the business management course
Key concept Understanding in relation to the course
Change This concept is explored from several perspectives since businesses operate in a
dynamic world that is subject to constant change. Change may be a conversion,
transformation, or movement from one form, state or value to another. Inquiry
into the concept of change involves understanding and evaluating causes,
processes and consequences. Due to increasing competition, new technologies
and markets as well as changing trends in consumer behaviour, business
Approaches to the teaching and learning in business management
12 Business management guide
Key concept Understanding in relation to the course
organizations need to adapt their objectives, strategies and operations if they are
to succeed. This success emerges from their ability to research and respond to
signals in both the internal and external environment.
Creativity Creativity is the process of generating new ideas and considering existing ideas
from new perspectives. Creativity includes the ability to recognize the value of
ideas when developing innovative responses to problems; it may be evident in
the process as well as outcomes, products or solutions. The creation of ideas and
solutions involves a process of synthesizing and evaluating in response to
surrounding changes.
Ethics Ethics refers to moral principles, code or morals that govern the behaviour of a
person or group of people. In understanding ethics, it is important to note that
every business decision has moral implications. These decision-making processes
are based on moral philosophies or guidelines that influence the way a business
conducts itself. The consequences of these implications can be significant for
internal and external stakeholders and the natural environment.
Sustainability Sustainability is “meeting the needs of the present without compromising the
ability of future generations to meet their own needs” (United Nations 1987).
Sustainability can be enhanced by conserving resources or finding more efficient
ways to produce or discover new resources. Business decisions should consider
the impacts of their results on people, planet and profit (this is termed the “triple
bottom line”).
• Cultural/social sustainability (people): businesses are encouraged to be
aware of their cultural and community settings. Within this mindset
businesses focus not only on the local community but also consider the
cultural norms and values within the external environment.
• Environmental sustainability (planet): this demands that enterprises work
on minimizing their negative environmental impact through different
practices such as reusing, recycling or reducing waste.
• Economic sustainability (profit): businesses/entrepreneurs are risk-takers
and strive to make a profit, which is part of their economic responsibility.
However, this also translates into employment opportunities and tax
revenue to allow for further development of the community.
Specific examples of how these key concepts can be integrated into the teaching and learning of the course
can be found in the TSM.
Business management toolkit
The business management toolkit is a set of situational, planning and decision-making tools. These tools
should be used by students to analyse and evaluate the syllabus content and can be applied in different
disciplinary and interdisciplinary contexts; teachers should integrate the tools while teaching the course.
Suggestions for usage are included in figure 5 and in every unit. A visual business management toolkit is
available in the TSM.
Note: The suggested areas of tool integration are indicative only and teachers should feel free to integrate
the tools in other unit areas where appropriate. All of these tools must be taught (at AO2 and AO4 level)
alongside the syllabus content.
Note: All tools are SL and HL unless otherwise stated. HL only tools are in bold.
Approaches to the teaching and learning in business management
13Business management guide
Figure 5
The business management toolkit
Business management tools Suggested unit areas for integration of tools (not
exhaustive)
SWOT analysis 1, 2, 3, 4, 5
Ansoff matrix 1, 4
STEEPLE analysis 1, 2, 4
Boston Consulting Group (BCG) matrix 3, 4
Business plan 1, 2, 3, 4, 5
Decision trees 1, 5
Descriptive statistics
These include the following.
• Mean
• Mode
• Median
• Bar charts
• Pie charts
• Infographics
• Quartiles
• Standard deviation
2, 3, 4, 5
Circular business models
These include the following.
• Circular supply models
• Resource recovery models
• Product life extension models
• Sharing models
• Product service system models
1, 5
Force field analysis (HL only) 2, 5
Gantt chart (HL only) 4, 5
Hofstede’s cultural dimensions (HL only) 2, 4, 5
Porter's generic strategies (HL only) 1, 4
Contribution (HL only)
Includes the following.
• Make or buy analysis
• Contribution costing
• Absorption costing
3, 4, 5
Critical path analysis (HL only)
Includes the following.
• Completion and analyses of a critical
path diagram (drawing of the
diagram is not expected)
• Identification of the critical path
4, 5
Approaches to the teaching and learning in business management
14 Business management guide
Business management tools Suggested unit areas for integration of tools (not
exhaustive)
• Calculation of free and total float
Simple linear regression (HL only)
Includes the following.
• Scatter diagrams
• Line of best fit
• Correlation/Extrapolation
1, 4, 5
The TSM provides further guidance on the application of this toolkit including additional support on the
approaches to teaching and learning in the course.
Engaging with sensitive topics
The study of business management provides students with an opportunity to engage with exciting,
stimulating and personally relevant business topics and issues. However, it should be noted that often such
topics and issues can also be sensitive and personally challenging. Teachers should be aware of this and
provide guidance to students on how to approach and engage with such topics and issues in a responsible
and inclusive manner, providing due consideration to questions and issues that may arise.
Prior learning
The business management course requires no specific prior learning of business management or business
studies. No particular background in terms of specific subjects for national or international qualifications is
expected or required. However, a familiarity with business concepts and theories 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 DP business
management course.
Students who have studied through the MYP are familiar with a conceptual approach to learning. For
example, the concepts of change, creativity, ethics and sustainability (within MYP individual and
societies courses) are further developed in the DP 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 DP course in business management, which requires the student to inquire, demonstrate
knowledge and understanding of content and concepts, and exhibit the capacity to think critically in a
given contextual setting. This learning process supports higher-level mastery of the approaches to teaching
and learning skills.
Links to the Career-related Programme
In the Career-related Programme (CP), students study at least two DP subjects, a core consisting of four
components and a career-related study, which is determined by the local context and aligned with student
needs. Courses can be chosen from any group of the DP, and it is possible to study more than one course
from the same group (for example, business management and economics).
Approaches to the teaching and learning in business management
15Business management guide
Business management develops the student’s creative, critical thinking and decision-making skills, which
are highly desired across a range of career-related pursuits. Business management is an ideal choice for CP
students considering careers in investment banking, chartered accounting, finance, corporate law, research,
leisure and tourism, government and non-governmental organizations, project management, and so on.
The DP business management course emphasizes the development of: strong written, verbal and visual
communication skills; critical thinking; problem-solving and ethical considerations that will assist students
in preparing for the future global workplace. This in turn fosters the IB learner profile attributes that are
transferable to the entire CP, providing relevance and support for the student’s learning.
For CP students, DP courses can be studied at SL or HL. Schools can explore opportunities to integrate CP
students with DP students.
Approaches to the teaching and learning in business management
16 Business management guide
Individuals and societies aims
Individuals and societies subjects help young people to develop a connection to our shared planet,
exploring how to live sustainably and promoting the well-being of all people in our pursuit of a more
peaceful world.
The aims of all the individuals and societies subjects are to equip young people to:
1. explore and critically engage with multiple perspectives and ways of thinking
2. investigate and evaluate the interactions between individuals and societies
3. think and act as informed and principled individuals in societies
4. understand and value the variety and diversity of the human experience across time and place.
Business management aims
The aims of the business management course at SL and HL are to enable students to:
1. develop as confident, creative and compassionate business leaders, entrepreneurs, social
entrepreneurs and as change agents
2. foster an informed understanding of ethical and sustainable business practices
3. explore the connections between individuals, businesses and society
4. engage with decision-making as a process and a skill.
Introduction
Aims
17Business management guide
By the end of the business management course, students are expected to achieve the following assessment
objectives.
AO1: Knowledge and understanding
Demonstrate knowledge and understanding of:
• business management tools and theories
• course topics and concepts
• business problems, issues and decisions
• HL extension topics (HL only).
AO2: Application and analysis
Apply and analyse:
• business management tools and theories
• course topics and concepts
• business problems, issues and decisions
• business decisions and issues through the selection and use of appropriate data
• HL extension topics (HL only).
AO3: Synthesis and evaluation
Synthesize and evaluate:
• business management tools and theories
• course topics and concepts
• business problems, issues and decisions
• stakeholder interests to reach informed business decisions
• recommendations for competing future strategic options (HL only)
• HL extension topics (HL only).
AO4: Use and application of appropriate skills
• Select and apply relevant business management tools, theories and concepts to support research into
a business issue or problem.
• Select, interpret and analyse business materials from a range of primary and secondary sources.
• Create well-structured materials using business management terminology.
• Communicate analysis, evaluation and conclusions of research effectively.
Introduction
Assessment objectives
18 Business management guide
Assessment
objective
Paper 1 (SL and HL) Paper 2 (SL and HL) Paper 3
(HL only)
Internal
assessment
(SL and HL)
Section A Section B Section A Section B
AO1
Knowledge and
understanding
√ √ √ √ √ √
AO2
Application and
analysis
√ √ √ √ √ √
AO3
Synthesis and
evaluation
√ √ √ √
AO4
Use and
application of
appropriate
skills
√ √ √ √ √ √
Command terms
Command terms are classified according to the AO levels.
Command terms related to cognitive demand progress from AO1 to AO3, while AO4 command terms are
specific to particular skills. Teachers and students must be familiar with the assessment objectives and the
command terms in order to understand the depth of treatment required in teaching and in examination
questions.
For use of command terms in examination questions, please refer to the “Assessment” section of this guide.
The command terms within each assessment objective are listed in alphabetical order in the following
table. Definitions of the command terms are listed in the “Glossary of command terms” in the appendices to
this guide.
Assessment objective Key command term Depth
AO1—knowledge and
understanding
Define
Describe
Identify
List
Outline
State
These terms require students to
learn and comprehend the
meaning of information.
AO2—application and analysis Analyse
Apply
These terms require students to
use their knowledge and skills to
Introduction
Assessment objectives in practice
19Business management guide
Assessment objective Key command term Depth
Comment
Demonstrate
Distinguish
Explain
Suggest
break down ideas into simpler
parts and to see how the parts
relate.
AO3—synthesis and evaluation Compare
Compare and contrast
Contrast
Discuss
Evaluate
Examine
Justify
Recommend
To what extent
These terms require students to
rearrange component ideas into a
new whole and make judgments
based on evidence or a set of
criteria.
AO4—use and application of
appropriate skills
Annotate
Calculate
Complete
Construct
Determine
Draw
Label
Plot
Prepare
These terms require students to
demonstrate the selection and use
of subject-specific skills and
techniques.
Assessment objectives in practice
20 Business management guide
Syllabus component Recommended teaching
hours
SL HL
Unit 1: Introduction to business management
1.1 What is a business?
1.2 Types of business entities
1.3 Business objectives
1.4 Stakeholders
1.5 Growth and evolution
1.6 Multinational companies (MNCs)
20 20
Unit 2: Human resource management
2.1 Introduction to human resource management
2.2 Organizational structure
2.3 Leadership and management
2.4 Motivation and demotivation
2.5 Organizational (corporate) culture (HL only)
2.6 Communication
2.7 Industrial/employee relations (HL only)
20 35
Unit 3: Finance and accounts
3.1 Introduction to finance
3.2 Sources of finance
3.3 Costs and revenues
3.4 Final accounts
3.5 Profitability and liquidity ratio analysis
3.6 Efficiency ratio analysis (HL only)
3.7 Cash flow
3.8 Investment appraisal
3.9 Budgets (HL only)
30 45
Unit 4: Marketing
4.1 Introduction to marketing
4.2 Marketing planning
4.3 Sales forecasting (HL only)
4.4 Market research
4.5 The seven Ps of the marketing mix
4.6 International marketing (HL only)
30 35
Unit 5: Operations management
5.1 Introduction to operations management
15 45
Syllabus
Syllabus outline
21Business management guide
Syllabus component Recommended teaching
hours
SL HL
5.2 Operations methods
5.3 Lean production and quality management (HL only)
5.4 Location
5.5 Break-even analysis
5.6 Production planning (HL only)
5.7 Crisis management and contingency planning (HL only)
5.8 Research and development (HL only)
5.9 Management information systems (HL only)
Business management toolkit 10 35
Research time allocated for the pre-released statement in paper 1 5 5
Internal assessment 20 20
Total teaching hours 150 240
Syllabus outline
22 Business management guide
Unit 1: Introduction to business management
Conceptual understandings
• Change is essential for businesses to achieve their desired aims
• Creative business planning can lead to organizational success
• Ethical business behaviour improves a business’ image as well as customer loyalty
• Sustainable business practices can enhance a business’ existence
Suggested business management tools to integrate (other tools may also be integrated)
SWOT analysis, Ansoff Matrix, STEEPLE analysis, business plan, decision trees, circular business models,
Porter’s generic strategies (HL only), simple linear regression (HL only)
Note: All content is SL and HL unless otherwise stated. HL only content is in bold.
1.1 What is a business? Depth of teaching
The nature of business AO1
Primary, secondary, tertiary and quaternary sectors AO2
Entrepreneurship AO2
Challenges and opportunities for starting up a business AO2
1.2 Types of business entities Depth of teaching
Distinction between the private and the public sectors AO2
The main features of the following types of organizations.
• Sole traders
• Partnerships
• Privately held companies
• Publicly held companies
AO3
The main features of the following types of for-profit social enterprises.
• Private sector companies
• Public sector companies
• Cooperatives
AO3
The main features of the following type of non-profit social enterprise.
• Non-governmental organizations (NGOs)
AO3
1.3 Business objectives Depth of teaching
Vision statement and mission statement AO2
Syllabus
Syllabus content
23Business management guide
1.3 Business objectives Depth of teaching
Common business objectives including growth, profit, protecting shareholder value
and ethical objectives
AO2
Strategic and tactical objectives AO3
Corporate social responsibility (CSR) AO3
1.4 Stakeholders Depth of teaching
Internal and external stakeholders AO2
Conflict between stakeholders AO2
1.5 Growth and evolution Depth of teaching
Internal and external economies and diseconomies of scale AO2
The difference between internal and external growth AO2
Reasons for businesses to grow AO3
Reasons for businesses to stay small AO3
External growth methods.
• Mergers and acquisitions (M&As)
• Takeovers
• Joint ventures
• Strategic alliances
• Franchising
AO3
1.6 Multinational companies (MNCs) Depth of teaching
The impact of MNCs on the host countries AO3
Suggested inquiry statements to explore
• How corporate social responsibility (CSR) could impact business creativity.
• Why business objectives might change over time.
• How ethical behaviour contributes to business sustainability.
• Why change could bring conflict among stakeholders.
• How businesses could benefit from adopting circular business models.
Suggested theory of knowledge questions
• Is the depiction of “business management” in this guide an accurate model of the contemporary
academic discipline of business management and today’s business environment?
• If the effects of a mission statement cannot be easily measured, does this mean that they are
worthless?
• Do CEOs have different ethical obligations and responsibilities compared to their employees?
• Does competition between companies help or hinder the production of knowledge?
• Is it possible to discover laws of business in the same way that the natural sciences discover laws of
nature?
Syllabus content
24 Business management guide
Unit 2: Human resource management
Conceptual understandings
• People play a major role in driving organizational change
• Creative employees could be essential for business success
• Ethical human resource systems may positively affect employee performance
• Sustainable human behaviour can bring positive change in a business
Suggested business management tools to integrate (other tools may also be integrated)
Force field analysis (HL only), descriptive statistics, SWOT analysis, STEEPLE analysis, Hofstede’s cultural
dimensions (HL only)
Note: All content is SL and HL unless otherwise stated. HL only content is in bold.
2.1 Introduction to human resource management Depth of teaching
Role of human resource management AO2
Internal and external factors that influence human resource planning (for example,
demographic change, change in labour mobility, immigration, flexi-time, gig
economy)
AO2
Reasons for resistance to change in the workplace AO2
Human resource strategies for reducing the impact of change and resistance to
change
AO3
2.2 Organizational structure Depth of teaching
The following terminology in relation to different types of organizational structures.
• Delegation
• Span of control
• Levels of the hierarchy
• Chain of command
• Bureaucracy
• Centralization
• Decentralization
• Delayering
• Matrix structure
AO2
The following types of organization charts.
• Flat or horizontal
• Tall or vertical
• By product, by function or by region
AO2, AO4
Appropriateness of different organizational structures given a change in external
factors
AO3
Changes in organizational structures (for example, project-based organization,
Charles Handy’s “Shamrock Organization”) (HL only)
AO3
Syllabus content
25Business management guide
2.3 Leadership and management Depth of teaching
Scientific and intuitive thinking/management (HL only) AO2
Management and leadership AO2
The following leadership styles.
• Autocratic
• Paternalistic
• Democratic
• Laissez-faire
• Situational
AO3
2.4 Motivation and demotivation Depth of teaching
The following motivation theories.
• Taylor
• Maslow
• Herzberg (motivation–hygiene theory)
AO3
The following motivation theories.
• McClelland’s acquired needs theory (HL only)
• Deci and Ryan’s self-determination theory (HL only)
• Equity and expectancy theory (HL only)
AO3
Labour turnover (HL only) AO2, AO4
The following types of appraisal (HL only).
• Formative
• Summative
• 360-degree feedback
• Self-appraisal
AO2
Methods of recruitment (HL only) AO2
Internal and external recruitment (HL only) AO3
The following types of financial rewards.
• Salary
• Wages (time and piece rates)
• Commission
• Performance-related pay (PRP)
• Profit-related pay
• Employee share ownership schemes
• Fringe payments
AO2
The following types of non-financial rewards.
• Job enrichment
• Job rotation
• Job enlargement
• Empowerment
• Purpose/the opportunity to make a difference
AO2
Syllabus content
26 Business management guide
2.4 Motivation and demotivation Depth of teaching
• Teamwork
The following types of training.
• Induction
• On the job
• Off the job
AO2
2.5 Organizational (corporate) culture (HL only) Depth of teaching
Organizational culture (HL only) AO1
Types of organizational culture, for example, Charles Handy's “Gods of
management” (HL only)
AO2
Cultural clashes when organizations change, including but not limited to, when
organizations grow and merge and when leadership styles change (HL only)
AO3
2.6 Communication Depth of teaching
Formal and informal methods of communication for an organization in a given
situation
AO3
Barriers to communication AO2
2.7 Industrial/employee relations (HL only) Depth of teaching
Sources of conflict in the workplace AO2
Approaches to conflict in the workplace by:
• employees—collective bargaining, work-to-rule and strike action
• employers—collective bargaining, threats of redundancies, changes of
contract, closure and lockouts.
AO3
The following approaches to conflict resolution.
• Conciliation and arbitration
• Employee participation and industrial democracy
• No-strike agreement
• Single-union agreement
AO3
Suggested inquiry statements to explore
• How technological advancement could help businesses manage their human resources department in
a more efficient way.
• How creative organizational structures can be more suitable in the dynamic business world.
• Why a democratic style of leadership is one way of encouraging creativity in a business.
• The impact of financial motivation on employees’ sustainable behaviour.
• How effective communication could impact business success.
• Why ethical and sustainable organizations are more likely to recruit top talent and have higher
employee retention.
Suggested theory of knowledge questions
• Is it inevitable that the implicit biases of the interviewer will influence the outcome of interviews?
• Is being knowledgeable an essential quality in a manager?
Syllabus content
27Business management guide
• How might emotive language and faulty reasoning be used in collective bargaining negotiations?
• In what ways can language be used to influence, persuade or manipulate employees?
• Should critical events in the historical development of the industrial/employee relations always be
judged by the standards of their time?
• Can we ever really know what motivates an employee?
Unit 3: Finance and accounts
Conceptual understandings
• Change in the business structure can impact a business’ financial resources
• Creativity in financial reporting can have diverse impacts in a business
• Ethical financial and accounting practices can be a form of sustainable business behaviour
Suggested business management tools to integrate (other tools may also be integrated)
Boston Consulting Group (BCG) matrix, descriptive statistics, SWOT analysis, contribution (HL only)
Note: All content is SL and HL unless otherwise stated. HL only content is in bold.
3.1 Introduction to finance Depth of teaching
Role of finance for businesses.
• Capital expenditure
• Revenue expenditure
AO2
3.2 Sources of finance Depth of teaching
The following internal sources of finance.
• Personal funds (for sole traders)
• Retained profit
• Sale of assets
AO2
The following external sources of finance.
• Share capital
• Loan capital
• Overdrafts
• Trade credit
• Crowdfunding
• Leasing
• Microfinance providers
• Business angels
AO2
Appropriateness of short- or long-term sources of finance for a given situation AO3
3.3 Costs and revenues Depth of teaching
The following types of cost, using examples.
• Fixed
• Variable
• Direct
AO2
Syllabus content
28 Business management guide
3.3 Costs and revenues Depth of teaching
• Indirect/overhead
Total revenue and revenue streams, using examples AO2
3.4 Final accounts Depth of teaching
The purpose of accounts to different stakeholders AO2
Final accounts
• Profit and loss account
• Balance sheet
AO2, AO4
Different types of intangible assets AO2
Depreciation using the following methods (HL only).
• Straight line method
• Units of production method
AO2, AO4
Appropriateness of each depreciation method (HL only) AO3
3.5 Profitability and liquidity ratio analysis Depth of teaching
The following profitability ratios.
• Gross profit margin
• Profit margin
• Return on capital employed (ROCE)
AO2, AO4
Possible strategies to improve these ratios AO3
The following liquidity ratios.
• Current ratio
• Acid test (quick) ratio
AO2, AO4
Possible strategies to improve these ratios AO3
3.6 Efficiency ratio analysis (HL only) Depth of teaching
The following efficiency ratios.
• Stock turnover
• Debtor days
• Creditor days
• Gearing ratio
AO2, AO4
Possible strategies to improve these ratios AO3
Insolvency versus bankruptcy AO2
3.7 Cash flow Depth of teaching
The difference between profit and cash flow AO2
Working capital AO2, AO4
Liquidity position AO2
Cash flow forecasts AO2, AO4
The relationship between investment, profit and cash flow AO2
Syllabus content
29Business management guide
3.7 Cash flow Depth of teaching
Strategies for dealing with cash flow problems AO3
3.8 Investment appraisal Depth of teaching
Investment opportunities using payback period, average rate of return (ARR) and
NPV (HL only)
AO3, AO4
3.9 Budgets (HL only) Depth of teaching
The difference between cost and profit centres AO2
The roles of cost and profit centres AO2
Constructing a budget AO2, AO4
Variances AO2, AO4
The importance of budgets and variances in decision-making AO2
Suggested inquiry statements to explore
• How cost and revenue management could ensure sustainability.
• Why final accounts analysis could be essential in changing stakeholder perspectives.
• Why profitable businesses may face insolvency.
• How time value of money affects future consumer choice.
• How triple bottom line accounting can support the shift towards more ethical business practices.
Suggested theory of knowledge questions
• Are objective facts or appeals to emotion more effective when applying for an external source of
finance?
• How do our expectations and assumptions have an impact on how we read company accounts?
• What roles do reason and emotion play when analysing financial performance?
• Are the results of some types of ratio analysis less open to interpretation than others?
• To what extent are the methods used to gain knowledge in investment appraisal “scientific”?
• What assumptions underlie the techniques used when budgeting?
Unit 4: Marketing
Conceptual understandings
• Social, cultural and technological change can impact the language and medium of marketing
• Creative ways of informing stakeholders can lead to positive business outcomes
• Ethical marketing practices can enhance a business’ brand image
• Sustainable marketing practices can be effective for business success
Suggested business management tools to integrate (other tools may also be integrated)
Ansoff matrix, SWOT analysis, STEEPLE analysis, Boston Consulting Group (BCG) matrix, descriptive
statistics, Gantt chart (HL only), simple linear regression (HL only), critical path analysis (HL only),
contribution (HL only), Hofstede’s cultural dimensions (HL only)
Note: All content is SL and HL unless otherwise stated. HL only content is in bold.
Syllabus content
30 Business management guide
4.1 Introduction to marketing Depth of teaching
Market orientation versus product orientation AO2
Market share AO2, AO4
Market growth AO2, AO4
The importance of market share and market leadership (HL only) AO3
4.2 Marketing planning Depth of teaching
The role of marketing planning AO2
Segmentation, targeting (target market) and positioning (position maps) AO2, AO4
The difference between niche market and mass market AO2
The importance of having a unique selling point/proposition (USP) AO2
How organizations can differentiate themselves and their products from competitors AO3
4.3 Sales forecasting (HL only) Depth of teaching
The benefits and limitations of sales forecasting AO3
4.4 Market research Depth of teaching
Why and how organizations carry out market research AO3
The following methods/techniques of primary market research.
• Surveys
• Interviews
• Focus groups
• Observations
AO2
The following methods/techniques of secondary market research.
• Market analyses
• Academic journals
• Government publications
• Media articles
• Online content
AO2
The difference between qualitative and quantitative research AO2
The following methods of sampling.
• Quota
• Random
• Convenience
AO2
4.5 The seven Ps of the marketing mix Depth of teaching
Product
The relationship between the product life cycle, product portfolio and the marketing
mix
AO2
Extension strategies AO3
The relationship between the product life cycle, investment, profit and cash flow AO2
Syllabus content
31Business management guide
4.5 The seven Ps of the marketing mix Depth of teaching
The following aspects of branding.
• Awareness
• Development
• Loyalty
• Value
AO2
The importance of branding AO2
Price
The appropriateness of the following pricing methods.
• Cost-plus (mark-up) pricing
• Penetration pricing
• Loss leader
• Predatory pricing
• Premium pricing
• Dynamic pricing (HL only)
• Competitive pricing (HL only)
• Contribution pricing (HL only)
• Price elasticity of demand (HL only)
AO3
Promotion
The following aspects of promotion.
• Above the line promotion
• Below the line promotion
• Through the line promotion
AO2
Social media marketing as a promotional strategy AO3
Place
The importance of different types of distribution channels AO3
People
The importance of employee–customer relationships in marketing a service and
cultural variation in these relationships
AO3
Processes
The importance of delivery processes in marketing a service and changes in these
processes
AO3
Physical evidence
The importance of tangible physical evidence in marketing a service AO3
Appropriate marketing mixes
Appropriate marketing mixes for particular products or businesses AO3
4.6 International marketing (HL only) Depth of teaching
The opportunities and threats posed by entering and operating internationally AO3
Syllabus content
32 Business management guide
Suggested inquiry statements to explore
• How marketing strategies may evolve in response to changeable customer preferences.
• Why effective market research may bring about creative business practice.
• How social media development could change an organization’s marketing strategies.
• Why globalization can bring many changes to business activity.
• Why successful marketing campaigns are increasingly being built around the ethical and sustainable
practices of a business.
Suggested theory of knowledge questions
• Can companies know us better than we know ourselves?
• How might a company protect against sample error and bias when designing primary market
research?
• Are there different criteria for ethical standards for online services compared to physical products?
• Are consumers rational?
• Are predictions in the human sciences inevitably unreliable?
• How might the language used in focus groups influence the conclusions that are reached?
• Are consumers too unpredictable to study scientifically?
• Is it possible to eliminate the effect of researcher bias when conducting market research?
• What impact has social media had on how consumers acquire and share knowledge of products?
Unit 5: Operations management
Conceptual understandings
• Change in operations impacts other business activities
• Creative production process can disrupt the market
• Operational business changes may affect its ethical stance
• Sustainability ensures efficiency in business operations
Suggested business management tools to integrate (other tools may also be integrated)
Decision trees, descriptive statistics, circular business models, Gantt chart (HL only), critical path
analysis (HL only), contribution (HL only), simple linear regression (HL only), Hofstede’s cultural
dimensions (HL only)
Note: All content is SL and HL unless otherwise stated. HL only content is in bold.
5.1 Introduction to operations management Depth of teaching
The role of operations management AO2
5.2 Operations methods Depth of teaching
The following operations methods.
• Job production
• Batch production
• Mass/flow production
• Mass customization
AO3
Syllabus content
33Business management guide
5.3 Lean production and quality management (HL only) Depth of teaching
The following features of lean production.
• Less waste
• Greater efficiency
AO1
The following methods of lean production.
• Continuous improvement (kaizen)
• Just-in-time (JIT)
AO2
Features of cradle to cradle design and manufacturing AO2
Features of quality control and quality assurance AO2
The following methods of managing quality.
• Quality circle
• Benchmarking
• Total quality management (TQM)
AO2
The impact of lean production and TQM on an organization AO3
The importance of national and international quality standards AO2
5.4 Location Depth of teaching
The reasons for a specific location of production AO2
The following ways of reorganizing production, both nationally and internationally.
• Outsourcing/subcontracting
• Offshoring
• Insourcing
• Reshoring
AO3
5.5 Break-even analysis Depth of teaching
Total contribution versus contribution per unit AO2
A break-even chart and the following aspects of break-even analysis.
• Break-even quantity/point
• Profit or loss
• Margin of safety
• Target profit output
• Target profit
• Target price
AO2, AO4
The effects of changes in price or cost on the break-even quantity, profit and margin
of safety, using graphical and quantitative methods
AO2, AO4
Limitations of break-even as a decision-making tool AO3
5.6 Production planning (HL only) Depth of teaching
The local and global supply chain process AO2
The difference between JIT and just-in-case (JIC) AO3
Stock control charts based on the following. AO2, AO4
Syllabus content
34 Business management guide
5.6 Production planning (HL only) Depth of teaching
• Lead time
• Buffer stock
• Reorder level
• Reorder quantity
Capacity utilization rate AO2, AO4
Defect rate AO2, AO4
Labour productivity, capital productivity, productivity rate, operating leverage AO2, AO4
Cost to buy (CTB) AO3, AO4
Cost to make (CTM) AO3, AO4
5.7 Crisis management and contingency planning (HL only) Depth of teaching
The difference between crisis management and contingency planning AO2
The factors that affect effective crisis management.
• Transparency
• Communication
• Speed
• Control
AO2
The impact of contingency planning for a given organization or situation in
terms of:
• cost
• time
• risks
• safety.
AO3
5.8 Research and development (HL only) Depth of teaching
The importance of research and development for a business AO3
The importance of developing goods and services that address customers’
unmet needs (of which the customers may or may not be aware)
AO2
Intellectual property protection; copyrights, patents, trademarks AO2
Innovation: incremental and disruptive AO2
5.9 Management information systems (HL only) Depth of teaching
Data analytics AO1
Database AO1
Cybersecurity and cybercrime AO1
Critical infrastructures, including artificial neural networks, data centres, and
cloud computing
AO2
Virtual reality AO2
The internet of things AO2
Artificial intelligence AO2
Syllabus content
35Business management guide
5.9 Management information systems (HL only) Depth of teaching
Big data AO2
Customer loyalty programmes AO3
The use of data to manage and monitor employees; Digital Taylorism AO3
The use of data mining to inform decision-making AO3
The benefits, risks and ethical implications of advanced computer technologies
(collectively referred to here as “management information systems”) and
technological innovation on business decision-making and stakeholders
AO3
Suggested inquiry statements to explore
• How high standards in operations management could make a business more sustainable.
• Why outsourcing could result in lower quality.
• Why research and development (R&D) could enhance creativity in a business.
• How technology may improve business productivity.
• How digital technology enables new business models to flourish.
• How circular business models can lead to greater resource efficiency.
Suggested theory of knowledge questions
• To what extent are our ideas dependent on our interactions with other people?
• To what extent can the human sciences provide accurate predictions?
• How might the methods used in R&D be limited by ethical considerations?
• Should we hold companies responsible for the applications of products they create?
• Are there new ethical challenges emerging from the increased use of data analytics in business
decision-making?
• To what extent do the classification systems we use in data analytics affect the conclusions that we
reach?
• How might personal prejudices, biases and inequality become “coded into” customer loyalty
programmes?
• To what extent is big data changing what it means to know your customers?
• Does artificial intelligence allow knowledge to reside outside of human knowers?
• What are the moral implications of possessing large amounts of information about consumer
behaviour?
Syllabus content
36 Business management guide
General
Assessment is an integral part of teaching and learning. The most important aims of assessment are that it
should support curricular goals and encourage appropriate student learning. Both external and internal
assessments are used in the Diploma Programme and Career-related Programme. IB examiners mark work
produced for external assessment, while work produced for internal assessment is marked by teachers and
externally moderated by the IB.
There are two main 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 at, or towards the end, of the course of study.
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 Assessment: principles and practice—Quality assessments in a
digital age.
To support teachers in the planning, delivery and assessment of the DP or CP courses, a variety of resources
can be found on the programme resource centre or purchased from the IB store (store.ibo.org). Additional
publications such as specimen papers and markschemes, teacher support materials, subject reports and
grade descriptors can also be found on the programme resource centre. Past examination papers as well as
markschemes can be purchased from the IB store.
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.
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 criterion’s 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
Assessment
Assessment in the Diploma Programme and Career-
related Programme
37Business management guide
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 access arrangements
Inclusive access arrangements are available for candidates with access requirements. Standard assessment
conditions may put candidates with assessment access requirements at a disadvantage by preventing them
from demonstrating their attainment level. Inclusive access arrangements enable candidates to
demonstrate their ability under assessment conditions that are as fair as possible.
The IB publication Access and inclusion policy provides details on all the inclusive access arrangements
available to candidates. The IB publication Learning diversity and inclusion in IB programmes: Removing
barriers to learning 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 publication Diploma
Programme Assessment procedures (updated annually), which includes the general regulations, provides
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 Access and
inclusion policy and Learning diversity and inclusion in IB programmes: Removing barriers to learning.
Assessment in the Diploma Programme and Career-related Programme
38 Business management guide
First assessment 2024
Assessment component Weighting
External assessment (3 hours)
Paper 1: (1 hour and 30 minutes)
Based on a pre-released statement that specifies the context and background for the unseen
case study
Assessment objectives: AO1, AO2, AO3, AO4 (30 marks)
Section A
Syllabus content: Units 1–5 excluding HL extension topics
Students answer all structured questions in this section based on the case study (20 marks)
Section B
Syllabus content: Units 1–5 excluding HL extension topics
Students answer one out of two extended response questions based on the case study (10
marks)
70%
35%
Paper 2: (1 hour and 30 minutes)
Based on unseen stimulus material with a quantitative focus
Assessment objectives: AO1, AO2, AO3, AO4 (40 marks)
Section A
Syllabus content: Units 1–5 excluding HL extension topics
Students answer all structured questions in this section based on the unseen stimulus
material (20 marks)
Section B
Syllabus content: Units 1–5 excluding HL extension topics
Students answer one out of two questions comprised of some structured questions and an
extended response question based on the unseen stimulus material (20 marks)
35%
Internal assessment (20 hours)
This component is internally assessed by the teacher and externally moderated by the IB at
the end of the course.
Business research project
Students produce a research project about a real business issue or problem facing a
particular organization using a conceptual lens. Maximum 1,800 words. (25 marks)
30%
Assessment
Assessment outline—SL
39Business management guide
First assessment 2024
Assessment component Weighting
External assessment (4 hours and 30 minutes)
Paper 1 (1 hour and 30 minutes)
Based on a pre-released statement that specifies the context and background for the unseen
case study
Assessment objectives: AO1, AO2, AO3, AO4 (30 marks)
Section A
Syllabus content: Units 1–5 excluding HL extension topics
Students answer all structured questions in this section based on the case study (20 marks)
Section B
Syllabus content: Units 1–5 excluding HL extension topics
Students answer one out of two extended response questions based on the case study (10
marks)
80%
25%
Paper 2 (1 hour and 45 minutes)
Based on the unseen stimulus material with a quantitative focus
Assessment objectives: AO1, AO2, AO3, AO4 (50 marks)
Section A
Syllabus content: Units 1–5 including HL extension topics
Students answer all structured questions in this section based on the unseen stimulus
material (30 marks)
Section B
Syllabus content: Units 1–5 including HL extension topics
Students answer one out of two questions comprised of some structured questions and an
extended response question based on the unseen stimulus material (20 marks)
30%
Paper 3 (1 hour and 15 minutes)
Based on unseen stimulus material about a social enterprise
Syllabus content: Unit 1–5 including HL extension topics
Assessment objectives: AO1, AO2, AO3, AO4 (25 marks)
Students answer one compulsory question based on the unseen stimulus material (25 marks)
25%
Internal assessment (20 hours)
This component is internally assessed by the teacher and externally moderated by the IB at
the end of the course.
Business research project
Students produce a research project about a real business issue or problem facing a
particular organization using a conceptual lens. Maximum 1,800 words. (25 marks)
20%
Assessment
Assessment outline—HL
40 Business management guide
Three different methods are used to assess students.
• Analytic markschemes specific to each examination paper
• Markbands
• Assessment criteria
The markbands and assessment criteria are published in this guide.
• For paper 1, there are markbands and markschemes.
• For paper 2, there are markbands and markschemes.
• For paper 3, there are assessment criteria and markschemes
The markbands and assessment criteria are related to the assessment objectives established for the
business management course and the individuals and societies grade descriptors. The markschemes are
specific to each examination.
Written papers
The external assessment of the business management course consists of two examination papers at SL and
three examination papers 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 70% to the final assessment at SL and 80% to the final assessment at
HL.
In common with all DP examination papers, students at SL and HL are given five minutes of reading time
before they begin answering the papers.
Paper 1 overview
Paper 1 is the same for SL and HL students. Three months prior to the examination the IB will release a
statement with two elements. The first element will be a small number of topics that provide context to the
case study. These topics will not be topics that are in the guide but ones that students are asked to research
for approximately five hours. Topics in the pre-released statement will build on topics contained in the
syllabus. The aim is to assess students’ knowledge around important contemporary business topics that
could not have been anticipated when the guide was written.
The second element will be the first 200 words, approximately, of the case study itself. The release of this
portion of the case study will provide additional context and will reduce the number of words to be read
during the examination period. The aim of the paper is to assess students’ knowledge of the business
management syllabus. The examination is based upon one case study, of approximately 800 to 1,000
words, that students do not see before the examination. Most questions will be qualitative, although some
minor calculations could be part of the assessment.
Paper 2 overview
Paper 2 will be based on stimulus material. SL and HL students will sit different examinations, but these will
be similar in intent and form. The aim of the examination is to assess students’ knowledge of the business
management syllabus. Most questions will be quantitative, though some questions may not have a
quantitative element. Students will receive an examination booklet with questions based on the stimulus
material seen for the first time during the examination. The stimulus material will be presented in parts.
Each part has a question; students will read each part and answer the question before reading the next part
Assessment
External assessment
41Business management guide
and answering the question, and so on. The stimulus material will be a combination of written and
diagrammatic stimulus such as charts and infographics. For SL only, one of the stimulus options in section B
of the examination may be on a social enterprise. HL students will be assessed on a social enterprise in
paper 3. Section A will be assessed against AO1, AO2 and AO4 levels whereas Section B will be assessed
against all four levels including AO3.
Paper 3 overview
Paper 3 will be about a social enterprise and requires students to identify and describe a human need and
the potential organizational challenges facing the social entrepreneur wanting to meet this need. Further
to this, students are required to write a decision-making document that includes a business
recommendation. Only HL students will sit this examination. The paper will consist of stimulus followed by
questions. The stimulus material will consist of a short introduction to an organization, supported by a
visual representation of a product, and five or six excerpts from various documents (such as emails, Twitter
feeds, newspaper articles, and so on).
The paper will have the following three tiers of questions.
• AO1 questions—assesses students’ ability to describe the human need in the stimulus material.
• AO2 questions—assesses students’ ability to explain the key challenges facing the social entrepreneur
or social enterprise in the setting of the stimulus material.
• AO3/AO4 questions—assesses students’ ability to recommend a plan for the organization in meeting
the identified human need. In doing so, students will be required to demonstrate knowledge and
understanding, and their ability to explain, synthesize and evaluate evidence, and formulate a
recommendation.
Please refer to the Business management teacher support material for further guidance on how to prepare for
the external assessments.
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”, and so on. 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 appendices.
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
explored in class and illustrate their answers with examples. In this way, students highlight their
understanding of how business management tools 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” section.
External assessment
42 Business management guide
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 annually
revised version of Calculators guidance for examinations booklet.
External assessment details—SL
Paper 1
Duration: 1 hour 30 minutes
Weighting: 35%
This paper is the same for both SL and HL. It is divided into two sections with questions based on the pre-
released statement issued to students three months before the examination and the unseen case study
issued during the examination. Section A has structured questions while section B has extended response
questions.
Students are expected to demonstrate the following assessment objectives.
Assessment objective Section A Section B
AO1—knowledge and understanding √ √
AO2—application and analysis √ √
AO3—synthesis and evaluation √
AO4—use and application of
appropriate skills
√ √
Marks (maximum per section) 20 10
Maximum marks for paper 1 30
Questions in this paper are drawn from units 1 to 5 of the syllabus excluding the HL extension material and
topics studied at HL only.
Section A
• Students answer all structured questions in this section.
• The command terms used in each part indicate the depth required.
• The marks available for each part are indicated on the examination paper.
• Marks are allocated using an analytic markscheme.
• This section is worth a total of 20 marks.
Section B
• Students answer one question from a choice of two.
• The command terms used in each part indicate the depth required.
• The marks available for each part are indicated on the examination paper.
• Each question is worth a total of 10 marks.
• Marks are allocated using a combination of an analytic markscheme and markbands.
• This section is worth a total of 10 marks.
Paper 2
Duration: 1 hour 30 minutes
External assessment
43Business management guide
Weighting: 35%
The structure of this paper is the same as HL paper 2. However, questions may be the same as, or different
from, the HL paper 2 questions. SL students answer fewer questions.
Students are expected to demonstrate the following assessment objectives.
Assessment objective Section A Section B
AO1—knowledge and understanding √ √
AO2—application and analysis √ √
AO3—synthesis and evaluation √
AO4—use and application of
appropriate skills
√ √
Marks (maximum per section) 20 20
Maximum marks for paper 2 40
Questions in this paper are drawn from units 1 to 5 of the syllabus excluding the HL extension material and
topics studied at HL only.
Section A
• The questions have a quantitative focus.
• Students answer all structured questions in this section.
• The questions are subdivided into parts.
• The command terms used in each part indicate the depth required.
• The marks available for each part are indicated on the examination paper.
• Marks are allocated using an analytic markscheme.
• This section is worth a total of 20 marks.
Section B
• Students answer one question from a choice of two.
• The question is subdivided into parts; structured questions and an extended response question.
• The command terms used in each part indicate the depth required.
• The structured questions are worth a total of 10 marks.
• Each extended response question is worth 10 marks.
• The marks available for each part are indicated on the examination paper.
• Marks are allocated using a combination of an analytic markscheme and markbands.
• This section is worth a total of 20 marks.
External assessment markbands—SL
Papers 1 and 2
In addition to an analytic markscheme specific to the question papers, markbands are used to allocate
marks in section B in papers 1 and 2 for the 10-mark extended response question.
Marks Level descriptor
0 The work does not reach a standard described by the descriptor.
1–2 • Little understanding of the demands of the question.
External assessment
44 Business management guide
Marks Level descriptor
• Little use of business management tools and theories; any tools and theories that are
used are irrelevant or used inaccurately.
• Little or no reference to the stimulus material.
• No arguments are made.
3–4 • Some understanding of the demands of the question.
• Some use of business management tools and theories, but these are mostly lacking
in accuracy and relevance.
• Superficial use of information from the stimulus material, often not going beyond the
name of the person(s) or name of the organization.
• Any arguments made are mostly unsubstantiated.
5–6 • The response indicates an understanding of the demands of the question, but these
demands are only partially addressed.
• Some relevant and accurate use of business management tools and theories.
• Some relevant use of information from the stimulus material that goes beyond the
name of the person(s) or name of the organization but does not effectively support
the argument.
• Arguments are substantiated but are mostly one-sided.
7–8 • Mostly addresses the demands of the question.
• Mostly relevant and accurate use of business management tools and theories.
• Information from the stimulus material is generally used to support the argument,
although there is some lack of clarity or relevance in some places.
• Arguments are substantiated and have some balance.
9–10 • Clear focus on addressing the demands of the question.
• Relevant and accurate use of business management tools and theories.
• Relevant information from the stimulus material is integrated effectively to support
the argument.
• Arguments are substantiated and balanced, with an explanation of the limitations of
the case study or stimulus material.
External assessment details—HL
Paper 1
Duration: 1 hour 30 minutes
Weighting: 25%
This paper is the same for both SL and HL. It is divided into two sections with questions based on the pre-
released statement issued to students three months before the examination and the unseen case study
issued during the examination. Section A has structured questions while section B has extended response
questions.
Students are expected to demonstrate the following assessment objectives.
Assessment objective Section A Section B
AO1—knowledge and understanding √ √
AO2—application and analysis √ √
AO3—synthesis and evaluation √
External assessment
45Business management guide
Assessment objective Section A Section B
AO4—use and application of
appropriate skills
√ √
Marks (maximum per section) 20 10
Maximum marks for paper 1 30
Questions in this paper are drawn from units 1 to 5 of the syllabus excluding the HL extension material and
topics studied at HL only.
Section A
• Students answer all structured questions in this section.
• The command terms used in each part indicate the depth required.
• The marks available for each part are indicated on the examination paper.
• Marks are allocated using an analytic markscheme.
• This section is worth a total of 20 marks.
Section B
• Students answer one question from a choice of two.
• The command terms used in each part indicate the depth required.
• The marks available for each part are indicated on the examination paper.
• Each question is worth a total of 10 marks.
• Marks are allocated using a combination of an analytic markscheme and markbands.
• This section is worth a total of 10 marks.
Paper 2
Duration: 1 hour 45 minutes
Weighting: 30%
The structure of this paper is the same as SL paper 2. However, questions may be the same as, or different
from, the SL paper 2 questions. HL students answer more questions.
Students are expected to demonstrate the following assessment objectives.
Assessment objective Section A Section B
AO1—knowledge and understanding √ √
AO2—application and analysis √ √
AO3—synthesis and evaluation √
AO4—use and application of
appropriate skills
√ √
Marks (maximum per section) 30 20
Maximum marks for paper 2 50
Questions in this paper are drawn from units 1 to 5 of the syllabus including the HL extension material and
topics studied at HL only.
Section A
• The questions have a quantitative focus.
• Students answer all structured questions in this section.
• The questions are subdivided into parts.
External assessment
46 Business management guide
• The command terms used in each part indicate the depth required.
• The marks available for each part are indicated on the examination paper.
• Marks are allocated using an analytic markscheme.
• This section is worth a total of 30 marks.
Section B
• Students answer one question from a choice of two.
• The question is subdivided into parts; structured questions and an extended response question.
• The command terms used in each part indicate the depth required.
• The structured questions are worth a total of 10 marks.
• Each extended response question is worth 10 marks.
• The marks available for each part are indicated on the examination paper.
• Marks are allocated using a combination of an analytic markscheme and markbands.
• This section is worth a total of 20 marks.
Paper 3
Duration: 1 hour 15 minutes
Weighting: 25%
This is an HL only paper.
Students are expected to demonstrate the following assessment objectives.
Assessment objective Question 1 Question 2 Question 3
AO1—knowledge and understanding √ √ √
AO2—application and analysis √ √
AO3—synthesis and evaluation √
AO4—use and application of
appropriate skills
√
Marks (maximum per question) 2 6 17
Maximum marks for paper 3 25
The question in this paper is drawn from units 1 to 5 of the syllabus including the HL extension material and
topics studied at HL only.
• Students answer the three compulsory questions given based on the stimulus material.
• The command terms used in each question indicate the depth required.
• The marks available for each question are indicated on the examination paper.
• Marks are allocated using a combination of an analytic markscheme and the assessment criteria.
External assessment markbands—HL
Papers 1 and 2
In addition to an analytic markscheme specific to the question papers, markbands are used to allocate
marks in section B in papers 1 and 2 for the 10-mark extended response question.
Marks Level descriptor
0 The work does not reach a standard described by the descriptor.
External assessment
47Business management guide
Marks Level descriptor
1–2 • Little understanding of the demands of the question.
• Little use of business management tools and theories; any tools and theories that are
used are irrelevant or used inaccurately.
• Little or no reference to the stimulus material.
• No arguments are made.
3–4 • Some understanding of the demands of the question.
• Some use of business management tools and theories, but these are mostly lacking
in accuracy and relevance.
• Superficial use of information from the stimulus material, often not going beyond the
name of the person(s) or name of the organization.
• Any arguments made are mostly unsubstantiated.
5–6 • The response indicates an understanding of the demands of the question, but these
demands are only partially addressed.
• Some relevant and accurate use of business management tools and theories.
• Some relevant use of information from the stimulus material that goes beyond the
name of the person(s) or name of the organization but does not effectively support
the argument.
• Arguments are substantiated but are mostly one-sided.
7–8 • Mostly addresses the demands of the question.
• Mostly relevant and accurate use of business management tools and theories.
• Information from the stimulus material is generally used to support the argument,
although there is some lack of clarity or relevance in some places.
• Arguments are substantiated and have some balance.
9–10 • Clear focus on addressing the demands of the question.
• Relevant and accurate use of business management tools and theories.
• Relevant information from the stimulus material is integrated effectively to support
the argument.
• Arguments are substantiated and balanced, with an explanation of the limitations of
the case study or stimulus material.
External assessment criteria—HL
Paper 3
For question 1 and question 2 an analytic markscheme will be used. For question 3 the following
assessment criteria will be used.
Criterion A: Use of resource materials
To what extent does the student use the resource materials provided to effectively support the
recommended plan of action?
Marks Level descriptor
0 The response does not reach a standard described by the descriptors below.
1 The response makes limited reference to the resource materials provided or the resources
identified have been used ineffectively to support the recommended plan of action.
External assessment
48 Business management guide
Marks Level descriptor
2 The response makes some reference to the resource materials provided or the resources
identified have been used in a superficial way to support the recommended plan of
action.
3 The response makes reference to most of the resource materials provided to support the
recommended plan of action.
4 The response makes reference to all resource materials provided to effectively support the
recommended plan of action.
Criterion B: Business management tools and theories
To what extent does the student’s plan of action effectively apply appropriate business management tools
and theories?
Marks Level descriptor
0 The work does not reach a standard described by the descriptors below.
1 The response demonstrates limited application of appropriate business management
tools and theories.
2 The response superficially applies appropriate business management tools and theories.
3 The response satisfactorily applies appropriate business management tools and theories.
4 The response effectively applies appropriate business management tools and theories.
Criterion C: Evaluation
To what extent does the student effectively evaluate the expected impact of their plan of action on the
relevant areas of the business?
Marks Level descriptor
0 The work does not reach a standard described by the descriptors below.
1–2 The response is largely descriptive with limited analysis or evaluation of the expected
impact of their plan of action. There is limited reference to the relevant areas of the
business.
3–4 The response analyses the expected impact of their plan of action with some reference to
the relevant areas of the business. There is some evidence of evaluation but it is not
sustained.
5–6 The student effectively evaluates the expected impact of their plan of action on the
relevant areas of the business and considers the trade-offs between those areas.
Criterion D: Sequencing of ideas and plan of action
To what extent are the student’s ideas and plan of action sequenced in a clear and coherent manner?
Marks Level descriptor
0 The response does not reach a standard described by the descriptors below.
1 The response is limited in its sequencing of ideas and plan of action.
2 The response consists of ideas and a plan of action but these are not always sequenced in
a clear manner.
External assessment
49Business management guide
Marks Level descriptor
3 The response effectively sequences appropriate ideas and a plan of action in a clear and
coherent manner.
External assessment
50 Business management guide
Purpose of internal assessment
Internal assessment (IA) 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 IA requirements at SL and at HL are the same. Students are expected to produce a business research
project about a real issue or problem facing a particular organization using a conceptual lens.
Guidance and authenticity
The business research project (SL/HL) submitted for the IA must be the student’s own work. However, it is
not the intention that students should decide upon a title or topic and be left to work on the IA 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; 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 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 integrity, 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, the difference between collaboration and collusion must be
clear to all students.
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 publications Academic integrity,
Diploma Programme: From principles into practice and the relevant articles in the “General regulations”
section in Diploma Programme Assessment procedures.
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 student’s initial proposal
• The first draft of the written work
• The references cited
Assessment
Internal assessment
51Business management guide
• 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 www.turnitin.com
The same piece of work cannot be submitted to meet the requirements of both the IA and the EE.
Time allocation
IA is an integral part of the business management course, contributing 30% to the final assessment in the
SL course and 20% to the final assessment in the HL course. 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 20 hours (SL/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 IA
• class time for students to work on the IA component and ask questions
• time for consultation between the teacher and each student
• time to review, monitor progress and to check authenticity.
Requirements and recommendations
It is important for the integrity of the moderation process that the IA 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 the IA, 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.
• The same 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.
• When assessing a student’s 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 student’s work should be chosen.
• Where there are two or more marks available within a level, teachers should award the upper marks if
the student’s 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 student’s 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.
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52 Business management guide
• 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 details—SL and HL
Business research project
Duration: 20 hours
Weighting: 30% SL and 20% HL
Introduction
The IA is a research project in which students apply appropriate business management tools and theories
to a real organizational issue or problem using a conceptual lens.
Requirements
The students are required to:
• select a real business issue or problem for their business research project that relates to any part of the
syllabus
• refer directly to a single business organization but may consider industry-wide issues that impact on
that organization
• provide a research question for the business research project that could either be forward looking or
backward looking
• base their research on primary and/or secondary research, selected for its suitability, depth and
breadth
• attach to the business research project three to five supporting documents from which the majority of
the information for the project has been obtained
• produce a business research project that does not exceed 1,800 words
• fully reference all supporting documents and additional sources and include them in a bibliography.
Key concept
The business research project must use only one of the four key concepts (change, creativity, ethics or
sustainability) as a lens through which to analyse the IA. This key concept may or may not be stated in the
research question; however, it must be clearly indicated on the title page which key concept was used. Five
marks are available for the identification and use of a relevant key concept; for these marks to be awarded,
students must make explicit the conceptual lens they are applying to their work.
Role of teacher’s guidance
With the teacher’s support, students should choose an issue or problem for investigation, and develop a
title in the form of a research question.
The teacher should approve 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.
Internal assessment
53Business management guide
Throughout the IA process, students and the teacher should engage in dialogue supportive of the students’
work. The teacher should comment on the students’ work plans and first draft of the project 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 business research projects reflect the students’ own individual research,
interpretation and analysis.
If a student also writes an EE in business management, it is the responsibility of the teacher to ensure that
the student’s IA and EE are distinct pieces of work using different research approaches. As there are
different requirements and assessment criteria, students should choose different organizations for these
different tasks.
Examples of appropriate questions
Examples of appropriate questions for the business research project might be as follows.
• Should company Y change its manufacturing to outsourcing?
The project could then examine areas within business management such as operations management
and human resource management using change as a conceptual lens.
• How can airline X successfully target segment Y?
The project could then examine business management topics such as market segmentation,
promotion, and measure of financial success using sustainability as a conceptual lens.
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.
Relevant supporting documents must be contemporary in nature and published within a maximum of
three years prior to the submission of the business research project to the IB. Submission of the business
research project occurs in April or October 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 or audio material. The
transcript must provide the essential points of the video or audio file used for the purposes of the project.
Only video or audio material published by a reliable organization should be used (such as the business
organization itself, an organization commissioned by the business or an NGO). Particular attention needs to
be paid to referencing the original video or audio file so that this may be traced.
The project can be based on primary and/or secondary sources that will form the basis of the supporting
documents.
Primary sources provide first-hand information or direct evidence for the research. Examples of primary
sources include:
• face-to-face and online surveys/questionnaires; students should include a blank copy of the
questionnaire and a tally/summary of responses
• face-to-face and online interviews; students should include a copy of the interview questions and
summary of the responses
• focus group discussions; students should include a copy of the focus group questions and summary of
the findings.
Secondary sources provide second-hand information or already existing data for the research. Examples of
secondary sources include:
• articles from the local, national or international press
• business accounts
• business plans
Internal assessment
54 Business management guide
• extracts from company websites
• transcripts of a relevant audio-visual file
• financial reports
• government and other statistics
• journal publications
• market research surveys
• mission statements.
Students must select three to five of their own supporting documents, which must not be provided to the
student by the teacher. Providing supporting documents with many pages is highly discouraged and hence
it is recommended that no one supporting document should exceed the equivalent of five A4 pages.
Students must highlight the parts of each supporting document that relate directly to their project. 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 project. These should be located at the
appropriate section at the end of the document.
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. Refer to the IB publication Effective citing
and referencing for further guidance.
Any additional sources such as textbooks and class notes must be referenced but will not be accepted as
supporting documents.
Structure
The business research project is intended to be a structured piece of well-organized writing that effectively
presents findings and conclusions. There are many different ways that a student might approach the
project, but students should ensure that the submitted business research project evidences the following
elements.
• An introduction that sets the context. The introduction should briefly demonstrate some background
information about the business organization, give a clear outline of the issue or problem under
investigation and explain the methodology used to investigate this issue or problem.
• The main body of the project in which findings from the supporting documents should be presented
and analysed with the help of relevant business management tools and theories including integrating
the key concept. 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 research
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?
• A conclusion that answers the research question. In the conclusion, the research question should be
explicitly answered. The conclusion should not introduce facts or arguments that have not been
discussed in previous sections of the project. Rather, it is good practice to include those aspects of the
research question that have not been fully answered in the project or that might need further
investigation in order to be judged more effectively.
Presentation
Effectively presented projects require a title page, an accurate table of contents page, appropriate headings
and sub-headings and numbered pages.
For the presentation of references and bibliography, please see the information on acknowledging the
ideas or work of another person in the “The Diploma Programme” section of this subject guide.
Internal assessment
55Business management guide
Word count
The business research project must not exceed 1,800 words. The word count must be included on the cover
page of the project. If the word limit is exceeded, the teacher’s assessment must be based on the first 1,800
words.
Note: Moderators will not read beyond 1,800 words for the project.
The following are not included in the word count.
• Acknowledgments
• Contents page
• Tables of statistical data
• Diagrams or figures
• Equations, formulae and calculations
• Supporting documents
• Citations (which, if used, must be in the body of the project)
• References (which, if used, must be in the footnotes/endnotes)
• Bibliography
Please note that footnotes or 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 project,
which is then linked to the full reference in the bibliography.
Please refer to the Business management teacher support material (TSM) for further guidance on how to
prepare for the IA.
Internal assessment criteria
The business research project 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 student’s work chosen.
There are seven assessment criteria for the business research project.
• Criterion A: Integration of a key concept
• Criterion B: Supporting documents
• Criterion C: Selection and application of tools and theories
• Criterion D: Analysis and evaluation
• Criterion E: Conclusions
• Criterion F: Structure
• Criterion G: Presentation
Criterion A: Integration of a key concept
To what extent does the student effectively integrate the analysis of the connection between the key
concept and the organization under study throughout the internal assessment?
Marks Level descriptor
0 Either the work does not reach a standard described by the descriptors below or the key
concept identified is neither change, creativity, ethics nor sustainability.
Internal assessment
56 Business management guide
Marks Level descriptor
1 The student demonstrates knowledge of the key concept.
2 The student describes the connection between the key concept and the organization
under study.
3 The student analyses the connection between the key concept and the organization
under study.
4 The student partially integrates the analysis of the connection between the key concept
and the organization under study in the internal assessment.
5 The student effectively integrates the analysis of the connection between the key concept
and the organization under study throughout the internal assessment.
Criterion B: Supporting documents
To what extent does the student select three to five relevant supporting documents that address the
research question in appropriate depth and breadth?
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 There are three to five supporting documents that are generally relevant but some lack
depth.
3 There are three to five supporting documents that are relevant and sufficiently in-depth.
4 There are three to five supporting documents that are relevant, sufficiently in-depth and
provide a range of ideas and views.
Criterion C: Selection and application of tools and theories
To what extent does the student effectively select and apply business management tools and theories that
are relevant to the research question?
Marks Level descriptor
0 The work does not reach a standard described by the descriptors below.
1 There is a limited selection and application of business management tools and theories or
these business management tools and theories are not relevant to the research question.
2 There are some business management tools and theories selected and applied to the
research question. Their relevance to the research question is superficial.
3 The business management tools and theories are adequately selected and applied to the
research question. Their relevance to the research question is not always clear.
4 The business management tools and theories are effectively selected and applied with
clear relevance to the research question.
Criterion D: Analysis and evaluation
To what extent does the student effectively select and use data from the supporting documents in their
analysis and evaluation of the research question?
Internal assessment
57Business management guide
Marks Level descriptor
0 The work does not reach a standard described by the descriptors below.
1 There is limited selection and use of data from the supporting documents with no analysis
and evaluation of the research question.
2 The selection and use of data from the supporting documents is superficial, leading to
limited analysis and evaluation of the research question.
3 The selection and use of data from the supporting documents is adequate with some
analysis and evaluation of the research question.
4 The selection and use of data from the supporting documents is sufficient, leading to a
mostly effective analysis and evaluation of the research question with some integration of
ideas.
5 The selection and use of data from the supporting documents is effective, leading to a
thorough analysis and evaluation of the research question. There is a sustained
integration of ideas with consideration of the assumptions underpinning the arguments
and implications.
Criterion E: Conclusions
To what extent is the student’s conclusion consistent with the evidence presented and explicitly answers
the research 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 research
question.
Criterion F: Structure
To what extent is the student’s research project organized using an appropriate structure?
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
To what extent is the student’s business research project effectively presented with the use of required
elements including a title page, an accurate table of contents, appropriate headings and sub-headings, 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 required elements of a well-presented research project is missing.
2 All of the required elements of a well-presented research project are included.
Internal assessment
58 Business management guide
Where profit and loss accounts, balance sheets, cash flow forecasts and budgets are given in case studies or
examination questions, they will be presented in the format shown in figure 6–11. Students should be
familiar with these layouts. Please note that a profit and loss account is also known as an income statement.
The term to be used in assessment in the presentation of the profit and loss account should be statement
of profit or loss.
The term to be used in assessment in the presentation of the balance sheet should be statement of
financial position.
Figure 6
Statement of profit or loss: Profit-making entity
Appendices
Presentation of nancial statements
59Business management guide
Figure 7
Statement of profit or loss: Non-profit entity
Presentation of nancial statements
60 Business management guide
Figure 8
Statement of financial position: Profit-making entity
Presentation of nancial statements
61Business management guide
Figure 9
Statement of financial position: Non-profit entity
Presentation of nancial statements
62 Business management guide
Figure 10
Cash flow forecast: Profit and non-profit entity
Figure 11
Budget: Profit and non-profit entity
Presentation of nancial statements
63Business management guide
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)
Grossprofitmargin =
gross profit
sales revenue
× 100
Profitmargin =
profitbeforeinterestandtax
salesrevenue
× 100
Return oncapitalemployed(ROCE) =
profitbeforeinterestandtax
capitalemployed
× 100
where capitalemployed = non‐currentliabilities + equity
Liquidity ratios (SL/HL)
Currentratio =
currentassets
currentliabilities
Acidtest(quick)ratio =
currentassets−stock
currentliabilities
Efficiency ratios (HL only)
Stockturnover(numberoftimes) =
costofsales
averagestock
or
Stockturnover(numberofdays) =
averagestock
costofsales
× 365
where
averagestock =
openingstock+closingstock
2
Debtordaysratio(numberofdays) =
debtors
totalsalesrevenue
× 365
Creditordaysratio(numberofdays) =
creditors
costofsales
× 365
Gearingratio =
non‐currentliabilities
capitalemployed
× 100
where capitalemployed = non‐currentliabilities + equity
Appendices
Formulae
64 Business management guide
Other formulae (SL/HL)
Investment appraisal
SL/HL
Averagerateofreturn(ARR) =
(totalreturns − capitalcost) ÷ yearsofuse
capitalcost
× 100
HL only
Netpresentvalue(NPV) =
∑
presentvaluesofreturn − originalcost
Capacity utilization and productivity (HL only)
Capacityutilizationrate =
actualoutput
productivecapacity
× 100
Productivityrate =
totaloutput
totalinput
× 100
Formulae
65Business management guide
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
Appendices
Discount tables (HL only)
66 Business management guide
Students should be familiar with the following key terms and phrases used 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
objective level
Definition
Analyse AO2 Break down in order to bring out the essential elements or structure.
Annotate AO4 Add brief notes to a diagram or graph.
Apply AO2 Use an idea, equation, principle, theory or law in relation to a given
problem or issue.
Calculate AO4 Obtain a numerical answer showing the relevant stages in the
working.
Comment AO2 Give a judgment based on a given statement or result of a calculation.
Compare AO3 Give an account of the similarities between two (or more) items or
situations, referring to both (all) of them throughout.
Compare and
contrast
AO3 Give an account of similarities and differences between two (or more)
items or situations, referring to both (all) of them throughout.
Complete AO4 Add missing information/data.
Construct AO4 Display information in a diagrammatic or logical form.
Contrast AO3 Give an account of the differences between two (or more) items or
situations, referring to both (all) of them throughout.
Define AO1 Give the precise meaning of a word, phrase, concept or physical
quantity.
Demonstrate AO2 Make clear by reasoning or evidence, illustrating with examples or
practical application.
Describe AO1 Give a detailed account.
Determine AO4 Obtain the only possible answer.
Discuss AO3 Offer a considered and balanced review that includes a range of
arguments, factors or hypotheses. Opinions or conclusions should be
presented clearly and supported by appropriate evidence.
Distinguish AO2 Make clear the differences between two or more concepts or items.
Draw AO4 Represent by means of a labelled, accurate diagram 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.
Evaluate AO3 Make an appraisal by weighing up the strengths and limitations.
Examine AO3 Consider an argument or concept in a way that uncovers the
assumptions and interrelationships of the issue.
Appendices
Glossary of command terms
67Business management guide
Command term Assessment
objective level
Definition
Explain AO2 Give a detailed account including reasons or causes.
Identify AO1 Provide an answer from a number of possibilities.
Justify AO3 Give valid reasons or evidence to support an answer or conclusion.
Label AO4 Add labels to a diagram.
List AO1 Give a sequence of brief answers with no explanation.
Outline AO1 Give a brief account or summary.
Plot AO4 Mark the position of points on a diagram.
Prepare AO4 Put given data or information from a stimulus/source into a suitable
format.
Recommend AO3 Present an advisable course of action with appropriate supporting
evidence/reason in relation to a given situation, problem or issue.
State AO1 Give a specific name, value or other brief answer without explanation
or calculation.
Suggest AO2 Propose a solution, hypothesis or other possible answer.
To what extent AO3 Consider the merits or otherwise of an argument or concept. Opinions
and conclusions should be presented clearly and supported with
appropriate evidence and sound argument.
Glossary of command terms
68 Business management guide
Refer to the “Glossary” section in the Business management teacher support material.
Appendices
Glossary of subjec t-specic terms
69Business management guide
This bibliography lists the principal works used to inform the curriculum review. It is not an exhaustive list
and does not include all the literature available: judicious selection was made in order to better advise and
guide teachers. This bibliography is not a list of recommended textbooks.
Backström-Widjeskog, B. 2010. “Teachers’ thoughts on entrepreneurship education”. In Skogen, K and
Sjøvoll, J (Eds), Creativity and innovation: Preconditions for Entrepreneurial Education. Pp 107–120. Trondheim,
Norway. Tapir Academic Press.
Barrett, T. 2005. “What is problem-based learning?” In O’Neill, G, Moore, S and McMullin, B (Eds). Emerging
Issues in the Practice of University Learning and Teaching. Pp 55–66. Dublin, Ireland. All Ireland Society for
Higher Education (AISHE).
Bhuyan, MS, Raju, V and Phung, SP. 2019. “Social Business and Entrepreneurship Development: A Critical
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