IB - HL Business Management - Unit 1

business

The organization that produces and provides goods and services to satisfy customer needs and wants

Inputs

Factors of Production

Human resources

Employees, management / Inputs (Factors of Production)

Finance

Capital, investments / Inputs (Factors of Production)

Enterprise

Leadership, innovation / Inputs (Factors of Production)

Land and Resources

Raw materials, energy / Inputs (Factors of Production)

Goods

Tangible products (e.g., smartphones, clothing) / Outputs (Products & Services)

Services

Intangible offerings (e.g., education, consulting) / Outputs (Products & Services)

Primary Sector

Extracting natural resources (e.g., agriculture, fishing, mining)

Secondary Sector

Manufacturing and construction (e.g., car production, building houses)

Tertiary Sector

Providing services (e.g., banking, tourism, education)

Quaternary Sector

Knowledge and technology-based services (e.g., IT, research, data analysis)

Human Resources (HR)

Recruitment, training, employee management / Business Functions (Core Business Functions)

Finance & Accounts

Budgeting, financial reports, investment decisions / Business Functions (Core Business Functions)

Marketing

Market research, branding, pricing strategies / Business Functions (Core Business Functions)

Operations Management

Production efficiency, quality control / Business Functions (Core Business Functions)

Job Creation

Providing employment opportunities / Importance of Business in Society

Economic Growth

Increasing GDP and improving living standards / Importance of Business in Society

Innovation & Development

Advancing technology and product improvements / Importance of Business in Society

Corporate Social Responsibility

Ethical business practices, sustainability efforts / Importance of Business in Society

Sole Trader

A business owned and operated by one person

Partnership

A business owned by two or more people who share profits and responsibilities

Corporations

A separate legal entity from its owners

General Partnership

Equal liability and management.

Limited Partnership

Some partners invest but don’t participate in management.

Private Limited Company

Shares are privately held.

Public Limited Company

Shares are publicly traded on a stock exchange.

Non-Profit Organizations

Run for social causes (e.g., charities, educational groups, religious organizations)

Non-Governmental Organizations

Operate independently from governments, often working on humanitarian and environmental issues.

Hybrid Organizations

These organizations combine profit-making and social responsibility

Social Enterprises

Aim to generate revenue while addressing social problems.

Cooperatives

Owned and operated by members (e.g., farmer co-ops). / Social Enterprises

Microfinance Institutions

Provide small loans to entrepreneurs in developing countries. / Social Enterprises

Public-Private Partnerships

Collaboration between governments and private businesses for public services. / Social Enterprises

Vision Statement

• Describes the long-term aspirations of a business.

• Focuses on what the company wants to become.

Mission Statement

• Outlines the purpose and values of the business.

• More specific than a vision statement.

Aims

• General, long-term goals of the organization.

• Often broad and qualitative.

Objectives

• Specific, measurable targets to achieve aims.

• Can be strategic (long-term) or tactical (short-term).

Strategic Objectives

Focus on growth, profitability, and market position. / Types of Business Objectives 비즈니스 목표 유형

Tactical Objectives

Help achieve strategic objectives through smaller, actionable steps. / Types of Business Objectives 비즈니스 목표 유형

Ethical Objectives

Focus on corporate social responsibility (CSR) and ethical behavior / Types of Business Objectives 비즈니스 목표 유형

Social Objectives

Aimed at creating positive social impacts / Types of Business Objectives 비즈니스 목표 유형

stakeholder

Any individual or group that has an interest in or is affected by a business's activities

Internal Stakeholders

These are individuals or groups directly involved in business operations.

External Stakeholders

These stakeholders are affected by the business but do not work within it.

The Power-Interest Grid

Businesses prioritize stakeholders based on their level of power and interest.

external environment

It refers to factors outside a business that can influence its operations.

PESTLE

It stands for Political, Economic, Social, Technological, Legal, and Environmental factors.

Economies of Scale

 🔹 Technical – More efficient machinery and technology
🔹 Managerial – Specialized managers improve efficiency
🔹 Financial – Easier access to loans and investment
🔹 Marketing – Bulk advertising reduces cost per unit
🔹 Purchasing (Bulk-buying) – Suppliers offer discounts for large orders

Diseconomies of Scale

 🔸 Communication Issues – Larger businesses struggle with coordination
🔸 Bureaucracy – Slow decision-making due to complex processes
🔸 Lack of Employee Motivation – Workers feel less connected in big companies

Internal Growth

Growth from within the company using its own resources

External Growth

Growth through partnerships, mergers, or acquisitions

Mergers

Two companies combine as equals

Acquisitions

One company takes over another

franchise

This is when a business allows individuals to operate under its brand

Globalization

The increasing integration of economies worldwide.

Multinational Corporations

Businesses operating in multiple countries.