IB Business HL – Condensed Exam Notes

Business Organisation & Environment

  • Role: combine land, labour, capital, enterprise ➜ goods/services.
  • Sectors: Primary, Secondary, Tertiary.
  • Ownership: Public vs Private → Unincorporated (sole trader, partnership) vs Incorporated (Ltd., PLC).
  • Non-profit forms: Charities, Pressure Groups, Public-Private Cooperation.
  • Objectives hierarchy: Mission → Vision → Strategic → Tactical → Operational (all as SMART).
  • CSR: ethical/environmental duties to all stakeholders.
  • Stakeholders: internal (owners, employees, management) vs external (customers, suppliers, community, govt, pressure groups).
  • Analyses: SWOT (internal S/W, external O/T) + PEST/ STEEPLE.
  • Growth: Economies (technical, managerial, financial, marketing, purchasing) vs Diseconomies (communication, control).
  • Growth paths: Internal (organic) vs External (M&A – horizontal, vertical, conglomerate; Joint Venture; Strategic Alliance; Franchising).
  • Planning tools: Decision Tree (EV), Fishbone, Force-Field, Gantt (time sequencing).

Human Resource Management

  • HR Planning cycle: Recruitment → Training (on/off/induction/cognitive/behavioural) → Appraisal (formative, summative, 360°, self) → Termination/Dismissal/Redundancy.
  • Labour Turnover = \dfrac{\text{leavers}}{\text{avg staff}} \times 100.
  • Recruitment sources: internal vs external.
  • Contemporary work patterns: teleworking, flexitime, migration.
  • Structures: Tall vs Flat; by hierarchy, function, product, region; Project-based; Shamrock (core, contractual fringe, flexible).
  • Key terms: Span of Control, Chain of Command, Delegation, (De)centralisation, Bureaucracy, De-layering.
  • Leadership styles: Autocratic, Paternalistic, Democratic, Laissez-faire, Situational.
  • Motivation theories: Taylor (money), Maslow (hierarchy), Herzberg (hygiene & motivators), Adams (equity), Pink (autonomy, mastery, purpose).
  • Rewards: Financial (salary, wage-time/piece, commission, profit-related pay) & Non-financial (empowerment, teamwork, job enrichment/rotation).
  • Culture types (Handy): Power, Role, Task, Person; Levels (Schein): Artifacts, Values, Assumptions.
  • Conflict & industrial action: work-to-rule, go-slow, overtime ban, strike; employer responses: lock-out, dismissal. Resolution: Arbitration, Industrial democracy, No-strike, Single-union.

Accounts & Finance

  • Capital vs Revenue expenditure.
  • Sources of Finance: Internal (retained profit, working capital, sale of assets) | External Short-term (overdraft, trade credit, hire purchase, leasing, debt factoring) & Long-term (share capital – ordinary, preference, deferred; debentures; mortgages; venture capital; govt grants).
  • Investment appraisal:
    • Payback = \frac{\text{remaining cost}}{\text{net cash in next year}} \times 12 (months)
    • ARR = \frac{\text{avg annual profit}}{\text{initial cost}} \times 100
    • NPV = Σ (\text{cashflow} \times \text{discount factor}) – \text{cost}.
  • Working Capital = \text{Current Assets} – \text{Current Liabilities}; cash-flow forecasting (inflows/outflows, opening/closing balance).
  • Final Accounts: Income Statement (Sales – COGS = Gross P; −Expenses = NPBIT; −Interest/Tax = NPAT; −Dividends = Retained). Balance Sheet: Assets = Liabilities + Equity; depreciation methods: Straight-line, Reducing-balance.
  • Ratios:
    • Profitability: GPM=\frac{GP}{Sales}\times100, NPM=\frac{NPBIT}{Sales}\times100
    • Liquidity: Current=\frac{CA}{CL}, Acid=\frac{CA-Stock}{CL}
    • Efficiency: ROCE=\frac{NPBIT}{\text{Capital Employed}}\times100; Stock\,days=\frac{\text{Avg Stock}}{COGS}\times365; Debtor\,days=\frac{Debtors}{Sales}\times365; Creditor\,days=\frac{Creditors}{Purchases}\times365
    • Gearing =\frac{Loan Capital}{Capital Employed}\times100 (high >50%).

Marketing

  • Definitions: Market size, share, growth; Marketing orientations (product, market, asset-led).
  • 7P Mix: Product, Price, Promotion, Place, People, Process, Physical evidence.
  • Porter 5 Forces: Supplier power, Buyer power, New entrants, Substitutes, Rivalry.
  • Research: Primary vs Secondary; Sampling – Random, Stratified, Quota, Cluster, Snowball.
  • Segmentation → Targeting → Positioning; Ansoff Matrix (Market Penetration, Product Dev, Market Dev, Diversification).
  • Product tools: PLC (Development, Intro, Growth, Maturity, Decline); Extension strategies; BCG Matrix (Star, Cash Cow, ? Mark, Dog); Branding (USP).
  • Pricing: Cost-plus, Penetration, Skimming, Loss-leader, Discrimination, Psychological, Promotional, Going-rate/Price leadership, Predatory.
  • Promotion: Above-the-line (TV, press, radio, posters, online) vs Below-the-line (PR, merchandising, sales promo, direct selling/mailing, exhibitions).
  • Place/Distribution channels: 0-level (direct), 1-level (retailer), 2-level (wholesaler), 3-level (agent+…).
  • E-commerce: B2C & B2B; impact on 7Ps.

Operations Management

  • Production methods: Job (one-off), Batch, Flow; trade-offs in cost, flexibility, motivation.
  • Cost types: TC=FC+VC; TR=PQ; Contribution =P-VC.
  • Break-even: Q{BE}=\frac{FC}{P-VC}; Margin of Safety = Actual Q − Q{BE}.
  • Quality: Quality Control vs TQM (quality chains, zero defects, benchmarking).
  • Stock control: JIT vs JIC; key levels – Max, Min, Re-order, Buffer; Lead time.
  • Capacity utilisation =\frac{\text{Current Output}}{\text{Max Output}}\times100.
  • Outsourcing: make-or-buy decision (cost & qualitative factors).
  • Crisis & Contingency: transparency, communication, speed, control; plan weighed by cost, time, risk, safety.