Paper 3 HL Notes: Social Enterprise (IB)
Overview of Paper 3
HL level only paper for IB Business Management (Paper 3)
Time: 1 hour 15 minutes
Total marks: 25
Percentage of course: 25%
Minutes per mark: 3 minutes
You must answer all of the questions
There are three questions in the exam: 2 mark, 6 mark, 17 mark
Case study format
You will be given a case study with a short introduction about the company and its products or services; the company will be a social enterprise.
You will learn more about the company through 5–6 resources (news articles, emails, customer reviews, social media posts, infographics, etc.).
This is a decision-making paper that requires you to make a recommendation to the business.
What is a social enterprise?
Definitions and examples are provided to explore what counts as a social enterprise
Emphasizes a mission to generate social impact alongside or instead of traditional profit maximization
Definitions of social enterprise (Key definitions to compare)
A social enterprise’s mission is to have a social impact rather than make a profit for owners/shareholders; it provides goods/services and uses profits to further social objectives.
European Union: Social enterprises demonstrate a better way to do business that prioritizes benefit to people and planet and uses the majority of any profit to further their mission; they contribute to reducing economic inequality, improving social justice, and environmental sustainability.
Social Enterprise UK: Reading definitions, identify THREE main features of a social enterprise.
BC Centre for Social Enterprise: 1) Have a clear mission to improve lives; 2) Generate revenue by selling a product/service; 3) Progressive in diversity, inclusion, and social justice.
What is NOT a social enterprise?
Charities are not social enterprises (no revenue generation used to change the world).
Businesses that donate a portion of profits are not social enterprises (main goal remains profits/shareholder value).
Companies that care about the environment or have environmentally friendly products are not automatically social enterprises; they are socially responsible businesses.
Service businesses that donate time (e.g., lawyers, doctors) do not provide solutions to social issues; their services are valuable but not a social enterprise.
So what is a social enterprise?
A business where giving and helping others is at the core of the business model; the mission is the reason for existence.
Energizing and inspirational to customers and others around it.
Constant focus on purpose/mission, not just short-term marketing.
Aspirational and belief-driven, emphasizing future hopes/goals to be achieved.
What makes it social?
Traditional businesses vs charities vs social enterprises: brainstorm examples in groups to identify characteristics that differentiate social enterprises as mission-driven, revenue-generating entities.
Profit vs Purpose debate
Group activity with three stances:
Team A: Profit should always come first in business
Team B: Social/environmental purpose is more important
Team C: A balanced approach is possible
Groups are randomly assigned stances; 10 minutes to prepare; 3 minutes to present arguments with evidence.
Social Enterprise Shark Tank
Group activity again; 15 minutes to devise a social enterprise idea; address:
What social/environmental issue is addressed?
What is the product/service?
Who is the target audience/market?
How will revenue be generated?
Each group pitches in 3 minutes.
Maslow's hierarchy of needs (foundational motivation theory)
Maslow’s hierarchy includes five levels:
Physiological needs: air, water, food, shelter, sleep, clothing, reproduction
Safety needs: personal security, employment, resources, health, property
Love and belonging: friendship, intimacy, family, sense of connection
Esteem: respect, self-esteem, status, recognition, strength, freedom
Self-actualization: desire to become the most that one can be
Visual cue often shown as a pyramid with Physiological at the base and Self-actualization at the top.
Motivational theories (HL only)
The following theories are covered:
McClelland’s acquired needs theory
Deci and Ryan’s self-determination theory
Adams’ equity theory
Vroom’s expectancy theory
McClelland’s acquired needs theory (Need for Achievement, Power, Affiliation)
N-Ach (Need for Achievement)
Moderate risk-takers; feel achievement if task is not too hard or too difficult.
Interested in personal success, not intrinsic/extrinsic rewards.
N-Pow (Need for Power)
Desire to influence others; institutional power tends to bring out the best in teams when used to achieve organizational objectives.
N-Aff (Need for Affiliation)
Seek good social/working relationships; motivated by teamwork or customer relations, not working alone.
Deci and Ryan: Self-determination theory
Core requirements for flourishing: Autonomy, Competence, Relatedness
Autonomy: sense of control over one’s work
Competence: feeling effective and capable
Relatedness: sense of connection to others
Equity theory (Adam’s)
Motivating factors depend on perceived fairness of inputs and outputs
Inputs: what employees contribute (effort, time, skill, etc.)
Outputs: what employees receive (remuneration, recognition, rewards)
Perceived equity arises when outputs are commensurate with inputs and fair relative to others performing similar work
Expectancy theory (Vroom)
Motivation depends on beliefs about outcomes:
Expectancy: belief that effort will lead to performance
Instrumentality: belief that performance will lead to a reward
Valence: value of the reward to the individual
Assessment criteria for Presentation (16–20 marks in this section in some rubrics; note overall total = 20 for this section)
Clarity, structure, engagement; effectively communicates key points within time
Originality and innovation in the recommended action plan; addresses challenges; evaluates trade-offs
Thorough research with credible sources; complete reference list (MLA)
Content coverage: name, introduction, mission, human need (linked to theory), challenges, action plan
2-mark questions: explanation and practice
2-mark breakdown tasks: describe a human need using a business theory (likely Maslow or another theorist)
Remember other theorists beyond Maslow; discuss briefly
2-mark discussion: human needs exercise
Create a list of human needs (e.g., Food, Shelter, Clothing, Water, Education, Love from others, Clean air, Medical care, etc.)
Marks: 1 for using an appropriate theory, 1 for describing the need
6-mark questions: explanation and practice
Structure: identify a problem, explain the issue with case-study quotes/information, and discuss the impact on the business
Each part contributes to a total of 6 marks (3+3)
Example: TOMS case study analysis with one issue, followed by justification and impact
Students should do this for their chosen enterprise’s issue
17-mark questions: explanation and practice
Four criteria: A, B, C, D
Criterion A: Use of resources
You must reference every resource used; clarity about which source supports which point
Criterion B: Tools and theories
Use specific business tools or theories; ensure vocabulary/theorists are integrated into analysis
Criterion C: Evaluation
Consider long-term vs short-term, financial vs non-financial, stakeholders, business context, objectives; include multiple angles and trade-offs
Criterion D: Sequence of ideas
Demonstrate logical order of ideas; use introduction, numbered transitions (first, second…), and clear reasoning for ordering
Rubrics and guidance for 17-mark questions (detailed)
Criterion A (Use of resources): Reference every resource; avoid overquoting; indicate which resource supports which claim (e.g., "In Source A, the CEO states…")
Criterion B (Tools and theories): Incorporate course vocabulary and theorists; show alignment of analysis with theories like Ansoff matrix, Herzberg, etc.
Criterion C (Evaluation): Provide multi-faceted evaluation across dimensions (long-term vs short-term, financial vs non-financial, stakeholders, context, objectives). Propose at least three evaluation angles; discuss trade-offs.
Criterion D (Sequence of ideas): Show planned progression; use a structured plan (introduction, step 1, step 2, counterpoints, conclusion) or alternative structure; justify sequencing
Structuring the essay (two valid structures)
Structure 1:
Introduction: outline problems the action plan addresses
Paragraph 1: first action; rationale; sources; syllabus area; evaluation elements
Paragraph 2: second action; rationale; sources; evaluation elements
Paragraph 3: counterpoint/alternative; trade-offs; evaluation elements
Paragraph 4: second counterpoint (if applicable)
Conclusion: summarize benefits and how plan helps achieve objectives
Structure 2 (alternatively):
Introduction; Action 1; Counterpoint 1; Action 2; Counterpoint 2; Conclusion
Either structure is acceptable; ensure 2–3 well-developed recommendations
Final notes and practice guidance
Practice is essential; aim for 2–3 strong recommendations rather than many weak ones
Read the case study closely to identify issues and opportunities
Use the action plan to demonstrate critical thinking, feasibility, and impact
Example case study reference (Coffee Up)
Coffee Up case study provided as an example in the materials. Resources and questions accompany the case study for practice.
References (illustrative list provided in the materials)
All about Social Enterprise. N.d. https://www.socialenterprise.org.uk/all-about-social-enterprise/
Hessekiel, D. (2021, April 28). The Rise and Fall of the Buy-one-give-one model at Tom’s. Forbes. https://www.forbes.com/sites/davidhessekiel/2021/04/28/the-rise-and-fall-of-the-buy-one-give-one-model-at-toms/
Social Enterprises. N.d. https://single-market-economy.ec.europa.eu/sectors/proximity-and-social-economy/social-economy-eu/social-enterprises_en
What is a Social Enterprise?. N.d. https://www.centreforsocialenterprise.com/what-is-social-enterprise/
Ugly Food resources: https://www.channelnewsasia.com/singapore/ugly-food-waste-imperfect-blemished-surplus-excess-3203996 and https://uglyfoodco.com/pages/about-uglyfood-2-0
Singapore and UK social enterprise resources (link references provided in the slides)
Additional resources for environmental sustainability (as listed in the slides)