HL BUSINESS MANAGEMENT

Syllabus Outline
Unit 1: Business organization and environment

↙ 1.1 Introduction to business management HL ONLY

The role of businesses in combining human, physical and financial resources to

create goods and services.

 Inputs
 Outputs
 Processes of a business
The main business functions and their roles:

 Human resources
 Finance and accounts
 Marketing
 Operations
Primary, secondary, tertiary and quaternary sectors Analyze the impact on business
activity of changes in economic
The nature of business activity in each sector and the impactof sectoral change on structure
business activity

The role of entrepreneurship (and entrepreneur) and intrapreneurship (and

intrapraneur) in overall business activity

Reasons for starting up a business or enterprise and finding a market opportunity

Common steps in the process of starting up a business or an enterprise

Problems that a new business or enterprise may face

The elements of a business plan Analyze and interpret business

plans.

↙ 1.2 Types of organizations

Distinction between the private and public sectors Analyze the relationship between
organizations in the private and
public sectors

The main features of the following types of for-­­profit (commercial) organizations:

 Sole traders
 Partnerships
 Companies/corporations
The main featured of the following types of for-­­profit social enterprises: Explain the nature of public-­­
private partnerships.
 Cooperatives
 Microfinance providers Analyze the costs and benefits of
 Public-­­private partnerships (PPP) cooperation between the public and
 private sector.

The main features of the following types of non-­­profit social enterprises:

 Non-­­governmental organizations (NGOs)

  Charities
↙ 1.3 Organizational objectives

Vision statement and mission statement

Aims, objectives, strategies and tactics, and their relationships

The need for organizations to change objectives and innovative in response to

changes in internal and external environments

Ethical objectives and corporate social responsibility (CSR)  Discuss why a firm’s view of
it social responsibilities may
 change over time.
 Discuss why attitudes
The reasons why organizations set ethical objectives and the impact of towards social
implementing them responsibility may
 change over time.
 Analyze the impact that
changes in societal norms
The evolving role and nature of CSR have on the way that firms
behave in a national and
 international context.
 Analyze the reasons why
firms may choose different
strategies towards their
social responsibilities.
SWOT analysis of a given organization

Ansoff matrix for different growth strategies of a given organization

↙ 1.4 Stakeholders HL ONLY

The interests of internal stakeholders

 Employees
 Managers
 Shareholders
The interests of external stakeholders

 Suppliers
 Customers
 Special Interest Groups
 Competitors
Possible areas of mutual benefit and conflict between stakeholders’ interests Evaluate possible ways to overcome
stakeholder conflict.

↙ 1.5 External environment

 STEEPLE analysis of a given organization

Consequences of a change in any of the STEEPLE factors for a business’s objectives

and strategy

↙ 1.6 Growth and evolution

Economies and diseconomies of scale

The merits of small versus large organizations

The difference between internal and external growth Evaluate internal and external
growth strategies as methods
of business expansion.
The following external growth methods

 Mergers and acquisitions (M&As) and takeovers Examine how Porter’s generic
 Joint ventures strategies may provide a framework
 Strategic alliances
for building competitive advantage.
 Franchising
The role and impact of globalization on the growth and evolution of businesses

Reasons for the growth of multinational companies (MNCs)

The impact of MNCs on the host countries

↙ 1.7 Organizational planning tools (HL)

The following planning tools in a decision making process: The following planning tools in a
decision making process:
 Scientific versus intuitive decision making process
  Fishbone diagram

  Decision tree
  Force field analysis
  Gantt chart
 The value to an organization of these

 planning tools.

↙ 1.8 Change and the management of change

 Causes of change
 Resistance to change
 Modelling change
  Lewin’s forced field analysis
 Strategies to reduce the
impact of change and
resistance to change.
Unit 2: Human Resource Management

↙ 2.1 Functions and evolution of human resources management. HL ONLY

Human resource planning (workforce planning)

Labor turnover

Internal and external factors that influence human resource planning (such as
demographic change, change in labor mobility, new communication technologies)

Common steps in the process of recruitment

Following types of training:  Analyze the impact on the

firm of legal employment
 On the job (induction and mentoring)  rights.
 Off the job  Examine how recruitment,
 Cognitive appraisal, training and
 Behavioral dismissal and redundancies
enable the firm to achieve
workforce planning targets.
The following types of appraisals:

 Formative
 Summative
 360 degree feedback
 Self-­­appraisal
Common steps in the process of dismissal and redundancy

How work patterns, practices and preferences change and how they affect the
employer and employees (teleworking, flextime, migration for work)

Outsourcing, off shoring and re-­­shoring as human resource strategies.

How innovation, ethical considerations and cultural differences may influence

human resource practices and strategies in an organization.

↙ 2.2 Organizational structure

The following terminology to facilitate understanding of different types of  Explain how organizational
organizational structures: structures affect employee
motivation, communication
 Delegation  and performance
 Span of control  Discuss factors influencing
 Levels of hierarchy the degree of centralization
 Chain of command and decentralization.
 Bureaucracy 
 
 Centralization 
 Decentralization 
 De-­­layering 
The following types of organizational charts:  Discuss the development of
more flexible organizational
 Flat/horizontal  structures.
 Tall/vertical  Evaluate the role and
 Hierarchical importance of the
 By product informal organization.
  By function
 By region
Changes in organizational structures (such as project based organization, Handy’s  Analyze the reasons for
Shamrock Org) changes in work patterns
and practices and the
consequences of these
changes for employers and
employees, for example
working from home,
teleworking and flextime.

 Apply appropriate
management theories such
as Handy’s shamrock
organization.
How cultural differences and innovation in communication technologies may impact
on communication in an organization.

↙ 2.3 Leadership and management

They key functions of management

Management versus leadership Key functions of management,

applying theories of Fayol, Handy,
and Drucker

The following leadership styles Trait and situation theory – results of

skills and abilities or circumstances
 Autocratic face
 Paternalistic
 Democratic
 Laissez-­­faire
 Situational Contingency theory – Likert, Fiedler,
Blake and Mouton, Tannenbaum and
Schmidt.

How ethical considerations and cultural differences may influence leadership and
management styles in an organization.

↙ 2.4 Motivation HL ONLY

The following motivation theories: Apply the content theories of Mayo

and McClelland
  Taylor
 Maslow Process theories:
 Herzberg (motivation – hygiene theory)
 Adams (equity theory)  Expectancy Theory
 Pink  Equity Theory
Apply theories of writers such as
Vroom and Adams.

The following types of financial rewards:

 Salary
 Wage (time and piece rates)
 Commission
  Profit related pay
 Performance related pay
 Employee share ownership schemes
 Fringe payment (perks)
The following types of non-­­financial rewards:

 Job enrichment
 Job rotation
 Job enlargement
 Empowerment
 Purpose to make a difference
 Teamwork
How financial and non-­­financial rewards may affect job satisfaction, motivation
and productivity in different cultures.

↙ 2.5 Organizational (corporate) culture (HL ONLY) HL ONLY

Organizational culture

Elements of organizational culture

Types of organizational culture

The reasons for and consequences of

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

How individual influence org culture

and how it influences individuals

↙ 2.6 Industrial/employee relations (HL ONLY) HL ONLY

The role and responsibility of

employee and employer
representatives

The following industrial employee

relations methods used by:

 Employees: collective
bargaining, slowdowns/go
slows, work to rule,
overtime bans and strike
action
 Employers: collective
bargaining, threats of
redundancies, changes of
contract, closure and lock
outs
Sources of conflict in the workplace

The following approaches to conflict

resolutions:

 Conciliation and arbitration

  Employee participation and
industrial democracy
 No-­­strike agreement
 Single-­­union agreement
Reasons for resistance to change in
the workplace (such as self-­­interest,
low tolerance, misinformation and
interpretation of circumstances)

Human resource strategies for

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

How innovation, ethical

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

↙ 2.7 Crisis Management and contingency planning (HL ONLY) HL ONLY

Explain the difference between crisis

management and contingency
planning

Evaluate the costs and benefits of

contingency planning.

Discuss how far it is possible to plan

for a crisis.

Unit 3: Accounts and Finance

↙ 3.1 Sources of finance HL ONLY

Role of finance for business:

 Capital expenditure
 Revenue expenditure
The following internal sources of finance:

 Personal funds (for sole traders)

 Retained profit
 Sale of assets
The following external sources of finance:

 Share capital
 Loan capital
 Overdrafts
 Trade credit
 Grants
 Subsidies
  Debt factoring
 Leasing
 Venture capital
 Business angels
Short, medium and long term finance

The appropriateness, advantage and disadvantages of sources of finance for a given

situation

↙ 3.2 Costs and revenues HL ONLY

The following types of cost, using examples:  Cost and profit centres
 Contribution analysis for
 Fixed multi-­­product firms
 Variable
 Semi-­­variable
 Direct
 Indirect/overhead
Total revenue and revenue streams, using examples.

↙ 3.3 Break-­­even analysis HL ONLY

Total contribution versus contribution per unit

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
The effects of changes in price or cost on the break-­­even quantity, profit and margin Target profit and revenue
of safety, using graphical and quantitative methods.

The benefits and limitations of break-­­even analysis

↙ 3.4 Final accounts HL ONLY

The purpose of accounts to different stakeholders

The principles and ethics of accounting practice

Final accounts:

 Profit and Loss Account (Income statements) – trading account, P/L

account, Appropriation Account
 Balance Sheet
Different types of intangible assets  Goodwill
 Patents and copyrights
 Brands
Depreciation using the following
methods:

 Straight line method

 Reducing/declining balance
 method
The strengths and weaknesses of
each method

Last in first out (LIFO)

First in first out (FIFO)

↙ 3.5 Profitability and liquidity ratio analysis HL ONLY

Profitability and efficiency ratios:

 Gross Profit margin

 Net profit margin
 ROCE
Possible strategies to improve these ratios

Liquidity ratios:

  Current
 Acid-­­test/quick
Strategies to improve these ratios

↙ 3.6 Efficiency ratio analysis (HL ONLY) HL Only

The following further efficiency

ratios:

 Inventory/stock turnover
 Debtor days
 Creditor days
 Gearing ratios
Shareholder ratios

 Earnings per share

 Dividend year
Possible strategies to improve these
ratios

↙ 3.7 Cash flow HL ONLY

Difference between profit and cash flow

Working capital cycle (cash flow cycle)

Cash flow forecasts

The relationship between investment, profit and cash flow

Strategies for dealing with cash flow problems:

 Reducing cash outflow

 Improving cash inflows
 Looking for additional finance
↙ 3.8 Investment Appraisal HL ONLY
 Investment opportunities using payback period and average rate of return (ARR) Discounted cash flow (DCF)

Investment opportunities using net

present value.

↙ 3.9 Budgets (HL ONLY) HL ONLY

The importance of budgets for

organization

The differences and roles between

cost and profit centres

Variances

The role of budgets and variances in

strategic planning

Unit 4: Marketing

↙ 4.1 The role of marketing HL ONLY

Marketing and its relationship with other business functions.

Differences between marketing of goods and services

Market orientation versus product orientation Analyze the influence of marketing

orientation on the success or
failure of firms

Difference between commercial marketing and social marketing Social marketing

Asset led marketing

Characteristics of the market in which an organization operates

Market share

The importance of market share and marketleadership

Marketing objectives of for profit organizations and nonprofit organizations

How marketing strategies evolve as a response to change in customer preferences

How innovation, ethical considerations and cultural differences may influence

marketing practices and strategies in an organization

↙ 4.2 Marketing planning HL ONLY

Elements of a marketing plan

Role of marketing planning

Four P’s of marketing mix

Appropriate marketing mix for a particular product or business

 Effectiveness of a marketing mix in achieving marketing objectives Porters five forces

 Apply Porters model to

classify and analyze
competitive pressure in the
marketplace.
Difference between target markets and market segments

Possible target markets and market segments in a given situation

Difference between niche market and mass market

How organizations target and segment their market and create consumer profiles

Product position map

Importance of having a unique selling point/proposition (USP)

How organizations can differentiate themselves and products from competitors

↙ 4.3 Sales forecasting (HL only) HL ONLY

Up to four-­­part moving average,

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

The benefits and limitations of sales

forecasting

↙ 4.4 Market research

Why and how organizations carry out market research

Following methods/techniques of primary market research:

 Surveys
 Interviews
 Focus groups
 Observations
Following methods/techniques of secondary market research:

 Market analysis
 Academic journals
 Government publications
 Media articles
Ethical considerations of market research

The difference between qualitative and quantitative research

Following methods/techniques of secondary market research: Sales forecasting and trends

 Quota  Seasonal cyclical and

 Random random variation
  Stratified
 Cluster
 Snowballing
  NEW -­­ Convenience
Results from data collection

↙ 4.5 The four P’s HL ONLY

PRODUCT

The product life cycle

Relationship between the product life cycle and the marketing mix

Extension strategies

Relationship between product life cycle, investment, profit and cash flow

Boston Consulting Group (BCG) matrix on an organization’sproducts

Branding:  Family branding

 Product branding
 Awareness  Company branding
 Development  Own label branding
 Loyalty  Manufactures branding
 Value 
Importance of Branding 


Importance of Packaging 

PRICE 

Appropriateness of the following pricing strategies:  Marginal cost pricing
  Contribution pricing
  Cost – plus (mark up)  Absorption cost and full
 Penetration  cost pricing
 Skimming   Going rate
 Psychological  Promotional
 Loss leader
 Price discrimination
 Price leadership
 Predatory
Elasticity

 Price elasticity
  Income elasticity
 Cross elasticity
  Advertising elasticity
 Relationship of elasticity
with product life cycle
PROMOTION

The following aspects of promotion:

 Above the line promotion

 Below the line promotion
 Promotional mix
Impact of changing technology on promotional strategies (such as viral marketing,
social media and social networking)
 Guerrilla marketing and its effectiveness as a promotional method.

PLACE

Importance of place in marketing mix Supply chain management/logistics

How organizations can increase the

efficiency of the supply chain

Effectiveness of different types of distribution channels

↙ 4.6 The extended marking mix of sevens P’s (HL ONLY ) HL ONLY

People

The importance of employee-­­

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

Processes

The importance of delivery

processes in marketing mix a service
and changes in these processes

Physical evidence

The importance of tangible physical

evidence in marketing a service

The seven Ps model in a service

based market

↙ 4.7 International marketing (HL ONLY) HL ONLY

Methods of entry into international

markets

The opportunities and threats posed

by entry into international markets

The strategic and operational

implications of international
marketing

The role of cultural differences in

international marketing

The implications of globalization on

international marketing

↙ 4.8 E-­­commerce HL ONLY

 Features of e-­­commerce

Effects of changing technology and e-­­commerce on the marketing mix

Difference between types of e-­­commerce:

 Business to business (B2B)

 Business to consumer (B2C)
 Consumer to consumer (C2C)
Costs and benefits of e-­­commerce to firms and consumers

Unit 5: Operations Management

↙ 5.1 The role of operations management HL ONLY

Operations management and its relationship with other business functions

Operations management in organizations producing goods and/or services

 Operations management strategies and practices for ecological, social

(human resources) and economic sustainability
↙ 5.2 Production Methods HL ONLY

The following production methods: Cell production, teamwork and

productivity implications
 Job/customized production
 Batch production
 Mass/flow process production
 NEW – cellular manufacturing
Most appropriate method of production for a given situation

↙ 5.3 Lean production and quality management (HL ONLY) HL ONLY

The following features of lean

production:

 Less waste
 Greater efficiency
The following methods of lean
production:

 Continuous improvement
(kaizen)
 Just in time (JIT)
 Kanban
 Andon
Features of cradle to cradle design
and manufacturing

Features of quality control and

quality assurance

The following methods of managing

quality:

 Quality circle
  Benchmarking
 Total quality management
(TQM)
The impact of lean production and
TQM on an organization

The importance of national and

international quality standards

↙ 5.4 Location HL ONLY

The reasons for a specific location of production

 Impact of globalization on location

NEW -­­ The following ways of re-­­organizing production, both nationally and
internationally :

 Outsourcing/subcontracting
 Offshoring
 Insourcing
↙ 5.5 Production planning (HL ONLY) HL ONLY

The supply chain processes

The difference between JIT and Just

in case (JIC)

Stock control charts based on the

following:

 Lead time
 Bugger stock
 Re-­­order level
 Re-­­order quantity
Capacity utilization rate

Productivity rate

Cost to buy (CTB)

Cost to make (CTM)

↙ 5.6 Research and Development (HL ONLY) HL ONLY

The importance of research and

development for a business

The importance of developing goods

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

The following types of innovation:

 Product
  Process
 Positioning
 Paradigm
The difference between adaptive
creativity (adapting something that
exists) and innovative creativity
(creating something new)

How pace of change in an industry,

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

LEAVING – patents, copyrights, and

trademarks

↙ 5.7 Crisis management and contingency planning (HL ONLY) HL ONLY

The difference between crisis

management and contingency
planning

The following factors that affect

effective crisis management:

 Transparency
 Communication
 Speed
 Control
The following advantages and
disadvantages of contingency
planning for a given organization or
situation:

 Cost, Time
  Risks, Safety
↙ LEAVING – Quality assurance HL ONLY

Continuous improvement

Benchmarking

National and international quality

standards

↙ LEAVING – Production planning HL ONLY

Stock control Traditional stock control (usage

patterns, lead times, buffer stocks
 Just in case and re-­­order levels)
 Just in time
Optimum stock levels
 Capacity utilization

Make or buy decisions

Unit 6: Business Strategy (HL ONLY)

This topic does not add new content but gathers together and synthesizes ideas, concepts and techniques from the
course. The use of these ideas, concepts and techniques will allow informed decisions to be made about the future
direction of an organization. This will be assessed through a question in section C of paper 1 requiring a strategic
response. Student’s should apply business theories learned in class to real-­­life situations.

Strategy is about asking questions: what, why, when, how, where and who?

Strategic management is the management of the long term activities of the business, which includes the integration of
strategic analysis, strategic choice and strategic implementation.

Stage 1: Strategic analysis – where is the business now?

Deciding where the business is now involves an analysis of its internal and external situation. The analysis will dictate
the nature of future strategy. The opportunities and threats faced will vary according to the nature of the business. An
analysis of the present market and the firms competitive situation will influence the aims, objects and principles. The
starting point for the analysis will probably be through the use of a SWOT and PEST analysis. Questions to consider:

  Is the business new or established?

  Who are the stakeholders?
  Is the business profit or NPO?
  Types of organization?
  What are objectives of organization?
  How does mission/vision statement reflect business?
  What are attitudes of the business to risk?
  What is the firms present financialsituation and is it conducive to change?
  Financial analysis and ratio analysis?
  Is present product portfolio appropriate? (Boston matrix)
  What resources are available to the business? (Porter’s five forces market analysis)
 Should the organization enter international markets?
 Stage 2: Strategic choice – where is the business aiming to be?

Once the business has identified its position in the market, it needs to consider its objectives in the short medium
and long term. To achieve this, the business must examine market opportunities, threats, and then plan for the
future. Questions to consider:

  Why are business plans important?

  How are markets developing? (Sales forecasting)
  Which new market opportunities are available? (Market research)
  What are the future directions available to the firm?
 When is expansion desirable and achievable? (Small vs large organizations, Cash flow forecasts, Gearing,
Sources of finance, HR planning)
  How can the core competencies of the business be developed?
  Growth strategies? (Ansoff matrix, Investment appraisal)
  What are competitors doing and how can their offer be matched or improved upon? (Benchmarking)
 How do the processes of decision making help to direct the business? (scientific and formal, decision tree,
Force field analysis?
 What are the measures of success? (ROCE, Market share, Motivation and productivity)

Stage 3: Strategic implementation – how is the business going to achieve its objectives?

Having decided on the future direction of the business, its mission, aims and objectives, how will the business put its
strategies into operation? Questions to consider:

  How can the firm develop competitive advantage? (Porters generic strategies)
  Which new products/services should be developed?
  Which new technologies could be applied?
  How can differentiation be achieved?
 How should the business plan for change? (Workforce planning, recruitment and training, flexible working
patterns, investment appraisal)
  What is the appropriate scale of operations? (economies and diseconomies ofscale)
  Which growth methods can and should be selected? (Internal/organic growth, external growth, globalization)
 Which marketing strategies can be implemented? (Market leadership and market penetration pricing,
 segmentation, targeting and positioning, distribution chain management, e-­­commerce)
 What is the appropriate organizational structure? (flattening, decentralization, flexible organization such as
Handy’s shamrock)
  What is the appropriate management and leadership style
  How should the firm incorporate social responsibility and ethical approaches?
 How can change be managed effectively? (change culture, contingency planning and crisis management)
Assessment Outline

Assessment Component Weight

External assessment (4 hours and 30 minutes total) 75%

Paper 1 ( 2 hour and 15 minutes) 40%

Based on case study issued in advance, with additional unseen material included in section Band
C. Students assessed on ALL syllabus content.

 Section A – Answer two of three structured questions (30 marks)

  Section B – Answer one compulsory question including evaluative skills. (20 marks)
 Section C -­­ Answer one compulsory question focusing on strategic decision
making through the use of extension material. (30 marks)

Paper 2 (2 hour and 15 minutes)

Students assessed on ALL syllabus content.

  Section A – Answer one of two structured questions with quantitative element (25 marks) 35%
 Section B – Answer two of three structured questions (50 marks)

Internal assessment (30 teaching hours total) 25%

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

Research proposal and action plan – a working document not part of the actual report, but part of
planning.

Report that addresses and issue facing an organization or analyses a decision to be made by an
organization. (Maximum 2000 words) ( 25 marks)