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Comprehensive IB Business Management SL & HL Syllabus

Chapter 1: Business Organization and Environment

Subtopic Subtopic Number IB Points to Understand
Introduction to Business management 1.1 Any decision-making organization that is involved in the process of using inputs to produce output that has the power to satisfy the demands of its customers is called a business.

Functions of business

Customers are the individuals or organizations that buy a product whereas consumers are the ones who buy the product for the consumption purpose.

Businesses can be classified into four interdependent sectors based on the stage of production 

An entrepreneur is a person who plans, organizes, and manages the resources while undertaking the financial and operational risks involved.

An Intrapreneur is an employee of the organization who thinks and acts as an entrepreneur, but within the organization.

Steps involved in starting a new business

Problems faced by a new business or a startup

A business plan

Types of organizations 1.2 Profit- based organizations– Businesses that aim to make profit. 

For profit social enterprises– These are revenue generating enterprises which aim for maximizing social impact along with the profits.

Non- profit social enterprises– These are the commercial enterprises which use their surplus revenues to achieve social goals. 

Sole Proprietorship – Any profit-making enterprise that is owned and run by a single person

Partnership – A profit-making business owned together by 2 or more individuals. There is a legal agreement among the partners known as “partnership deed” which specifies the terms of contract

Corporations – corporations are separate legal entities distinct from its owners. Board of directors (BOD) are elected by the shareholders of the company to manage the company and
represent the company on their behalf.

Private vs Public limited companies

Kinds of for-profit social enterprises

Kinds of not for-profit social enterprises

Organizational Objectives 1.3 SMART criterion

Mission statement: Short/medium term interpretation of the vision of an organization

Vision statement: Focuses on the accomplishment of the long term aim

Aims are defined as the long-term goals of an organization which are expressed in unquantifiable terms.

Objectives on the other hand, are the short- to- medium term targets set by the organization for the achievement of aims. 

Strategies are the action plans sketched to achieve the strategic objectives of an organization.

Tactics are the short-term approaches identified to accomplish the organization’s tactical objectives.

Internal and external factors that cause the aims and objectives of organization to change

Ethics are the moral principles that act as guidelines while outlining strategies/plans.

Corporate Social Responsibility: It is defined as the act of taking responsibility for its actions and considering the impact of its decisions on the society, while making any decisions in the favor of organization’s objectives.

An audit simply means the inspection of accounts of an organization’s accounts by an independent body. 

SWOT Analysis and Ansoff Matrix

Stakeholders 1.4 Any person/organization/group that has a stake in a particular business organization and is affected by its activities and performance is counted as a stakeholder for that company.

Internal and external stakeholders

Shareholders: Primary stakeholders that have a share in the profits/losses of the company and the portion of profit which is distributed among them is known as dividend.

A best-fit theoretical solution to address the interests of stakeholders, available in the form of a model known as Stakeholder Mapping.

External Environment 1.5 External environment is the business environment that is composed of the factors which influence the operations of the organization but are beyond the control of the business organization.

STEEPLE analysis is an analytical tool used by the managers of the organization to identify and assess the opportunities and threats in the external environment of the business.

  • Social opportunities and threats – include the values, attitudes and beliefs of people in the society that have a direct impact 
  • Technological opportunities and threats – include the improvements and advancement in technology. 
  • Economic opportunities and threats – include the changes in the state of economy that can have an impact on the operations of the business
  • Environmental opportunities and threats – include environmental changes that can have a negative or positive impact 
  • Political opportunities and threats – include changes in the political conditions of the country that can have a negative or positive impact
  • Legal opportunities and threats – changes in the rules and regulations and the laws of the country imposed by the government. 
  • Ethical opportunities and threats – moral principles/ the codes of conduct that guide the decision-making of the business enterprise.
Growth and evolution 1.6 The reductions in the average cost of production of a firm that results from the increase in the scale of operations is called as economies of scale. 

The cost-saving benefits that arise because of the internal factors that are within the control of the organization are called as internal economies of scale.

The cost-saving benefits that arise because of the external factors that are beyond the control of the organization are called external economies of scale.

Diseconomies of scale refer to the increase in average costs of production as the business continues to increase its size and becomes inefficient.

Small organization and large organizations

Business growth refers to the stage where the business reaches the point of optimal utilization of resources and aims to expand further to increase profitability and market share. There is internal and external growth

Organizational planning tools 1.7 Organizational planning is the identification of the clear and attainable objectives of the organization and the formulation of the plans of action and strategies to achieve them. 

  • Fishbone diagram – is a qualitative planning tool that helps identify and represent the causes and effects of a problem or situation.
  • Decision tree – is a quantitative decision-making tool that represents the different alternatives available to a business while making a decision.
  • Force field analysis
  • Gantt chart – used to schedule the business projects and oversee the tasks and activities of staff in terms of the time duration
  • SWOT analysis
Change and management of change 1.8 Management of change implies planning, organizing, directing, and controlling the financial, physical and human resources 

External causes for change

Globalization 1.9 Globalization is the integration and interdependence of the local and national economies of the world into a single global economy

Importance of globalization and impact of it on growth and evolution of business

An organization that operates in more than one country is termed as a multinational company (MNC)

The World Trade Organization or WTO is the international body that deals with global rules of trade between the nations and helps in the resolution of disputes that arise in the process of international trade.

 

Chapter 2: Human Resources

Subtopic Subtopic Number IB Points to Understand
Organizational Structure 2.2 Organizational structure is the formal framework within a business organization which identifies the roles/ job functions of different people in an organization

Job roles of human resources

The five key elements in the organizational chart are different departments, chain of command, span of control, channels of communication and the levels of hierarchy

Factors that affect the span of control

A level of hierarchy represents the rank of members of that level.

The formal line of authority through which the orders/ instructions are passed down the levels of hierarchy is called chain of command.

Delayering is the process of removal of one or more layers/ levels from the hierarchical structure of the organization. Downsizing implies reduction in the workforce due to mass redundancies.

Centralization and Decentralization

A project-based organization is an organization in which the human resources are structured on the basis of projects of different departments. 

Shamrock organization

Communication 2.3 Effective communication between the people or groups is vital to the success of any organization.

Different types of communication: 

  • Verbal: Oral, Written, Electronic, Visual
  • Non verbal: Speed, Cost, etc

The factors that prevent a message/ information from being received or clearly understood by the receiver are called as the ‘communication barriers’

Different types of formal communication networks

Leadership and management 2.4 The roles and responsibilities of a manager are defined as the functions of management. 

Henri Fayol says there are 5 functions of management

Charles Handy defined 3 key roles of management

Peter Drucker says there are 5 functions of management

A leader motivates and inspires an individual/ group of individuals to get the things done. Kinds of leadership styles

Difference between leadership and management

 

Chapter 3: Account and Finance

Subtopic Subtopic Number IB Points to Understand
Sources of finance 3.1 Finance is the management of money pertaining to organizations, companies, or the government.

Internal sources of finance – Finance/ Capital generated internally by the business which does not put any liability on the business’s head.

External sources of finance

Costs and revenues 3.2 Cost/ cost of production refers to the total amount spent by an organization in the process of production of output. 

Fixed Costs: Cost of production that must be paid by the business organization even if there is no production.

Variable Costs: Variable costs are the costs that change in proportion with the change in output.

Direct costs – Direct costs are the costs that are directly related to the production of output

Indirect costs – The costs that cannot be traced to the production of any single output

Sales Revenue refers to the amount of money that acts as income for the business. 

Other revenue includes the revenue items generated from other sources, not from the sale of goods/ services. 

Break even analysis 3.3 Contribution refers to the amount of money that remains after the total variable costs associated with the production are deducted from the total sales revenue.

Contribution analysis helps a business organization to set the correct prices of the product to ensure that there is sufficient contribution towards the payment of fixed costs.

Break-even analysis is a management decision-making tool drawn on the basis of expected sales and cost. 

 

Chapter 4: Marketing

Subtopic Subtopic Number IB Points to Understand
The role of marketing 4.1 Marketing: The management process involved in identifying, anticipating and satisfying consumer requirements profitably.

Difference between marketing good and services

Difference between market and product orientation

Difference between commercial and social marketing 

A market is a place where the customers and the suppliers come together for the trade of goods and services.

Market share refers to the firm’s portion of the total sales revenue of the industry.

Marketing Planning 4.2 A marketing plan is a document or a report that outlines the marketing strategies to be used to achieve the marketing objectives of the organization. 

Marketing mix is the combination of the marketing strategies pertaining to the seven key elements.

A market segment refers to the group of customers (part of the whole market) with similar characteristics/ requirements.

Targeting refers to the process of identifying the target markets for the business and effectively marketing the product to that market segment with the use of appropriate marketing strategy.

Positioning is the process that is used by the marketers to establish their product or brand in the minds of target customers at a distinctive position to receive competitive advantage. 

Unique selling point or proposition is the differentiating aspect of a business, brand or product which makes that product or brand unique and gives it a competitive advantage.

The act of distinguishing a business or its products from its rivals or competitors in the industry is called as differentiation.

E-commerce 4.7 Electronic commerce is a term that defines the trading of goods and services through electronic systems and computer networks via use of the internet.

Price, Distribution, Promotion, Product

Types of e-commerce

 

Chapter 5: Operation Management

Subtopic Subtopic Number IB Points to Understand
The role of operations management 5.1 Operations management is an area of management that is concerned with the administration, coordination and control of the activities pertaining to the production of output. 

It is practiced in all the four sectors of the economy

Operations management plays an important role in creating a balance between the social, ecological, and economic needs of people today and for the future generations.

Ecological sustainability refers to the ability and capacity of the natural environment to meet the needs of the current generation.

Social sustainability refers to the ability of the society to develop in a way that it can meet the societal needs of the current and future generations.

Economic sustainability refers to the ability of the country’s economy to support production and long-term economic growth without impacting the social and environmental aspects of the community.

Production methods 5.2 Job Production – This production method is used for the production of one-off items that are designed/tailored from top to toe to meet customer requirements.

Batch production – This method of production is used by the business organizations that produce a wide range of products.

Flow Production – This is a capital-intensive method of production where the workers are primarily employed to control the functioning of automated machines.

Mass Production – This production method is almost the same as flow production.

Cellular Production – Cellular production method is a replacement for the conventional mass and flow production methods.

Factors that determine which production method is apt

Lean production and quality management 5.4 Lean production is when all forms of wastage are eliminated to pull down the financial costs of wastage to achieve greater production efficiency

Features of lean production

Methods of lean production – Kaizen, Just-in-time, Kanban, Andon, C2C Design and manufacturing

Quality management refers to the function of controlling and management of the business activities and production processes in a way that products can meet the expectations of the customers

Methods to measure quality

Quality management methods

Best practice benchmarking is the practice of comparing the business’s products, operations and processes with the market leaders in the same industry. 

The organizations which meet or exceed the set quality standards are awarded with quality symbols/logos on their products that assist them in the promotion of the product

Research and development innovation 5.6 Research – A detailed investigation/ study of the unknown process, product, issue, or any concept

Development – The insights or findings of research are used to develop the new product/ process or incorporate improvements in the existing product/ process.

Importance of R&D

Innovation – ​​It is a process of continuous improvement in the existing product/ process or launching of new products, with the use of new ideas and creativity.

Types of innovation – Product, Process, Positioning, Paradigm

Factors affecting innovation 

Crisis management 5.7 Any unpredictable/ unexpected event that puts a business into a major problem is called a crisis.

Crisis management – the response and reaction of an organization towards contingent situations.

Factors affecting effective crisis management

Contingency planning can be defined as the proactive approach of dealing with a crisis in advance

 

Chapter 6: Business Strategy

Subtopic Subtopic Number IB Points to Understand
Business Strategy 6.1 Business strategy – Long-term plan of action for the organization

The role of management in implementing the business strategy to meet the long-term goals of the organization is called as strategic management

Strategic hierarchy – Corporate, Business, Functional

Process of strategic management 

    • Analysis – The managers assess the business environment (internal & external factors) within which the business operates to know about the current position of the company
  • Choice – ​​Strategic options are identified that can help in the attainment of corporate goals.

A corporate plan is a long-term plan that contains the details of the organizational goals and objectives and the strategies to be followed to achieve them.

  • Implementation – This stage involves the implementation (putting into effect) of strategic plans that have been chosen.

 

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