Business and management

First examinations 2009
Diploma Programme
Guide

Diploma Programme
Business and management
Guide
First examinations 2009
International Baccalaureate Organization Buenos Aires Cardiff Geneva New York Singapore Diploma Programme
Business and management—guide
Published March 2007
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© International Baccalaureate Organization 2007
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IBO mission statement
The International Baccalaureate Organization aims to develop inquiring,
knowledgeable and caring young people who help to create a better and more
peaceful world through intercultural understanding and respect.
To this end the IBO works with schools, governments and international
organizations to develop challenging programmes of international education
and rigorous assessment.
These programmes encourage students across the world to become active,
compassionate and lifelong learners who understand that other people, with
their differences, can also be right.

IB learner profile
The aim of all IB programmes is to develop internationally minded people who, recognizing their common
humanity and shared guardianship of the planet, help to create a better and more peaceful world.
IB learners strive to be:
Inquirers They develop their natural curiosity. They acquire the skills necessary to conduct
inquiry and research and show independence in learning. They actively enjoy
learning and this love of learning will be sustained throughout their lives.
Knowledgeable They explore concepts, ideas and issues that have local and global significance. In so
doing, they acquire in-depth knowledge and develop understanding across a broad
and balanced range of disciplines.
Thinkers They exercise initiative in applying thinking skills critically and creatively to recognize
and approach complex problems, and make reasoned, ethical decisions.
Communicators They understand and express ideas and information confidently and creatively in
more than one language and in a variety of modes of communication. They work
effectively and willingly in collaboration with others.
Principled They act with integrity and honesty, with a strong sense of fairness, justice and
respect for the dignity of the individual, groups and communities. They take
responsibility for their own actions and the consequences that accompany them.
Open-minded They understand and appreciate their own cultures and personal histories, and are
open to the perspectives, values and traditions of other individuals and communities.
They are accustomed to seeking and evaluating a range of points of view, and are
willing to grow from the experience.
Caring They show empathy, compassion and respect towards the needs and feelings of
others. They have a personal commitment to service, and act to make a positive
difference to the lives of others and to the environment.
Risk-takers They approach unfamiliar situations and uncertainty with courage and forethought,
and have the independence of spirit to explore new roles, ideas and strategies. They
are brave and articulate in defending their beliefs.
Balanced They understand the importance of intellectual, physical and emotional balance to
achieve personal well-being for themselves and others.
Reflective They give thoughtful consideration to their own learning and experience. They are
able to assess and understand their strengths and limitations in order to support
their learning and personal development.

Introduction 1
The Diploma Programme 1
Nature of the subject 3
Aims 5
Assessment objectives 6
Mapping the course 7
Syllabus 9
Syllabus overview 9
Syllabus outline 10
Syllabus details 12
Assessment 44
Assessment outline 44
Assessment details 46
Assessment criteria 55
Appendices 69
Formulae 69
Discount tables—HL only 71
Presentation of balance sheets and profit and loss accounts 72
Glossary of command terms 74
Contents

The Diploma Programme is a rigorous pre-university course of study designed for students in the 16 to 19
age range. It is a broad-based two-year course that aims to encourage students to be knowledgeable
and inquiring, but also caring and compassionate. There is a strong emphasis on encouraging students
to develop intercultural understanding, open-mindedness, and the attitudes necessary for them to respect
and evaluate a range of points of view.
The Diploma Programme hexagon
The course is presented as six academic areas enclosing a central core. It encourages the concurrent
study of a broad range of academic areas. Students study: two modern languages (or a modern language
and a classical language); a humanities or social science subject; an experimental science; mathematics;
one of the creative arts. It is this comprehensive range of subjects that makes the Diploma Programme
a demanding course of study designed to prepare students effectively for university entrance. In each
of the academic areas students have flexibility in making their choices, which means they can choose
subjects that particularly interest them and that they may wish to study further at university.
Introduction
The Diploma Programme
© International Baccalaureate Organization 2007 1
Choosing the right combination
Students are required to choose one subject from each of the six academic areas, although they can
choose a second subject from groups 1 to 5 instead of a group 6 subject. Normally, three subjects (and
not more than four) are taken at higher level (HL), and the others are taken at standard level (SL). The
IBO recommends 240 teaching hours for HL subjects and 150 hours for SL. Subjects at HL are studied in
greater depth and breadth than at SL.
At both levels, many skills are developed, especially those of critical thinking and analysis. At the end of
the course, students’ abilities are measured by means of external assessment. Many subjects contain
some element of coursework assessed by teachers. The course is available for examinations in English,
French and Spanish.
The core of the hexagon
All Diploma Programme students participate in the three course requirements that make up the core of
the hexagon. Reflection on all these activities is a principle that lies at the heart of the thinking behind
the Diploma Programme.
The theory of knowledge (TOK) course encourages students to think about the nature of knowledge, to
reflect on the process of learning in all the subjects they study as part of their Diploma Programme course,
and to make connections across the academic areas. The extended essay, a substantial piece of writing
of up to 4,000 words, enables students to investigate a topic of special interest that they have chosen
themselves. It also encourages them to develop the skills of independent research that will be expected
at university. Creativity, action, service (CAS) involves students in experiential learning through a range
of artistic, sporting, physical and service activities.
The IBO mission statement and the IB learner profile
The Diploma Programme aims to develop in students the knowledge, skills and attitudes they will need
to fulfill the aims of the IBO, as expressed in the organization’s mission statement and the learner profile.
Teaching and learning in the Diploma Programme represent the reality in daily practice of the
organization’s educational philosophy.
First examinations 2009
2 © International Baccalaureate Organization 2007
The Diploma Programme
Business and management is a rigorous and dynamic discipline that examines business decision-making
processes and how these decisions impact on and are affected by internal and external environments.
It is the study of both the way in which individuals and groups interact in an organization and of the
transformation of resources. It is, therefore, perfectly placed within the group 3 subject area.
The Diploma Programme business and management course is designed to develop an understanding of
business theory, as well as an ability to apply business principles, practices and skills. The application of
tools and techniques of analysis facilitates an appreciation of complex business activities. The course
considers the diverse range of business organizations and activities and the cultural and economic context
in which business operates. Emphasis is placed on strategic decision-making and the day-to-day business
functions of marketing, production, human resource management and finance. Links between the topics
are central to the course, and this integration promotes a holistic overview of business activity.
The business and management course aims to help students understand the implications of business
activity in a global market. It is designed to give students an international perspective of business and
to promote their appreciation of cultural diversity through the study of topics like international marketing,
human resource management, growth and business strategy.
The ideals of international cooperation and responsible citizenship are at the heart of Diploma Programme
business and management. The course encourages the appreciation of ethical concerns and issues of
social responsibility in the global business environment. Students should be able to make sense of the
forces and circumstances that drive and restrain change in an interdependent and multicultural world.
The business and management course will contribute to students’ development as critical and effective
participants in local and world affairs.
Difference between HL and SL
The HL course in business and management differs from the SL course in business and management in
terms of the:
· hours devoted to teaching (240 hours for HL compared to 150 hours for SL)
· extra depth and breadth required (topic 6 for HL students and the HL extension units)
· nature of the learning outcomes (more higher-order skills for HL)
· nature of the internal assessment task
· nature of the examination questions.
Introduction
Nature of the subject
© International Baccalaureate Organization 2007 3
Business and management and prior learning
No particular background in terms of specific subjects studied for national or international qualifications
is expected or required and no prior knowledge of business and management is necessary for students
to undertake a course of study based on this specification. However, a familiarity with business concepts
would be an advantage, as would completing the humanities course in the IB Middle Years Programme
(MYP).
Business and management and the MYP
The MYP humanities course develops technical skills, analytical skills, decision-making skills and
investigative skills, all of which are required in business and management. In addition, an understanding
of the key concepts of time, place and space, change, systems and global awareness prepares students
for the demands of the business and management course.
Business and management and TOK
Students of group 3 subjects study individuals and societies. This means that they explore the interactions
between humans and their environment in time and place. As a result, these subjects are often known
collectively as the “human sciences” or “social sciences”.
As with other subject areas, there is a variety of ways of gaining knowledge in group 3 subjects. For
example, archival evidence, data collection, experimentation, observation, inductive and deductive
reasoning can all be used to help explain patterns of behaviour and lead to knowledge claims. Students
in group 3 subjects are required to evaluate these knowledge claims by exploring knowledge issues such
as validity, reliability, credibility, certainty, and individual as well as cultural perspectives.
The relationship between group 3 subjects and TOK is of crucial importance and fundamental to the
Diploma Programme. Having followed a course of study in group 3, students should be able to reflect
critically on the various ways of knowing and methods used in human sciences, and in doing so, become
“inquiring, knowledgeable and caring young people” (IBO mission statement).
During the course in business and management a number of issues will arise that highlight the relationships
between TOK and business and management. Some of the questions that could be considered during
the course are identified below.
· Is the practice of developing ethical objectives solely as a marketing strategy, in fact, ethical?
· Can today’s CEOs (chief executive officers) in business learn from great military leaders of the past?
· What sort of knowledge is communicated through a set of business accounts?
· Is there room for both logic and emotion in business?
· Are globalization and the maintenance of cultures mutually exclusive?
· Does marketing respond to, or change, the perceptions of individuals and societies?
· How do we know that business information is reliable?
· What is the role of intuition and tacit knowledge in business decisions?
· Is business an art or a science? What is the role of creativity in business, and how is it manifested?
4 © International Baccalaureate Organization 2007
Nature of the subject
The aims of all subjects in group 3, individuals and societies are to:
· encourage the systematic and critical study of: human experience and behaviour; physical, economic
and social environments; the history and development of social and cultural institutions
· develop in the student the capacity to identify, to analyse critically and to evaluate theories, concepts
and arguments about the nature and activities of the individual and society
· enable the student to collect, describe and analyse data used in studies of society, to test hypotheses
and interpret complex data and source material
· promote the appreciation of the way in which learning is relevant to both the culture in which the
student lives, and the culture of other societies
· develop an awareness in the student that human attitudes and opinions are widely diverse and that
a study of society requires an appreciation of such diversity
· enable the student to recognize that the content and methodologies of the subjects in group 3 are
contestable and that their study requires the toleration of uncertainty.
The aims of the business and management course at HL and SL are to:
· promote the importance of exploring business issues from different cultural perspectives
· encourage a holistic view of the world of business
· enable the student to develop the capacity to think critically about individual and organizational
behaviour
· enhance the student’s ability to make informed business decisions
· enable the student to appreciate the nature and significance of change in a local, regional and global
context
· promote awareness of social, cultural and ethical factors in the actions of organizations and individuals
in those organizations
· appreciate the social and ethical responsibilities associated with businesses operating in international
markets.
Introduction
Aims
© International Baccalaureate Organization 2007 5
Having followed the business and management course at HL or SL, students will be expected to:
1. demonstrate knowledge and understanding of business terminology, concepts, principles and
theories
2. make business decisions by identifying the issue(s), selecting and interpreting data, applying
appropriate tools and techniques, and recommending suitable solutions
3. analyse and evaluate business decisions using a variety of sources
4. evaluate business strategies and/or practices showing evidence of critical thinking
5. apply skills and knowledge learned in the subject to hypothetical and real business situations
6. communicate business ideas and information effectively and accurately using appropriate formats
and tools.
In addition to the above, students at HL will be expected to:
7. synthesize knowledge in order to develop a framework for business decision-making.
Introduction
Assessment objectives
6 © International Baccalaureate Organization 2007
Objective Course component Assessment tool
External assessment
· Paper 1 (HL and SL): all sections
· Paper 2 (HL and SL): both sections
Internal assessment
· HL—emphasized in criterion B
· SL—emphasized in criterion B
· External
assessment
· Internal
assessment
1. Demonstrate knowledge and
understanding of business
terminology, concepts,
principles and theories
External assessment
· Paper 1 (HL and SL): all sections—
emphasized in section C (HL)
· Paper 2 (HL and SL): both
sections—emphasized in section A
Internal assessment
· HL—emphasized in criterion D
· SL—emphasized in criteria B and D
· External
assessment
· Internal
assessment
2. Make business decisions by
identifying the issue(s),
selecting and interpreting
data, applying appropriate
tools and techniques, and
recommending suitable
solutions
External assessment
· Paper 1 (HL and SL): all
sections—emphasized in section B
· Paper 2 (HL and SL): both
sections—emphasized in section B
Internal assessment
· HL—emphasized in criterion C
· SL—emphasized in criterion C
· External
assessment
· Internal
assessment
3. Analyse and evaluate business
decisions using a variety of
sources
External assessment
· Paper 1 (HL and SL ): all
sections—emphasized in section C (HL)
· Paper 2 (HL and SL): both sections
Internal assessment
· HL—emphasized in criterion C
· SL—emphasized in criterion E
· External
assessment
· Internal
assessment
4. Evaluate business strategies
and/or practices showing
evidence of critical thinking
Introduction
Mapping the course
© International Baccalaureate Organization 2007 7
Objective Course component Assessment tool
External assessment
· Paper 1 (HL and SL): all sections
· Paper 2 (HL and SL): both sections
Internal assessment
· HL—emphasized in criteria A and B
· SL—emphasized in criteria A and B
· External
assessment
· Internal
assessment
5. Apply skills and knowledge
learned in the subject to
hypothetical and real business
situations
· External External assessment
assessment
· Internal
assessment
6. Communicate business ideas
and information effectively
and accurately using
appropriate formats and tools
Paper 1 (HL and SL): all sections
Paper 2 (HL and SL): both sections
Internal assessment
· HL—emphasized in criterion E
· SL—emphasized in criterion F
External assessment
· Paper 1 (HL): section C
Internal assessment
· HL—emphasized in criterion C
· External
assessment
· Internal
assessment
In addition, students at HL will be
expected to:
7. synthesize knowledge in
order to develop a framework
for business decision-making
8 © International Baccalaureate Organization 2007
Mapping the course
The curriculum model for Diploma Programme business and management is a core curriculum for higher
level (HL) and standard level (SL) consisting of five topics with common content and learning outcomes.
In addition to the core, HL students are expected to complete extension areas of study, in all five topics,
adding both depth and breadth to the course. HL students also study one extension topic listed below
as topic 6, business strategy.
HL and SL core
Topic 1: Business organization and environment
Topic 2: Human resources
Topic 3: Accounts and finance
Topic 4: Marketing
Topic 5: Operations management
HL only
Topic 6: Business strategy
The business strategy topic is intended to provide a framework and overview for the students to think
in an integrated way about the future strategy of a business or businesses. These skills are particularly
relevant when examining the case study and when researching for, and writing, the internal assessment
components. The purpose of the business strategy topic is not to add extra content to the business and
management course, but to collect together business ideas, concepts and techniques, which will develop
the skills that allow an informed decision to be made about the future direction of an organization. The
type of thinking encouraged by this approach will provide a bridge between the Diploma Programme
business and management course and higher education or employment.
Syllabus
Syllabus overview
© International Baccalaureate Organization 2007 9
HL and SL core
Topic 1: Business organization and environment
1.1 Nature of business activity
1.2 Types of organization
1.3 Organizational objectives
1.4 Stakeholders
1.5 External environment
1.6 Organizational planning tools
1.7 Growth and evolution
1.8 Change and the management of change
1.9 Globalization
Topic 2: Human resources
2.1 Human resource planning
2.2 Organizational structure
2.3 Communication
2.4 Leadership and management
2.5 Motivation
2.6 Organizational and corporate cultures
2.7 Employer and employee relations
2.8 Crisis management and contingency planning
Topic 3: Accounts and finance
3.1 Sources of finance
3.2 Investment appraisal
3.3 Working capital
Syllabus
Syllabus outline
10 © International Baccalaureate Organization 2007
3.4 Budgeting
3.5 Final accounts
3.6 Ratio analysis
Topic 4: Marketing
4.1 The role of marketing
4.2 Marketing planning
4.3 Product
4.4 Price
4.5 Promotion
4.6 Place (distribution)
4.7 International marketing
4.8 E-commerce
Topic 5: Operations management
5.1 Production methods
5.2 Costs and revenues
5.3 Break-even analysis
5.4 Quality assurance
5.5 Location
5.6 Innovation
5.7 Production planning
5.8 Project management
HL only
Topic 6: Business strategy
Stage 1: Strategic analysis
Stage 2: Strategic choice
Stage 3: Strategic implementation
© International Baccalaureate Organization 2007 11
Syllabus outline
HL and SL core
Topic 1: Business organization and environment
Content Learning outcomes
HL/SL core HL extension HL/SL core HL additional
1.1 Nature of business activity
Identify inputs, outputs
and processes of a
business.
What is a business?
Describe how business
activity combines
human, physical and
financial resources to
create goods and
services.
Business functions
· Production/operations
· Marketing
· Finance
· Human
resources/personnel
Explain the role of the
different business
departments in overall
business activity.
Analyse the impact on
business activity of
changes in economic
structure.
Explain the nature of
business activity in each
sector.
Primary, secondary and
tertiary sectors
1.2 Types of organization
Analyse the relationship
between organizations
in the private and public
sectors.
Distinguish between
organizations in the
private and public
sectors.
Private sector and
public sector
Syllabus
Syllabus details
12 © International Baccalaureate Organization 2007
Content Learning outcomes
HL/SL core HL extension HL/SL core HL additional
Explain the reasons for
setting up a business.
Starting a business
· Reasons for setting up
a business
· Identifying a market
opportunity
· Possible problems
faced by start-ups
Explain the process a
business will have to go
through to start up.
Analyse the problems
that business start-ups
may face.
Distinguish between
different types of
business organization
and identify their main
features.
Profit-based
organizations
· Sole traders
· Partnerships
· Companies/
corporations Analyse the extent to
which ownership and
control differ in
organizations.
Evaluate the most
appropriate form of
ownership for a firm.
Analyse the impact of
the division between
ownership and control
on internal and external
stakeholders.
Compare and contrast
the objectives of NGOs
and non-profit
organizations and other
organizations.
Non-profit and
non-governmental
organizations (NGOs),
including charities and
pressure groups
Analyse the impact of
the actions of NGOs and
other non-profit
organizations.
Explain the nature of
public–private
partnerships.
Public–private
enterprise
Analyse the costs and
benefits of cooperation
between the public and
private sector.
© International Baccalaureate Organization 2007 13
Syllabus details
Content Learning outcomes
HL/SL core HL extension HL/SL core HL additional
1.3 Organizational objectives
Evaluate the need for
firms to change
objectives in response
to changes in the
internal and external
environment.
Explain the importance
of objectives in
managing an
organization.
The importance of
objectives
Explain the purpose of
mission and vision
statements.
Statements
· Mission statements
· Vision statements
Analyse the role of
mission and vision
statements in an
organization.
Distinguish between
objectives, strategies
and tactics, and discuss
how these interrelate.
Aims and objectives
· Aims
· Strategic objectives
· Tactical/operational
objectives
Examine the reasons
why organizations
consider setting ethical
objectives.
Ethical objectives
Analyse the advantages
and disadvantages of
ethical objectives.
Discuss the impact of
implementing ethical
objectives.
Explain the different
views that firms may
take of their social
responsibility in an
international context.
Corporate social
responsibility
· Differing views of
social responsibility
· Policies to implement
objectives of social
responsibility (such as
environmental
auditing)
Analyse the value of
social and
environmental audits to
different stakeholders.
14 © International Baccalaureate Organization 2007
Syllabus details
Content Learning outcomes
HL/SL core HL extension HL/SL core HL additional
Discuss why a firm’s
view of its social
responsibilities may
change over time.
Changes in corporate
social responsibility over
time
Changes in society’s
expectations of the
behaviour of firms
Discuss why attitudes
towards social
responsibility may
change over time.
Analyse the impact that
changes in societal
norms have on the way
that firms behave in a
national and
international context.
Analyse the reasons why
firms may choose
different strategies
towards their social
responsibilities.
1.4 Stakeholders
Explain the interests of
internal stakeholders.
Internal stakeholders
· Employees
· Shareholders
· Managers
Explain the interests of
external stakeholders.
External stakeholders
· Suppliers
· Customers
· Special interest
groups
· Competitors
Evaluate possible ways
to overcome
stakeholder conflict.
Discuss possible areas of
conflict between
stakeholders.
Stakeholder conflict
© International Baccalaureate Organization 2007 15
Syllabus details
Content Learning outcomes
HL/SL core HL extension HL/SL core HL additional
1.5 External environment
Prepare a PEST analysis
for a given situation and
use it to analyse the
impact of the external
environment on a firm.
PEST (political,
economic, sociological,
technological) analysis
(STEEPLE, PESTLE and
other variations)
(Students will not be
tested on
country-specific laws,
regulations or economic
policies. The focus is on
the impact of the
external environment
on businesses.)
Evaluate the impact on
a firm’s objectives and
strategy of a change in
any of the PEST/PESTLE
factors.
Analyse the impact that
external opportunities
and threats may have on
business objectives and
strategy.
Opportunities and
threats
· Social/cultural
· Technological
· Economic
· Environmental
· Political
· Legal
· Ethical
Explain how external
opportunities and
threats can impact on
business
decision-making and
SWOT (strengths,
weaknesses,
opportunities, threats)
analysis.
1.6 Organizational planning tools
Analyse and interpret
business plans.
Analyse the importance
of the information in the
business plan to
different stakeholders.
Business plans
Apply a formal
decision-making
framework to a given
situation.
Decision-making
framework
16 © International Baccalaureate Organization 2007
Syllabus details
Content Learning outcomes
HL/SL core HL extension HL/SL core HL additional
Apply decision-making
processes and planning
tools (for example,
fishbone) to a given
situation and evaluate
their value.
Decision-making
· Fishbone
· Scientific versus
intuitive
decision-making
processes
· Decision trees
Internal/external
constraints on
decision-making
Compare and contrast
scientific and intuitive
decision-making
processes.
Construct and interpret
decision trees.
Critically evaluate the
value of decision trees
as a decision-making
tool.
Prepare a SWOT analysis
for a given situation.
SWOT analysis
Analyse an
organization’s position
using a SWOT analysis.
1.7 Growth and evolution
Apply the concepts of
economies and
diseconomies of scale to
business decisions.
Economies and
diseconomies of scale
Evaluate the relative
merits of small versus
large organizations.
Small versus large
organizations
Recommend an
appropriate scale of
operation for a given
situation.
Explain the difference
between internal and
external growth.
Internal/organic growth
© International Baccalaureate Organization 2007 17
Syllabus details
Content Learning outcomes
HL/SL core HL extension HL/SL core HL additional
Evaluate joint ventures,
strategic alliances,
mergers and takeovers
as methods of achieving
a firm’s growth
objectives.
External growth
· Joint ventures
· Strategic alliances
· Mergers and
takeovers
Evaluate internal and
external growth
strategies as methods of
business expansion.
Porter’s generic
strategies
Examine how Porter’s
generic strategies may
provide a framework for
building competitive
advantage.
Analyse the advantages
and disadvantages of a
franchise for both
franchisor and
franchisee.
Franchises
Evaluate the use of
franchising as a growth
strategy.
Explain the value of the
Ansoff matrix as a
decision-making tool.
Ansoff matrix
Apply the Ansoff matrix
growth strategies to a
given situation.
18 © International Baccalaureate Organization 2007
Syllabus details
Content Learning outcomes
HL/SL core HL extension HL/SL core HL additional
1.8 Change and the management of change
Explain the causes of
change and factors
causing resistance to
change.
Causes of change
Resistance to change
Modelling change
Lewin’s force field
analysis
Examine the dynamic
nature of organizations
and the relative
importance of driving
and restraining forces.
Strategies to reduce the
impact of change and
resistance to change
Evaluate different
strategies for reducing
the impact of change
and resistance to
change.
1.9 Globalization
Discuss reasons for the
growth of multinational
companies.
Multinational
companies
Analyse the role played
by multinationals in the
global business
environment.
Evaluate the impact of
multinational
companies on the host
country.
Explain the impact on
business of a country
that is a member of a
regional economic
group/bloc.
Regional trading blocs
© International Baccalaureate Organization 2007 19
Syllabus details
Topic 2: Human resources
Content Learning outcomes
HL/SL core HL extension HL/SL core HL additional
2.1 Human resource planning
Identify the constraints
and opportunities
provided by
demographic change.
Supply of human
resources
Workforce planning
Discuss the significance
of changes in labour
mobility, both domestic
and international.
Compare present
human resources with
future requirements and
evaluate strategies for
developing future
human resources.
Analyse the impact on
the firm of legal
employment rights.
Describe methods of
recruitment, appraisal,
training and dismissal.
Recruitment
Appraisal
Training
Examine how
recruitment, appraisal,
training, dismissal and
redundancies enable
the firm to achieve
workforce planning
targets.
Discuss advantages and
disadvantages of
different methods of
recruitment, appraisal
and training.
Dismissal and
redundancies/
retrenchment/lay-off
Analyse reasons for
changes in work
patterns and practices
and the consequences
of these changes for
employers and
employees, for example,
working from home,
teleworking and
flexitime.
Describe reasons for
changes in work
patterns and practices
and the consequences
of these changes for
employers and
employees, for example,
working from home,
teleworking and
flexitime.
Changing employment
· Patterns and practices
Apply appropriate
management theories
such as Handy’s
shamrock organization.
20 © International Baccalaureate Organization 2007
Syllabus details
Content Learning outcomes
HL/SL core HL extension HL/SL core HL additional
2.2 Organizational structure
Construct different
types of organization
chart and describe the
nature of their structure,
for example, flat, tall.
The formal organization
· Delegation and span
of control
· Levels of hierarchy
· Flat and tall
organizations
· Chain of command
Analyse changes in
organizational
structures and their
effects.
Explain how
organizational
structures affect
employee motivation,
communication and
performance.
Delegation and
accountability
Bureaucracy
Centralization and
decentralization
Discuss factors
influencing the degree
of centralization and
decentralization.
Discuss the
development of more
flexible organizational
structures.
Matrix structure/project
teams
Flexible structures
Apply the theories of
writers such as
Mintzberg and Peters.
Evaluate the role and
importance of the
informal organization.
The informal
organization
Identify why firms need
to organize employees
in particular ways, for
example, by function
and geography.
The organization of
human resources
Analyse methods of
organizing human
resources that are used
by different
organizations.
© International Baccalaureate Organization 2007 21
Syllabus details
Content Learning outcomes
HL/SL core HL extension HL/SL core HL additional
Analyse the reasons
behind, and the effects
of, moving some human
resource functions to
external organizations
located nationally or
globally.
Outsourcing, offshoring
and migration of human
resource functions
Evaluate whether firms
will benefit from
outsourcing, offshoring
and the migration of
human resource
functions.
2.3 Communication
Compare the ways in
which communication
takes place within
organizations, analyse
the causes of
communication failure
and evaluate the
solutions to such
failures.
Communication
classification
· Oral
· Written
· Visual
· Non-verbal
· Formal and informal
communication
· Barriers to effective
communication
Prepare different forms
of communication, for
example, reports and
research proposals.
Identify types of ICT,
and discuss the effect of
new technologies on
the effectiveness of
communication within
and between
organizations and their
stakeholders.
Information and
communication
technology (ICT)
Explain how types of
communication
networks influence the
effectiveness of
communication.
Communication
networks
22 © International Baccalaureate Organization 2007
Syllabus details
Content Learning outcomes
HL/SL core HL extension HL/SL core HL additional
2.4 Leadership and management
Evaluate the
effectiveness of various
styles of leadership and
their implications for
organizations.
Nature of leadership
Leadership styles
· Autocratic
· Democratic
· Laissez-faire
· Situation leadership
Discuss whether
successful leadership in
identified situations is
the result of natural
skills and abilities, or is
a consequence of the
circumstances faced.
Trait and situation
theory
Contingency theory
The difference between
leadership and
management
Apply to given
situations the theories
of writers such as Likert,
Fiedler, Blake and
Mouton, and
Tannenbaum and
Schmidt.
Explain the key
functions of
management, applying
the theories of writers
such as Fayol, Handy
and Drucker.
Key functions of
management
2.5 Motivation
Analyse the intrinsic and
extrinsic needs that
have to be satisfied at
work, and the rewards
(financial and
non-financial) that
motivate individuals.
Motivation in theory
· Content theories of
Taylor, Maslow,
McGregor and
Herzberg
Apply the content
theories to given
situations.
Apply the content
theories of Mayo and
McClelland.
Content theories of
Mayo and McClelland
© International Baccalaureate Organization 2007 23
Syllabus details
Content Learning outcomes
HL/SL core HL extension HL/SL core HL additional
Analyse the effect of
thought processes and
expectations on
individual motivation.
Process theories
· Expectancy theory
· Equity theory
Apply the theories of
writers such as Vroom
and Adams.
Evaluate alternative
financial reward
packages.
Motivation in practice
· Financial motivation
- Methods of
payment
- Wages (time and
piece rates)
- Salary
- Commission
- Profit-related pay
- Performance-related
pay (PRP)
- Employee
share-ownership
schemes
- Fringe payments
Evaluate the impact of
financial reward
packages on job
satisfaction, motivation
and productivity.
Evaluate alternative
methods of
non-financial rewards in
different circumstances
in the workplace.
Explain how
non-financial rewards
can affect job
satisfaction, motivation
and productivity.
· Non-financial
motivation
- Job enrichment
- Job enlargement
- Empowerment
- Teamwork
24 © International Baccalaureate Organization 2007
Syllabus details
Content Learning outcomes
HL/SL core HL extension HL/SL core HL additional
2.6 Organizational and corporate cultures
Explain the influences
on organizational
culture.
Corporate/organizational
culture
Describe different
corporate/organizational
cultures and analyse
their effects on, for
example, motivation
and organizational
structures.
Analyse the
consequences of
cultural clashes within
and between
organizations, for
example, when
organizations merge
and leadership styles
change.
2.7 Employer and employee relations
Analyse the dynamic
nature of relationships
between employees,
employers and their
representatives.
Negotiations/collective
bargaining
© International Baccalaureate Organization 2007 25
Syllabus details
Content Learning outcomes
HL/SL core HL extension HL/SL core HL additional
Examine the methods
used by employees and
their representatives in
pursuit of their
objectives.
Methods employed to
achieve individual and
group objectives
· Employees
- Negotiations
- Go-slows
- Work-to-rule
- Overtime bans
- Strike action
Examine the methods
used by employers to
put pressure on
employees.
· Employers
- Negotiations
- Public relations
- Threats of
redundancies
- Changes of contract
- Closure
- Lock-outs
Evaluate the effect of
such actions on the
individual employee,
employee
representatives and the
employers.
Identify the sources of
conflict in the workplace
and evaluate alternative
approaches to conflict
resolution.
Conflict
· Causes
· Resolution
- Conciliation and
arbitration
- Employee
participation and
industrial
democracy
- No-strike
agreement
- Single-union
agreement
26 © International Baccalaureate Organization 2007
Syllabus details
Content Learning outcomes
HL/SL core HL extension HL/SL core HL additional
2.8 Crisis management and contingency planning
Explain the difference
between crisis
management and
contingency planning.
Crisis management and
contingency planning
Evaluate the costs and
benefits of contingency
planning.
Discuss how far it is
possible to plan for a
crisis.
Topic 3: Accounts and finance
Content Learning outcomes
HL/SL core HL extension HL/SL core HL additional
3.1 Sources of finance
Evaluate the advantages
and disadvantages of
each form of finance.
Internal and external
finance
Finance in the long,
medium and short term Evaluate the
appropriateness of a
source of finance for a
given situation.
3.2 Investment appraisal
Calculate the payback
period and ARR for an
investment.
Payback period
Average rate of return
(ARR)
Analyse the results of
the calculations.
Calculate the NPV for an
investment.
Discounted cash flow
(DCF)
Analyse the results of
the calculations.
Net present value (NPV)
© International Baccalaureate Organization 2007 27
Syllabus details
Content Learning outcomes
HL/SL core HL extension HL/SL core HL additional
3.3 Working capital
Define working capital
and explain the working
capital cycle.
Working capital cycle
Cash-flow forecasts
Management of working
capital
Prepare a cash-flow
forecast from given
information.
Evaluate strategies for
dealing with liquidity
problems.
3.4 Budgeting
Explain the importance
of budgeting for
organizations.
The purpose of budgets
Variance analysis
(Knowledge of specific
budgets and variances
is not required, for
example, sales variance.)
Calculate and interpret
variances.
Analyse the role of
budgets and variances
in strategic planning.
3.5 Final accounts
Explain the purpose of
accounts.
Accounts for limited
companies (income
statements)
· Trading account
· Profit and loss
account
· Appropriation
account
Balance sheets
Construct and amend
accounts from
information given.
Evaluate the importance
of final accounts to each
stakeholder group.
(Students will not be
tested on the
manufacturing account
or double entry.)
Calculate depreciation
using straight line and
reducing balance
methods.
Depreciation
· Straight line
· Reducing balance
Evaluate the strengths
and weaknesses of each
method.
28 © International Baccalaureate Organization 2007
Syllabus details
Content Learning outcomes
HL/SL core HL extension HL/SL core HL additional
Explain the meaning
and value to the firm of
different types of
intangible assets.
Intangible assets
· Goodwill
· Patents and
copyrights
· Brands Understand the
difficulties associated
with valuing intangible
assets.
Make calculations of
closing stock using LIFO
and FIFO.
Stock valuation
· Last-in-first-out (LIFO)
· First-in-first-out (FIFO)
Calculate the effect of
different stock
valuations on profit.
3.6 Ratio analysis
Evaluate possible
financial and other
strategies to improve
the values of ratios.
Calculate ratios.
Use the ratios to
interpret and analyse
financial statements
from the perspective of
various stakeholders.
Profitability ratios
· Gross profit margin
· Net profit margin
Liquidity ratios
· Current ratio
· Acid test ratio (Ratio formulae are
given in the appendices
and a copy of the
formulae will be
provided for students in
examinations.)
Debtor days
Creditor days
Efficiency ratios
· Stock turnover
· Return on capital
employed (ROCE)
Shareholder ratios
· Earnings per share
· Dividend yield
Gearing ratio
© International Baccalaureate Organization 2007 29
Syllabus details
Topic 4: Marketing
Content Learning outcomes
HL/SL core HL extension HL/SL core HL additional
4.1 The role of marketing
Examine the
characteristics of the
market in which the firm
is immersed.
The market
· Market size
· Market growth
· Market share
Calculate market share
from given information.
Define marketing and
describe its relationship
with other business
activities.
Definition and nature of
marketing
· Market and product
orientation
· Marketing of
goods/services
Describe the difference
between market and
product orientation.
Explain the difference
between the marketing
of goods and services.
Analyse the influence of
marketing orientation
on the success or failure
of firms.
Additional marketing
orientations
· Social marketing
· Asset-led marketing
Analyse the marketing
techniques of non-profit
organizations.
Marketing in non-profit
organizations
Describe the elements
of a marketing plan.
A marketing plan
30 © International Baccalaureate Organization 2007
Syllabus details
Content Learning outcomes
HL/SL core HL extension HL/SL core HL additional
4.2 Marketing planning
Discuss the
effectiveness of a
selected marketing mix
in achieving strategic
objectives.
Apply the elements of
the marketing mix to
given situations.
Discuss the
effectiveness of a
selected marketing mix
in achieving marketing
objectives.
Marketing mix
· Product
· Place
· Price
· Promotion
· People
· Process
· Physical evidence
· Packaging
Construct an
appropriate marketing
mix for a particular
product or firm.
Discuss the ethical
issues of what is
marketed and how it is
marketed: nationally,
internationally and
across cultures.
Ethics of marketing
Explain the value of a
marketing audit as a
business tool.
Marketing audit
Apply Porter’s five
forces model to classify
and analyse competitive
pressures in the
marketplace.
Porter’s five forces
Examine how
appropriate the
marketing objectives are
in achieving the goals of
an organization.
Marketing objectives
Analyse the role of
market research.
Market research
· Role of market
research
· Primary and
secondary research
Evaluate different
methods of market
research.
© International Baccalaureate Organization 2007 31
Syllabus details
Content Learning outcomes
HL/SL core HL extension HL/SL core HL additional
Evaluate different
methods of sampling,
for example, quota,
random, stratified,
cluster and snowballing.
Sampling
Methods of sampling
Limitations of sampling
Sampling errors
Analyse the usefulness
of market segmentation
and consumer profiles.
Market segmentation
and consumer profile
Identify possible target
markets.
Targeting
Apply an appropriate
marketing mix to the
target market(s).
Develop and evaluate
strategies designed to
change customer
p, erceptions.
Construct a position
map from given
information.
Discuss how
organizations can
differentiate themselves
and their products from
competitors.
Positioning
· Corporate image
· Position/perception
maps
· Unique selling
point/proposition
(USP)
Design or evaluate
marketing strategies for
given situations. Apply
an appropriate
marketing mix to the
strategy.
Development of
marketing strategies
and tactics
Analyse sales trends and
forecasts from given
data, and evaluate the
significance for
marketing and resource
planning.
Sales forecasting and
trends
· Seasonal, cyclical and
random variation
32 © International Baccalaureate Organization 2007
Syllabus details
Content Learning outcomes
HL/SL core HL extension HL/SL core HL additional
4.3 Product
Classify products by line
range and mix.
Classification of
products
Describe the importance
of innovation in an era
of rapid technological
change and discuss the
problems of financing
research and
development.
New product design and
development
Analyse the relationship
between the product
life cycle and the
marketing mix, and
determine appropriate
extension strategies.
Product life cycle
· Extension strategies
· Relationship with
investment, profit and
cash flow
Analyse the relationship
between the product
life cycle, investment,
profit and cash flow.
Use the BCG matrix to
help in developing
future strategic
direction.
Apply the BCG matrix to
a given situation.
Product portfolio
analysis
· Boston consulting
group (BCG) matrix
Discuss the importance
and role of branding.
Branding
· Brand awareness
· Brand development
· Brand loyalty
Distinguish between
different types of
branding.
Types of branding
· Family branding
· Product branding
· Company branding
· Own label branding
· Manufacturer’s brand
Analyse the role of
branding in a global
market.
© International Baccalaureate Organization 2007 33
Syllabus details
Syllabus details
34 © International Baccalaureate Organization 2007
Content Learning outcomes
HL/SL core HL extension HL/SL core HL additional
4.4 Price
Pricing strategies
• Cost-based
– Cost-plus – Marginal cost pricing
– Contribution pricing
– Absorption cost and
full-cost pricing
Analyse the
appropriateness of
each pricing strategy.
Analyse the
appropriateness of
each pricing policy.
• Competition-based
– Price leadership – Predatory
– Going rate
• Market-based
– Penetration
– Skimming
– Price discrimination
– Loss leader
– Psychological
– Promotional pricing
Supply and demand
• Price determination
Evaluate the impact
of changes in the
conditions of supply
and demand.
(Diagrams are not
required.)
Elasticity
• Price elasticity
• Income elasticity
• Cross-elasticity
• Advertising elasticity
• Relationship of
elasticity with
product life cycle
Calculate and interpret
price, income, crossand
advertising
elasticity.
Explain the relationship
between elasticities and
the product life cycle.
Analyse the relationship
between price elasticity
and sales revenue.
4.5 Promotion
Types of promotion
• Above the line
• Below the line
Distinguish between
the different types of
promotion.
Analyse the various
promotional tools and
discuss their effectiveness.
Promotional mix Prepare an appropriate
promotional mix.
Content Learning outcomes
HL/SL core HL extension HL/SL core HL additional
4.6 Place (distribution)
Evaluate the
effectiveness of
different types of
distribution channels
including producers,
wholesalers, agents and
retailers.
Discuss the
effectiveness of
different types of
distribution channels.
Channels of distribution
Distribution strategy
Examine how
organizations can
increase the efficiency
of the supply chain.
Supply chain
management/logistics
4.7 International marketing
Evaluate the
opportunities and
threats posed by entry
into international
markets.
Entry into international
markets
Analyse given situations
considering the cultural,
legal, political, social
and economic issues of
entering international
markets.
4.8 E-commerce
Analyse the effect of
e-commerce on the
marketing mix.
Business-to-business
(B2B)
Business-to-customers
(B2C) Discuss the costs and
benefits of e-commerce
to firms and consumers.
© International Baccalaureate Organization 2007 35
Syllabus details
Topic 5: Operations management
Content Learning outcomes
HL/SL core HL extension HL/SL core HL additional
5.1 Production methods
Describe and compare
the features and
applications of each
method.
Job, batch, line and
flow, and mass
production
Analyse the implications
for marketing, human
resource management
and finance that arise
from changing the
production system.
Cell production,
teamwork and
productivity
implications
Analyse the most
appropriate method of
production for a given
situation.
Understand the need for
organizations to use
more than one method
of production.
5.2 Costs and revenues
Define, explain and give
examples of each
different type of cost.
Types of costs
· Fixed
· Variable
· Semi-variable
· Direct
· Indirect/overheads
Explain the meaning of
revenue and comment
on possible sources of
revenue for different
firms.
Revenue
Explain and calculate
the contribution to fixed
costs.
Contribution to fixed
costs
36 © International Baccalaureate Organization 2007
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Content Learning outcomes
HL/SL core HL extension HL/SL core HL additional
Explain the nature of
cost and profit centres.
Cost and profit centres
Contribution analysis for
multi-product firms Analyse the value of
cost and profit centres
to a firm.
Analyse the role of
contribution analysis in
determining the
viability of each product
for a multi-product firm.
5.3 Break-even analysis
Use graphical and
quantitative methods to
calculate the break-even
quantity, profit and
margin of safety.
Break-even quantity
Profit or loss
Margin of safety
Use graphical and
quantitative methods to
analyse the effects of
changes in price or cost
on the break-even
quantity, profit and
margin of safety.
Changes in break-even
Limitations of
break-even analysis
Target profit and
revenue
Analyse the
assumptions and
limitations of
break-even analysis.
Calculate required
output level for a given
target profit or level of
revenue.
5.4 Quality assurance
Analyse the move from
traditional quality
control methods to total
quality management
(TQM).
Quality control and
quality assurance
Total quality culture
© International Baccalaureate Organization 2007 37
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Content Learning outcomes
HL/SL core HL extension HL/SL core HL additional
Explain the role of
Kaizen in quality
improvement.
Continuous
improvement
Benchmarking
Evaluate different
approaches to quality
improvement.
National and
international quality
standards
Explain the role of local
and national standards
in assuring quality for
consumers.
5.5 Location
Explain the causes and
consequences of
location and relocation,
both domestically and
internationally.
Location of production
· National
· International
Consider the effects of
globalization on
location.
Impact of globalization
on location
Analyse the impact of
location on different
areas of business
activity (such as
marketing, production,
finance and human
resources).
5.6 Innovation
Explain the importance
of R&D for a business.
Research and
development (R&D)
Explain the role and
importance of
intellectual property
rights for a business.
Patents, copyrights and
trademarks (intellectual
property rights)
Factors affecting
innovation Analyse the factors
affecting innovation.
38 © International Baccalaureate Organization 2007
Syllabus details
Content Learning outcomes
HL/SL core HL extension HL/SL core HL additional
5.7 Production planning
Recognize the need for
optimum stock levels;
prepare and analyse
appropriate graphs.
Explain the difference
between just-in-case
and just-in-time.
Traditional stock control
(usage patterns, lead
times, buffer stocks and
re-order levels)
Stock control
· Just-in-case
· Just-in-time
Explain different stock
control methods and
analyse the
appropriateness of each
method in a given
situation.
Optimum stock levels
Capacity utilization
Explain outsourcing and
subcontracting.
Outsourcing and
subcontracting
Discuss the arguments
for and against
outsourcing and
subcontracting,
compared with
provision by the firm
itself.
Make appropriate
calculations to support
a decision to make or
buy.
Make-or-buy decisions
5.8 Project management
Construct and interpret
a network, identify the
critical path, and
calculate the free and
total float.
Critical path analysis
Evaluate the value of a
network in the
management of
projects.
© International Baccalaureate Organization 2007 39
Syllabus details
HL only
Topic 6: Business strategy
This topic does not add new content to the Diploma Programme business and management course, but
gathers together and synthesizes business ideas, concepts and techniques from the topics in the HL
course. The use of these ideas, concepts and techniques will allow informed decisions to be made about
the future direction of an organization. This will be assessed through a question in section C of paper 1
requiring a strategic response.
Cross-referencing to other topics is shown throughout the three stages of the strategic framework
(figure 1). It provides a framework for students to think in an integrated and holistic fashion about the
future strategy of an organization, given a range of information about the present and the past. The skills
developed in this topic are particularly relevant when taking a case-study approach to learning and
assessment, and in preparation for the internal assessment. The strategic framework is useful as a tool
for synoptic assessment and revision. However, it is expected that this approach will be little more than
a formalization of existing good practice.
Materials used to present the topic should allow the student to apply business theories learned in the
classroom to real-life situations. Source materials might include business case studies, biographies, the
Internet, and newspaper/magazine articles about management action and reaction to issues or challenges
facing individual firms and industries.
Strategy is about asking questions: what, why, when, how, where and who?
Strategic management is the management of the long-term activities of the business, which includes
the integration of strategic analysis, strategic choice and strategic implementation.
Figure 1
Strategic framework
Strategic analysis
Strategic choice
Strategic implementation
Stage 1: Strategic analysis—where is the business now?
Deciding where the business is now involves an analysis of its internal and external situation. This analysis
will dictate the nature of future strategy. The opportunities and threats faced will vary according to the
nature of the business. An analysis of the present market and the firm’s competitive situation will influence
the aims, objectives and core principles. The starting point for this analysis will probably be through the
use of a SWOT and PEST analysis (topics 1.5, 1.6).
Questions to be considered may include the following.
· Is the business new or established? (Topic 1.2)
· Who are the stakeholders? (Topic 1.4)
40 © International Baccalaureate Organization 2007
Syllabus details
· Is the business in the profit or not-for-profit sector?
- Types of organization (Topic 1.2)
· What are the objectives of the organization? (Topic 1.3)
· How does the vision/mission statement reflect what the organization is doing now and where it is
heading? (Topic 1.3)
· What are the attitudes of the business to risk? (Topics 1.3, 2.4, 2.6)
· What is the firm’s present financial situation, and is it conducive to change? (Topics 1.8, 3.5)
- Financial analysis and ratio analysis (Topics 3.5, 3.6)
· Is the present product portfolio adequate and appropriate?
- Boston matrix (Topic 4.3)
· What are the resources available to the business? (Topic 1.1)
· What are the competitive forces facing the business in the market?
- Porter’s five forces market analysis (Topic 4.2)
· Should the organization enter international markets? (Topic 4.7)
Stage 2: Strategic choice—where is the business aiming to be?
Once the business has identified its position in the market, it needs to consider its objectives in the short,
medium and long term. To achieve this, the business must examine market opportunities and threats,
and then plan for the future.
Questions to be considered may include the following.
· Why are business plans important? (Topic 1.6)
· How are markets developing?
- Sales forecasting (Topic 4.2)
· Which new market opportunities are available?
- Market research (Topic 4.2)
· What are the future directions available to the firm? (Topic 1.7)
· When is expansion desirable and achievable?
- Small versus large organizations (Topic 1.7)
- Cash-flow forecasts (Topic 3.3)
- Gearing (Topic 3.6)
- Sources of finance (Topic 3.1)
- Human resource planning (Topic 2.1)
© International Baccalaureate Organization 2007 41
Syllabus details
· How can the core competencies of the business be developed?
- Potential growth strategies—such as Ansoff’s matrix (Topic 1.7)
- Investment appraisal (Topic 3.2)
· What are competitors doing, and how can their offer be matched or improved upon?
- Benchmarking (Topic 5.4)
· How do the processes of decision-making help to direct the business?
- Scientific and formal decision-making (Topic 1.6)
- Decision trees (Topic 1.6)
- Force field analysis (Topic 1.8)
· What are the measures of success?
- Return on capital employed (Topic 3.6)
- Market share (Topic 4.1)
- Motivation and productivity (Topic 2.5)
Stage 3: Strategic implementation—how is the business going to achieve its objectives?
Having decided on the future direction of the business, its mission, aims and objectives, how will the
business put its strategies into operation?
Questions to be considered may include the following.
· How can the firm develop competitive advantage?
- Porter’s generic strategies (Topic 1.7)
· Which new products and/or services should be developed? (Topic 4.3)
· Which new technologies could be applied? (Topics 1.6, 2.3, 4.3)
· How can differentiation be achieved? (Topic 4)
· How should the business plan for changes in the size and nature of business operations?
- Workforce planning (Topic 2.1)
- Recruitment and training (Topic 2.1)
- Developing flexible working patterns (Topic 2.1)
- Homeworking (Topic 2.1)
- Investment appraisal (Topic 3.2)
· What is the appropriate scale of operation?
- Economies and diseconomies of scale (Topic 1.7)
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· Which growth methods can and should be selected?
- Internal/organic growth (Topic 1.7)
- External growth: mergers and acquisitions (Topic 1.7)
- Globalization of sales, manufacturing and operations (Topic 1.9)
· Which marketing strategies can be implemented?
- Market leadership and market penetration pricing (Topic 4.4)
- Segmentation, targeting and positioning (Topic 4.2)
- Distribution chain management (Topic 4.6)
- E-commerce (Topic 4.8)
· What is the appropriate organizational structure?
- Flattening hierarchies (Topic 2.2)
- Decentralization (Topic 2.2)
- Flexible organization structures such as Handy’s shamrock (Topic 2.1)
· What is the appropriate management and leadership style? (Topic 2.4)
· How should the firm incorporate social responsibility and ethical approaches? (Topic 1.3)
· How can change be managed effectively?
- Developing a change culture (Topic 1.8)
- Contingency planning and crisis management (Topic 2.8)
© International Baccalaureate Organization 2007 43
Syllabus details
Higher level (HL)
First examinations 2009
External assessment Internal assessment
Paper 1 Paper 2
Any topic from the full HL
syllabus
Syllabus All six topics All six topics
content
Assessment 1–7 1–6 1–7
objectives
Based on a case study issued in Section A Research project
advance.
Method
Research proposal and
action plan—a working
document not part of the
actual report, but part of
planning.
Students answer one of
two structured
questions based on
stimulus material with a
quantitative element.
(25 marks)
Section A (HL/SL)
Students answer two of three
structured questions. (30 marks)
Section B (HL/SL)
Report that addresses an
issue facing an
organization or analyses a
decision to be made by an
organization.
(Maximum 2,000 words)
(25 marks)
Section B
Students answer two of
three structured
questions based on
stimulus material.
(50 marks)
Students answer one compulsory
structured question including
evaluative skills. (20 marks)
Section A and section B are
common to both HL and SL
students. HL students also have
a section C.
Section C
Students answer one compulsory
question focusing on strategic
decision-making through the use
of extension material. (30 marks)
Total marks 80 marks 75 marks 25 marks
Component 2¼ hours 2¼ hours 30 hours
time
Weighting 40% 35% 25%
Assessment
Assessment outline
44 © International Baccalaureate Organization 2007
Standard level (SL)
First examinations 2009
External assessment Internal assessment
Paper 1 Paper 2
Any topic from the HL/SL
core syllabus
Syllabus All five topics All five topics
content
Assessment 1–6 1–6 1–6
objectives
Based on a case study issued in Section A Written commentary
advance.
Method
Written commentary
based on three to five
supporting documents
about a real issue or
problem facing a
particular organization.
(Maximum 1,500 words)
(25 marks)
Students answer one of
two structured questions
based on stimulus material
with a quantitative
element. (20 marks)
Section B
Students answer two of
three structured questions
based on stimulus
material. (40 marks)
Section A (HL/SL)
Students answer two of three
structured questions.
(30 marks)
Section B (HL/SL)
Students answer one
compulsory structured
question including evaluative
skills. (20 marks)
Section A and section B are
common to both HL and SL
students. SL students do not
have a section C.
Total marks 50 marks 60 marks 25 marks
Component 1¼ hours 1¾ hours 15 hours
time
Weighting 35% 40% 25%
© International Baccalaureate Organization 2007 45
Assessment outline
External assessment
General
Papers 1 and 2
The two written examination papers, paper 1 and paper 2, which are externally set and externally marked,
test the assessment objectives identified in the introduction.
Case study (paper 1)
· The case study is provided by the IBO well before the examination session. Teachers are advised to
spend no more than four weeks on the case study.
· The case study on which paper 1 is based will be the same for HL and SL students, but different
questions will be set for each level.
· The purpose of the case study is to assess, in depth and across a number of topics, the student’s
ability to apply business knowledge to a given situation.
Calculators
· Students may be expected to carry out simple arithmetic calculations, therefore each student is
required to have access to a calculator with basic arithmetic operations for both examination papers.
Calculators must not be shared.
· Regulations concerning calculators are given in the relevant section of the Vade Mecum.
HL written papers
Paper 1
Duration: 2 hours 15 minutes
Weighting: 40%
This paper is divided into three sections, each based on the IBO-prescribed case study issued to students
well before the examination. Sections A and B are common to both HL and SL students. Only HL students
complete section C. The maximum number of marks available is given below. The marks available for
each question, and each part of a question, will be indicated on the examination paper.
Section A
Students should answer questions by referring primarily to information derived from the case study, as
well as referring to their own knowledge.
Students must answer two of the three structured questions in this section. The maximum number of
marks available for this section is 30.
Section B
Students must answer the one compulsory structured question in this section. Part of the question will
test evaluative skills. The maximum number of marks available for this section is 20.
Assessment
Assessment details
46 © International Baccalaureate Organization 2007
Section C
Students must answer the one compulsory structured question in this section. The question will focus
on strategic decision-making. The maximum number of marks available for this section is 30.
Paper 2
Duration: 2 hours 15 minutes
Weighting: 35%
This paper is divided into two sections. The maximum number of marks available is given below. The
marks available for each question, and each part of a question, will be indicated on the examination
paper.
Section A
Students must answer one of the two structured questions in this section. The questions are based on
stimulus material and contain a quantitative element. The maximum number of marks available for this
section is 25.
Section B
Students must answer two of the three structured questions in this section. The questions are based on
stimulus material. The maximum number of marks available for this section is 50.
SL written papers
Paper 1
Duration: 1 hour 15 minutes
Weighting: 35%
This paper is divided into two sections, both based on the IBO-prescribed case study issued to students
well before the examination. Sections A and B are common to both HL and SL students. The maximum
number of marks available is given below. The marks available for each question, and each part of a
question, will be indicated on the examination paper.
Section A
Students should answer questions by referring primarily to information derived from the case study, as
well as referring to their own knowledge.
Students must answer two of the three structured questions in this section. The maximum number of
marks available for this section is 30.
Section B
Students must answer the one compulsory structured question in this section. Part of the question will
test evaluative skills. The maximum number of marks available for this section is 20.
Paper 2
Duration: 1 hour 45 minutes
Weighting: 40%
This paper is divided into two sections. It is a different examination from HL paper 2. The maximum
number of marks available is given below, and the marks available for each question, and each part of a
question, will be indicated on the examination paper.
Section A
Students must answer one of the two structured questions in this section. The questions are based on
stimulus material and contain a quantitative element. The maximum number of marks available for this
section is 20.
© International Baccalaureate Organization 2007 47
Assessment details
Section B
Students must answer two of the three structured questions in this section. The questions are based on
stimulus material. The maximum number of marks available for this section is 40.
Internal assessment
General
Introduction
Internal assessment is an integral part of the Diploma Programme business and management course and
is compulsory for both HL and SL students. It enables students to demonstrate the application of their
skills and knowledge in business and management without the time limitations and stress associated
with written examinations.
Guidance and authenticity
The teacher should play an important role in helping students to plan and to work on the research project
(HL) or written commentary (SL). It is also helpful if teachers encourage students to be responsible for
their own work and so take pride in the finished product.
It is the responsibility of the teacher to ensure that students are familiar with:
· the requirements of the type of work internally assessed
· the means by which the work is assessed
· the assessment criteria.
Teachers and students need to discuss the investigation. Students should be encouraged to initiate
discussions with the teacher to obtain advice and information, and should not be penalized for seeking
guidance. However, if a student could not have completed the work without substantial support from
the teacher, this must be recorded on the appropriate form in the Vade Mecum.
Teachers must ensure that the work presented is entirely the student’s own work. Teachers are required
to sign the internal assessment (IA) coversheet to confirm that the work of each student is his or her own
unaided work.
When authenticity is in doubt, the teacher should first discuss this with the student. In addition, one or
more of the following actions may be helpful.
· Compare the style of writing with work known to be that of the student.
· Check the references cited by the student and the original sources.
· Interview the student in the presence of a third party.
· Use one of the many web sites set up to detect plagiarism.
As part of the learning process, teachers can give advice to students on a first draft of the written report
(HL) or the written commentary (SL). Advice on improving the work can be given, but this first draft must
not be heavily annotated or edited by the teacher. Constant drafting and redrafting is not allowed, and
the next version handed to the teacher after the first draft must be the final one.
48 © International Baccalaureate Organization 2007
Assessment details
HL research project
Weighting: 25%
Introduction
The research project enables HL students to demonstrate the application of their skills and knowledge
to real organizational issues or decision-making. Students must select a real organization, not a fictional
one, and the issue or decision under investigation must also be real. The expectation is that a student
should gather primary research from the organization. The style and format of the report should be in
the form of a useful working document for management.
Requirements
HL students are required to:
· design and undertake research that either addresses an issue facing an organization or range of
organizations or analyses a decision to be made by an organization or range of organizations
· produce a research proposal that should be used as the primary planning document and be presented
in terms of an action plan
· provide a title for the research project that, to give focus and direction, must be framed as a question
· produce a written report that does not exceed 2,000 words.
More than one student is allowed to choose the same organization for their research, provided that the
written report reflects the student’s own individual work, interpretation and analysis.
Choice of research topic
Students should, with the teacher’s guidance, choose their own topic and organization. Ideally, students
should find their topics interesting and motivating.
The teacher should approve each topic before work is started, and ensure that it complies with the
requirements for internal assessment.
For a variety of reasons not apparent at the start of the project, for example confidentiality, some
organizations fail to provide data, which will undermine the quality of the final report. Students must
therefore make sure before starting their investigations that they will be able to obtain the necessary
data from the chosen organization.
Students must be aware of ethical considerations when undertaking any research. There is a need for
tact, sensitivity to other people and respect for confidentiality.
Research proposal and action plan
The internal assessment must start with the research proposal and action plan. These will become the
primary planning documents, giving direction to the research project.
The research proposal and action plan must outline:
· the research question
· the rationale for study
· areas of the syllabus to be covered
· possible sources of information
· organizations and individuals to be approached
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Assessment details
· methods to be used to collect and analyse data, and the reason for choosing them
· anticipated difficulties
· the order of activities and timescale of the project.
Required format for research proposal and action plan
· Research question
· Theoretical framework
· Methodology
· Anticipated difficulties
· Action plan
Students should use the research proposal and action plan as their primary planning documents, reviewing
them regularly with the teacher and modifying or rewriting them as necessary should circumstances
change.
The maximum achievement level for criterion A, research proposal and action plan, is four (see “HL internal
assessment criteria”). Students who fail to produce a research proposal or action plan will be awarded
zero for this criterion.
Students should consider the possible difficulties they may face when carrying out their research, for
example, limited or biased sources.
Research question
The research question should be forward-looking rather than descriptive and should require the
student to make recommendations for further action.
50 © International Baccalaureate Organization 2007
Assessment details
Written report
The written report, which follows the research proposal, is the second part of the internally assessed
research project.
The report must follow acceptable practice in report presentation, reflected in the required format for
the written report shown below.
Required format for written report
· Title page
· Acknowledgments
· Contents page
· Executive summary (abstract)
· Introduction
· Research question
· Procedure or method
· Main results and findings
· Analysis and discussion
· Conclusions and recommendations
· Bibliography and references
· Appendices
The 2,000 words does not include supplementary information such as the title page, executive summary,
diagrams, figures, tables of data, references and appendices.
The executive summary should be a concise, clear and explicit summary (maximum 200 words) of the
document, including any recommendations or conclusions. The research question and executive summary
should guide the reader to the substance of the report.
To be of practical value to management, the report should be forward-looking and support the decisionmaking
process.
The appendices should contain only information/data that is required in support of the text, and should
be clearly referred to at relevant points.
Time allocation
The fact that internal assessment is an integral component of the HL course, contributing 25% to the
final assessment, should be reflected in the total time allocated to the research project.
It is recommended that approximately 30 hours should be allocated to the research project. This should
include:
· time for the teacher to explain to students the requirements of the project, including codes of ethical
behaviour and confidentiality
© International Baccalaureate Organization 2007 51
Assessment details
· class time for students to work on their projects
· time spent by the student making arrangements with the selected organization and visiting to collect
data
· additional time spent outside normal class time for students to work on their own
· time for consultation between the teacher and each student
· time to review and monitor progress, and to check authenticity.
SL written commentary
Weighting: 25%
Introduction
The SL internal assessment is a written commentary. Students need to demonstrate the application of
business and management tools, techniques and theories to a real business issue or problem.
Students must select a real issue or problem, not a fictional one, and must produce a commentary with
a title presented as a question. The commentary must refer directly to a single business organization,
but may consider industry-wide issues that impact on that organization.
The commentary must be based on primary and/or secondary data, selected for its suitability, depth and
breadth.
The commentary
The issue or problem selected for the commentary must relate to the SL syllabus and refer directly to a
single business organization.
The title of the commentary must be phrased in the form of a question.
The commentary requires the application of business tools, techniques and theory to a contemporary
business issue or problem.
The commentary must not exceed 1,500 words. A word count must be included as part of the commentary.
The commentary requires analysis and evaluation of the business issue or problem. Judgments are likely
to be made throughout the commentary, but are essential within a conclusion.
The student must attach to the commentary three to five supporting documents from which the majority
of the information for the commentary has been obtained. Any additional sources, such as textbooks,
class notes and DVDs/videos, must be referenced, but will not be accepted as supporting documents.
Students must highlight the parts of each supporting document that relate directly to their commentary.
All supporting documents and additional sources must be fully referenced and included in a bibliography.
Selection of supporting documents
The supporting documents must be of a contemporary nature and written a maximum of two years
before the submission of the written commentary.
Students must select their own supporting documents, which must not be provided to the student by
the teacher.
Students must work independently, and it is recommended that they do not use the same supporting
documents as other students within the school.
52 © International Baccalaureate Organization 2007
Assessment details
Any highlighted parts of supporting documents that are not in the language for which the student is
registered, must be translated.
Guidance
With the teacher’s support, students should choose an issue or problem for investigation, and develop
a title in the form of a question.
The teacher should approve the student’s question before work is started, to ensure that it is suitable for
investigation and allows access to all levels of the assessment criteria. It is highly advisable that every
student is supplied with a copy of the assessment criteria.
The commentary can be based on secondary sources and/or primary data.
Examples of secondary sources might include:
· market research surveys
· articles from the local, national or international press
· financial reports
· business accounts
· business plans
· mission statements
· web-based surveys
· extracts from company web sites
· government and other statistics
· academic publications.
Examples of primary data might include:
· responses to questionnaires (students should include a blank copy of the questionnaire and a
tally/summary of results)
· transcripts of interviews and discussions with focus groups
· results of surveys.
The selection of the documents is very important. To achieve the highest levels of each assessment
criterion, it is strongly recommended that the supporting documents present a range of ideas and views.
For example, the selection of three to five documents published by a single company, or three to five
surveys of similar populations, would not provide balance or objectivity.
An example of an appropriate question might be, “Can company X, an independent food retailer, survive?”
The commentary could then examine business concepts such as economies of scale, mergers and
acquisitions, distribution chains, the marketing mix, and the impact of changes in the external environment
represented as economic, social and demographic trends.
The student is likely to make judgments throughout the commentary about the significance and nature
of change, but would also be expected to answer the overall question regarding survival of the
independent food retailer in the commentary’s conclusion.
© International Baccalaureate Organization 2007 53
Assessment details
The commentary may include tables and/or graphs. The supporting documents and supplementary
information such as diagrams, figures, tables of data and references, are not included in the 1,500 words.
Time allocation
The fact that the internal assessment is an integral component of the SL course, contributing 25% to the
final assessment, should be reflected in the total time allocated to the written commentary.
It is recommended that approximately 15 hours should be allocated to the written commentary. This
should include:
· time for the teacher to explain to students the requirements of the task, including codes of ethical
behaviour and confidentiality
· class time for students to work on their tasks
· additional time spent outside normal class time for students to work on their own
· time for consultation between the teacher and each student
· time to review and monitor progress, and to check authenticity.
54 © International Baccalaureate Organization 2007
Assessment details
General information
There are two different methods of assessment in Diploma Programme business and management. For
the external assessment there are detailed markschemes specific to each examination paper. The
assessment criteria published in this guide are used to assess the internal assessment, that is, the research
project (HL) and the written commentary (SL).
The method of assessment used by the IBO is criterion-related rather than norm-referenced; that is to
say, the method of assessing the business and management HL research project and SL written
commentary judges each student in relation to identified assessment criteria, and not in relation to the
work of other students.
Using the internal assessment criteria
Teachers should judge the internally assessed work against the criteria using the descriptors.
· Different assessment criteria are provided for HL and SL. There are five assessment criteria (A–E) for
HL and six assessment criteria (A–F) for SL internal assessment.
· The aim is to find, for each criterion, the descriptor that conveys most adequately the achievement
level attained by the student.
· Only whole numbers should be recorded; partial marks, fractions and decimals are not acceptable.
· Teachers should not think in terms of a pass/fail boundary, or make comparisons with the IBO 1–7
grade scale, but should concentrate on identifying the appropriate descriptor for each assessment
criterion.
· The highest descriptors do not imply faultless performance, but should be achievable by a student.
Teachers should not hesitate to use the extremes if they are appropriate descriptions of the work
being assessed.
· A student who attains a high level of achievement in relation to one criterion will not necessarily
attain high levels of achievement in relation to the others, and vice versa. Teachers should not assume
that the overall assessment of the students will produce any particular distribution of scores.
The assessment criteria should be available to students at all times.
Assessment
Assessment criteria
© International Baccalaureate Organization 2007 55
HL internal assessment criteria
The HL business and management research project is assessed against five criteria that are related to the
objectives for the business and management course. Criterion A refers to the research proposal and
action plan, while criteria B–E are used to assess the written report.
When the work to be assessed has been read, the descriptors for each criterion should be studied until
a descriptor is reached that most appropriately describes the achievement level. If a piece of work seems
to fall between two descriptors, both descriptors should be read again and the one that more appropriately
describes the student’s work chosen.
Criterion A Research proposal and action plan
Criterion B Use of theoretical concepts, sources and data (written report)
Criterion C Analysis and evaluation (written report)
Criterion D Conclusions and recommendations (written report)
Criterion E Value to management (written report)
56 © International Baccalaureate Organization 2007
Assessment criteria
A Research proposal and action plan
Criterion A should be used to assess the research proposal and action plan only.
Descriptor
Achievement
level
0 There is no research proposal or action plan.
There is a research proposal and action plan. However, elements of the research
proposal or action plan are inappropriate.
1
The research proposal and action plan are generally appropriate, but they are not
clear and focused.
2
The research proposal and action plan are appropriate, clear and focused. There
is some identification of the theoretical framework and methodology to be
employed.
3
The research proposal and action plan are appropriate, clear and focused. There
is clear identification and explanation of the theoretical framework and
methodology to be employed.
4
© International Baccalaureate Organization 2007 57
Assessment criteria
B Use of theoretical concepts, sources and data (written report)
Descriptor
Achievement
level
0 There is no use of theoretical concepts, sources or data.
There is a very limited understanding of relevant theoretical concepts, and these
concepts have been misused. The sources and data are irrelevant or insufficient.
1
There is a limited understanding of relevant theoretical concepts, but these have
not been applied effectively. The sources and data are generally relevant, but
insufficient.
2
There is an understanding of relevant theoretical concepts and evidence of some
of them being applied effectively. The sources and data are relevant and sufficient.
3
There is an understanding of relevant theoretical concepts and evidence of them
being applied effectively. The sources and data are relevant and sufficient. There
is some evidence of the sources and data being used effectively and related to
the theoretical framework.
4
There is an in-depth understanding of relevant theoretical concepts and consistent
evidence of them being applied effectively. The sources and data are relevant and
sufficient. There is consistent evidence of the sources and data being used
effectively and integrated with the theoretical framework.
5
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Assessment criteria
C Analysis and evaluation (written report)
Descriptor
Achievement
level
0 There is no discussion, analysis or evaluation.
Findings are very limited and the discussion is superficial. The report lacks order
and coherence.
1
Findings are limited and the discussion tends to be superficial. There is an attempt
to sequence ideas and references.
2
There is some analysis of the findings but the discussion may be unnecessarily
descriptive. There is some integration of ideas and issues in a logical order.
3
The analysis of the findings is appropriate. There is some integration of ideas and
issues in a coherent order.
4
The analysis of the findings is appropriate and there is an attempt at evaluation.
There is sound integration of ideas and issues in a coherent order.
5
The analysis and evaluation of the findings are appropriate. There is sound
integration of ideas and issues in a coherent order, and some evidence of critical
thinking.
6
The analysis and evaluation of the findings are appropriate. There is sound
integration of ideas and issues in a coherent order, and consistent evidence of
critical, reflective thinking.
7
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Assessment criteria
D Conclusions and recommendations (written report)
Descriptor
Achievement
level
0 There are no conclusions or recommendations.
There are conclusions or recommendations, but they are inconsistent with the
evidence presented.
1
There are conclusions or recommendations. Some are consistent with the research
question, but may not be supported by evidence presented in the main body of
the report.
2
There are conclusions and recommendations. These are consistent with the
evidence presented in the main body of the report and with the research question,
but are not fully developed.
3
There are conclusions and recommendations. These are consistent with the
evidence presented in the main body of the report and with the research question,
and are well developed.
4
There are conclusions and recommendations. These are consistent with the
evidence presented in the main body of the report and with the research question,
and are well developed. Future action to address limitations of the research is
proposed.
5
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Assessment criteria
E Value to management (written report)
Descriptor
Achievement
level
0 The report is of no practical value to management.
1 The report exceeds 2,000 words, or is of limited practical value to management.
The report has some practical value to management. There are significant omissions
in the presentation of the report. Bibliography and referencing are inappropriate.
2
The report is of practical value to management. There are minor omissions in the
presentation of the report. Bibliography and referencing are appropriate.
3
The report is of practical value to management. The report is well presented,
forward-looking and follows the required written report format*. Bibliography
and referencing are appropriate.
4
* See “Required format for written report” in the section “HL research project”.
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Assessment criteria
SL internal assessment criteria
The SL business and management written commentary is assessed against six criteria that are related to
the objectives for the business and management course.
When the work to be assessed has been read, the descriptors for each criterion should be studied until
a descriptor is reached that most appropriately describes the achievement level. If a piece of work seems
to fall between two descriptors, both descriptors should be read again and the one that more appropriately
describes the student’s work chosen.
Criterion A Supporting documents
Criterion B Choice and application of business tools, techniques and theory
Criterion C Use, analysis and synthesis of data
Criterion D Conclusions
Criterion E Evaluation and critical thinking
Criterion F Presentation
62 © International Baccalaureate Organization 2007
Assessment criteria
A Supporting documents
If fewer than three supporting documents are presented, a maximum of three marks can be awarded.
Descriptor
Achievement
level
0 There are no documents presented in support of the commentary.
1 The supporting documents are irrelevant.
2 The supporting documents are generally relevant but some lack depth.
3 The supporting documents are relevant and sufficient in depth.
The supporting documents are relevant, sufficient in depth and provide a range
of ideas and views.
4
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Assessment criteria
B Choice and application of business tools, techniques and theory
Descriptor
Achievement
level
0 There is no use of business tools, techniques or theory.
1 There is a limited selection of business tools, techniques and theory.
There is a limited selec, tion of business tools, techniques and theory, and these
are superficially applied.
2
There is appropriate selection of business tools, techniques and theory, but these
are superficially applied.
3
There is appropriate selection of business tools, techniques and theory, and these
are suitably applied.
4
There is appropriate selection of business tools, techniques and theory, and these
are competently applied.
5
There is a broad and appropriate selection of business tools, techniques and theory,
and these are skillfully applied.
6
64 © International Baccalaureate Organization 2007
Assessment criteria
C Use, analysis and synthesis of data
Descriptor
Achievement
level
0 There is no use of data from the supporting documents.
1 There is inappropriate selection of data from the supporting documents.
2 There is appropriate selection of data from the supporting documents.
There is appropriate selection of data from the supporting documents with
superficial analysis.
3
There is appropriate selection of data from the supporting documents with
appropriate analysis.
4
There is appropriate selection of data from the supporting documents with
appropriate analysis. There is some integration of ideas.
5
There is appropriate selection of data from the supporting documents with
appropriate and detailed analysis. There is coherent integration of ideas.
6
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Assessment criteria
D Conclusions
Descriptor
Achievement
level
0 There are no conclusions.
1 Conclusions are inconsistent with the evidence presented.
2 Some of the conclusions are consistent with the evidence presented.
The conclusions are consistent with the evidence presented and answer the
commentary question.
3
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Assessment criteria
E Evaluation and critical thinking
Descriptor
Achievement
level
0 There is no evidence of evaluation.
1 There is limited evidence of evaluation.
2 There is evidence of evaluation, but not all judgments are substantiated.
There is evidence of evaluation, and judgments are substantiated. Critical and
reflective thinking occurs in the commentary.
3
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Assessment criteria
F Presentation
Descriptor
Achievement
level
0 The commentary exceeds 1,500 words.
The commentary is disorganized and lacks structure. Sources are not appropriately
referenced.
1
The commentary is sufficiently organized and structured with some use of
appropriate business terminology. Sources are appropriately referenced.
2
The commentary is well organized and structured, with consistent use of
appropriate business terminology. Sources are appropriately referenced and an
appropriate bibliography is provided.
3
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Assessment criteria
The following formulae will be used in business and management external assessment. A copy of the
formulae will be provided for students in the examination.
Formulae for ratio analysis
Profitability ratios
Liquidity ratios
Shareholder (stockholder) ratios
Efficiency ratios
Appendices
Formulae
© International Baccalaureate Organization 2007 69
or
Gearing ratio
Other formulae
Investment appraisal
Elasticity—HL only
70 © International Baccalaureate Organization 2007
Formulae
A discount table will be provided for students in the examination.
Years Discount rate
4% 6% 8% 10% 20%
1 0.9615 0.9434 0.9259 0.9091 0.8333
2 0.9246 0.8900 0.8573 0.8264 0.6944
3 0.8890 0.8396 0.7938 0.7513 0.5787
4 0.8548 0.7921 0.7350 0.6830 0.4823
5 0.8219 0.7473 0.6806 0.6209 0.4019
6 0.7903 0.7050 0.6302 0.5645 0.3349
7 0.7599 0.6651 0.5835 0.5132 0.2791
8 0.7307 0.6271 0.5403 0.4665 0.2326
9 0.7026 0.5919 0.5002 0.4241 0.1938
10 0.6756 0.5584 0.4632 0.3855 0.1615
Appendices
Discount tables—HL only
© International Baccalaureate Organization 2007 71
Where balance sheets and profit and loss accounts are given in case studies or examination questions,
they will be presented in the format shown below.
ABC Ltd
Balance sheet as at 31 May 20**
$000 $000
Fixed assets ****
Current assets
Stock ****
Debtors ****
Cash ****
Total ****
Current liabilities
Creditors ****
Short-term borrowing ****
________
Total ****
Net assets ****
________
Share capital ****
Loan capital ****
Retained profit ****
Capital employed ****
________
Appendices
Presentation of balance sheets and profit and loss
accounts
72 © International Baccalaureate Organization 2007
Profit and loss account for ABC Ltd for the year ended 31 May 20**
$000
Sales revenue ****
Cost of goods sold ****
________
Gross profit ****
Expenses ****
________
Net profit before interest and tax ****
Interest ****
Tax ****
________
Net profit after interest and tax ****
Dividends ****
Retained profit ****
© International Baccalaureate Organization 2007 73
Presentation of balance sheets and profit and loss accounts
Group 3 command terms
Students should be familiar with the following key terms and phrases used in examinations in group 3
subjects. An explanation is given for each term and an example, specific to business and management,
is provided.
Command term Definition Business and management example
Analyse the impact of external
opportunities and threats on the
business strategy of company A.
Break down in order to bring out the
essential elements, structure, any
underlying assumptions and any
interrelationships involved.
Analyse
Compare the benefits of adopting
LIFO with those of FIFO.
Describe two (or more) situations and
present the similarities between
them.
Compare
With reference to the impact on
profit, contrast the FIFO method of
stock valuation with the LIFO method
of stock valuation.
Describe two (or more) situations and
present the differences between
them.
Contrast
Give a clear and precise meaning of Define the term “stakeholder”.
a given word, term or concept.
Define
Describe company X’s corporate
culture.
Present the characteristics of a
particular topic.
Describe
Discuss how the introduction of an
employee share-ownership scheme
could affect motivation for
employees of company X.
Offer a considered and balanced
review of a particular topic. Opinions
or conclusions should be presented
clearly and supported by empirical
evidence and sound argument.
Discuss
Distinguish between variable costs
and fixed costs.
Make clear the differences between
two or more concepts/terms.
Distinguish
Evaluate the option of accelerating
company X’s overseas development
through the use of franchising or
joint ventures.
Make an appraisal by weighing up
the strengths and limitations of
different evidence and arguments.
Evaluate
Examine company X’s present
marketing approach in the light of
changes in the external environment.
Consider an argument or concept in
a way that uncovers the assumptions
and interrelationships of the issue.
Examine
Appendices
Glossary of command terms
74 © International Baccalaureate Organization 2007
Explain why company X has changed
its pricing strategy.
Explain Describe, giving reasons.
Identify two reasons why the owner
has chosen a particular method of
investment appraisal.
Recognize and state briefly a
distinguishing fact or feature.
Identify
Justify your reasons for introducing
an extension strategy for product X.
Provide evidence to support or
defend a choice, decision, strategy
or course of action.
Justify
To what extent was the marketing
strategy of company X successful?
Evaluate the success or otherwise of
an argument or concept. Opinions
and conclusions should be presented
clearly and supported with empirical
evidence and sound argument.
To what
extent
Subject-specific command terms
Although the group 3 command terms are used frequently in business and management examination
questions, other terms may be used to direct students to present an answer in a specific way for business
and management. Students should be familiar with the following command terms used in HL and SL
business and management examination questions.
Command term Definition Business and management example
Advise the human resources manager
on the use of both monetary and
non-monetary rewards to improve
staff motivation at XYZ Ltd.
Offer suggestions/recommendations
for a potential course of action.
Advise
Applying Maslow’s motivation theory,
suggest a new rewards package for
employees of company X.
Use an idea, principle or theory in
relation to a problem or issue.
Apply
Calculate the acid test ratio for
company X in 2008.
Calculate Give a precise numerical answer.
Classify the range of products sold
by line range and mix.
Arrange or order by class or
categories.
Classify
Comment on the profitability,
liquidity and efficiency of the firm.
Write an explanation of, or
commentary on, the information
given in relation to a problem or
issue.
Comment
Complete the critical path diagram
by calculating the earliest starting
time and latest finishing time for each
activity.
Complete Add missing information/data.
© International Baccalaureate Organization 2007 75
Glossary of command terms
Based on the information given,
construct a break-even chart for
company X.
Present a variety of information in a
diagrammatic or tabular form.
Construct
Formulate an appropriate
promotional mix for company X.
Express precisely, clearly and in a
systematic manner the relevant
concept(s) or argument(s).
Formulate
(Calculate and) interpret the value of
the sales variance for XYZ Ltd.
Use knowledge and understanding
to explain and, where appropriate,
draw inferences from a given
situation, problem or issue.
Interpret
Outline two advantages and
disadvantages of working from home.
Give a brief explanation and/or
summary of the issues, principles, or
arguments stated in the question.
Outline
Prepare a cash-flow forecast for
company X for January, February and
March 2010.
Put given data or information into a
suitable business format.
Prepare
Recommend a suitable growth
strategy for company X.
Present an advisable course of action
with appropriate supporting
evidence/reasons, in relation to a
given situation, problem or issue.
Recommend
76 © International Baccalaureate Organization 2007
Glossary of command terms