CUP IB Bus Man Teacher Resource Starter Pack

Business
Management
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for the IB Diploma
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Digital Teacher’s Resource

Together with IB teachers
Original material © Cambridge University Press 2022. This material is not final and is subject to further changes prior to publication.
Dear IB Teacher,
The Business Management for the IB Diploma Teacher’s Resource will publish later
this year.
We have produced this ‘Starter Pack’ to enable you to plan and teach the new course
while we finalise and print the new resource.
We are working to provide resources to support your students following the Business
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Management for the IB Diploma course to give you confidence that they reflect the
new syllabus.
The pack contains the following:
• Chapter 1: What is a business?
• Chapter 2: Types of business entities
• Chapter 3: Business objectives
• Chapter 4: Stakeholders
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• Chapter 5: Growth and evolution
Please note that the material included in this Starter Pack is at an advanced draft
stage but may still change between now and publication. In addition, the content
from the sample is also available digitally and may vary visually in this format.
Visit our website to view the full series or speak to your local sales representative.
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You can find their contact details here:
cambridge.org/education/find-your-sales-consultant
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BUSINESS MANAGEMENT FOR THE IB DIPLOMA: TEACHER’S RESOURCE
Contents
Welcome
About the authors
How to use this series
How to use this Teacher’s Resource
Scheme of work for the whole course
Lesson plan template and exemplar
About the guide/syllabus
About the assessment/examination
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Approaches to teaching and learning: IB Pedagogy for Business Management
Integrating Theory of knowledge into your Business Management lesson
A guide to academic writing
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Teaching notes and supporting material
Unit 1: Introduction to business management

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1 What is a business?
2 Types of business entities
3 Business objectives
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4 Stakeholders
5 Growth and evolution
6 Multinational companies (MNCs)
Unit 2: Human resource management

7 Introduction to human resource management
8 Organisational structure
9 Leadership and management
10 Motivation and demotivation
11 Organisational (corporate) culture (HL only)
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12 Communication
13 Industrial/employee relations (HL only)
Unit 3: Finance and accounts
14 Introduction to finance/sources of finance
15 Costs and revenues
16 Final accounts
17 Profitability and liquidity ratio analysis
18 Debt/equity ratio analysis (HL only)
19 Cash flow
20 Investment appraisal
21 Budgets (HL only)
Unit 4: Marketing
22 Introduction to marketing
23 Marketing planning
24 Sales forecasting (HL only)
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25 Market research
26 The seven Ps of the marketing mix
27 International marketing (HL only)
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Unit 5: Operations management
28 Introduction to operations management
29 Operations methods
30 Lean production and quality management (HL only)
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31 Location
32 Break-even analysis
33 Production planning (HL only)
34 Crisis management and contingency planning (HL only)
35 Research and development (HL only)
36 Management information systems (HL only)
End of course tests
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Answers
End of chapter tests (specimen papers)
End of course tests
Worksheets
Coursebook activities and case studies
Coursebook exam-style questions
Glossary
Acknowledgements
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1 What is a business?
Teaching plan
Section Approximate number Learning content Resources
of learning hours
1.1 The role 1 hour, 15 minutes How businesses Coursebook
of business turn the factors of Business in context
production – land, Sections 1.1 to 1.3
labour, capital and
enterprise – into Teacher’s resource
goods and services YouTube video on factors of
through business production
PowerPoint slides 2 and 3
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activity
1.2 Business 1 hour, 30 minutes The main functions of Coursebook
functions a business, including Section 1.4
HRM, finance and Activity 1.1
accounts, marketing
and operations Teacher’s resource
management PowerPoint slide 4
The interrelationship
of business functions
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1.3 Economic 1 hour How business Coursebook
sectors: activity in each Section 1.5
primary, sector operates Case studies 1.1 and 1.2
secondary, Activity 1.2
tertiary and The impact of Table 1.1
quaternary sectoral changes on
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sectors business Teacher’s resource
PowerPoint slide 5
1.4 Starting a 1 hour The steps involved Coursebook
business in starting a business Section 1.6
and the difficulties Theory of knowledge
associated with new Learner profile
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business Case study 1.3

Exam-style questions
Project
Teacher’s resource
Online quiz: BBC News Quick
quiz: Would you make a good
entrepreneur?
PowerPoint slides 6 to 8
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of learning hours
1.5 Business 1 hour Why have a business Coursebook
management plan, what business Section 1.7
tools: plans should contain Case study 1.4
Business and who uses them Activity 1.3
plans Table 1.2
PowerPoint slide 9
Skills development worksheet
activity 1.1
BACKGROUND KNOWLEDGE
• Learners may not have previously knowledge when completing their work.
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studied business, although some learners Many will have family members working in
will have studied IGCSE Business. a business or perhaps even running one. All
However, no background knowledge is will be familiar with a number of the world’s
needed for this chapter. largest and most successful companies and
• Although business management shares the brands that they produce.
many similarities with other social sciences, • To perform well in this subject, learners will
it is also distinct in a number of ways. As a need a range of skills. The mathematically
subject it is often compared with economics, inclined learner, for example, may find that
but while business management focuses they enjoy Unit 3 – the finance unit. Similarly,
on the decisions made by each area of learners with a greater language inclination
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an organisation, economics is the study will probably enjoy other units more.
of scarcity and resource allocation. And • Many of the sections in this introductory
while some syllabus areas belong in both chapter will be revisited at different points in
disciplines, the approach taken by both the course, but learners should gain a basic
subjects is different. understanding of what to expect from this
• Wherever possible, learners should be course during this chapter.
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encouraged to draw on their current
Syllabus overview
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This chapter covers ‘1.1 What is a business?’ in detail. As this topic is the same at SL and HL, nothing
additional is needed for HL. This introductory chapter of Unit 1 sets business management in context:
learners learn to analyse the environment in which businesses operate and the nature of business activity
within different economic sectors, and they learn about entrepreneurship.
This chapter connects with the Theory of knowledge syllabus. For example, learners may choose to investigate
what motivates entrepreneurs to set up a business or investigate why certain theories become the dominant
ones within the discipline. Alternatively, ‘what it takes to be an entrepreneur’ might inspire service-learning
projects which can contribute to learners’ creativity, activity and service (CAS) requirements.
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1.1 The role of business

LEARNING OBJECTIVES
Learning objectives Success criteria
• Know and understand the nature • Learners will be able to explain, using
of business. examples, how different businesses turn
the factors of production into goods
and services.
• Learners will be able to evaluate how the
different activities of a business combine to
generate sales revenue by adding value to
resource inputs.
LANGUAGE FOCUS
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Key language can also be learnt in the Skills
development worksheet 1.1. Encourage learners
to learn exact definitions of key terms – this
is particularly relevant to those terms they are
already familiar with.
Encourage learners to write out definitions
capital goods: physical goods used by
industry aid in the production of other
goods and services such as machines and
commercial vehicles
consumer goods: the physical and tangible
goods sold to final users
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on flash cards and test themselves either consumer services: non-tangible products
individually or with peers. This will also help that are sold to final users and include hotel
learners with words that are difficult to spell, accommodation, insurance services and
such as ‘entrepreneur’ train journeys
Language support
While many learners will not have studied

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the subject previously, all should have prior
knowledge of many of the terms in this chapter,
for example primary, secondary and tertiary
sectors and the term ‘entrepreneur’. Question
learners on the terms they might be familiar with.
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Common misconceptions
Misconception How to identify How to overcome
When they start the Ask learners to list Provide examples of different
class, some learners think entrepreneurs they know entrepreneurs, some well known (such as
that all business ideas and then follow this up Steve Jobs) but others such as window
make a profit, and that with a question about what cleaners and self-employed hair stylists.
most business activity is determines successful Include entrepreneurs who have been
carried out by large and entrepreneurship. successful and others who have not
successful organisations. (assess the reasons for failure).
Ask learners to investigate what
percentage of new businesses in their own
country are still operating after 12 months
– their findings may surprise them.
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Assessment ideas
• When completing the starter activity for this section, do not allow learners to look up the answer
on Google. It is better for them to think about what might be an appropriate response. You can always ask
them to write down a more accurate one in their notes once the activity is complete.
• For the first main teaching idea, a good video (six minutes long) is included. This can be viewed before the
activity begins or afterwards, allowing learners to check their responses after completing the activity.
• When completing the reflection activity in main teaching activity 2, direct your learners to section 1.7 of the
Coursebook, which contains a useful section on the impact of enterprise on business activity.
Starter idea
Introduction to business (10–15 minutes)
Resources: Whiteboard.
Description and purpose: What do we mean by business activity?
On the whiteboard write, ‘What is business activity?’ This starter can be done as a class discussion or a group
discussion. Ask each group to come up with a definition of business activity, such as ‘Business activities are any
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actions taken by a company for the purpose of making money.’
Main teaching ideas
1 Business in context 1 (10–15 minutes)
Resources: PowerPoint slides 2–3, Coursebook section 1.3 What are business ‘inputs’? YouTube video
‘Four Factors Of Production: Practice Problems Included’.
Description: Watch the YouTube video or look at slides 2–3 to introduce the concept of business inputs.
Ask the learners to work in groups to provide three or four examples of different businesses and how they
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turn inputs into goods and services. Tell learners that when they choose their examples they should describe
the whole production process starting with purchasing the inputs, how they add value to those inputs and
then finally giving a brief description of the finished product. Share the ideas as a class.
This activity is designed to help learners understand the different ways that businesses turn factors of
production into goods and services. Each group should provide three or four examples.
Assessment ideas: Learners could use the traffic light system to indicate their level of understanding
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of this activity from red = don’t understand, amber = some understanding, to green meaning
complete understanding.
Differentiation:
• Support: Central to this task is the concept of ‘value added’. If learners find the concept difficult,
ask them how a business such as an automobile manufacturer adds value to the components
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purchased, or how a taxi or car hire business adds value to the car they buy. Putting the concept
into context will make it easier to understand.
• Stretch and challenge: Provide an item such as a pencil or piece of paper and ask learners to think
about how an individual or business could add value to that product.
2 Business in context 2 (30–40 minutes)

Resources: Coursebook, plus computer, tablet or mobile phone.
Description: Learners should read the Business in context feature ‘Enterprise in Chile’ in the Coursebook.
Then they should research the World Bank’s ‘Ease of doing business’ webpage and identify the nations with
the highest ranking. Ask them to suggest possible reasons why the countries at the top are ranked so highly.
Assessment ideas: Use peer assessment to assess this task. Invite individual learners to present their findings
to the class and ask others in the class to provide feedback. Learners should explain one thing they agreed
with and another that they believe could be improved.
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Differentiation:
• Support: Guide some learners to the World Bank’s ‘Ease of doing business’ webpage and then work
through the possible economic, cultural and political factors that might make businesses easier to
operate. This exercise can help learners to complete the main task.
• Stretch and challenge: If learners complete this activity early, ask them to discuss with a partner
the question: ‘What can nations do to create a more friendly business environment?’
This might include factors such as:
• How easy is it to start a business?
• How easy is it to hire workers?
• What about dealing with construction permits and obtaining credit, etc.?
• What other factors might encourage businesses to locate or set up in a specific nation?
Reflection: What benefits does growth in business activity bring to the citizens of that country?
Consider the following: employment prospects, income levels, tax revenue, infrastructure, environmental
costs. Ask learners, in pairs, to brainstorm this question and discuss their responses with the class.
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Plenary ideas
Combining factors of production into products (10–15 minutes)
Resources: Whiteboard, Coursebook section 1.3 What are business ‘inputs’?, PowerPoint slides 2–3.
Description and purpose: Match the terms to the definitions given, then provide an example to demonstrate
understanding of the term. This is designed as a quick and fun revision activity for this section. You can write
the key terms on the board and then read out the description for learners to guess which you are describing.
They could then be called upon to give an example. Alternatively, create a handout with a table in it, like the one
shown here.
Terms
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Consumer Factors of production Capital goods
Business Consumer services Consumer goods
Key term Description Example

The physical and tangible goods sold to final Cars, television and clothes
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users
Includes all the inputs that a business needs to
create goods and services, e.g. land, labour,
capital and entrepreneurship
An organisation established to turn business Google, HSBC, Amazon, Ford
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inputs into goods and/or services

Non-tangible products that are sold to final
users
Physical goods used by industry in the
production of other goods and services
The end user of a product – not necessarily the
person buying the good or service (customer)
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Answers to plenary activity
Consumer The physical and tangible goods sold to final users Cars, television and clothes
goods
Factors of Includes all the inputs that a business needs to Land – factory
production create goods and services, e.g. land, labour, capital
and entrepreneurship Labour – workers
Capital – start-up capital for business
Entrepreneurship – Steve Jobs
Business An organisation established to turn business inputs Google, HSBC, Amazon, Ford
into goods and/or services
Consumer Non-tangible products that are sold to final users Hotel accommodation, insurance
services services, train journeys
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Capital goods Physical goods used by industry in the production of Robot technology, 3D printing
other goods and services machines, computers used in offices
(but not personal use)
Consumer The end user of a product – not necessarily the Someone receiving (and using)
person buying the good or service (customer) the product
Differentiation:
• Support: Some learners/groups may have difficulty starting off the task and may need to be
provided with one or two examples to get them started.
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• Stretch and challenge: Learners with a good subject knowledge should be asked to expand their list
beyond five as well as considering who completes these tasks in a sole trader/partnership business.
1.2 Business functions
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LEARNING OBJECTIVES

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• Know and understand the nature of business. • Learners will be able to evaluate the
role that each business function plays
in the production of goods and services
and be able to apply their knowledge in
given situations.
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LANGUAGE FOCUS
marketing: the management task that links the finance and accounting: the department
business to the customer by identifying and which manages and records payments going
meeting the needs of customers profitably – it into and out of the business. This department
does this by getting the right product at the also compiles cash flow statements for
right price to the right place at the right time the organisation
HRM: the strategic approach to the effective operations management: the area of the
management of an organisation’s workers so business which enhances and processes the
that they help the business achieve its objectives finished product and ensures each product
and gain a competitive advantage made meets agreed quality standards
Assessment ideas
• Activity 1.1 would be good preparation for the main teaching activity.
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• Direct learners to section 1.4 Business functions before completing the main activities in this section.
• It is important when completing the main teaching activities in this section for learners to consider and
discuss not only the role played by each function but also the areas where a degree of cooperation between
departments is required. Reward learners who are able to illustrate the entire production process for a good
or service and the role of each function in the process.
Starter ideas
The main business functions and their roles (10–15 minutes)
Resources: Whiteboard, Coursebook section 1.4 Business functions.
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Description and purpose: Investigate the main functions of business and the role they play in producing goods
and services.
Write the following four terms on the whiteboard and ask learners to pair up and share ideas about the role each
plays in the business: human resources, finance and accounts, marketing, and operations management. Learners
should then read Coursebook section 1.4 Business functions in preparation for the main teaching activities.
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Main teaching ideas
1 Business in context (20–30 minutes)
Resources: Coursebook section 1.4 Business functions, access to the internet, PowerPoint slide 4.
Description: Divide the class into four equal groups and ask each group to research one of the following four
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functions: HRM, financial accounting, marketing, and operations management. Each group should work
on the task until they have written down at least five roles fulfilled by each function. Then they should share
them with the class (so that each group has accurate notes about all four functions).
Answers: Relevant responses include (but not limited to):
The role of the human resource management team includes attracting, selecting, inducting, reviewing,
rewarding and (if necessary) retaining workers at the business.
The accounts department is responsible for paying suppliers, creditors and staff; budgeting; estimating the
profit of different projects; and preparing the company’s financial statements.
Marketing involves the following responsibilities: research into new markets, research into new products,
deciding on the correct pricing for goods, promotion of the goods and services that the business produces,
buying advertising space and distribution.
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Operations management has the following roles: deciding how to produce and which type of production is
most suitable, ensuring quality and legal standards are met, inventory control, research and development,
making location decisions and crisis management.
Assessment ideas: Learners can be assessed on the content of their lists. Check that each group has written
down the minimum of five roles and award points for the number and accuracy of the learners’ lists.
Differentiation:
• Support: Some learners/groups may have difficulty starting off the task and may need to be
provided with one or two examples to get them started.
• Stretch and challenge: Learners with a good subject knowledge should be asked to expand their list
beyond five as well as considering who completes these tasks in a sole trader/partnership business.
2 Categorising business products (20–30 minutes)

Description: How do we differentiate between consumer and capital goods?
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On the whiteboard, write down the following products: laptop computer, vehicle, toolbox, a battery-powered
torch, table and chairs, mobile phone, drinking glass and washing machine. Ask learners to work in pairs
to discuss how each of the goods could be either capital goods or consumer goods, depending on how the
product is used after it is purchased.
Assessment ideas: Move around the classroom to check how each group is completing the task.
Learning points which are not being understood should be reinforced before moving on to the
plenary activity.
Differentiation:
• Support: Help learners with difficult terms and provide additional examples if required,
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e.g. when is a computer or oven a consumer good and when is it a capital good?
• Stretch and challenge: Learners should be encouraged to produce their own list of goods and
services which might fall into either category and then discuss the question: Can all products be
categorised as both consumer and capital goods depending on the circumstance in which they
are used?
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Plenary ideas
Business in context (10–15 minutes)
Resources: Access to the internet, Activity 1.1.
Description: Using the Coursebook and/or internet sources, learners should match the correct department to the
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description provided. You could write the functions on the board and then read out the roles for them to guess
where they fit or get learners to work in groups to complete a table, like the one shown here.
Departments: Finance HR management Marketing Operations management
Role Function
Setting prices of new products
Recruiting a new operations manager
Allocating resources to capital equipment
Deciding on the appropriate inventory levels of raw materials
Finding out if consumers prefer one product design to another
Determining the level and number of employees the business needs for future operations
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Assessment ideas: Move around the groups in the classroom and check the learners’ answers against the
answers here.
Differentiation:
• Support: Help learners with difficult terms and provide additional examples if required.
• Stretch and challenge: If learners find the activity straightforward, they should consider whether some
of those roles might be performed by a combination of departments, e.g. pricing might involve both
marketing and finance departments. Some learners may also wish to add their own examples of a role
performed by each department.
Answers:
Role Function
Setting prices of new products Marketing
Recruiting a new operations manager HR management
Allocating resources to capital equipment Finance
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Deciding on the appropriate inventory levels of raw materials
Finding out if consumers prefer one product design to another
Determining the level and number of employees the business needs for future
operations
Operations management
Marketing
HR management
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1.3 Economic sectors: Primary, secondary, tertiary
and quaternary sectors
LEARNING OBJECTIVES
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• Apply and analyse primary, secondary, • Learners will be able to distinguish between
tertiary and quaternary sectors. each of the four sectors and understand that
all businesses operate in one or more of
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those sectors.
• Learners will be able to evaluate the impact
of sectoral changes on business activity.
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LANGUAGE FOCUS
primary sector: businesses engaged in farming, tertiary sector: businesses that provide services
fishing, oil extraction and all other industries to consumers and other businesses, such as
that extract natural resources to be used and retailing, transport, insurance, banking, hotels,
processed by other businesses tourism and telecommunications
secondary sector: businesses that manufacture quaternary sector: businesses focused on
and process products from natural resources, information technology (IT) and information
including furniture, brewing, baking, clothing service providers such as research and
and construction development, business consulting and
information gathering
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Some learners, when asked to select the economic Check for understanding Provide examples of
sector that a business belongs to, confuse the job by asking learners to different occupations
(position) with the industry. For example, some identify the correct and businesses,
learners will argue that an office worker, employed by sector for a range with the correct
a manufacturing business, is employed in the tertiary of occupations and economic sector.
sector or that a machine operator in a service-based businesses.
business is employed in the secondary sector.
Assessment ideas
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• The activities here are supported by section 1.5 in the Coursebook, so it would be a good idea for learners to
read that section before starting the activities.
• Direct learners to Table 1.1 and have a short discussion on the contents of the table during one of the
lessons in this section. You could also ask learners to research the breakdown of other nations to further
guide them in this activity.
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• Learners should complete Case studies 1.1 and 1.2 and Coursebook Activity 1.2 in this section as these will
provide context for the section activities.
Starter idea
Economic sectors: Primary, secondary, tertiary and quaternary (10–15 minutes)
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Resources: Whiteboard, Coursebook section 1.5 Economic sectors, PowerPoint slide 5, Case study 1.2.
Description and purpose: Learners should begin this lesson by completing the table here, starting by matching the
correct term to the definition before placing the following businesses in the correct economic sectors:
Exxon, BP, Barclays, Kellogg’s, Audi, University of Cambridge, Samsung, Apple, Facebook
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Key term Definition Examples

Economic How economists divide output in an economy. Each sector Primary, secondary,
sector includes a range of industries based on their contribution to tertiary and quaternary
the production of goods and services
This sector of the economy contains businesses that provide
services to consumers and other businesses, such as
retailing, transport, insurance, banking, hotels, tourism and
telecommunications
The sector of the economy that manufactures and processes
products from natural resources, including computers,
brewing, baking, clothing and construction
This sector of the economy contains businesses engaged in
farming, fishing, oil extraction and all other industries that
extract natural resources to be used and processed by other
firms
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Focused on information technology (IT) businesses
and information service providers such as research and
development, business consulting and information gathering
What to do next: Project the answers onto the front of the classroom and then ask learners to either mark
their own work or have another class member grade the work. Then spend five minutes answering individual
questions (e.g. why some businesses belong in more than one sector) before moving to the main lesson activities.
Learners can indicate their level of understanding using the traffic light system.
Answers:
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Key term Definition Examples
Economic How economists divide output in an economy. Each sector includes Primary, secondary, tertiary
sector a range of industries based on their contribution to the production of and quaternary
goods and services
Tertiary This sector of the economy contains businesses that provide services Barclays, University of
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sector to consumers and other businesses, such as retailing, transport, Cambridge
insurance, banking, hotels, tourism and telecommunications
Secondary The sector of the economy that manufactures and processes Kellogg’s, Audi, Samsung
sector products from natural resources, including computers, brewing,
baking, clothing and construction
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Primary This sector of the economy contains businesses engaged in farming, Exxon, BP (though both
sector fishing, oil extraction and all other industries that extract natural businesses are also present
resources to be used and processed by other firms in the secondary and
tertiary sectors)
Quaternary Focused on information technology (IT) businesses and information Apple, Facebook
sector service providers such as research and development, business
consulting and information gathering
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Main teaching ideas
1 Economic sectors (20–30 minutes)
Resources: Coursebook Table 1.1.
Description: The class should start by examining Table 1.1, which illustrates the percentage of total
employment in the UK and Ghana by sector. Then ask learners to use the information contained in the
table to answer the following two questions:
• What do you notice about the breakdown of the two economies by industrial sector?
Why is the primary sector a much larger share of Ghana’s economy than in the UK?
• Use Table 1.1 in the Coursebook to evaluate the following notion: As countries develop
economically they experience industrialisation; however, as they continue to progress they
experience deindustrialisation.
Answers:
• As the table indicates, as a nation goes through its development journey, the primary sector becomes
less important. The economy of Ghana, for example, contains relatively few industries and an
undeveloped service sector. This means that farming and fishing are significant contributors to national
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output. As the UK has developed, agriculture, fishing, mining, etc., have grown very slowly, and
the sector as a whole is dwarfed by size of the industrial and service sectors, which have grown at a
faster rate.
• As a country develops, the industrial sector is the first to benefit, followed by the development of the
tertiary and financial sectors, which emerge to satisfy the needs of the new industrial sector as well
as provide the new affluent classes with services. A number of middle-income countries spend a large
proportion of their budgets on new infrastructure to fuel their initial economic growth – infrastructure
is an industry in the secondary sector.
Assessment ideas: Learners could use the traffic light system to indicate their level of understanding
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of the lesson from red = don’t understand, amber = some understanding, to green meaning
Differentiation:
• Support: For learners having difficulty, help them start off by providing one or two examples of how
a nation begins to develop through its industrial sector.
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• Stretch and challenge: Learners could be asked to expand their list to question other reasons why
nations may deindustrialise as they move from middle to fully developed status, e.g. the role of
wage levels.
Reflection: Lead a class discussion on the following question: ‘Can deindustrialisation be a good thing for
the economy?’ Learners will need to justify their responses to the class, with examples, e.g. India, the USA,
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the UK.
2 Economic sectors (20–30 minutes)

Resources: Coursebook, whiteboard.
Description: Using the information from the Coursebook, learners should produce a table with four
columns, labelled Primary, Secondary, Tertiary, Quaternary. Firstly, select one of the following products:
T-shirt, McDonald’s extra value meal, Nike trainers or Apple smartphone. Then explain the contribution
made by each of the four economic sectors in getting the finished product to market. This will help learners
to identify which sector of economic activity different parts of the production process can be found in.
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Answer: Example for McDonald’s extra value meal
Primary Secondary Tertiary Quaternary
Farming – rearing the cows Processing the raw food Sold in restaurants Research into
used to make beef and ingredients into burgers, as well as consumer habits, healthy
growing potatoes, potato fries, packaging distribution companies eating trends
tomatoes, lettuce
Assessment ideas: Check individual learners’ progress by comparing the depth and accuracy of their
responses as well as how many correct examples they complete.
Differentiation:
• Support: Some learners may benefit from seeing the answer above to get them started.
• Stretch and challenge: Ask learners to come up with their own examples, as many as they can
complete in the time allocated for the task.
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3 The effect of sectoral change on different stakeholders (20–30 minutes)
Description: Learners should start by reading the section of the Coursebook called ‘Changes in economic
structure – sectoral change’, in particular the benefits and problems associated with change.
In pairs or small groups, learners should identify two stakeholders and make notes on how each might be
affected by either industrialisation (a low economically developed country moving towards middle income
status) or deindustrialisation (a developed nation). Each pair/group should state whether they are likely to
be a beneficiary or a victim of sectoral change. Learners could do additional research online.
This task is designed to develop learners’ knowledge of how different stakeholders are affected
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by industrialisation/deindustrialisation.
Assessment idea: Each pair/group could create mind maps to illustrate how different stakeholders are
affected by sectoral change. The more comprehensive responses could then be shared with the rest of the
class as a class discussion, with learners providing peer feedback. Each group should provide one question
and identify one thing that they fully understood as a way of assessing their understanding of the task.
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Differentiation:
• Support: Provide some learners with a list of two suitable stakeholders to support them.
• Stretch and challenge: Ask learners how some stakeholders have updated their skills to take
advantage of sectoral change.
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Plenary idea
Reflection activity on the impact of national economies (10–15 minutes)
Resources: Whiteboard, learners’ completed responses from main activity 3.
Description: Using the information from main activity 3, learners should explain how the involvement of all four
sectors in the production process of many products contributes towards the following:
• employment patterns around the world
• differences in living standards and economic development around the globe
• income inequalities between different parts of the world.
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1.4 Starting a business

LEARNING OBJECTIVES
• Apply and analyse challenges and • Learners will be able to provide examples of
opportunities for starting a business. the different reasons that businesses start up.
• Learners will be able to evaluate the
effectiveness of different ways a business
may start.
• Learners will be able to evaluate some of
the difficulties that new businesses face, and
apply each to a given situation.
Assessment ideas
•
•
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When learners are completing the reflection activity in the main teaching activity, challenge them to consider
different motivations for setting up a business. Is it always to make money?
When completing the main activity ‘The difficulties associated with setting up a business’, direct learners
who may require additional sources to the Case study 1.3 in the Coursebook, which contains information
that will help guide them.
When learners are completing the plenary activity, ask them to grade themselves before completing the
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project and then compare this with the actual findings from the webpage. Remind learners that they should
give the best genuine description of themselves, and not simply give what they believe to be the correct
answers. This is not a competition to learn who the best entrepreneur is!
• The exam-style question could be used in this section, as a written activity to support the other
activities here.
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• The project would also be completed in this section.
Starter idea
Reasons for starting a business (10–15 minutes)
Resources: Whiteboard, PowerPoint slide 7, Coursebook section 1.6.
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Description and purpose: Start with the opening question: ‘Why do entrepreneurs start their businesses?’
Ask learners to work in pairs to brainstorm the question: ‘What motivates entrepreneurs to start their
own business?’ and create a mind map of their ideas. These ideas can be compared with those identified on
PowerPoint slide 7.
Main teaching idea
The difficulties associated with setting up a business (20–30 minutes)
Resources: Learner profile, PowerPoint slide 8, Case study 1.3.
Description: Start by writing this question on the whiteboard: ‘What percentage of new businesses fail within the
first 18 months?’
Answer: As Case study 1.3 in the Coursebook identifies, 90% of new businesses in the USA fail within the first 18
months of operating.
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In pairs, learners can brainstorm the question: ‘Identify some of the difficulties associated with new businesses.’
The Coursebook identifies the main difficulties but some learners may think of more.
Assessment ideas: Identify learners’ understanding by asking them to read out and explain their responses.
This can then be peer assessed, with responses compared to those identified here.
Differentiation:
• Support: Guide learners to Case study 1.3 in the Coursebook: ‘Why do start-ups fail?’ to help them.
• Stretch and challenge: Ask learners to consider risks that specifically impact on new start-ups as
opposed to established businesses.
Answers: Problems that new businesses may encounter include the following:

• Low levels of finance, particularly insufficient liquidity to pay staff, suppliers and/or creditors.
• Insufficient market research, particularly concerning the size of their potential market.
• Lack of skilled and experienced staff, with the entrepreneur often having to complete tasks that they lack
the expertise for.
• Long hours – many self-employed people work significantly longer hours than they would if they were
employed by someone else, as they try to avoid hiring more workers and the related costs.
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• Lack of knowledge of the market, suppliers and customers, etc.
• Low marketing budgets make it difficult to gain recognition in the market – especially when competing
against larger and more established businesses.
• Changes to the business environment, e.g. changes in legal structure or changes in demand/taste or fashion.
Reflection: Learners can discuss the following question: ‘Given the high chance of failure, long hours, insecurity
and often little financial reward, why is it that many individuals still want to be entrepreneurs?
Plenary idea
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Do you have what it takes to be an entrepreneur? (15–20 minutes)
Resources: Online quiz: BBC News Quick quiz: Would you make a good entrepreneur?
Description: Learners should complete the quiz, which is self-grading. However, learners may wish to share their
results with the class.
Assessment: This is automatically graded via the website with answers based on the learners’ responses.
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1.5 Business management tools: Business plans

LEARNING OBJECTIVES
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• Select and apply the elements of a • Learners will be able to evaluate the
business plan. effectiveness of different business plans as
well as write their own for a given situation.
LANGUAGE FOCUS
business plan: a written document that its strategies, the market it is in and its
describes a business, its objectives and financial forecasts
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Assessment ideas
• Ask learners to read section 1.7 of the Coursebook before completing this section. Many will not have seen
a business plan before and will benefit from seeing an example of what type of information appears in a
successful business plan. You could also encourage them to research their own business plans and bring
them to the lesson before starting this section. They can then compare the contents with section 1.7 and
Table 1.2.
• Learners can also complete Case study 1.4 to provide further understanding of this section. The ideal time
to complete this would be after the main activity has been completed and before the final plenary activity.
Starter idea
The role of a business plan (10–15 minutes)
Resources: Whiteboard, Coursebook section 1.7 Business management tool: Business plans.
Description and purpose: Start with the opening question: ‘Why do entrepreneurs need a business plan?’
Then learners should read the section of the Coursebook called ‘Importance of business plans’. Then ask
learners to work in pairs to brainstorm the question: ‘Why are business plans important for a new business?’
Main teaching idea
FT
What should a business plan contain? (20–30 minutes)
Resources: Online resources, Coursebook section 1.7, PowerPoint slide 9.
Description: Start with the opening question: ‘What makes a successful business plan?’
Ask learners to think about a new business idea. It might be for a business that has just started or one that
they would like to set up themselves. Write a brief plan for the business using the template in Table 1.2 in
the Coursebook.
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Assessment ideas: Peer-assessment: invite learners to briefly present their findings to the class. Following this,
the class can provide the speakers with feedback – one thing they liked about the presentation and one element
they believe can be improved.
Differentiation:
• Support: The question can be guided towards the previous lesson, where learners investigated some
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of the common reasons that new businesses fail. How would better planning have avoided some of
these problems?
• Stretch and challenge: How does the phrase, ‘Fail to plan, plan to fail’ apply to this task?
Plenary idea
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Revision crossword on Skills development worksheet 1.1 (15–20 minutes)

Resources: Skills development worksheet activity 1.1.
Description: Learners should complete the revision crossword before checking their responses with the answers
in the Teacher’s resource. All of the clues relate to Chapter 1 and are associated with the beginning part of
the course.
Project guidance
Many of your learners will recognise the format of the project as similar to the well-known television series
Dragons’ Den. The programme is known by different names around the world, e.g. Shark Tank in Australia and
the USA. Many learners may also be surprised to learn that the programme actually started in Japan where it
was called Tigers of Money. You could show some of the best ideas from the show before beginning the activity,
and you could have ideas from the project gauged by the other learners, who could act as ‘dragons’ to assess the
quality of each sales pitch.
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2 Types of
business entities
Teaching plan
Sub-chapter Approximate number Learning content Resources
of learning hours
2.1 Private 2 hours Distinction between the Coursebook
and public private and the public Section 2.1
sectors sectors
FT
PowerPoint slides 2, 3 and 4
2.2 The main 1 hour The main features of sole Coursebook
features traders, partnerships, Section 2.2
of private privately held companies Business in context
sector and publicly held Case studies 2.1 and 2.2
organisations companies Tables 2.1 to 2.4
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PowerPoint slide 5
2.3 Types 2 hours, 30 minutes The main features of the Coursebook
of for- following types of for-profit Section 2.3
profit social social enterprises: Table 2.6
enterprises – • private sector Business in context
private Case study 2.3
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sector Activities 2.1 and 2.2
companies Theory of knowledge exercise
on ethics
Vocabulary building worksheet
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2.4 For- 2 hours, 30 minutes The main features of the Coursebook
profit social following types of for-profit Section 2.3
enterprises – social enterprises: Table 2.6
public sector • public sector companies
companies • cooperatives Teacher’s resource
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Sub-chapter Approximate number Learning content Resources

of learning hours
2.4 Non- 1 hour The main features of the Coursebook
profit social following types of non- Section 2.4
enterprises profit social enterprises: Activity 2.3
• non-governmental Learner profile
organisations (NGOs) Project
activity 2.2
PowerPoint slide 7
• Learners should be encouraged, wherever • Many learners will also be aware of different
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possible, to draw on their current knowledge attempts by businesses to embrace
when completing their work. Many will be corporate social responsibility. They will also
familiar with the level of service in both have some knowledge of the difference
private and public sectors and also have between objectives in the public and
family members and friends working in private sectors.
different organisations.
Syllabus overview
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This chapter covers syllabus section 1.2 Types of business entities. It describes the distinction between the private
sector and public sector, and evaluates the different types of for-profit commercial businesses, for-profit social
enterprises and non-profit social enterprises.
This chapter connects with the Theory of knowledge syllabus via the payday loan market as well as the question
of the degree of government control that is desirable in a modern economy.
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2.1 Private and public sectors
LEARNING OBJECTIVES
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• Apply and analyse the distinction between • Learners will be able to evaluate the
the private and public sectors. differences between organisations in the
private and public sector and provide
examples of organisations in both sectors.
• Learners will be able to explain why the
size of the private and public sectors
differs between nations with different
economic systems.
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LANGUAGE FOCUS
private sector: comprises businesses owned command economy: economic resources are
and controlled by individuals or groups owned, planned and controlled by the state
of individuals free-market economy: economic resources are
mixed economy: economic resources are owned largely by the private sector, with very
owned and controlled by both private and little state intervention
public sectors privatisation: the sale of public sector
public sector: comprises organisations organisations to the private sector
accountable to and controlled by central or local
government (the state)
FT
Many learners confuse the terms Ask learners to list different Provide examples of public
‘public sector corporations’ and businesses in both categories corporations and public
‘public limited companies’. and check that they have not limited companies to illustrate
confused the terms. the difference between the
two terms.
Assessment ideas
• When learners do the starter activity, ask them to compile as many different examples as they can, and
ensure that they are aware of the difference between public limited companies and public corporations, as
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learners sometimes get these confused. You could also limit the number of each to just ten public and ten
private companies and set the task as a race to see who can finish first.
• In the first main activity, stress that learners are not required to have an in-depth knowledge of all the
characteristics of the business, e.g. scope, mission statement, etc. All of this information can be obtained
from the company website. You could also direct some learners to individual websites, e.g. those of Nike,
Apple, etc. – businesses they know well and will feel confident writing about.
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• After learners have completed the arrow activity (main activity 2), ask them to justify their placing of the
different countries, especially when they differ from the answer provided in the Teacher’s resource.
Starter idea
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Private and public sectors (10–15 minutes)

Resources: Whiteboard, PowerPoint slides 2, 3 and 4.
Description and purpose: Recognising different organisations in the public and private sectors of the economy.
On the whiteboard write, ‘Different organisations in the economy’. Then ask learners to work in pairs for just
5–6 minutes to write down as many public and private sector organisations as they can. Ask one or two pairs to
share their lists. The other learners should determine whether each of the organisations chosen has been placed
in the correct sector.
Learners can then use the traffic light system to indicate their level of understanding of differences
between the two sectors from red = don’t understand, amber = some understanding, to green meaning
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Main teaching ideas
1 Investigate two contrasting organisations (50–60 minutes plus time required for
presentations and reflection)
Resources: Coursebook section 2.1 and internet sources.
Description: In pairs, learners collect information on two contrasting organisations, one from the public
sector and one from the private sector. A detailed presentation is not required at this stage; the main aim of
the exercise is to enable learners to research different businesses and divide up the work as a pair.
Learners should prepare a short (4–5 minutes) slideshow presentation comparing the two organisations
according to the following:
• the ownership, scope, sector and size of the business
• the business mission, vision and values
• a brief comment on how successful the organisation has been at meeting the objectives set out in the
mission statement and how this can be measured.
Assessment ideas: It would be a good to use peer assessment on this task, with the other learners providing
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feedback on each presentation, highlighting one thing they liked and another they believe showed room
for improvement.
Presentations should be assessed based on the quality of the work produced. Have each of the three points
listed here been addressed? Is the information easy to understand? The slides from model student answers
could be used as an in-class wall display to use as examples in future lessons. Bear in mind that this will be
the learners’ first experience of some of the terminology and a detailed presentation is not required.
Differentiation:
• Support: If learners need support in selecting organisations, prepare a short list of organisations
where the required information is relatively easy to discover and direct learners to those sites.
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• Stretch and challenge: Some pairs could be challenged to go beyond the brief by examining more
than one of the objectives of each organisation and addressing these in their presentation.
Reflection: Ask learners to consider the following question: ‘Is it necessarily the case that firms in the public
service prioritise service and those in the private sector prioritise profit?’ Learners should write down brief
answers. Invite some learners to share their thoughts.
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Answers: Consider the following: the core objectives of private social enterprises such as cooperatives and
NGOs; why large private sector businesses allocate vast sums of money to corporate social responsibility.
2 Different economic systems (25–30 minutes)

Resources: Whiteboard, Coursebook section 2.1.
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Description: Draw an arrow on the whiteboard and label it as shown below. Ask learners to place the
following nations on the arrow diagram:
Canada, France, Venezuela, Hong Kong, North Korea, USA, India, Cuba, Sweden
Free market system Mixed economic system Planned economic system
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Answer:
Free market system Mixed economic system Planned economic system
Hong Kong India USA Canada France Sweden Venezuela Cuba North Korea
Assessment ideas: This task can be self-assessed by each learner, comparing their responses with the
answers that you should draw on the whiteboard.
Differentiation:
• Support: Support students who are having difficulty by providing one or two examples to get them
started (e.g. Hong Kong as the most free market nation).
FT
• Stretch and challenge: Learners should be encouraged to research the internet and list some of the
advantages and disadvantages of each economic system.
Answers include:
Economic system Advantages of the economic system Disadvantages of the economic system
Free market Resources are not wasted unnecessarily Unregulated markets can lead to vast
system because profit acts as a signal to income inequalities as well as poor
producers to produce more of the goods regulations of factories, leading to
or services excessive pollution and other externalities
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Mixed economic Most of the advantages of both planned Mixed economies also include most of the
system and free market economic systems are disadvantages of other economic systems
also present in a mixed economy
Planned economic Income inequality and social inequality are With no incentives for entrepreneurs and
system much lower innovators, productivity and economic
growth are low
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Reflection: Finish this exercise by leading a short conversation as to why no country is either 100% planned
or free market, and that nations instead exist somewhere on the scale, with elements of both systems present
in their economies.
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Plenary idea
Learning mind map (5–10 minutes)
Resources: None.
Description: Write on the board the question: ‘What did we learn today?’ as the centre of a mind map.
Ask learners to come up and write one thing that they learnt on the board. This can then be turned into a
revision resource from the lesson and learners could take a photo of the finished work for their future studies.
Assessment ideas: Support learners by identifying any gaps in the completed mind map and make a note of
these to use as a starter for the next lesson.
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2.2 The main features of private sector organisations

LEARNING OBJECTIVES
• Evaluate the main features of the following • Learners will be able to describe the
types of organisations: sole traders, characteristics and provide examples
partnerships, privately held companies and of different types of for-profit
publicly held companies. (commercial) organisations.
• Learners will able to evaluate the
effectiveness of each type of legal structure
for a given situation.
FT
LANGUAGE FOCUS
sole trader: a business that is exclusively owned partnership: a business formed by two or
by one person who has full control of it and is more people to carry on a business together,
entitled to all of the profit (after tax) with shared capital investment and, usually,
share: a certificate confirming part ownership. shared responsibilities
Most types of share entitle shareholders to limited liability: the only liability – or potential
dividends paid from profits loss – a shareholder (or partner in a limited
shareholders: individuals or institutions that liability partnership) has if the company fails is
the amount invested in the company, not the
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buy/own shares in a limited company
total wealth of the shareholder
publicly held company (plc): a limited company
with the legal right to sell shares to financial privately held company: a business that is
institutions and the general public; its share owned by shareholders who are often members
price is quoted on the national stock exchange of the same family; this company cannot sell
shares to the general public
initial public offering (IPO): the process of
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offering for sale the shares of a privately held
company to financial institutions and the
general public
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Assessment ideas
• You could begin this exercise by asking the class where either of their parents works. Then, as a way of
introducing the section, ask them to explain the likely legal structure of their place of work.
• This section is designed to be completed alongside case studies 2.1 and 2.2. Each of these focus on the
material from this section and will help to develop learners’ understanding of the chapter.
• An additional activity for this unit might be to ask learners to research the IPOs of Netscape and Uber and
explain why they were less successful than both businesses hoped. This will help learners to complete the
second main teaching idea.
• The exam-style questions could also be completed during this section, supporting the other activities here.
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Starter idea
Martha’s digital marketing agency (15–20 minutes)
Resources: Coursebook section 2.2, Case study 2.1, PowerPoint slide 5.
Description and purpose: Discuss the challenges faced by sole trader Martha’s digital marketing agency. In pairs,
learners should read about sole traders and partnerships in section 2.2 and write down any terms or concepts
they are unsure of. Once they have done that, learners should discuss the four questions on Martha’s business
in Case study 2.1 and then share their answers with another pair. Do they agree with each other? Make sure the
learners explain their answers fully to try to develop their speaking skills. Check that learners understand the
concept and relevance of the terms ‘limited liability’ and ‘unlimited liability’.
Main teaching ideas
1 Features of different private sector business (45–50 minutes + additional time
for presentations)
Resources: Coursebook section 2.2, Tables 2.1 to 2.4.
FT
Description: Classify organisations by business ownership. Learners should get into pairs or small groups
depending on class size (the ideal number of groups is five, one for each type of private sector business).
Allocate each pair/group a type of private sector business: sole trader, partnership, private limited company,
public limited company and cooperative.
Each pair/group needs to prepare a five-minute presentation (with accompanying slides that are capable
of supporting other learners) on the business structure they are allocated. This needs to include the
following information:
• a definition of relevant key terms
• the advantages and disadvantages of this type of business
• limited or unlimited liability and what this means for the business
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• examples of businesses with this structure.
Assessment ideas: Learners should be assessed on the extent to which the key information on each business
structure is presented in an easy-to-understand way. Each pair/group should also present a summary of their
slides to support learners in developing their understanding of key terms and provide them with a useful
revision tool.
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Differentiation:
• Support: Direct learners to Tables 2.1–2.4 in the Coursebook, which contain information to support
them in the task.
• Stretch and challenge: Learners should be encouraged to prepare a slightly longer presentation, with
an explanation of why the legal structure is particularly relevant to different industries, e.g. which
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type of firm or industry is most appropriate for the type of legal structure they are researching and
presenting on.
Reflection: In pairs, learners should discuss possible reasons why certain industries normally operate under
the same legal structure. For example:
• Why are legal firms and accountants generally partnerships?
• Why are many telecommunications, water and power industries public corporations?
• Why do many restaurants belong to a franchise?
• Why are businesses with low start-up costs, such as window cleaners and builders, operating as
sole traders?
2 Converting from private to public – the popularity of IPOs (30–40 minutes)

Resources: Coursebook, Business in context feature, internet sources.
Description: Ask learners to work in pairs to investigate one of the following IPOs: Alibaba Group Holding
Limited (2014), General Motors (2010), Facebook (2012) or Visa (2008) and then in pairs evaluate the success
of each share offering. This should be written in the form of a short report, including the following questions:
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• Why did the owners arrange the IPO and was the sale successful? Calculate the degree to which both
sales revenue and profit have grown since the IPO. Have there been any negative consequences from the
public offering?
• What might be the concerns for any businesses considering converting from a private limited company
to a public limited company?
• Are there any IPOs which have failed to raise sufficient capital from their initial flotation?
Answers: Will depend on the business chosen, but all of the four examples provided have seen significant
rises in revenue and profits since going public. Netscape and Uber are examples of failed IPOs, in both cases
losing their shareholders’ money due to reduced share value.
Assessment ideas: Ask each pair to share their findings with the class. Then collect in the individual reports
for grading.
Differentiation:
• Support: You may have to guide some learners by showing them where they can access the
information on one of the IPOs mentioned here.
FT
• Stretch and challenge: Learners should be encouraged to write beyond the brief by detailing in more
depth why their chosen IPO succeeded and giving an explanation of why another IPO, e.g. Uber or
Netscape, failed.
Reflection: Based on what they have learnt, learners should consider why some IPOs fail and some succeed.
Plenary idea
Legal structures of private businesses (15–20 minutes)
Resources: Coursebook section 2.2, Vocabulary building worksheet activity 2.1.
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Description: The activity on the Vocabulary building worksheet contains three exercises relating to the legal
structures of businesses. Each should be completed as an individual exercise and are designed as simple revision
practice. In questions 1 and 2, learners will complete the paragraphs, filling in the blank spaces. In question 2,
learners will use the words: public/private/profit/not for profit to complete each of the sentences. Finally, in
question 3, learners can complete the table by stating whether each of the statements is true or false.
Assessment ideas: You can move around the class and assess the learners’ responses to check that key messages
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from the section have been understood. Key learning points can be self-graded and any gaps in knowledge can
be noted as the basis for the starter of the following lesson.
Differentiation:
• Support: You may need to help some learners get started. You could also refer them to the relevant
sections of the Coursebook, which provide additional help with this exercise.
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• Stretch and challenge: Learners can research examples of NGOs, NPOs and charities and then
share their answers with the rest of the class. This can also be used as a starter question for the
following lesson.
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2.3 For-profit social enterprises – private

sector companies
LEARNING OBJECTIVES
• Evaluate the main features of the following • Learners will be able to identify the main
types of for-profit social enterprises: features of for-profit social enterprises and
• private sector companies. evaluate the appropriateness of this type of
organisation for different situations.
LANGUAGE FOCUS
maximising returns to owners
FT
social enterprise: a business with social and/or
environmental objectives that reinvests most
of its profits into benefiting society rather than
social entrepreneur: a person who establishes

an enterprise with the aim of solving social
problems or achieving social change
triple bottom line: the three objectives
of social enterprises: economic, social
and environmental
cooperative: a group of people acting together
to meet the common needs and aspirations of
its members, sharing ownership and making
decisions democratically
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Assessment ideas
• A good way to begin this section would be to ask learners to research examples of social enterprises and
cooperatives before inviting them to discuss the differences between the types of organisations. Then
complete the activities in this section.
• This section is designed to be completed alongside Case study 2.3, which focuses on the material from this
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section and will help to develop understanding of the chapter.
Starter idea
Introducing for-profit social enterprises (10–15 minutes)
Resources: Coursebook section 2.3, PowerPoint slides 6 and 7.
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Description and purpose: Learners should start by reading section 2.3 in the Coursebook. Then in pairs they
should discuss answers to the following question: ‘Social enterprises refer to the term “triple bottom line” –
what does this phrase mean when applied to social enterprises?’
Answer: Whereas business enterprises have one bottom line (profit), social enterprises have three – economic,
social and environmental.
Assessment idea: This can be self-graded based on the answer provided here. Learners can indicate their level of
understanding using the traffic light system before moving on.
Main teaching idea
Different types of for-profit social structures (40–50 minutes)
Resources: Coursebook section 2.3.
Description: In pairs, learners should create a mind map of for-profit social structures, identifying the differences
between this structure and other for-profit businesses.
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Answer: While most for-profit organisations will typically have a hierarchical organisational structure,
often very formal with clear lines of authority, the structure in many for-profit social structures reflects
the cooperative nature of the organisation. As a consequence, the structure tends to be less hierarchical
and more matrix in style. Under UK law, such businesses are prohibited from deviating from their original
social mission.
Assessment ideas: This activity can be peer assessed, with each group/individual reading out their answers
and other learners asking questions as a method of feedback. Mind maps can also be added to the walls of
the classroom for future learning opportunities.
Differentiation:
• Support: Some learners may may benefit from searching for-profit social enterprises online before
beginning the exercise. Learners may also benefit from being shown an example of an appropriate
structure before beginning their response.
• Stretch and challenge: To build on their mind maps, learners could identify examples of each type
of organisational structure. Learners could also complete the three questions in Case study 2.3.
FT
Reflection: Direct learners to Coursebook section 2.3 and to the Theory of knowledge exercise. After
learners complete the discussion activity, ask them to discuss the following question: ‘Is it inevitable that
businesses based on a for-profit model will always put profits before ethics?’
Plenary idea
Types of legal structure (10–15 minutes)
Resources: Coursebook section 2.3, access to the internet for research.
Description and purpose: Recognising the different legal structures of various businesses in the public and private
sectors of the economy.
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Ask learners to research the following types of business structure and then place each under the correct heading
in the table.
Cooperatives Sole trader Government departments
Franchise Microfinance providers Charities
Partnership Public services (e.g. health, schools)
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Public-private partnerships (PPP) Private limited company (Ltd)
Public limited company (PLC) Non-governmental organisations (NGOs)
For-profit social Non-profit social For-profit enterprise Public sector

enterprises enterprises corporation
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Answers:
For-profit social Non-profit social For profit enterprise Public sector corporation
enterprises enterprises
Cooperatives Non-governmental Sole trader Government departments

organisations (NGOs)
Microfinance providers Charities Partnership Public services

(e.g. health, schools)
Private limited
company (Ltd)
Public limited
company (PLC)
Franchise
2.4 For-profit social enterprises – public

sector companies
LEARNING OBJECTIVES
Learning objectives
FT Success criteria
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• Evaluate the main features of the following • Learners will be able to evaluate the
types of for-profit social enterprises: strengths and weaknesses of public versus
• public sector companies private sector corporations against a range
• cooperatives. of prescribed criteria.
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LANGUAGE FOCUS
public corporation: a business enterprise known as nationalised industry or public

owned and controlled by the state – also sector enterprise
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Many learners confuse Ask learners to list different Direct learners to the tip near the
the terms ‘public sector businesses in both beginning of section 2.4 on public sector
corporations’ and ‘public categories and check that enterprises, which explains the difference
limited companies’. they have not confused between the two concepts.
the terms.
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Assessment ideas
• Begin this section with a short discussion on some of the public corporations operating in the learners’
country. Who controls these organisations and who owns them? Stress the idea that the answer is not the
government for both – governments control public sector organisations, but they are owned by the public,
including everybody in the classroom. Do governments sometimes appear to forget this distinction, and do
governments also require checks and balances to moderate how they operate?
Starter idea
Organisational structures in the public sector (10–15 minutes)
Resources: Internet sources for research, whiteboard, PowerPoint slide 6.
Description and purpose: The following list includes some of the characteristics of both government departments
and public sector corporations. Both are different components of the public sector and distinguishing between
the two is a good way to start this section. Place each of the following characteristics under one of the
two headings:
• State instruments created to administer specific services
FT
• At least 51% of the capital is owned by the government
• Shares many of the characteristics of private companies
• Their primary objective includes providing a service to the public
• Under the control of parliament, government and the public
• Examples include British Telecom and Turkish Airlines
• Directly controlled by government/civil servants
• Examples include departments such as the police force, national defence or public schools
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Government departments Public corporations
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Answers:
Government departments Public corporations
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State instruments created to administer specific services Shares many of the characteristics of private companies
Their primary objective includes providing a service to At least 51% of the capital is owned by the government
the public
Directly controlled by government/civil servants Under the control of parliament, government and
the public
Examples include departments such as the police force, Examples include British Telecom and Turkish Airlines
national defence or public schools
Main teaching idea
The strengths and weaknesses of public corporations (20–25 minutes)
Resources: Coursebook section 2.4, Table 2.6.
Description: Learners should read Coursebook section 2.4 on public sector companies. In pairs, they should
review the advantages and disadvantages of public corporations.
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Still in their pairs they can then make a list of the main strengths and weaknesses of public sector organisations
and then decide whether they would support increased government control of the economy.
Assessment ideas: Ask some groups to share their responses and then have the assessment peer reviewed, with
groups deciding on the effectiveness of each response based on how well they justify and explain their reasons.
Differentiation:
• Support: Direct learners to Table 2.6 in the Coursebook, which shows advantages and disadvantages of
public corporations. This provides more information for learners who may need examples to help them
answer the question.
• Stretch and challenge: In their responses, learners should be challenged to think beyond the examples in
the Coursebook.
Plenary idea
Recap on what has been learnt so far (5–10 minutes)
Resources: None.
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Description: To support learners in reviewing their learning, ask them to write down at least two things they
learnt from the lesson – either a strength or weakness of public sector businesses that they fully understand, and
one question they still have about public corporations.
Assessment ideas: Take in the responses, which will provide you with an indication of what learners did and did
not understand. Then make a list of the most important questions and provide answers to each at the start of
the next lesson.
2.5 Non-profit social enterprises

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LEARNING OBJECTIVES
• Evaluate the main features of the following • Learners will be able to identify the main
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types of non-profit social enterprises: features of non-profit social enterprises and
• non-governmental organisations (NGOs). evaluate the appropriateness of this type of
organisation in different situations.
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LANGUAGE FOCUS
non-profit organisation: any organisation that non-governmental organisation (NGO):

has aims other than making and distributing a legally constituted body that functions
profit and which is usually governed by a independently of any government and that
voluntary board has a specific humanitarian or social aim/
purpose, e.g. supporting disadvantaged groups
in developing countries or advocating the
protection of human rights
Assessment ideas
• Coursebook activity 2.3 includes an exercise which will reinforce the learners’ understanding of this section
and would be a good activity to complete after the reflection at the end of the main teaching activity and
just before the plenary exercise.
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• During this section, ask learners to research and then discuss as a class the differences between the
organisations in this section and the for-profit organisations already studied.
• The project could also be completed during this section, supporting the other activities here.
Starter idea
Introducing non-profit social enterprises (5–10 minutes)
Resources: Coursebook section 2.5 on non-profit social enterprises.
Description and purpose: In pairs or small groups, learners should start by investigating one of the following
non-profit social enterprises via their respective websites:
• Bike Project Surrey
• Changing Perceptions upcycling furniture workshop
• Seagulls paint reuse charity
• PBS4 (Positive Behaviour Support)
• Hortic Therapy (gardening and health).
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What to do next: In their pairs or small groups, learners should provide a brief report, outlining the purpose of each
social enterprise and what they do. The reports can be read out and then discussed as an introduction. You can then
ask the groups or pairs to explain the difference between the enterprises described and for-profit enterprises.
Answer: The difference is primarily one of size and therefore scale of operations as well as purpose. In many
cases, larger charities and NGOs also use fundraising as a way of increasing awareness of their cause.
Main teaching idea
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Médecins Sans Frontières (MSF) (25–30 minutes)
Resource: Coursebook section 2.5, IB learner profile
Description: Learners should start by reading Coursebook section 2.5 on non-profit social enterprises and
the Learner profile activity on the principles behind Médecins Sans Frontières (MSF). After completing the
discussion activities in the profile, learners should investigate one of the other NGOs described in the section:
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• Amnesty International
• Article 19
• Avocats Sans Frontières
• Ford Foundation
• MacArthur Foundation
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• International Committee of the Red Cross (ICRC).

What to do next: In pairs or small groups, learners should compare the activities of the organisations they have
researched and use the IB learner profile to state which of the ten IB learner profile attributes are clearly in
evidence in the practices of the organisation.
Assessment ideas: Learners will deliver their own responses but must be able to justify their findings. Praise
learners who are able to go beyond a simple identification of learner profile attributes and those able to justify
their response, particularly those able to provide an original perspective.
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Differentiation:
• Support: Allow some learners to complete the task as one of a pair so they can discuss their ideas with
another learner before completing the task.
• Stretch and challenge: Learners can be challenged to research their own non-profit organisation and
complete the same exercise for that business.
Answer: While many learners will select the obvious learner profile trait of ‘principled’, there are others that may
well be in evidence, e.g. thinker, reflective, communicator, risk taker, knowledgeable, etc.
Reflection: Ask learners to consider why some social enterprises operate for profit while others run on a
not-for-profit basis. Ask them to outline one advantage of each legal structure.
Answer: Might include tax advantages to being non-profit as well as access to grants/government support. An
advantage of for-profits may be access to larger funds, allowing them to complete more of the charitable work
they were set up to do.
Plenary idea
Revision of key terms (15–20 minutes)
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Resources: Vocabulary building worksheet 2.1 activity 2.2.
Description and purpose: Vocabulary building worksheet 2.1 activity 2.2 contains a list of key terms for this
chapter, with a correct definition for each. Learners need to unjumble the key terms so that they match the
definition provided. The purpose of this activity is to check understanding of the necessary key terms, and this is
an effective revision exercise. Once completed, learners should turn their responses into a revision sheet or set of
flash cards for future learning opportunities. This exercise could also be turned into a revision poster to display
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on a wall of the classroom.
Project guidance
When completing the project, learners should first consider whether they have a family member or family friend
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who works for an NGO. It is much easier for learners to gain access to an organisation (especially the manager
of it) if a member of the class has a contact at the company in question.
The poster and/or video will need to include all of the features requested, as well as any additional information
the learners may collect independently. The class should aim to turn this information into a poster or video
capable of being presented to other learners and containing sufficient information to be used as a revision
prompt for later in the course. This means that the information contained must not be too descriptive, i.e. it
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should describe the precise legal structure and the relationship with the government and other stakeholders –
how does each stakeholder contribute to the workings of the organisation and what are its main sources
of funding?
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3 Business objectives
Teaching plan
of learning hours
3.1 Vision 2 hours The usefulness and Coursebook
statement contents of an effective Business in context
and mission mission statement and Section 3.1
statement vision statement Table 3.1
Theory of knowledge
PowerPoint slide 2
3.2 Common
business
objectives
3.3 Corporate
social
responsibility
2 hours
2 hours
FT The aims, objectives,
strategies and tactics
of businesses and the
relationship between each
The reasons why

organisations set ethical
objectives and the impact
Coursebook
Sections 3.2–3.3
Activity 3.2
PowerPoint slide 3
Coursebook
Sections 3.2 and 3.4
Case study 3.1–3.3
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(CSR) of implementing them Activity 3.3
The evolving role and Teacher’s resource
nature of CSR PowerPoint slide 4
3.4 Business 1.5 hours SWOT analysis of a Coursebook
management given organisation Section 3.5
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tools: SWOT Case study 3.4
analysis The need for organisations Learner profile
to change objectives and
innovate in response to Teacher’s resource
changes in internal and Skills development worksheet
external environments activity 3.1
PowerPoint slide 5
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3.5 Business 2 hours Identifying how changes Coursebook

management to external variables Section 3.5
tools: STEEPLE impact on a given
analysis business’s prospects Teacher’s resource
PowerPoint slide 6
3.6 Business 1.5 hours Ansoff matrix for different Coursebook
management growth strategies of a Section 3.5
tools: Ansoff given organisation and Case study 3.4
matrix situation
PowerPoint slide 7
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• Many learners will be aware of recent trends working hard to promote a positive image.
in several nations towards corporate social They will also be aware of some aspects of
responsibility (CSR), with nearly all companies SWOT analysis through their GCSE studies.
Syllabus overview
Chapter 3 covers organisational objectives, and the grand plans of businesses as illustrated by the mission
statement and vision statement. Learners will be required to compile a SWOT analysis for a given business as
well as a relevant Ansoff matrix for a given marketing campaign.
As the course progresses, learners will also need to be able to distinguish between smaller tactical decisions,
made lower down the company by supervisors and junior managers, and larger strategic decisions, made
by senior management and company owners/directors. This chapter also provides further opportunities for
connection to the Theory of knowledge syllabus through the question: ‘How can we evaluate the usefulness of
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evidence in decision making?’
3.1 Vision statement and mission statement

LEARNING OBJECTIVES

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• Apply and analyse vision statements and • Learners will be able to analyse the
mission statements. effectiveness of different mission and vision
statements and apply each objective to a
given situation.
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LANGUAGE FOCUS
mission statement: a statement of the vision statement: a statement of what the

business’s core aims, phrased in a way to organisation would like to achieve or accomplish
motivate employees and to stimulate interest in the long term
from outside groups
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Many learners confuse the Ask learners to distinguish, Provide examples of both to
terms ‘mission statement’ and using examples, the difference illustrate the point. Check for
‘vision statement’. between the two concepts. understanding of the difference
in the reflection activity (main
teaching activity 2), which
differentiates between the
two statements. Table 3.1 of
the Coursebook also provides
a good illustration of the
difference.
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Assessment ideas
• Before starting this unit, ask learners to read the key concept at the beginning of the chapter, ‘Change’.
Much of the chapter focuses on how the goals and objectives of an organisation change over time.
Perhaps start this chapter by asking learners to suggest businesses that have changed their objectives
over time. For example, Starbucks changed its world-famous logo as part of its rebrand, removing the link
to coffee in the new logo. This reflected the new goals of the organisation, focusing on non-coffee sales as
part of its expansion plans – see Case study 3.1.
• When learners work on the starter activity, emphasise that it is the precise method of achieving their goals
that is important, not the goals themselves. For instance, while it will be tempting for learners to express a
desire to be rich or to pass their IB with 40+ points, they need to outline a policy for achieving this,
e.g. complete examination activities, etc.
• After completing the main teaching activity on Daimler AG, you could set Case study 3.1 as a class or
homework activity to support their understanding of the unit and to help them complete the reflection
activity at the end of main teaching activity 2. Table 3.1 is also a useful resource to help complete
this activity.
• Case study 3.1 on Starbucks also complements the activities in this section and would be an effective
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homework or written class activity.
• When learners are completing the plenary activity, make sure that they are creating a mission statement and
not a vision statement. Learners sometimes find it difficult to distinguish between the two.
Starter idea
What are your goals? (10–15 minutes)
Description and purpose: Finding out about goals and vision.
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On the whiteboard write the following:
‘What are your goals for the next five years?
Write down a potential road map for achieving these goals.’
For example, if the goal involves securing a good salary and a prestigious job, then this may depend on them
gaining a degree in either business management or economics.
Answers can then be shared and compared with other learners. Explain to learners that in completing this task
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they have identified their short-term and longer-term objectives, just as businesses complete mission and vision
statements to map out their future plans. Learners will come back to this activity later in the lesson.
Main teaching ideas
1 Mission statements (40–50 minutes)
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Resources: Coursebook, Business in context feature, access to the internet, PowerPoint slide 2.
Description: Learners will evaluate the contents and uses of organisational mission statements.
Learners should begin by reading the strategic approach of Daimler AG in the Business in context feature
and use the information to write a short report (600 words maximum) evaluating Daimler’s mission
statements. The report will support learners in developing their thinking and evaluation skills by getting
them to explain their own individual views on mission statements.
Assessment ideas: Use peer assessment to assess this task. Ask each learner to read the work of their
neighbour (or another learner from the class) and provide feedback on the report, explaining one thing they
agreed with and another that they believe could be improved.
Differentiation:
• Support: Provide learners with a list of questions to help them structure their report:
• What is the mission statement of the business?
• Why do you think it has chosen this mission statement?
• What does it tell you about the business?
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• Is it clear or is it vague? Why do you think this?

• Is it general or does it lack detail? Why do you think this?
• Overall, do you think the mission statement is good or not? Why do you think this?
• Stretch and challenge: Once learners have completed this task, you can ask them to complete the
questions from the Business in context feature.
2 Vision statements (20–30 minutes)

Resources: Coursebook Table 3.1.
Description: Learners will compare organisational strategy, mission and vision statements and then relate
each to the goals/targets they identified in the starter activity.
What to do next: Having read the mission and vision statements in Table 3.1, learners should revisit their
road maps compiled during the starter activity and the goals they set for themselves. The aim of this
activity is for learners to recognise the similarity between their own goals and the aims and objectives of
different organisations.
Assessment ideas: In pairs, learners should then discuss the benefits of completing both the goal and road
map. While there are no formal answers for this assessment, you may guide learners to the recommended
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answers here.
Answers: Examples might include:

• Writing down plans provides a vision of where they want to be.
• It also helps plan the steps required to get there.
• It allows each learner to assess (in five years’ time, for example) whether they have been successful in
achieving their goal or not.
Differentiation:
• Support: Support learners by guiding them to consider their ultimate goal as their ‘vision
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statement’, their path to success as a ‘mission statement’, and objectives as individual steps to take,
e.g. spend 2–3 hours each night revising their work.
• Stretch and challenge: Learners should be encouraged to compare their own goals to the mission
and vision of different businesses.
Reflection: Ask learners to reflect on this unit by providing examples which illustrate the difference
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between vision and mission statements. Learners can visit the website of an organisation and highlight both
the vision and mission statement. Learners can then discuss each statement with the class, indicating the
differences between the two statements.
3 Real-world examples of objectives (30–40 minutes)

Resources: Blank flashcards for learners to fill out (six cards per learner).
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Description and purpose: Learners will analyse the different objectives of businesses.
Learners should create six flashcards, with a business objective on one side and a short description of the
objective on the reverse.
Read a list of scenarios (see list of examples below). Learners will hold up the card with the objective they
think is most suitable for each scenario. Learners should be able to justify their decisions. In situations where
the objectives chosen conflict, this can be discussed and each learner can be asked to justify the reason for
their choice of objective. This will allow learners to develop their discussion skills within the context of real-
world examples. Scenarios should include businesses from the public and private sectors, social enterprises,
as well as businesses of different sizes and established at different times over the years.
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Examples are:
• a new business start-up in a competitive field with a high failure rate
• a private skate park in an inner-city area
• an established business that is a leader in its field
• the owner of a baseball franchise purchasing an ice hockey franchise
• a business set up to provide shelter for abandoned pets
• a city underground metro system
• an established business diversifying into a new market for the first time.
Answers:
• A new business start-up in a competitive field with a high failure rate – survival.
• A private skate park in an inner-city area – social cause but perhaps some profit motive.
• An established business that is a leader in its field – maximise profit.
• The owner of a baseball franchise purchasing an ice hockey franchise – increased market share/profit.
• A business set up to provide shelter for abandoned pets – promote a cause.
• A city underground metro system – provide a service to the public.
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• An established business diversifying into a new market for the first time – gain market share.
Assessment ideas: This activity can be peer assessed, with learners encouraged to discuss the suitability of
each chosen flashcard and provide feedback. This activity could also finish with a class discussion about the
reasons why entrepreneurs have different motivations for starting a business.
Differentiation:
• Support: Learners could do this task in pairs – allowing for a short discussion with their partner
before making their decision.
• Stretch and challenge: You could also make a small number of more difficult scenarios, for
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example the owner of a chemical business invests in a scholarship programme for young science
undergraduates. This is a more difficult scenario because science scholarships can have more than
one obvious objective.
Plenary idea
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Class mission statement (15–20 minutes)
Resources: None.
Description: Ask learners to create a class mission statement, with learners contributing ideas and one person
charged with writing them down. The aim is to create a mission statement that represents the learners as a class.
This can then be referred back to as the course progresses. The task also highlights the difference between a
mission statement and individual objectives.
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Assessment ideas: Display the finished work in the classroom as a source of motivation and discussion for the
remainder of the course.
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3.2 Common business objectives

LEARNING OBJECTIVES
• Apply and analyse common business • Learners will be able to analyse the
objectives, including growth, profit, aims, objectives, strategies and tactics of
protecting shareholder value and different businesses, including growth,
ethical objectives. profit, protecting shareholder value and
ethical objectives.
• Synthesise and evaluate different strategic
and tactical objectives. • Learners will be able to distinguish between
the strategic and tactical objectives of
• Select and apply STEEPLE analysis. different organisations and apply each to a
given situation.
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• Learners will be able to evaluate the need
for organisations to change objectives and
innovate in response to changes in internal
and external environments.
LANGUAGE FOCUS
strategic objective: a long-term plan of action business objectives: short- or medium-term

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for the whole organisation, designed to achieve goals or targets – usually specific in nature –
the corporate aim which must be achieved for an organisation to
tactical objective: a short-term target aimed attain its overall corporate aim
at resolving a particular problem or meeting a corporate aims: the long-term goals which a
specific part of a longer-term strategic objective business hopes to achieve
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Assessment ideas
• When learners do the starter activity, direct them to the Theory of knowledge question: ‘How can we
evaluate the usefulness of evidence in strategic decision making?’ and ask them to complete the three
discussion questions as a back-up to the starter activity. This provides an ideal introduction to the section.
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• After learners complete the starter activity direct them to Figure 3.1, which illustrates the concept of the
hierarchy of objectives. You could then discuss examples of each of the levels of hierarchy before moving on
to the main teaching activities in this section.
• The first main teaching activity is designed to be completed alongside Coursebook Activity 3.2. You could
set this as a written activity before or after the main activity.
• Case study 3.3 would make a good homework activity during this section as the questions at the end of the
study complement the other activities.
• Section 3.2 of the Coursebook provides useful material for the learners to read when completing the
second main teaching activity on common corporate aims. Ask learners read this section before completing
Activity 3.2.
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Starter idea
Hierarchy of objectives (10–15 minutes)
Resources: Coursebook section 3.3, Figure 3.1.
Description and purpose: Learners should use the information contained in section 3.3 and Figure 3.1 to create a
chain of reasoning, illustrating the role of objectives in the stages of business decision-making. Learners can use
an example to illustrate their work.
Answer: Learners will make their own chain of reasoning, but an example might be:
1 Overall vision statement or corporate aim
2 Mission statement
3 Corporate objectives for the whole division/subsidiary
4 Departmental objectives
5 Individual employee or team objective
Main teaching ideas
FT
1 The importance of SMART targets (30–40 minutes)
Resources: Coursebook section on SMART targets, Activity 3.2, PowerPoint slide 3.
Description: Learners develop an understanding of the importance of making targets SMART.
They should begin this activity by writing out SMART targets for what they hope to achieve on this course.
They should explain why it is important for targets to be SMART.
Assessment ideas: This assessment should be peer reviewed, with learners comparing targets with a partner.
Each pair should then decide whether the targets being reviewed are sufficiently SMART. If not, can they
advise their partner how they could be adapted?
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Differentiation:
• Support: Provide learners with a more scaffolded template for their response, with more specific
headings. They could also be shown a ready-made example that you have prepared yourself.
You could direct learners to Activity 3.2, which provides examples of SMART objectives.
• Stretch and challenge: Encourage learners to produce SMART targets for their entire IB studies,
including CAS, Theory of knowledge and extended essay completion.
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Reflection: Ask learners to research the vision and mission statements for the following businesses and
decide whether each is sufficiently SMART:
Tumblr, Amazon.com, LinkedIn, Asos, Alibaba, Facebook, PayPal, Twitter, Uber, the BBC, Tesla, Forbes,
Disney, Sony, Kickstarter and Asana.
2 Common corporate aims (40–50 minutes)

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Resources: Coursebook section 3.2, whiteboard, access to the internet.

Description: Learners should analyse common corporate aims and provide reasons why these may change
over time as circumstances evolve.
Start by writing on the whiteboard the common aims that are identified in the Coursebook – profit
maximisation, profit satisficing, growth, increasing market share, survival, maximising short-term sales
revenue, and protecting and increasing shareholder value.
In pairs, learners should research recent events that might have an impact on a business, e.g. Covid-19,
Brexit, climate change. They should choose five relevant articles and then write a report containing five
paragraphs (one per article) which uses a chain of reasoning to identify:
• the article
• possible change in objectives that are needed
• examples of businesses likely to be affected.
This activity is designed to support learners in understanding how changes in the external environment can
affect business objectives.
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Typical answers:
• The hospitality industry is decimated by rules on social distancing.
• Businesses in hospitality are forced to absorb significant costs for adapting their premises, and they
have to reduce the capacity of the venues.
• Businesses in the hospitality industry.
Assessment ideas: Create a ‘news wall’ in the classroom displaying the news articles collected.
Differentiation:
• Support: Support learners by providing links to suitable news sources to help them start the task.
• Stretch and challenge: Instead, learners can write an article in the style of a newspaper report about
how a company has responded to the news event.
Plenary idea
Making objectives SMARTer (20–30 minutes)
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Resources: None
Description: The following short list contains some objectives; learners should write a SMART target for each.
1 Profit objective
Example: To achieve a 10% return on capital employed by the end of the fiscal year.
2 Market share objectives
Example: To achieve 20% of the market for shoes in 2023.

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3 Promotional objectives
Example: To increase the awareness of the brand from 8% to 10% among the target group by the end of 2023.
4 Objectives for survival
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Example: To survive the current period of recession in the economy.
5 Objectives for growth
Example: To increase sales revenue by 30% by 2028.

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6 Ethical objectives
Example: To reduce the business’s carbon footprint by 25% by 2030 and remove suppliers that do not sign up to
our declaration of conduct by 2027.
Assessment ideas: The task can be assessed in terms of whether they satisfy each criterion of SMART.
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3.3 Corporate social responsibility (CSR)

LEARNING OBJECTIVES
• Synthesise and evaluate corporate social • Learners will be able to evaluate the reasons
responsibility (CSR). why organisations set ethical objectives and
the impact of implementing them.
evolving role and nature of CSR.
LANGUAGE FOCUS
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stakeholders: people or groups of people corporate social responsibility: this concept
who can be affected by, and therefore have an applies to those businesses that consider the
interest in, any action taken by an organisation interests of society by taking responsibility
social audit: an independent report on the for the impact of their decisions and activities
impact a business has on society. This can on customers, employees, communities and
cover pollution levels, health and safety record, the environment
sources of supplies, customer satisfaction and ethical code (code of conduct): a document
contribution to the community detailing a company’s rules and guidelines
ethics: moral guidelines that determine on staff behaviour that must be followed by
all employees
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decision-making
Assessment ideas
• This section of the chapter should be completed using section 3.4 and subsection 3.2 ‘Ethical objectives’ of
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the Coursebook. Begin the section by asking learners to read Coursebook section 3.4 and subsection 3.2
‘Ethical objectives’. You could even set this as pre-class reading (a flipped classroom approach) before
starting the section.
• Guide learners to the moral dilemmas in the subsection of section 3.2, Ethical objectives, as additional
support when considering the reflection activity on universal ethical behaviours at the end of main teaching
activity 2.
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• Case study 3.2 on the Dubai housing market can be set as a class or homework activity for learners. An ideal
time for this would be alongside the first main teaching activity, as this is the focus for the reflection question
at the end of this activity.
• Activity 3.1 on Netflix is also a useful written activity to support learning from this section.
Starter idea
Key terms: ethical objectives and corporate social responsibility (CSR)
(10–15 minutes)
Resources: Coursebook sections 3.2 and 3.4.
Description and purpose: Learners should begin this section by adding the key term to the correct definition so
that each statement is correct. Each term relates to the sections on ethics and CSR.
Key terms:
Ethical code (code of conduct), Ethics, Social audit, Stakeholders, Corporate social responsibility (CSR)
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Key term Definition

This concept applies to those businesses that consider the interests of
society by taking responsibility for the impact of their decisions and
activities on customers, employees, communities and the environment
Moral guidelines that determine decision-making
An independent report on the impact a business has on society. This
can cover pollution levels, health and safety record, sources of supplies,
customer satisfaction and contribution to the community
A document detailing a company’s rules and guidelines on staff
behaviour that must be followed by all employees
People or groups of people who can be affected by, and therefore have
an interest in, any action by an organisation
Answers:
Key term
Corporate social responsibility
Ethics
Social audit
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Definition
This concept applies to those businesses that consider the interests of society by
taking responsibility for the impact of their decisions and activities on customers,
employees, communities and the environment
Moral guidelines that determine decision-making
An independent report on the impact a business has on society. This can

cover pollution levels, health and safety record, sources of supplies, customer
satisfaction and contribution to the community
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Ethical code (code of conduct) A document detailing a company’s rules and guidelines on staff behaviour that
must be followed by all employees
Stakeholders People or groups of people who can be affected by, and therefore have an
interest in, any action by an organisation
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Assessment ideas: This activity can be self-assessed from the answers you will give learners.
Main teaching ideas

1 Ethical objectives (40–50 minutes)
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Resources: Coursebook section 3.2, Case study 3.2, PowerPoint slide 4.

Description: Learners will evaluate the impact that ethics can have on business objectives and behaviour.
They should start by reading the ten ethical dilemmas in the ‘Ethical objections’ subsection of the
Coursebook and then in pairs discuss five (either assigned by you or chosen themselves), from the viewpoint
of the following stakeholders:
• shareholders
• customers
• employees
• the community they operate in.
Answers: These will depend on each learner’s own opinions, but they should be rewarded for a genuine
discussion which considers both the advantages and disadvantages of the dilemma.
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Assessment ideas: Learners should write down what they think they have learnt about the importance of
balance in any evaluation task. A small selection of learners can be invited to share their thoughts with
the class.
Differentiation:
• Support: By completing the task in pairs, each learner will be able to discuss their own ideas and
read the points made by other learners.
• Stretch and challenge: Encourage learners to challenge others’ opinions. Also encourage them to
consider both the merits and costs with taking an ‘ethical’ stance and the impact this might have on
the overall objectives of a business.
Reflection: Learners should read Case study 3.2 on real-estate agencies in Dubai. They should consider
whether the agencies are likely to follow the DLD standards of ethical practices and whether it is possible
to enforce such rules. Might this kind of ethical code be better enforced via a joint approach, rather than
relying on individual agencies to decide whether they wish to conform or not?
2 Social audits (50–60 minutes)

Resources: Coursebook section on Measuring CSR – social audits.
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Description: Learners will conduct their own social audit on their current school. Start this activity by
asking learners to familiarise themselves with the definition of a social audit. They can find this in their
Coursebooks, as well as referring back to their notes from the starter activity.
What to do next: In small groups, learners should conduct a social audit of the school, focusing on the
following factors:
• record of health and safety, e.g. number of accidents amongst staff/students in the school (not including
sports-related injuries in organised competitive matches)
• contributions to local community events and charities, including major CAS activities organised by
the school
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• proportion of supplies that come from ethical sources, e.g. Fairtrade Foundation suppliers
• employee benefit schemes, including awards as recognition of long service
• feedback from customers and suppliers on how they perceive the ethical nature of the school’s activities.
This activity will involve each learner completing their own research, including interviewing school staff.
The research should be presented in the form of a report which could potentially be used by management at
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the school as a guide for further improvement. The report can be submitted as a group, not individually, but
each member of each group is expected to have contributed to its findings.
Answers: Will depend on the learners’ own opinions, but the findings of the report should be justified based
on the evidence provided.
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Assessment ideas: Learners should submit their findings in the form of an 800-word report, including
responses to all of the questions and the evidence used to justify their conclusions. The report should also
conclude with at least one or two recommendations for improvement at the school. A small selection of
learners can be invited to share their thoughts with the class.
Differentiation:
• Support: By completing the task in small groups, each learner will be able to discuss their own ideas
and read the points made by other learners.
• Stretch and challenge: Encourage learners to go beyond the brief by adding to their report
some recommendations for improvement at the school. For example, if the school is not relying
sufficiently on ethically based sources, suggest some suppliers that the school might be able to use to
address this.
Reflection: Having completed this task, learners should reflect on their work and ask whether ethics are
simply a matter of opinion or whether there is a set of universal ethical behaviours that all individuals can
agree on, regardless of culture or political/social opinions.
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Plenary idea
‘Nice to do’ becomes a ‘need to do’ (10–15 minutes)
Resources: Coursebook section 3.4, Table 3.3.
Description: Learners will evaluate the increasing importance of corporate social responsibility (CSR). In pairs
learners brainstorm ideas about some of the advantages of incorporating CSR into business organisations.
Answers: Examples of responses might include that CSR:

• boosts the engagement of employees
• helps to attract and retain core workers
• creates a more positive environment to work in
• promotes individual philanthropy, attracted by the potential for good publicity
• creates a culture that promotes innovation and creativity
• encourages professional and personal growth
• improves the public image of the business/brand.
Assessment ideas: Learners can check their responses with Table 3.3 in the Coursebook, before using the traffic
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light system to indicate their level of understanding of this section from red = don’t understand, amber = some
understanding, to green meaning complete understanding.
Differentiation:
• Support: Support learners by providing them with one or two examples to get them started.
• Stretch and challenge: Having compiled advantages of incorporating CSR into business organisations,
learners can be encouraged to investigate some of the disadvantages of CSR.
Answers: CSR can be expensive to administer and may also conflict with other objectives such as profit and
sales growth.
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3.4 Business management tools: SWOT analysis
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LEARNING OBJECTIVES
• Select and apply SWOT analysis. • Learners will be able to select SWOT
analysis and apply it to a given organisation.
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LANGUAGE FOCUS
SWOT analysis: a form of strategic analysis opportunities and threats that will influence the
that identifies and analyses the main internal future direction and success of a business
strengths and weaknesses and external
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Learners will sometimes This will be noticed during Emphasise to your class that strengths
confuse internal and questioning or learner and weaknesses are internal factors only
external factors, e.g. work when responses are (relating just to the individual business),
confusing strengths confused. and that opportunities and threats are
with opportunities and external factors, which impact on similar
weaknesses with threats. businesses in the industry.
Assessment ideas
• Begin this chapter by directing learners to section 3.5 of the Coursebook so that they are familiar with the
terms before starting this activity.
• Learners regularly struggle with the difference between strengths and opportunities for a business and
between weaknesses and threats, so you will need to emphasise the differences throughout the section.
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Test learners on their understanding of the differences throughout the unit.
Starter idea
Introduction to SWOT analysis (20–30 minutes)
Resources: Coursebook section 3.5 on SWOT, Table 3.5, whiteboard.
Description and purpose: Learners should read the Coursebook section which explains the concept of SWOT.
Draw a blank SWOT diagram on the whiteboard and instruct learners to compile a SWOT diagram for a
business of their choice. This can be a small business run by a family or friend, or a large company such as Nike
or Google. Stress to learners the importance of separating factors into those that are internal and those that
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are external. Responses will be individual but must include a minimum of two each of strengths, weaknesses,
opportunities and threats.
Main teaching ideas
1 Applying SWOT to an NGO (50–60 minutes)
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Resources: Coursebook section 3.5 on SWOT analysis, Learner profile on OpenMinds, Table 3.5, PowerPoint
slide 5, IB learner profile.
Description and purpose: Learners should complete a SWOT analysis for the NGO OpenMinds, using the
information contained in section 3.5, supported by their own research online.
Learners should then produce a report, divided into strengths, weaknesses, opportunities and threats for the
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business. For each title learners will need to identify two to three strengths, weaknesses, opportunities and
threats for the organisation. These must be specific, relating to the NGO, not generic. The report should
conclude with one or two recommendations, focused on the future direction of the organisation.
Answers: Responses might include:

Strengths – Clear and unifying mission and vision statement, website is also clear and well designed
Weaknesses – Currently small in scale and limited in scope, which reduces possibilities for economies of scale
Opportunities – Multiple links with overseas (and well-funded) partner schools
Threats – Economic challenges in Lebanon, particularly the sharp depreciation of the currency, which is
likely to increase costs and make it more difficult to raise funds.
Assessment ideas: Learners should submit the SWOT analysis to you, which should be 750–850 words
long. Learners must include each of the elements of SWOT and responses must be supported by evidence
found online or in the Coursebook. Learners should not be rewarded for responses which are either generic
or unsupported.
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Differentiation:
• Support: Refer learners to PowerPoint slide 5 and work through an example of a SWOT analysis
for any business (perhaps their own school), so that they have a working example to support them.
Table 3.5 in the Coursebook also contains some additional support.
• Stretch and challenge: Challenge some learners to go beyond the brief by adding two or three
strategic objectives to their report.
Reflection: Learners should reflect on the Learner profile text on OpenMinds. They should consider which
other components of the IB Learner profile are in evidence at OpenMinds, besides being open-minded.
Answers: Learners might select Inquirer, Principled or Caring as Learner profile attributes which fit with
the organisation.
Plenary idea
Organisational objective crossword (30–40 minutes)
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Resources: Skills development worksheet activity 3.1.
Description: Finish this lesson by giving out the Skills development worksheet for learners to complete.
This is designed as an enjoyable revision activity, which the learners can complete either individually or in
pairs. Learners may want to use their Coursebook or notes to help them complete the worksheet. All clues and
answers relate to Chapter 3 Business objectives.
Assessment ideas: You should move between groups/individuals, checking on their progress. Once completed,
the activity can be self-graded by learners against the answers in the Teacher’s resource.
Differentiation:
• Support: Support some learners by providing them with one or two answers to get them started.
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• Stretch and challenge: Challenge some learners to complete the exercise without referring to their
Coursebook notes or other sources of information.
3.5 Business management tools: STEEPLE analysis

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LEARNING OBJECTIVES

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• Select and apply STEEPLE analysis. • Learners will be able to evaluate how
potential changes to a firm’s external
environment impacts on the way that the
business can operate.
LANGUAGE FOCUS
STEEPLE analysis: the strategic analysis of the including, social, technological, economic,
macro-environment in which a business operates environmental, political, legal and ethical factors
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Many learners believe that they Learners will often declare a Ask learners to name as many
require a wide knowledge of lack of knowledge and ask if global firms as they can, as well
how business activity is done in a knowledge of economics is as one or two headlines from
a range of countries. This is not essential for studying this unit. recent events around the world.
the case as one or two examples
(perhaps from their own nation)
will suffice.
Many IB learners get the In the starter activity, learners Guide learners though the
following STEEPLE terms may struggle to distinguish starter activity using PowerPoint
confused: environmental between the some of the terms slide 6 and provide different
and ethical; legal and and will ask questions such as examples to assist learners
political factors. ‘Are minimum wage changes to understand the difference
legal or political?’ between factors.
Assessment idea
•
• FT
The starter activity is where you will introduce each of the STEEPLE factors to your class. Some IB learners
confuse STEEPLE factors so this activity is your opportunity to clarify them from the outset. A good
example could be minimum wage – some learners will be unsure whether this is political or legal. Provide
clarity on this and any other misunderstandings.
Take this opportunity to explain the difference between a STEEPLE diagram, PESTEL diagrams and PEST
diagrams, as some of your learners may have heard these terms and will want to understand the difference
between them.
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Starter idea
The impact of external changes on businesses (10–15 minutes)
Resources: Figure 3.3, PowerPoint slide 6.
Description and purpose: Write down the name of an organisation, e.g. your school, on the whiteboard and ask
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learners to identify different social, technological, economic, environmental, political, legal and ethical factors
which might impact on the organisation. Add each suggestion to the whiteboard. This will introduce the concept
of STEEPLE to your class, and it will help you to understand which concepts the learners understand and which
ones they do not.
Main teaching ideas
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1 Be a journalist (50–60 minutes)
Resources: Access to the internet.
Description: Learners should each choose an organisation, which can be:
• one they are interested in
• a business in which they have contacts, e.g. family, friends, friends of family
• one from an interesting business article that they have read in the past.
Learners then research their organisation in the following ways.
• visit the organisation’s website
• interview somebody from the organisation (if possible)
• find news articles about the organisation and relevant external factors, e.g. economic factors.
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Note: The research must be recent (within the last year) because the learners are analysing the current
position of the organisation.
Learners should then use their research to prepare a STEEPLE analysis of their chosen business. Responses
should be less than 800 words.
Assessment ideas: Collect in the completed work and grade it against the rubric that you create. Award
learners for specific references to their research and the identification of multiple STEEPLE factors.
Differentiation:
• Support: Provide a small number of ready-made examples, e.g. well-known/topical businesses such
as Amazon, which might be easier to identify appropriate STEEPLE factors from. Some learners
may also benefit from an initial example of one of the factors to get them started.
• Stretch and challenge: Encourage learners to find relevant changes to each of the STEEPLE factors.
These might be more specific/non-generic examples, e.g. the EU data protection law which had an
impact on UK businesses, particularly those in the social media industry.
2 Employment law report (30–40 minutes)

Resources: Internet sources.
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Description: Learners should start by researching examples of different employment laws which may affect a
business, e.g. the impact of laws concerning:
• employment practices
• health and safety at work
• minimum wage.
Having completed their research, learners should devise a 500-word report which could be given to new
employees, advising them of their legal rights.
Assessment ideas: Select some of the learners’ work to be displayed in the classroom as a revision aid and
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motivation for future lessons.
Differentiation:
• Support: Direct learners to the appropriate websites to make the task easier to complete. Some
learners may also benefit from writing a leaflet (shorter than the report), rather than undertaking
the full task.
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• Stretch and challenge: Encourage learners to go beyond the three pieces of legislation outlined
above and investigate other laws affecting businesses to incorporate into their work.
Plenary idea
Classifying parts of the STEEPLE analysis (15–20 minutes)
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Resources: None.
Description: Learners should write each of the seven STEEPLE factors onto individual pieces of paper or small
pieces of card. You will then write the name of a well-known company on the whiteboard (e.g. Amazon) and
read out different scenarios to the class. Each learner will demonstrate their understanding by holding up the
correct factor for the given scenario. Typical scenarios you could use include:
• a rise in the minimum wage
• a rise in fuel/energy costs
• a decrease in income tax
• a fall in sales taxes
• a rise in interest rates
• a rise in the age of the population over time
• an increase in awareness of the importance of CSR
• a new government is elected.
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This activity will help you to understand which STEEPLE categories the learners understand and which they are
less clear about. Weaker areas can then be noted and addressed at the beginning of the next lesson.
Assessment ideas: This activity can be peer-assessed, with learners discussing each scenario so that consensus
is achieved.
3.6 Business management tools: Ansoff matrix

LEARNING OBJECTIVES
• Select and apply the Ansoff matrix. • Learners will be able to select and apply
an appropriate Ansoff matrix for different
organisations, given a range of different
strategies for growth.
LANGUAGE FOCUS
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Ansoff matrix: a model used to show the
degree of risk associated with the four
growth strategies of: market penetration,
market development, product development
and diversification
diversification: the process of selling different,
unrelated goods or services in new markets
market penetration: achieving higher market
shares in existing markets with existing products
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product development: the development and
market development: the strategy of selling sale of new products or new developments of
existing products in new markets existing products in existing markets
Assessment ideas
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• Case study 3.4 complements the main activity here. It can be done as a stretch and challenge activity or
before the main teaching activity as a flipped learning activity.
• Support learners also with PowerPoint slide 7. Work through an example with the learners using this slide
and check for understanding of this matrix throughout the unit.
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Starter idea
What is the Ansoff matrix? (15–20 minutes)
Resources: Figure 3.4 Ansoff’s matrix, Coursebook section 3.5, PowerPoint slide 7.
Description and purpose: Learners should start by reading the Coursebook section on the Ansoff matrix and
then completing their own matrix for an organisation. For each growth strategy they could provide examples of
products, businesses or situations relevant to it and indicate the level of risk attached to each strategy.
Answers: Learners can use a variety of relevant products, businesses or situations, but an example is
included here.
Market penetration, e.g. Tesco (a leading supermarket in the UK) attempting to penetrate the market further by
discount pricing and sales – the risk is relatively low with this strategy.
Product development, e.g. Apple or Samsung developing a new version of a smartphone – the risk with this
strategy is relatively low.
Market development, e.g. Tesco (a leading supermarket in the UK) attempting to penetrate the US market – the
risk is relatively high with this strategy.
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Diversification, e.g. Tata (one of India’s leading companies) venturing into entirely new markets,
e.g. car manufacturing, chemicals, hotels, communications and steel making – this is a high-risk strategy.
Main teaching idea
Constructing an Ansoff matrix for different businesses (50–60 minutes)
Resources: Coursebook section 3.5, Figure 3.4.
Description: Learners should start by reading section 3.5 of the Coursebook, and using the information included
in the section, plus their own knowledge of the subject, complete the following activity. Investigate one of these
markets: smartphone, fashion, holiday locations; then complete an Ansoff matrix illustrating the position of a
range of different products on it.
Assessment ideas: The matrix should be designed so that it recognises that within a certain industry there are
many different products – some well-established market leaders as well as new entrants. Learners should identify
as many products as they can from their chosen industry and outline a possible growth strategy for each. Award
candidates that are able to identify businesses at each stage of the matrix and are able to justify their conclusions.
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Differentiation:
• Support: Some learners could complete this activity with a partner so that they can share the workload
and compare answers. Figure 3.4 of the Coursebook contains a useful example which can be used to
support learners.
• Stretch and challenge: Learners could complete the questions in Case study 3.4. It is an exam-style
question and graded out of 20. The aim is to provide practise for the learners in writing answers to
exam-style questions under timed conditions. It can be graded under the IB criteria and you can also
choose to write your own exemplar response, which can be given to learners as a revision aid for future
questions on the topic.
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Plenary idea
Fill in the missing key terms (15–20 minutes)
Resources: None.
Description: Learners can complete this lesson by completing the table, adding the correct key terms from
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the list below for the appropriate description, then writing examples. This is designed as an enjoyable revision
activity, which the learners can complete either individually or in pairs. All terms relate to this section on the
Ansoff matrix.
Key terms:
Product development, Market development, Market penetration, Diversification
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Achieving higher market shares in existing
markets with existing products
The strategy of selling existing products in
new markets
The process of selling different, unrelated
goods or services in new markets
The development and sale of new products
or new developments of existing products in
existing markets
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Answers:
Market penetration Achieving higher market shares in A mobile phone company already exists
existing markets with existing products in the market, but it wants to increase
sales. It starts a plan offering discounts
to new customers referred by an existing
customer
Market development The strategy of selling existing products The mobile phone company now wants
in new markets to enter the movie download market with
customers able to watch films and TV
series via their phones
Diversification The process of selling different, unrelated The company now launches its own
goods or services in new markets brand of watches, to complement its
existing cellphones
Product development The development and sale of new The company introduces a new add-on
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products or new developments of allowing customers to charge their
existing products in existing markets phones without a power supply
Assessment ideas: You should move between groups/individuals, checking on their progress. Once completed,
the activity can be self-graded by learners against the answers provided.
Project guidance
For this project you will need to split the learners into groups of three or four, and you will also want to ensure
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that abilities are fairly distributed throughout the groups before the activity begins.
Encourage groups to select different organisations so that learners can learn from each other’s work, and try to
encourage some groups to select some smaller organisations that others in the class may not know.
The most challenging part of this activity is to get each group to provide objectives that are relevant and suitably
SMART. Guide learners away from overambitious targets – keep them as real as possible. A final task in the
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activity could be for each group to write up their presentation and distribute it to the other learners, so that they
can use it as a revision/learning guide for later.
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4 Stakeholders
Teaching plan
of learning hours
4.1 Business 1 hour Identifying stakeholders Coursebook
stakeholders as individuals or groups Sections 4.2 and 4.3
with an interest or stake in Theory of knowledge
a business question
Table 4.1
Classifying stakeholders Case studies 4.1 and 4.2
into internal, e.g.
employees, owners, and Teacher’s resource
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external stakeholders, Vocabulary building
e.g. customers and the worksheet activity 4.1
community where they PowerPoint slides 2 and 3
operate
4.2 Evaluating 2 hours Stakeholder conflict – Coursebook
stakeholder identifying conflicting Sections 4.3 and 4.4
conflict stakeholder aims Business in context feature
and objectives Project
How businesses manage
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Tables 4.1 and 4.3
the different aims and
objectives of stakeholders Teacher’s resource
PowerPoint slide 4
Stakeholder role play activity
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• Learners will need to understand Chapter 3 • Learners should have some basic
on business objectives before beginning understanding of the term ‘stakeholder’ as it
this chapter. has been referenced in earlier chapters.
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Syllabus overview
Chapter 4 on business stakeholders is designed to build on the work covered in Chapter 3 Business objectives.
Unlike Chapter 3, where business objectives related to the objectives of the business as a whole (i.e. common
goals), this chapter recognises that organisations are made up of different stakeholders and that many of these
have very different, and sometimes conflicting, aims.
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4.1 Business stakeholders
LEARNING OBJECTIVES
• Apply and analyse internal and external • Learners will be able to identify the different
stakeholders. internal and external stakeholders of a
chosen business and analyse the role that
each plays in the organisation.
LANGUAGE FOCUS
stakeholders: people or groups of people external stakeholders: those not involved

who can be affected by, and therefore have an directly in the company
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interest in, any action taken by an organisation stakeholder concept: the view that businesses
internal stakeholders: stakeholders that are and their managers have responsibilities to a
part of the organisation, either as employees wide range of groups, not just shareholders
or investors
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Learners regularly confuse This can be picked up from Constant reinforcement of the
the terms ‘stakeholder’ and responses to questions or differences – all shareholders
‘shareholder’ – both terms assessment. are stakeholders but not all
sound similar but have stakeholders are shareholders.
different meanings.
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Learners will sometimes get This can be picked up from Specific reinforcement that
confused about the difference responses to questions or ownership depends on the type
between the owners of a assessment. of business, e.g. shareholders
business and the shareholders. own limited companies, while
Be careful to ensure that sole traders and partnerships
learners used the correct term are managed and owned by
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when identifying ‘owners’ the owners of the business, and

and ‘shareholders’. public sector corporations are
owned by the nation.
Assessment ideas
• This section should be used in conjunction with Coursebook sections 4.2 and 4.3. Case studies 4.1 and 4.2
contain questions that can be given as a written activity alongside the main teaching activity in this section.
• When doing the reflection activity in the main teaching idea, direct learners to the Theory of knowledge
question (section 4.2), which also looks at how different stakeholders are considered of greater importance
than others.
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Starter idea
Introduction to stakeholder concepts (10–15 minutes)
Resources: Whiteboard, Coursebook section 4.2.
Description and purpose: Write a definition of the term ‘stakeholder’ on the whiteboard and ask learners to
identify different stakeholder groups. Add each suggestion to the whiteboard. When adding the stakeholders to
the board, place the internal ones on one side and the external ones on the other. Then ask learners to explain
how you grouped the stakeholders. This will highlight which stakeholder groups they know and which ones
they do not.
Main teaching idea
Stakeholder objectives (30–40 minutes)
Resources: Table 4.1, Case study 4.2, PowerPoint slides 2 and 3
Description and purpose: Learners will recognise the objectives of different stakeholders. In pairs, learners should
create a mind map containing the objectives of the following stakeholders: creditors, customers, employees,
government, the community where the business operates, owners, and suppliers. Learners can select any business
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they are familiar with, including the IB school where they currently study.
Answers: Examples of objectives include:

• creditors: to receive payment as scheduled
• customers: high-quality products at low prices
• employees: generous renumeration, job security and comfortable working conditions
• government: for the business to provide employment opportunities and tax revenue to fund the
government's spending programmes
• community: jobs and investment to the area
• owners: profit
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• suppliers: regular orders and punctual payment.
Assessment ideas: The completed mind maps can be displayed on the walls of the classroom to refer to for
future learning and revision purposes.
Differentiation:
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• Support: You may want to start off the mind map and complete an example with the class as a whole
to show learners how to do the task before they complete it themselves. Table 4.1 can also be used as a
useful resource in this exercise.
• Stretch and challenge: Encourage learners to go beyond the activity brief by providing more specific
details of the individual needs of each stakeholder. Learners could also complete the questions in Case
study 4.2 as an extension exercise.
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Reflection: Learners should consider the list of stakeholders they have compiled and then rank them in terms
of importance. For example, are customers more important than suppliers; are owners more important than
employees, etc.?
Plenary idea
Stakeholder wordsearch (10–15 minutes)
Resources: Vocabulary building worksheet activity 4.1.
Description and purpose: Learners should complete this lesson by trying the word search on the key terms from
this lesson in Vocabulary building worksheet activity 4.1. Each of the hidden words relate to Chapter 4 of the
Coursebook. Words may appear either horizontally, vertically or diagonally, forwards or backwards, but they
will always appear in a straight line, even if the clue consists of two words.
Assessment ideas: Learners can self-assess using the answers, or swap with a partner to check each other’s work.
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4.2 Evaluating stakeholder conflict

LEARNING OBJECTIVES
• Apply and analyse conflict between • Learners will be able to analyse the areas
stakeholders. of mutual benefit and conflict between
stakeholders’ interests, applying them to
different business scenarios.
LANGUAGE FOCUS
arbitration: resolving an industrial dispute by using an independent third party to judge and
recommend an appropriate solution
Misconception
Some learners may believe
that all stakeholder aims can,
and should, be met in every
business decision.
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How to identify
This will become evident in the
responses provided.
How to overcome
Provide learners with alternative
views on the ranking importance
of stakeholders – this will be
different for every organisation.
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Learners will sometimes
regard the owners as the
most important stakeholder
and therefore likely to always
get their own way in any
conflict situation.
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Assessment ideas
• Begin this section by asking learners to read the Business in context feature and then discuss the questions at
the end of the feature, before moving on to the starter activity.
• Learners should also read and make notes on Table 4.3 before they begin the reflection activity in the main
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teaching activity.
• The exam-style question and project should both be completed during this section, supporting the other
activities here.
Starter idea
Identify conflicting stakeholder aims and objectives (10–15 minutes)
Resources: Coursebook Business in context feature, PowerPoint slide 4.
Description and purpose: Learners should read the Business in context feature. Then, in pairs, learners should
brainstorm the various stakeholders of the new airport and highlight possible areas of conflict between
each stakeholder.
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Main teaching idea
Time to role play? (About 1 hour plus presentation time)
Resources: Tables 4.1 and 4.3.
Description and purpose: Learners decide whether they would like to be an actor or a cartoonist.
What to do next: Learners read through the options and choose one to complete.
Option 1 – Create a cartoon.
• Learners work individually to create a cartoon that features at least two stakeholders who are in conflict.
Learners should communicate the main interests of each stakeholder and depict the main area of conflict
between them that emerges. Then learners should produce their cartoon digitally or using pen and paper.
Option 2 – Create a script and video.
• Learners write a script for a five-minute play, involving a scenario where at least two stakeholders are in
conflict. After writing the script, learners act out the script and film it (in small groups). If there is time,
learners can use video-editing software to finalise the video.
Assessment ideas:
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This assignment can be peer reviewed – learners could provide feedback on each other’s work based on the
following criteria: Were the stakeholders easy to identify? Was the area of conflict obvious?
Each group should highlight something they liked about the work as well as one area for improvement.
Differentiation:
• Support: Provide learners with a set scenario that they can either draw or act out. Some learners may
also benefit from choosing Option 2 and working as part of a group for this activity. Table 4.1 of the
Coursebook contains information that might be useful for learners to refer to for this activity.
• Challenge and stretch: Encourage learners to go beyond the activity brief by including more than two
stakeholders in their cartoon/video.
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Reflection: Using the information contained in Table 4.3, learners should decide on a method of conflict
resolution and explain how it might be used to resolve the areas of conflict that they have identified in
their cartoon/video.
Plenary idea
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Glossary of terms (10–15 minutes)
Description: Learners can finish by unjumbling the six key words so that each matches the correct definition.
Write the jumbled words on the board and read out the descriptions one by one to allow learners to work out
which word matches each definition. Or you could create a worksheet from the table shown here. All of the
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jumbled words are included in Chapter 4 of the Coursebook.
Key term Definition

triairnaobti When the stakeholders involved in a conflict agree to defer to an independent
arbitrator, with all parties accepting the decision
hsledkoaetr ccenpot The view that businesses and their managers have responsibilities to a wide
range of groups, not just shareholders
rtnxaele hsoasrledket Stakeholders not involved directly in the company

innlatre hsoaledketrs Stakeholders that are part of the organisation, either as employees or investors
haotldesersk Individuals, organisations or groups with a vested interest or stake in the
business, e.g. competitors, employees and the government
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Answers: arbitration, stakeholder concept, external stakeholders, internal stakeholders, stakeholders
Assessment ideas: Responses can be self-assessed. Learners could then turn these into flash cards or a revision
sheet for future learning.
Project guidance
While learners are working on this project you will have to act as the arbitrator between all three groups. Allow
sufficient time for each group to research their position carefully; turning up unprepared will spoil much of the
experience of this activity.
Encourage learners to make a plan regarding their goals for the exercise, i.e. what they hope to get out of the
negotiations and what they are prepared to accept as a compromise. As the arbitrator you will also have to
draw up ‘rules of combat’ for the exercise. This should include time limits on how long each party can speak for
at any one time.
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5 Growth and
evolution
Teaching plan
of learning hours
5.1 Economies 1 hour How a business’s Coursebook
and average costs respond to Sections 5.2–5.5
diseconomies changes in the scale of Business in context feature
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of scale the company Case study 5.1
Tables 5.1–5.3
The different types
of economies and Teacher’s resource
diseconomies of scale Vocabulary building
worksheet activity 5.1
The relative merits of small PowerPoint slide 2
versus large organisations
5.2 Internal and 5 hours The following external Coursebook
external growth growth methods: Section 5.6
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• mergers, acquisitions Case studies 5.2–5.4
and takeovers Tables 5.4–5.6
• joint ventures Business in context feature
• strategic alliances Project
• franchises Exam-style questions
Internal growth methods: Teacher’s resource
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• organic growth Vocabulary building
worksheet activity 5.2
PowerPoint slides 3–6
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• In this unit, learners will benefit from structure impacts on the primary objectives
understanding the different types of business of that business.
ownership structures; this is because the • Learners will also benefit from understanding
process of growth is different depending on how the different functional areas (finance,
the type of business structure(s) involved. human resources, marketing, finance and
For the same reason, learners also need operations management) will be impacted by
to understand why the type of business the growth of a business.
Syllabus overview
This chapter compares and contrasts different ways in which a business may grow, divided into internal (organic)
growth and external growth (by purchasing/merging with a different business). By the end of this chapter,
learners should be able to evaluate each of the different methods of growth.
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5.1 Economies and diseconomies of scale

LEARNING OBJECTIVES
• Analyse and apply internal and external • Learners will be able to provide examples
economies and diseconomies of scale. of relevant economies and diseconomies of
scale and evaluate the potential benefits of a
• Synthesise and evaluate the reasons for firm increasing its scale of operation.
businesses to grow.
• Synthesis and evaluate the reasons for advantages and disadvantages of scale,
businesses to stay small. applying each to a given organisation.
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LANGUAGE FOCUS
scale of operation: the maximum output that internal economies of scale: reductions in unit
can be achieved using the available inputs (average) costs of production that result from an
(resources) – this scale can only be increased in increase in the scale of operations of a business
the long term by employing more of all inputs external economies of scale: reductions in unit
external diseconomies of scale: factors causing (average) costs of production of a business that
unit costs for a business to rise as an industry result from growth of the industry, often in one
expands, especially in a given region particular region
internal diseconomies of scale: factors that external growth: business expansion achieved
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cause unit (average) costs of production to by means of merging with or taking over
rise when the scale of operation of a business another business, from either the same or
is increased a different industry
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Learners often get confused with Learners will sometimes imply Lead a discussion on the costs
business objectives, particularly that organic growth is inferior and benefits of business growth.
the idea that not all businesses and so may imply that it is This can be applied to different
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want to grow. automatic for all businesses to situations, e.g. sole traders or
want to grow quickly. niche products.
Learners sometimes confuse Learners will sometimes Check for understanding of this
the term ‘economies of scale’ confuse this in their responses, concept. During the main activity,
with the benefits of being a e.g. they might suggest that learners will need to demonstrate
large company. increased sales or greater brand this difference in their response.
recognition are examples of
economies of scale.
Assessment ideas
• After finishing the starter activity in this section, you should direct learners to the discussion questions at the
end of the Business in context feature in the Coursebook, before moving on to the main teaching activities.
• Learners would also benefit from completing Case study 5.1 in the Coursebook during this section as it
supports the main content.
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• In the main teaching activity, care must be taken to ensure that learners are aware that only the financial
benefits leading to reduced production costs are recognised as economies of scale, and not any other
financial or non-financial benefits of scale.
• Once learners have completed Coursebook Activity 5.1 discuss the following question with the class:
‘If Walmart was a nation, how big would it be, using revenues as a measure?’
Starter idea
Benefits of business growth (10–15 minutes)
Resources: Whiteboard, Coursebook tables 5.1 and 5.2, PowerPoint slide 2.
Description and purpose: On the whiteboard draw two columns. Label one ‘Benefits of growth’ and the other
‘Costs of growth’. Ask learners to spend five minutes brainstorming two or three benefits and costs of growth
and then, ask each learner to come up to the front of the class and add their contributions to each side of the
whiteboard. At the end of this activity, the learners can check their answers against Tables 5.1 and 5.2 in the
Coursebook. This short activity will help you introduce the concept of growth to your class, and to understand
which of these the learners find easiest to understand and which they find difficult.
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Main teaching ideas
1 Economies of scale (40–50 minutes)
Resources: Figure 5.1, Case study 5.1, Coursebook sections 5.2–5.5, Tables 5.1–5.3, PowerPoint slide 2.
Description: Learners should read the following text and compare the two schools described.
Great IB International School is a long-established school offering all three IB programmes. It has 2500
learners in the school, covering nursery to grade 12. It is large enough to employ specialist managers for the
finance, human resources and marketing departments as well as a number of specialist support assistants.
The school is also equipped with a number of ICT labs, media suites and sports facilities as well as Primary
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Years Programme (PYP), Middle Years Programme (MYP) and Diploma Programme (DP) coordinators, a
school principal and a team of assistant principals and counsellors.
Little IB International School is also well established and has an equally sound academic reputation,
but it is very different in other ways. The school has just 250 learners, and there are no specialists within
the school. The school has one principal responsible for marketing and human resources, and a finance
assistant. The IB coordinator runs all three programmes as well as the school counselling programme.
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Unsurprisingly, the school has a limited range of subjects available and few facilities.
Learners should work individually or in pairs to describe as many financial advantages and disadvantages of
the larger school as they can think of before, then compile individual reports outlining their findings.
Answers: The advantages, called the economies of scale, include:

• the specialist teams, which can complete the tasks more efficiently than general practitioners
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• the shared facilities such as the ICT labs, media suite and sports facilities. These are largely fixed costs
which, given the large learner body, makes AFC (average fixed costs) relatively small
• the ability to negotiate bulk buying discounts on supplies and equipment
• the services such as transport which can be provided economically with a large number of learners to
share the costs.
The disadvantages, called the diseconomies of scale, include:
• less feeling of belonging or perhaps pride in the school given its size. This may result in higher absentee
rates among learners and staff, for instance
• a less-personal approach, which may result in more learners feeling alienated or disengaged from
their studies.
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Assessment ideas: Collect in the written work and provide feedback based on the answers above. Learners
should be encouraged to provide their own opinions, but they must include both strengths and weaknesses,
as well as recognising that the larger school enjoys both economies and diseconomies of scale.
Differentiation:
• Support: Some learners may feel more comfortable completing this activity in pairs so that they
have someone to share ideas with before submitting their work.
• Stretch and challenge: Challenge some learners to go beyond the brief by reading Case study 5.1
and completing the questions at the end of it, to provide further learning on this topic. This could
be set as a homework or class activity; allocate around 40 minutes for the task.
Reflection: Learners should read section 5.2 of the Coursebook and then consider what the appropriate
size is for an IB school. Learners must be specific in terms of learner numbers as well as class size and school
grounds, etc. Learners should consider the financial costs and benefits completed in the activity as well as
non-financial factors such as educational and social facilities and environment. They should consider that
some factors such as small class sizes inevitably mean higher tuition fees.
Plenary idea
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Key definitions (economies of scale) (20–30 minutes)
Description: This revision activity contains a number of explanations and key terms from the section.
Learners should match the key terms with the correct definition provided and then develop their understanding
by adding an example to each. All of the key terms relate to this chapter and to economies of scale.
Assessment ideas: This assignment can be self-assessed using the answers provided, and time should be
allocated for discussion of this activity if there are points to clear up.
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5.2 Internal and external growth
LEARNING OBJECTIVES
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• Analyse and apply the difference between • Learners will be able to synthesise the
internal and external growth. different types of internal and external
growth and evaluate the effectiveness of
• Synthesise and evaluate external growth each for a given situation and organisation.
methods: mergers and acquisitions,
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takeovers, joint ventures, strategic alliances

and franchising.
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LANGUAGE FOCUS
acquisition: when a company buys at least 50% franchise: a business that uses the name, logo
of the shares of another company and becomes and trading systems of an existing successful
the controlling owner – with the agreement of business
the existing owner(s)/managers backward vertical integration: integration with
horizontal integration: integration with a a business that is in the same industry but a
business that is in the same industry and at the supplier of the existing business
same stage of production conglomerate integration: merger with
forward vertical integration: integration with a or takeover of a business that is in a
business in the same industry but a customer of different industry
the existing business strategic alliances: agreements between
joint venture: two or more businesses agree to businesses in which each agrees to commit
work closely together on a particular project and resources to achieve an agreed set of objectives
create a separate business division to do so
Assessment ideas
•
•
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A key part of this section is the reasons why a number of businesses choose to grow via external methods
and the differences between full mergers, joint ventures and strategic alliances. You could start this section
with a discussion of possible reasons why a company might wish to grow, as well as reasons why businesses
might choose to do so in different ways. Learners could be directed to section 5.4 to help them with this task.
Ask learners to read and then discuss the questions at the end of the Business in context feature as an
introduction to this section, before completing the activities on this page.
Learners should also complete Case studies 5.2 and 5.3 in section 5.6 of the Coursebook when looking
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at mergers, acquisitions, strategic alliances and joint ventures, as they will complement the activities in
the teaching activities.
• Once learners have completed the section on franchising, they should write answers to the questions at the
end of Case study 5.4 in the Coursebook.
• The exam-style questions and project could both be completed during this section, supporting the other
activities in the section.
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Starter idea
Mergers and acquisitions (15–20 minutes)
Resources: Table 5.4, PowerPoint slides 3–6.
Description: Completing this activity will help learners to understand the different types of mergers that can
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take place. Learners should start this activity by investigating the following mergers/acquisitions. Then, using the
information contained in Table 5.4, they should state which category of merger/acquisition each falls into.
vertical forwards merger vertical backwards merger horizontal or conglomerate merger
1 AOL and Time Warner, a $360 billion deal, completed in 2001

2 IKEA’s purchase of an 83 000 acre forest in Romania in 2015
3 T-Mobile and Sprint, a $26.5 billion deal completed on 1 April 2020
4 Amazon and Zoox, a $1.2 billion deal completed on 26 June 2020
5 Exxon and Mobil in 1998, who merged to form the ExxonMobil Corporation in a deal worth $78.9 billion
6 United Technologies and Rockwell Collins, a $30 billion deal completed in 2017
7 Just Eat and Grubhub, a $7.3 billion deal completed on 10 June 2020
8 3M and Acelity, a $6.7 billion deal completed in 2009
9 Daimler-Benz and Chrysler in 1998, in a deal worth $70 billion
10 AT&T purchase of Time Warner in 2018, a deal worth $85 billion
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Answers:
1 conglomerate merger
2 backwards vertical merger
3 horizontal merger
4 backwards vertical merger
5 horizontal merger
7 horizontal merger
9 horizontal merger
10 forwards vertical merger
Main teaching ideas
1 Investigating successful mergers (about 1 hour, plus time for presenting)
Resources: Internet sources, PowerPoint slides 3–6.
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Description: Learners investigate one of the following mergers:
• Vodafone and Mannesmann merger (1999) – $202.8 billion
• AOL and Time Warner merger (2001) – $182 billion
• Gaz de France and Suez merger (2007) – $182 billion
• Dow Chemical and DuPont merger (2015) – $130 billion
• AT&T and Time Warner merger (2018) – $85 billion
• AB InBev and SABMiller merger (2015) – $107 billion
• Glaxo Wellcome and SmithKline Beecham merger (2000) – $107 billion
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• Heinz and Kraft merger (2015) – $100 billion
• Royal Dutch Petroleum and Shell merger (2004) – $95 billion.
What to do next: In pairs or small groups, learners should spend one hour preparing a short presentation
(5 minutes) with slides, detailing a merger/acquisition from the list above. You could allow learners to choose
a merger/acquisition from the list, or to prevent duplication assign a merger/acquisition to each pair or
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group. The presentation should include the following information:
• a little information about the two businesses before the deal.
• Was the merger/acquisition a takeover or a genuine merger? If the deal was a takeover, to what extent
was it hostile?
• Which type of merger was it – horizontal, vertical, conglomerate?
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• Has the merged company been successful or not, and what is the evidence for this?
• What difficulties (if any) has the newly merged organisation experienced?
• any additional relevant information learners want to add.
Answers: Learners will provide their own responses but presentations should include answers to the
questions in the list.
Assessment ideas: This activity can be peer assessed, with learners describing one thing they liked in the
presentation and one thing they thought could have been improved. Time should also be provided to allow
groups to ask each other questions and discuss each merger in more detail.
Differentiation:
• Support: Some groups may require additional support in the form of help finding information on
a suitable merger. They may also require direction on some of the more technical information,
e.g. the type of merger that it falls into.
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• Stretch and challenge: Learners could choose to investigate a merger or acquisition that is not in the
prescribed list above. They should be encouraged to add extra slides covering areas such as cultural
difficulties that emerged from the integration, or specific economies of scale that the newly merged
company was able to benefit from.
Reflection: Learners should consider the following question: ‘To what extent can we judge the success of
any merger?’ Ideas might include growth before and after the merger, or increased brand/organisational
recognition – are these factors possible to quantify?
2 Joint ventures and strategic alliances (about 1 hour)

Resources: Coursebook section 5.6, internet sources, PowerPoint slides 3–6.
Description: Learners investigate one of the following joint ventures or strategic alliances:
• Toyota and Mazda (joint venture)
• Sony Ericsson (joint venture)
• Tata Starbucks Private Ltd (joint venture)
• Spotify and Uber (strategic alliance)
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• Starbucks and Barnes & Noble (strategic alliance)
• Hewlett-Packard and Disney (strategic alliance)
What to do next: Learners should research their chosen venture or alliance and write a report detailing
the following:
• a little information about the two businesses before the deal.
• What did both businesses hope to gain from the joint venture or strategic alliance?
• Was the venture or alliance successful in achieving those goals?
• What difficulties (if any) were experienced during the alliance, and were these resolved?
• any additional relevant information learners want to add.
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Answers: Learners will provide their own responses and should include answers to the questions listed here.
Assessment ideas: This assessment should be graded according to the quality of the report, with learners
rewarded for answering each of the questions in the brief as well as for any additional appropriate
information that they include.
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Differentiation:
• Support: Some groups may require additional support regarding the difference between a merger
and a strategic alliance, as well as the differences between the two companies involved.
• Stretch and challenge: Challenge some learners to go beyond the brief by adding extra slides
covering areas such as cultural difficulties that emerged from the venture or specific economies of
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scale that the companies were able to benefit from.

Reflection: Learners should read Coursebook section 5.6 and then discuss with another class member why
the two businesses they investigated chose not to turn their venture into a full merger.
3 Franchising (40–50 minutes, plus time for presenting)

Resources: Case study 5.4, Tables 5.5 and 5.6, internet sources, PowerPoint slides 3–6.
Description: In pairs or small groups, learners should spend 40 minutes preparing a short presentation
(5 minutes) explaining the success of a local franchise business. This could be a well-known franchise such as
Burger King or Pizza Hut, or a less well-known one. The presentation should include the following information:
• an illustration of the growth in franchise units over a historical period
• the benefits enjoyed by both the franchiser and franchisee
• the likelihood that franchisees of this company will succeed
• to what extent owning a franchise provides entrepreneurs with the opportunity to run their own
business, but with a degree of security they would not otherwise have
• any additional relevant information they may want to add
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Answers: Learners will provide their own responses but presentations should include responses to the points
listed here.
Assessment ideas: This activity can be peer assessed, with learners describing one thing they liked in the
presentation and one thing they thought could have been improved. Time should also be allowed for groups
to ask each other questions and discuss each presentation in more detail.
Differentiation:
• Support: Some learners will benefit from the additional support provided by the group and can also
be directed to Tables 5.5 and 5.6, which contain additional information about the advantages and
disadvantages to franchisers and franchisees that can be used in the activity.
• Stretch and challenge: Learners can complete Case study 5.4 in the Coursebook as a homework
activity, to provide an additional challenge.
Reflection: Learners should consider the following questions: ‘Explain why franchises are generally
retail or entertainment businesses. Why are businesses in other industries less likely to choose this method
of expansion?’
Plenary idea
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Fill in the gaps: Growth and evolution (15–20 minutes)
Description: This is a fun revision activity which learners should enjoy and find informative. Learners should
unjumble each key term so that it matches the correct sentence. Each jumbled word contains a business term
from this chapter on growth and evolution. Having completed the activity, learners could turn the answers into
a revision sheet or set of question cards for future learning. Learners can also use the revision sheet to test each
other in future lessons.
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Project guidance
This project should ideally be completed in groups of two to four, so while the brief in the Coursebook says
divide the class into two groups, you may instead require more groups, depending on what is suitable for your
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class size. Each group can investigate a different social enterprise. Learners can use the organisation that they
used for their CAS activities, and this might also be an excellent opportunity to supplement the work they
complete on their CAS project – this would require an individual written submission in addition to the group
poster they produce.
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End of chapter test

Chapter 1: What is a business?
Paper 1 exam-style question
‘It’s not a business that will make you a millionaire,’ claims Fahad, owner of The Cutting Crew in New Rise,
San Francisco. As the business enters its tenth year of operation he claims that it is, however, a business which
tends to inspire a great deal of loyalty from its customers, who will often visit the same branch for years.
‘Some people have even followed me when I moved to my new premises. It’s lucky, therefore, that like many
successful stylists I am a “people person”.’
Continuing his story of the business he claims that his biggest fears are when he is cutting a child’s hair and
they are hating the experience of sitting in the chair wrapped in a gown. ‘These are the times when it’s
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important to keep your cool in the face of any possible tantrums.’
‘I’ve had the privilege of working with some wonderful people. Getting paid for something you love doing
and working with friends in a nice atmosphere can’t be beaten.’
‘Having said that, there’s more to it than just standing there and asking the customer where they’re going for
their holidays. Things can get tense, particularly on Saturday mornings or around Christmas and it’s best to be
able to stay calm in stressful situations. Making mistakes with people’s hair is not one they’ll forgive easily.’
Questions:
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a Identify two different factors of production used by Fahad. [4]
b Identify the difference between consumer goods and consumer services. [2]
c Outline two ways in which the business could benefit from greater employee specialisation. [4]
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d Explain two examples of business activities undertaken by Fahad that benefit the
local economy. [4]
e Analyse the qualities that Fahad will need to be a successful entrepreneur. [6]
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Business Management for the IB Diploma – Johnson © Cambridge University Press 2022 1
End of chapter test

Chapter 2: Types of business entities
Finding Careers
Finding Careers is an organisation in the public sector with the following mission statement:
To match businesses needing workers with workers needing work.
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There is an outlet of Finding Careers in every main town and city in a particular country. Each outlet must
cooperate with the others to provide the best service to those looking for new employment and businesses looking
for new employees. Each outlet has three different departments (see Table 1.1).
Department Main functions Total number of Number of employees who left in
employees 2021
A Helping people find jobs 25 000 6 250
B Helping businesses find suitable 5 000 550
workers
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C Administrative duties 10 000 600
Table 1.1: Employee data for Finding Careers
Rolland-Vaughan Ltd
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Established in 1990, Rolland-Vaughan is a private limited company operating a specialist boutique financial
services agency that recruits experienced personnel for wealth management positions on Wall Street. Rolland-
Vaughan specialises in finding and introducing individuals for private-client adviser investment banks, family
offices and investment management firms. The fees that Rolland-Vaughan receives for matching clients with
experienced professionals are considerable, reflecting the seniority of the positions.
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Rolland-Vaughan has the following mission statement:
To place exceptional individuals in their ideal jobs.
Employees are separated in to two divisions (see Table 1.2).

Department Main functions Total number of Number of employees who left
employees in 2021
A Professional recruitment 450 10
B Client services 675 15
Table 1.2: Employee data for Rolland-Vaughan
Questions:
a Define the following terms
i ‘public sector’ (Finding Careers). [2]
ii ‘private limited company’ (Rolland-Vaughan). [2]
b Describe one advantage and one disadvantage of Rolland-Vaughan being a private
limited company. [3]
c Explain the relationship between a mission statement and business objectives. [3]
d Using the two businesses illustrated in the text and your knowledge of business management,
evaluate differences between firms in the public and private sectors. [15]
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A
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End of chapter test

Chapter 3: Business objectives
Vegan Sushi Bar
The Vegan Sushi bar opened its first restaurant in San Francisco, California in January 2015. It serves ‘vegan’
sushi fish rolls using ingredients that include. Thai sweet potato, beet, pickle and hoisin mock duck. The sushi bar
aims to raise awareness of ocean overfishing, and one of the company’s USPs is that a small percentage of
revenues are donated to marine preservation projects around the world. The restaurant also pays its employees
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more than the industry average for the city and also contributes to a company pension scheme for workers once
they have completed 12 months of service with Vegan Sushi Bar.
Questions:
a Define the term ‘value added’. [2]
b Briefly explain two ways a restaurant could increase its value added. [3]
c ‘Because there is a conflict between profit and corporate social responsibility (CSR),
private sector businesses should not have CSR as an objective.’ Do you agree? Justify your view. [15]
A
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End of chapter test

Chapter 4: Stakeholders
Source 1: Children Need Both Parents website
Children Need Both Parents was founded in 1972 and became one of the top shared-parenting charities in
North America. Its website states its mission and purpose: ‘We believe in a responsible and collaborative
approach, both for parenting and also when working for change’. The organisation is primarily run by
volunteers and relies on donations to run their services. In 2020, they received a significant and much-
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needed grant from the US state government in recognition of the work completed and to support its
continued operations.
Source 2: Taken from the organisation’s Facebook page

The #DearDeidre page in The Falcon yesterday recommended our Helpline to a dad whose ex denied his
children access to him when she got a new partner.
A large proportion of people who come to us experience similar behaviour. The arrival of a new partner
triggers motivations that are not child-centred.
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Questions:
a Using an appropriate business management theory, describe a human need that the
organisation meets by completing its work. [2]
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b Explain two possible challenges facing the organisation. [6]
c Using the resources included and your knowledge of the subject, recommend an action plan
for the charity for the next five years. [17]
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End of chapter test

Chapter 5: Growth and evolution
Daimler and Chrysler
When German company Daimler (the makers of Mercedes-Benz) merged with American company Chrysler in the
late 1990s, it seemed a natural evolution for the two automobile giants. Mercedes was one of the dominant brands
in Europe, while Chrysler was equally dominant in the USA. Both firms hoped to gain wider access and expertise
in markets they had not previously had success with. This was called a ‘merger of equals’. A few years later it was
being called a ‘fiasco’. Discordant company cultures had the two divisions at war as soon as they merged.
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Differences between the companies included their level of formality, philosophy on issues such as pay and
expenses, and operating styles. The German culture became dominant and employee satisfaction levels at Chrysler
dropped sharply. One unhappy joke circulating at Chrysler at the time was: ‘How do you pronounce Daimler
Chrysler?’ Answer: ‘Daimler’ – the “Chrysler” is silent.’ By 2000, major losses were projected, and a year later
layoffs began. In 2007, Daimler sold Chrysler to Cerberus Capital Management for $6 billion.
Questions:
a
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Describe the type of merger where the two car giants agreed to join together. [2]
b Apply the Ansoff matrix to Daimler’s growth strategy with respect to the merger. [4]
c Explain the main interests of two stakeholder groups of the newly merged business of
Daimler-Chrysler. [4]
d With reference to Daimler-Chrysler, discuss the merits of small organisations compared with
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large organisations. [10]
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End of chapter tests – answers

a Examples might include:
• labour, such as the stylists he employs
• capital used to run the business, plus pay for supplies, e.g. shampoo and hairspray
• land the shop that he owns and works in
• his own entrepreneurship.
b Consumer goods are the physical and tangible goods sold to consumers.
Consumer services are non-tangible products such as hotel accommodation, insurance services and, in the
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example of the case study, haircuts.
c Examples might include:
• Specialisation reduces errors as specialists are less likely to make mistakes and are likely to become more
skilled doing the task repeatedly.
• Specialisation saves time because completing the same task repeatedly will inevitably lead the worker to
find shortcuts. Set-up times are also reduced.
• Training staff in just one task reduces the overall costs of training.
d Increasing the tax base – despite Fahad’s own tax contribution, his employees must also pay taxes.
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Local small businesses like Fahad’s are also more likely to buy locally, meaning that the wealth generated
remains in the community.
Local jobs – Fahad’s business will also create jobs, some directly and others indirectly. Those employed
are also likely to live in the local area and so contribute to the local economy.
e Suggested qualities:
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• discipline – entrepreneurs are normally focused on making their businesses work and avoid distractions
to this goal
• confidence
• open-mindedness
• self-starter
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• creativity
• determination
• strong people skills.

a Answers are:
i Public sector: the section of the economy owned by the public but controlled by the government.
ii Private limited company: a business owned by shareholders, who are often members of the same family,
and which cannot sell shares to the general public.
b One advantage might be limited liability and the ease of running an limited company.
A disadvantage is that the business cannot sell any of its shares on the stock market, thus reducing one obvious
source of raising finance.
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c The objectives of an organisation will be influenced by its mission statement, with the mission of the business
determining its objectives. For example, a firm that prioritises ethical perspectives will reflect this theme in
its objectives.
d Responses might include:
• Public and private sector companies have different primary objectives, for instance Finding Careers and
Rolland-Vaughan both operate in the same industry but with very different objectives.
• Private sector companies are owned by shareholders and public sector businesses are owned by the public
and controlled by the government.
• Public sector businesses are financed by the public purse and private businesses are funded by raising
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money from shareholders.
• The government controls the pricing of the products in public sector entities which is not the case with
private companies.
• Private companies will often provide higher salaries and better working conditions (note the difference
in retention rates between the two businesses in 2021).
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Responses for question d should be graded according to the following mark bands:
Marks Level descriptor
0 The response is below the standards described below.
1–3 The response indicates little understanding of the demands of the question.
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Appropriate differences are not addressed or are addressed inappropriately.

No relevant or appropriate business theory is used in the response.
Little attempt is made to make use of the text/data.
4–6 The response shows some understanding of the demands of the question.
Some differences are identified and there is an attempt to discuss them.
There is some attempt to apply relevant business theory in the response.
7–9 The response shows an understanding of the demands of the question.
Appropriate differences have been identified and these are applied appropriately.
There is a clear attempt to apply relevant business theory to the question.
The response makes use of the text/data to support the arguments.

10–12 The response shows a good understanding of the demands of the question.
Appropriate differences have been identified and these are applied consistently and
appropriately in answering the question.
Relevant business theory is applied to the question.
The response makes significant use of the text/data to support the answer.
13–15 The response shows an excellent understanding of the demands of the question.
Appropriate differences have been identified and they are applied consistently and skilfully in
answering the question.
The response makes excellent use of the text/data to support the answer.
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A
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D

a Value added is the extra feature businesses add to products and services before offering them to customers.
Value added is the difference between the cost that a business pays for its supplies and the price that it sells
them for.
b Responses might include:
• Prepare the meals faster so the restaurant can improve its churn rate – this is particularly true during
peak times.
• Focus on improved quality or perceived better-quality products so it can charge higher prices.
• Improve customer service so it can again increase its prices.
c Answers may include:
communities and the environment.

Negative aspects of CSR
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• A definition of CSR that describes the concept that businesses should consider the interests of society by
taking responsibility for the impact of their decisions and activities on customers, employees,
• A recognition that embracing CSR might include paying higher wages, improving working conditions
and safety standards, cutting waste and pollution, and supporting worker security. For example, the case
study notes that Vegan Sushi Bar pays ‘employees more than the industry average for the city and also
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contributes to a company pension scheme’. This may well mean a sacrifice of profit levels and increased
costs.
• Can lead to conflict between competing stakeholders, for example there may be disagreement among the
owners of Vegan Sushi Bar regarding objectives.
• Some customers simply want low prices and are not worried about ‘how’ a product is made.
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Positive aspects of CSR
• More socially conscious customers may be attracted to the restaurant, raising revenues.
• It may also lead to greater employee loyalty and enhanced reputation, which then leads to higher long-
term profit levels.
Candidates should be rewarded for addressing the complexity of the assertion in the question.
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Marks Descriptor
0 The response does not reach any of the descriptors below.
1–3 Some understanding of CSR but limited understanding of the question.
4–6 Limited analysis with some application of CSR and its role in business activity.
7–9 Analysis of the statement on CSR as a business objective and some attempt at discussing the
relative merits of the question.
10–12 Good analysis and some evaluation of the statement on CSR as a business objective,
with some reference to either agree or not agree and with some justification in order to reach
a conclusion.
13-15 Effective evaluation of the statement on CSR as a business objective, with a reference made
that either agrees or disagrees with the statement, including a convincing justification of
views expressed.

a Appropriate theories include Maslow’s hierarchy of needs – security, social and physiological needs or the
sense of belonging and purpose (Herzberg).
b Possible challenges include:
• Financial – the organisation requires government or public funding, which may be difficult to maintain
moving forward. For instance, the text states the charity recently received a significant grant, but it may
not be able to rely upon receiving it in future years.
• Political – access to grants and favourable tax conditions is governed by political considerations, which
may change at short notice.
FT
• Time constraints of the volunteers completing the work, which is crucial to the work that it does.
• If economic conditions deteriorate, which is possible in the post-Covid 19 era, then donations may be
more difficult to acquire.
Level Descriptor Marks
0 The work does not reach any of the standards described below. 0
1 The response contains one or two of the above challenges but the explanation is vague 1–2
or inaccurate.
2 The response contains two or more challenges applied appropriately. 3–4
A
The response makes use of the text material to illustrate the arguments.
3 The response contains two or more challenges skilfully applied. 5–6
The response makes skilful use of the text material.
c Ideas for the action plan for Children Need Both Parents:
• Strategies aimed at the charity’s sources of finance and human resources, including a recognition of those
R
roles that need to be filled by paid employees and roles that can reasonably be undertaken by volunteers.
• The use of market segmentation in order to carry out more targeted marketing.
• A strategy to maintain the company’s brand.
• Potential reset of the charity’s vision and mission as it grows.
D
• How it can avoid diseconomies of scale as the organisation grows.

Responses for question c should be graded according to the following mark bands:
Appropriate strategies are not addressed or are addressed inappropriately.
No relevant or appropriate business theory is used in the response.
4–6 The response shows some understanding of the demands of the question.
Some appropriate strategies are identified and there is an attempt to apply them.
There is some attempt to apply relevant business theory in the response.

Appropriate strategies have been identified and these are applied appropriately.
There is clear attempt to apply relevant business theory to the question.
The response makes use of the text/data to support the arguments.
Appropriate strategies have been identified and these are applied consistently and appropriately in
The response makes significant use of the text/data to support the action plan.
Appropriate strategies have been identified and they are applied consistently and skilfully in
FT
The response makes excellent use of the text/data to support the action plan.
A
R
D

a The merger would be an example of a horizontal merger, as it represents two businesses within the same
industry and at the same stage of production.
Award 1 mark for a partial answer.
b
FT
‘Apply’ in this case means to use an idea, equation, principle, theory or law in relation to a given problem or
A
issue. The Ansoff matrix is an analytical model that helps organisations to map strategic product market
growth.
The merger of two businesses hoping to access new markets suggests a market development strategy.
The stimulus material indicates that both firms hoped to gain wider access and expertise in markets they had
not previously had success with, i.e. Mercedes in the USA and Chrysler in Europe.
R
Award 1 mark for some minimal understanding of what an Ansoff matrix is, or for just drawing the matrix or
inappropriate application.
Award 2 marks for some limited theoretical understanding of an Ansoff matrix (it could be drawn) and
limited application.
Award 3 marks for some description and some application/categorisation of the strategy according to the
D
Ansoff matrix, but both lack some depth/detail.

Award 4 marks for a clear and relevant explanation and application/categorisation of the strategy according to
the Ansoff matrix.
Note: The Ansoff matrix does not need to be drawn for full marks, but reference has to be made to the type of
product and market.
c Explain (AO2) = Give a detailed account including reasons or causes.
Workforce/employees – The main interest of workers includes a steady, reliable job and income.
As a result of the merger some employees may face redundancy.
Owners – The main interests of the owners/shareholders revolve around the success and profitability of the
newly formed business.
Customers are primarily motivated by high quality at a reasonable price and might hope to benefit from lower
prices and new models in the future.
Competitors may be concerned about a potential fall in their market share and profits.
Mark as 2 + 2.
• For explanation of the main interests of one stakeholder group with no application, award 1 mark.
• For explanation of the main interests of one stakeholder group and application, award 2 marks.
Application must refer to the specifics of Daimler-Benz stakeholders.
d Advantages of large businesses include:
• an enhanced ability to survive
• economies of scale
• higher status
• market leader status
• increased market share.
e Advantages of small businesses include:
• greater focus
• greater cachet
f
• greater motivation
• competitive advantage
• less competition.
Marks
0
1–3
Descriptor FT
Responses should be graded according to the following mark bands:
None of the descriptors have been reached.

The response is unbalanced and does not provide either an advantage of a small company or an
A
advantage of a larger one. Little or no judgement is provided.
4–6 There is an attempt at balance, with at least one advantage of a large company and one advantage
of a smaller organisation provided. There is some attempt at justifying the reasons provided.
Limited use of the text.
7–8 The response is balanced, providing at least two advantages of a large company and two advantages
R
of smaller organisations.
The response includes appropriate judgements.
The text is used appropriately to help explain the response.
9–10 The response is balanced, providing at least two advantages of a large company and two advantages
of smaller organisations.
D
The response includes both a conclusion and skilfully applied judgement.

There is skilful use of the text to help explain the response.
Paper 1 example paper

Standard Level and Higher Level
Time: 1 hour 30 minutes
Instructions to candidates
Do not open this examination paper until instructed to do so.
FT
Read the case study carefully.
Section A: answer all questions.
Section B: answer one question.
A calculator is not required for this examination paper.
The maximum mark for this examination paper is 30 marks.
A
R
D
Miramedia (MM)
Miramedia Ltd is a digital agency founded in 1999 and owned by Dominic Johnson. The company started by
providing bespoke website designs for clients, and quickly established itself as a leading provider of event and
conference websites, developing a reputation for working collaboratively with its clients.
Dominic founded MM, along with his business partner, James, when they were both studying software design at
5 the University of Sussex in Brighton. They decided to set up the business as a private limited company and became
equal shareholders in the newly founded business. When founding the company, both noted that this was a boom
period for the sector. Businesses were just beginning to recognise the importance of an online presence. The
partners recognised that as the technology was so new, few companies were able provide an effective online
platform. The market was dominated by a handful of specialist businesses providing bespoke services, at a
10 premium price, to medium and large organisations. The partners recognised that a gap existed in the market and
quickly put their expertise in website design to work, targeting small- to medium-sized businesses with their
designs.
FT
MM’s mission statement is: ‘To be a leading provider of digital experiences, allowing clients to maximise reach
and revenues through our platforms’. The company also has three ethical objectives: promoting environmentally
15 friendly practices, treating all employees as partners, and being open and transparent with stakeholders.
Although the market was initially dominated by a small number of large companies, the partners believed that
small businesses like MM had advantages in the field. The partnership grew rapidly in the UK and evolved from
being a web design company specialising in designing digital platforms for the events industry, to a company
providing a range of other services, including effective branding, wireframing, UX and APP design.
20 MM owns an office building, without a mortgage or any other debt, where its software developers work in project
A
teams and enjoy the benefits of flexible working hours. Some employees are also based in leased office spaces in
the city centre (downtown) of Tonbridge Wells, Kent. MM also employs a team of salespeople, working on a
commission basis, who provide a personalised service to clients. Dominic employs a democratic leadership style in
managing the office, conscious that the quality of the employees has contributed to the company’s rapid growth.
25 Despite the number of employees growing every year, Dominic knows each employee individually.
R
In 2020 and 2021, Miramedia was severely impacted by the Covid-19 pandemic. Despite its diversification into
other digital services, the business was still reliant on servicing clients in the events industry for the majority of its
work, and this sector was one of the first to be closed as Covid-19 forced many businesses to suspend trading.
These difficulties were compounded by Miramedia’s desk rental business. Renting out desks (primarily to freelance
30 website developers) had become an increasingly significant (and profitable) part of the firm’s revenue streams and
D
this sector was also severely impacted when workers abandoned the office and began working from home. By the
middle of 2021, MM was running out of cash and the business was facing an uncertain future.
At this time, Remoteworking.com, a large company specialising in the industry, approached MM to purchase its
desk rental business, aiming to add this to its current portfolio of desk spaces. It made MM an offer, based on the
35 annual revenue figures for the past five years. James, who had created the desk rental business, wanted to reject the
offer, believing that the offer (based on revenues that included the decline in revenues during the pandemic)
represented poor value for the company. He believed that the desk rental sector was likely to grow significantly in
the future. He also had concerns about recent reports that linked Remoteworking.com to the building of unsafe and
environmentally damaging premises, and he was concerned about the impact of the reports on MM’s own
40 reputation. Dominic was more responsive to the offer. He believed that, moving forward, the business should go
back to basics and invest all of its energy and resources into web design. He viewed the offer as a welcome
opportunity to provide much-needed capital and the chance to refocus the business towards its core business.
Section A
Answer all questions from this section.
1 Define the term ‘democratic leadership’ (line 22). [2]
2 Define the term ‘commission’ (line 22). [2]
4
FT
Explain one advantage and one disadvantage for MM of being a small business (line 15).
State the business structure of MM and describe two features of this type of structure.
[4]
[4]
A
R
5 Draw an Ansoff matrix and identify which section of the matrix could be used to describe Miramedia’s
expansion into ‘desk rentals’ (line 28). [4]
D
6 Explain why Dominic is unable to accept the offer from Remoteworking.com without agreement
from James (line 39). Suggest one way that the disagreement could be resolved. [4]
FT
A
R
D
Section B
Answer one question from this section.
7 Discuss two appropriate sources of finance that MM could use to finance the business if it does not
accept the offer for its desk rental business. [10]
8
FT
Discuss whether or not MM should accept the offer from Remoteworking.com. [10]
A
R
D
Paper 1 sample exam mark scheme

Standard Level and Higher Level
Miramedia (MM)
Section A
1 Define the term ‘democratic leadership’ (line 22). [2]
Level Descriptor Mark
FT
1 The idea that it is a management style based on democracy or listening to workers. 1
2 An accurate definition that democratic leadership, sometimes called participative leadership, is 2
a style of leadership that includes involving employees in any decision-making processes.
2 Define the term ‘commission’ (line 22). [2]

1 A vague definition that it involves employees receiving some of their income from sales made. 1
2 An accurate definition that commission payments mean that either the whole or part of an 2
A
employee’s salary is based on the income they bring into the business.
3 Explain one advantage and one disadvantage for MM of being a small business (line 15). [4]
R
1 For a response explaining either one economy of scale or one disadvantage of scale. 1–2
Alternatively, responses providing a vague example of both would also be awarded a mark in
this grade band.
2 For a response explaining one accurate example of an advantage of scale and one accurate 3–4
example of a disadvantage of scale.
D
4 State the business structure of MM and describe two features of this type of structure. [4]
The business structure is a private limited company.
Features of limited companies include:
• The owners of private companies cannot transfer or sell their shares to another person without the
consent of other members of the company.
• Members (Dominic and James) enjoy limited liability, meaning that their personal assets are not at
risk should the business fail.
• As a limited company company, the business must present their financial accounts for scrutiny to the
appropriate authority.
• A private limited company is a separate legal entity from its members.
• The company must appoint at least two directors of the business.

1 For identifying MM as a private limited company and providing one feature of private limited 1–2
companies.
2 For identifying MM as a private limited company and providing two features of private limited 3–4
companies. Responses that do not specifically state that MM is a private limited company can
receive a maximum of 3 marks.
5 Draw an Ansoff matrix and identify which section of the matrix could be used to describe
Miramedia’s expansion into ‘desk rentals’ (line 28). [4]
1 For a correctly drawn (and labelled) Ansoff matrix or an explanation that expanding into the 1–2
desk rental business would be an example of product development, offering a new product
FT
into an existing market (the text states that the clients in this case were other web designers).
2 For a correctly drawn (and labelled) Ansoff matrix and an explanation that expanding into the 3–4
desk rental business would be an example of product development, offering a new product
into an existing market (the text states that the clients in this case were other web designers).
6 Explain why Dominic is unable to accept the offer from Remoteworking.com without agreement
from James (line 39). Suggest one way that the disagreement could be resolved. [4]
A
1 For an explanation that one of the conditions of a private limited company is that partners 1–2
cannot sell part of the business without the other’s consent. For stating that as one of the
equal 50% shareholders in the business, James could simply reject any such offer;
or identifying that the dispute could be resolved in one of the following ways:
• James and Dominic could reach agreement over the sale
• the partnership could be dissolved, with one partner effectively buying out
R
the other.
2 For an explanation that one of the conditions of a private limited company is that partners 3–4
cannot sell part of the business without the other’s consent. For stating that as one of the
equal 50% shareholders in the business, James could simply reject any such offer,
and identifying that the dispute could be resolved in one of the following ways:
D
• James and Dominic could reach agreement over the sale

• the partnership could be dissolved, with one partner effectively buying out
the other.
Section B
7 Discuss two appropriate sources of finance that MM could use to finance the business, if it does not
accept the offer for the desk rental business. [10]
Command term:
‘Discuss’ requires learners to ‘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.
Responses may include:

• using personal funds
• bringing another partner into the business, which would bring new funds into the business but
dilute the control of the existing partners
• take out a loan, which could be secured on the property that the business owns (line 19).
Responses for question 7 should be graded according to the following mark bands:
Appropriate financing methods are not discussed or addressed inappropriately.
3–4 The response indicates some understanding of the demands of the question.
Appropriate financing methods are identified and used appropriately.
FT
There is limited discussion included in the response.
The response makes limited use of the text/data to support their arguments.
Two appropriate financing methods are identified and used appropriately.
There is some discussion included in the response.
The response makes use of the text/data to support their arguments.
Two appropriate financing methods are identified and used appropriately.
A
The response includes a discussion of the suitability of each funding method identified.
The response makes good use of the text/data to support their arguments.
Two appropriate financing methods are identified and used skilfully.
The response includes a comprehensive discussion of the suitability of each funding
R
method identified.
The response makes excellent use of the text/data to support their arguments.
8 Discuss whether or not MM should accept the offer from Remoteworking.com. [10]
Command term:
‘Discuss’ requires learners to ‘offer a considered and balanced review that includes a range of
D
arguments, factors or hypotheses.’ Opinions or conclusions should be presented clearly and supported by
appropriate evidence.
Responses may include:
Arguments in favour of accepting the offer:
• The business is in need of finance, and by selling the desk rental business it will be able to ensure the
firm’s short- to medium-term future.
• Other methods of attracting finance would mean either the business paying interest on the original loan or
diluting control of the business.
• The desk rental business could be seen as a deviation from the firm’s original core business, and it faces
an uncertain future given the increasing popularity of homeworking since 2020.
Arguments against accepting the offer:

• Ethical considerations of selling to a company that has received poor publicity in recent months.
Accepting the offer could open the business up to accusations of hypocrisy, given MM’s mission
statement.
• It may be presumptuous to assume that the desk rental market will continue to struggle, with economies
around the world reopening after the pandemic. Prior to 2020, this section of the business was said to be
increasingly profitable. (line 29)
• The offer from Remoteworking.com may well be below market value given that it is based on the last
five years’ revenue – including the previous two years when economic activity was curtailed. (line 35)
Responses for question 8 should be graded according to the following mark bands:
FT
Appropriate arguments are not used or used inappropriately.
3–4 The response indicates some understanding of the demands of the question.
Appropriate arguments (either in favour or against accepting the offer) are used appropriately.
There is limited discussion included in the response.
The response makes limited use of the text/data to support their arguments.
Arguments both in favour and against the offer are identified and used appropriately, though the
response may lack some balance.
A
There is some discussion included in the response.
The response makes use of the text/data to support their arguments.
Arguments both in favour and against accepting the offer have been identified and are used
appropriately. The response is balanced.
R
There is appropriate discussion included in the response.
The response makes a clear use of the text/data to support their arguments.
9–10 The response shows a clear understanding of the demands of the question.
Arguments both in favour and against accepting the offer have been identified and are skilfully
applied. The candidate has been careful to apply balance in their response.
D
There is extensive discussion in the response.

The response makes skilful use of the text/data to support their arguments.
Skills development worksheet 1.1

Activity 1.1
Complete the crossword based on Coursebook Chapter 1, using the clues provided.
FT
A
R
D
Across Down
2 Inputs of the business are called ‘factors of ___ 1 Business function that makes sure employees
(10) get paid on time (7,10)
4 Type of goods – not for consumers (7,5) 3 A business uses resources to meet the needs of
___ (9)
6 A broad type of business activity, for example
‘secondary sector’ (8,6) 5 The business function responsible for sales (9)
8 Farming is an example of this category of 7 A business in the secondary sector, involved in
business activity. (7,6) building (12)
9 Bill Gates and Steve Jobs are examples of this 12 Business activity exists to produce goods or ___
type of businessperson. (8)
10 A business must identify the needs of the ___ 13 Most businesses aim to make a ___ (6)
(8)
FT
14 ___ management is responsible for ensuring
11 Business function responsible for training and adequate resources are available for production
recruitment (5,9) (10)
15 The economic sector that would include
restaurants and bars (8,6)
16 Land, labour, capital, etc (8,6)
A
R
D
BUSINESS MANAGEMENT FOR THE IB DIPLOMA TEACHER’S RESOURCE
Vocabulary building worksheet 2.1

Activity 2.1 Common types of business ownership
sole traders license unlimited liability partnership brand
franchisee limited stock market private limited company
franchise general franchiser debts owns
FT
1 Fill the blank spaces in the following paragraphs with the correct words.
A feature of ______________ ______________ is that just one person ______________ the business and runs
the organisation. While this is straightforward to set up, one disadvantage is that the owner has
______________ ______________, meaning that the owner is personally liable for all ______________ and
losses that the business builds up.
Another type of business structure is called a ______________, which is a business structure in which two or
A
more people own and operate the business. This structure comes in two main types – ______________ and
______________.
Corporations are a separate legal entity from the owners, requiring the business to comply with additional
R
regulations and tax requirements. Shares in corporations can be freely bought and sold via the
______________ ______________.
A ______________ ______________ ______________, such as a corporation, enjoys ______________

liability, but ownership of the business remains private.
D
A ______________ is a business in which independent entrepreneurs use the rights to a larger company’s
______________ to operate an individual subsidiary. The ______________ is the owner who sells the rights
to ______________ their business, and the ______________ is the third-party owner of the subsidiary.
2 Complete the following sentences using the words public / private / profit / not for profit.
In a ______________ limited company, shares are not for sale to the general public, but shares in
______________ limited companies are freely exchanged on the stock exchange. A plc/Inc. is called a
______________ limited company or corporation. A Ltd or Pte is a ______________ limited company.
Both forms of business operate in the ______________ sector and operate as ______________ businesses.
______________ limited companies are sometimes confused with ______________ corporations, which are
state-run enterprises operating in the ______________ sector and operate on a ______________ basis.
3 Complete the following table by stating whether each of the statements is true or false:
Sole trader Partnership Ltd Plc Public
corporation
Owned by shareholders
Can issue shares to the general public
Owned and controlled by one person
Enjoys limited liability
Seeks to make a profit
Requires financial statements to be
prepared by a qualified accountant
Can raise funds for the business by
way of a long-term loan or mortgage,
secured on assets
FT
Likely to enjoy economies of scale
Controlled by government
Owned by the public
A
R
D
Activity 2.2 Chapter revision terms

The jumbled words are all key terms from Chapter 2. Unjumble the terms using the definitions to help you.
Jumbled words Key term Description
alcois tepirresen a business with social and/ or environmental objectives that reinvests
most of its profits into benefiting society
hhsoerldaers individuals or institutions that buy/own shares in a limited company
lsacio prnrtrueneee a person who establishes an enterprise with the aim of solving social
problems or achieving social change
pculib oainotrrpoc a business enterprise owned and controlled by the state – also known
as nationalised industry or public sector enterprise
varpite tsocre comprises businesses owned and controlled by individuals or groups
of individuals
FT
nno-novgreemanlt a legally constituted body that functions independently of any
iisgronanaot government and that has a specific humanitarian or social
aim/purpose, e.g. supporting disadvantaged groups in developing
countries or advocating the protection of human rights
evperatcisoo a group of people acting together to meet the common needs and
aspirations of its members, sharing ownership and making decisions
democratically
iitdeml iytlblaiil the only liability – or potential loss – a shareholder (or partner in a
limited liability partnership) has if the company fails is the amount
A
invested in the company, not the total wealth of
the shareholder
srtaativiiopn the sale of public sector organisations to the private sector
ycthari an organisation set up to raise money to help people in need or to

support causes that require funding
R
xedim ocmoeny economic resources are owned and controlled by both private and
public sectors
ratpphsnrei a business formed by two or more people to carry on a business
together, with shared capital investment and, usually,
shared responsibilities
D
elso readtr a business that is exclusively owned by one person who has full control
of it and is entitled to all of the profit (after tax)
tlepri oobttm neli the three objectives of social enterprises: economic, social
and environmental
etvriaylp dhle a business that is owned by shareholders who are often members of
ynompac the same family; this company cannot sell shares to the general public
byclipul dhel a limited company with the legal right to sell shares to financial
ponamcy institutions and the general public
losaic prretnieee a business with social and/or environmental objectives that reinvests
most of its profits into benefiting society rather than maximising
returns to owners
efre-amkter economic resources are owned largely by the private sector, with very
ocmeony little state intervention

hrase a certificate confirming part ownership of a company. Most types of
share entitle shareholders to dividends paid from profits
onn-rpfoit any organisation that has aims other than making and distributing
nisgataoiorn profit and which is usually governed by a voluntary board
FT
A
R
D
Skills development worksheet 3.1

Activity 3.1
Complete the crossword based on Coursebook Chapter 3, using the clues provided.
FT
A
R
D
Across Down
1 A declaration of an organisation’s purpose, 2 Aims that are specific, measurable, achievable,
sometimes called ‘how we do things here’ (7,9) realistic and time specific (5, 10)
5 How a business plans to achieves its 3 When a business focuses its strategy on selling
long-term objectives (8) existing products to new customers (6,11)
13 Introducing new products to existing customers 4 Allows managers to assess the positive and
– part of the Ansoff matrix (7,11) negative (internal and external factors) facing
the business (4,8)
14 An organisation’s long-term aspirations, where
it hopes to be in the future (4) 6 Short-term methods used to implement the
overall objectives/strategy of the business (7)
16 The growth strategy when a business launches
new products in a new market (15) 7 A focus on developing existing products in
existing markets (6,11)
FT
8 When an organisation’s goals and decision-
making conform to a set of moral guidelines set
by the company (7,10)
9 A declaration of what an organisation hopes to
achieve in the future (6,9)
10 A marketing tool, used to help a business
develop market/product growth strategies (6,6)
A
11 Clearly defined targets that a business uses to
achieve its aims (10)
12 An attempt by an organisation to prioritise
the community in its objectives, not just
its shareholders (3)
R
15 A code of practice governing moral
organisational behaviour (6)
D

Activity 4.1
Find key terms from Chapter 4 in the grid.
Words may appear horizontally, vertically or diagonally, forwards or backwards, but they will always appear in a
straight line, even if the term consists of more than one word.
FT
A
R
D

Activity 5.1: Economies and diseconomies of scale
Match the business term to the correct description and then provide a relevant example to support your work.
Financial economies of scale, Specialist economies of scale, Marketing economies of scale,

Purchasing economies of scale, Internal economies of scale, Risk-bearing economies, Technical
economies of scale, Managerial economies of scale, Economies of scale, Diseconomies of scale
Key term
External economies of scale
Description
FT
When all firms within the industry
benefit from lower unit costs of
production as the industry grows
Benefits derived from being able to
attract loans at lower interest rates than
smaller businesses
Gains from scale that occur from within
Example
The concentration of large businesses
within one area attracts other firms to the
area, in a range of support industries
A
the organisation itself, rather than
growth in the overall industry
Efficiency gains through specialist
management
Increases in unit (average) costs of
R
production that result from an increase
in the scale of operations of a business
The use of specialist workers rather than
generalist staff
When the larger firm can gain scale
efficiencies through a specialist
D
marketing team
Reductions in unit (average) costs of
production that result from an increase
in the scale of operations of a business
Efficiency gains from pooling of risk
among a range of products
Efficiency gains through purchasing
supplies
Greater use of automation and division
of labour
Activity 5.2: Business growth word jumble

The jumbled words are all key terms from Chapter 5. Unjumble the words using the definitions to help you.
zorhntiaol aionittegrn Integration with a firm in the same industry and at the same stage
of production
estcrgati lanaceils Agreements between firms in which each agrees to commit resources
to achieve an agreed set of objectives
wbaadrck lavercit Integration with a business in the same industry but a supplier of the
aioniegtrnt existing business
ntamuttoinilal Business organisation that has its headquarters in one country,
acpoynm but with operating branches, factories and assembly plants in
other countries
semcioeno fo lsaec Reductions in unit (average) costs of production that result from an
FT
increase in the scale of operations of a business
eref aedrt No restrictions or trade barriers exist that might prevent or limit trade
between countries
ijnot uevernt Two or more businesses agree to work closely together on a particular
project and create a separate business division to do so
mdiseiscoeno fo aeslc Increases in unit (average) costs of production that result from an
increase in the scale of operations of a business
railntne wghrto Expansion of a business by means of opening new branches, shops or
factories (also known as organic growth)
A
wforadr cavielrt Integration with a business in the same industry but a customer of the
anittiegron existing business
sglatobnoiali The growing integration of countries through increased freedom of
global movement of goods, capital and people
egmerr An agreement by shareholders and managers of two businesses to
R
bring both firms together under a common board of directors, with
shareholders in both businesses owning shares in the newly
merged business
ianctqiouis When a company buys at least 50% of the shares of another company
and becomes the controlling owner – often referred
to as a takeover
D
lraexnte hgwtro Business expansion achieved by means of merging with or taking over
another business, from either the same or a different industry
rgmoenetcloa Merger with or takeover of a business in a different industry
aionitegtrn
lsace fo notpeoria The maximum output that can be achieved using the available inputs
(resources) – this scale can only be increased in the long term by
employing more of all inputs
yrsygne The concept that, following a merger or acquisition, the combined
value and performance of two businesses will be greater than the sum
of the separate individual businesses
hefrsainc A business that uses the name, logo and trading systems of an existing
successful business
Worksheet answers
Chapter 1: Skills development worksheet
Activity 1.1
FT
A
R
D
Worksheet answers
Chapter 2: Vocabulary building worksheet
Activity 2.1 Common types of business ownership
1 A feature of sole traders is that just one person owns the business and runs the organisation. While this is
straightforward to set up, one disadvantage is that the owner has unlimited liability, meaning that the owner is
personally liable for all debts and losses that the business builds up.
Another type of business structure is called a partnership, which is a business structure in which two or more
people own and operate the business. This structure comes in two main types – general and limited.
Corporations are a separate legal entity from the owners, requiring the business to comply with additional
FT
regulations and tax requirements. Shares in corporations can be freely bought and sold via the stock market.
A private limited company, such as a corporation, enjoys limited liability but ownership of the business
remains private.
A franchise is a business in which independent entrepreneurs use the rights to a larger company’s brand to
operate an individual subsidiary. The franchiser is the owner who sells the rights to license their business, and
the franchisee is the third-party owner of the subsidiary.
2 In a private limited company, shares are not for sale to the general public, but shares in public limited
companies are freely exchanged on the stock exchange. A plc/Inc. is called a public limited company or
A
corporation. A Ltd or Pte is a private limited company. Both forms of business operate in the
private sector and operate as for-profit businesses. Public limited companies are sometimes confused with
public corporations, which are state-run enterprises operating in the private sector and operate on a
not-for-profit basis.
3
Sole trader Partnership Ltd Plc Public
R
corporation
Owned by shareholders False False True True False
Can issue shares to the general public False False False True False
Owned and controlled by one person True False False False False
Enjoys limited liability False False True True False
D
Seeks to make a profit True True True True False

Requires financial statements to be False False True True True
prepared by a qualified accountant
Can raise funds for the business by a True True True True True
long-term loan or mortgage, secured
on assets
Likely to enjoy economies of scale False False False True True
Controlled by government False False False False True
Owned by the public False False False False True
Activity 2.2 Chapter revision terms

1 microfinance
2 shareholders
3 social entrepreneur
4 public corporation
5 private sector
6 non-governmental organisation
7 cooperative
8 limited liability
9 privatisation
FT
10 charity
11 mixed economy
12 partnership
13 sole trader
14 triple bottom line
15 privately held company
A
16 limited liability
17 social enterprise
18 free-market economy
19 share
R
20 non-profit organisation
D
Worksheet answers
Chapter 3: Skills development worksheet
Activity 3.1
FT
A
R
D
Worksheet answers
Chapter 4: Vocabulary building worksheet
Activity 4.1
FT
A
R
D
Worksheet answers
Activity 5.1
Business term Description Example
External economies of scale When all firms within the industry benefit The concentration of large businesses
from lower unit costs of production as the within one area attracts other firms
industry grows to the area, in a range of
support industries
Financial economies of scale Benefits derived from being able to attract Larger firms are generally able to profit
FT
loans at lower interest rates than smaller from lower interest credit terms due to
businesses their perceived lower risks
Internal economies of scale Gains from scale that occur from within Financial, marketing, division of labour
the organisation itself, rather than growth economies, etc.
in the overall industry
Managerial economies of scale Efficiency gains through specialist As a business grows it has the
management resources to hire specialist managers
rather than relying on a smaller
number of general managers
Diseconomies of scale Increases in unit (average) costs of Poor communication,
A
production that result from an increase in misunderstandings or lack of pride in
the scale of operations of a business the company
Specialist economies of scale The use of specialist workers rather than Larger firms can afford to hire
generalist staff and train specialist workers,
boosting productivity
R
Marketing economies of scale When the larger firm can gain scale Larger businesses can share the costs
efficiencies through a specialist of marketing between a larger number
marketing team of units
Economies of scale Reductions in unit (average) costs of Bulk buying, easier access to cheap
production that result from an increase in credit, or lower unit costs from
the scale of operations of a business increased specialisation
D
Risk-bearing economies Efficiency gains from pooling of risk Large businesses can afford to take
amongst a range of products greater risks because they are able to
share the risks among different
products in their portfolio
Purchasing economies of scale Efficiency gains through purchasing Larger firm are able to make significant
supplies savings through bulk-buying discounts
Technical economies of scale Greater use of automation and division As a business grows it can afford to
of labour make greater use of mass production
techniques, reducing unit costs
Activity 5.2
Key term Description
Horizontal integration Integration with a firm in the same industry and at the same stage of production
Strategic alliances Agreements between firms in which each agrees to commit resources to achieve an
agreed set of objectives
Backward vertical integration Integration with a business in the same industry but a supplier of the existing business
Multinational company Business organisation that has its headquarters in one country, but with operating
branches, factories and assembly plants in other countries
Economies of scale Reductions in unit (average) costs of production that result from an increase in the
scale of operations of a business
Free trade No restrictions or trade barriers exist that might prevent or limit trade
between countries
Joint venture Two or more businesses agree to work closely together on a particular project and
FT
create a separate business division to do so
Diseconomies of scale Increases in unit (average) costs of production that result from an increase in the scale
of operations of a business
Internal growth Expansion of a business by means of opening new branches, shops or factories
(also known as organic growth)
Forward vertical integration Integration with a business in the same industry but a customer of the
existing business
Globalisation The growing integration of countries through increased freedom of global movement
of goods, capital and people
A
Merger An agreement by shareholders and managers of two businesses to bring both firms
together under a common board of directors, with shareholders in both businesses
owning shares in the newly merged business
Acquisition When a company buys at least 50% of the shares of another company and becomes
the controlling owner – often referred to as a takeover
R
External growth Business expansion achieved by means of merging with or taking over another
business, from either the same or a different industry
Conglomerate integration Merger with or takeover of a business in a different industry
Scale of operation The maximum output that can be achieved using the available inputs (resources) –
this scale can only be increased in the long term by employing more of all inputs
D
Synergy The concept that, following a merger or acquisition, the combined value and
performance of two businesses will be greater than the sum of the separate
individual businesses
Franchise A business that uses the name, logo and trading systems of an existing
successful business

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Business

Digital Teacher’s Resource

About the authors

How to use this series 

How to use this Teacher’s Resource 

Scheme of work for the whole course 

Lesson plan template and exemplar 

About the guide/syllabus 

About the assessment/examination 

Integrating Theory of knowledge into your Business Management lesson

Unit 1: Introduction to business management

2 Types of business entities

5 Growth and evolution

6 Multinational companies (MNCs)

Unit 2: Human resource management

End of course tests

business Case study 1.3

Section Approximate number Learning content Resources

1.1 The role of business

Learning objectives Success criteria

While many learners will not have studied

2 Business in context 2 (30–40 minutes)

Key term Description Example

inputs into goods and/or services

Answers to plenary activity

Key term Description Example

Capital – start-up capital for business

Entrepreneurship – Steve Jobs

Learning objectives Success criteria

Answers: Relevant responses include (but not limited to):

2 Categorising business products (20–30 minutes)

Setting prices of new products Marketing

Recruiting a new operations manager HR management

Allocating resources to capital equipment Finance

Finding out if consumers prefer one product design to another

Key term Definition Examples

2 Economic sectors (20–30 minutes)

Answer: Example for McDonald’s extra value meal

Primary Secondary Tertiary Quaternary

1.4 Starting a business

Learning objectives Success criteria

Answers: Problems that new businesses may encounter include the following:

1.5 Business management tools: Business plans

Learning objectives Success criteria

Revision crossword on Skills development worksheet 1.1 (15–20 minutes)

PowerPoint slides 6 and 7

Sub-chapter Approximate number Learning content Resources

Learning objectives Success criteria

Private and public sectors (10–15 minutes)

2 Different economic systems (25–30 minutes)

Free market system Mixed economic system Planned economic system

2.2 The main features of private sector organisations

Learning objectives Success criteria

2 Converting from private to public – the popularity of IPOs (30–40 minutes)

2.3 For-profit social enterprises – private

Learning objectives Success criteria

maximising returns to owners

social entrepreneur: a person who establishes

About the authors

How to use this series

How to use this Teacher’s Resource

Scheme of work for the whole course

Lesson plan template and exemplar

About the guide/syllabus

About the assessment/examination