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IB Business Management revision notes

Group 3 · Individuals & Societies · SL / HL

Unit 1 sets up the language of the course: what a business is, who owns it, what it aims for and who cares about it.

Course topics

Unit 1 · Introduction to business management · Sectors, entrepreneurship, legal forms, objectives, stakeholders, growth · 6 subtopics
Unit 2 · Human resource management · Workforce planning, structure, leadership, motivation, culture · 7 subtopics
Unit 3 · Finance and accounts · Sources of finance, costs and revenue, break-even, ratios, cash flow · 9 subtopics
Unit 4 · Marketing · Marketing mix, market research, segmentation, branding, e-commerce · 6 subtopics
Unit 5 · Operations management · Production methods, lean production, quality, location, supply chains · 9 subtopics

Free lesson: Unit 1 · Introduction to business management

Sectors: Primary (raw materials), secondary (making), tertiary (services), quaternary (knowledge, R&D, IT)
Liability: Unlimited: owners can lose personal assets. Limited: they lose only what they invested
Stakeholders: Anyone with an interest in the business: internal (employees, managers) or external (customers, suppliers, community)

Legal form	Owners	Liability	Key trade-off
Sole trader	1	Unlimited	Full control vs. high personal risk
Partnership	2–20 (typically)	Usually unlimited	Shared skills vs. disagreements
Privately held company	Shareholders (private)	Limited	Protection vs. harder to raise large capital
Publicly held company	Shareholders (stock exchange)	Limited	Big capital vs. loss of control, public accounts

Vision = where the firm wants to be long term. Mission = its purpose now.
Strategic objectives are long term; tactical are medium term; operational are day to day.
Growth: internal (organic) or external (mergers, acquisitions, joint ventures, strategic alliances, franchising).

Worked example

A local bakery wants to open three more shops. Should it stay a sole trader? (short 4-mark style answer)

Define: a sole trader is owned by one person with unlimited liability.
Apply: three shops need much more finance, and the owner's house would be at risk if it fails.
Counter-point: staying a sole trader keeps full control and all profit.
Judge: changing to a privately held company makes sense, because limited liability protects the owner as risk grows.

Common mistakes

Saying “shareholders” when you mean “stakeholders”.
Giving theory with no link to the case study. Always use the company's name and facts.
Listing advantages without a final judgment in evaluation questions.
Mixing up horizontal and vertical integration.

Quick check

A firm that does software research and data analysis is in which sector?

Quaternary. The quaternary sector covers knowledge-based activities like R&D and IT.

Which type of business has unlimited liability?

Sole trader. A sole trader is legally the same as the owner, so personal assets are at risk.

Two car makers merge. This is…

Horizontal integration. Same industry, same stage of production = horizontal integration.

Which group is an internal stakeholder?

Employees. Employees work inside the business, so they are internal stakeholders.

Practise this in the app. Interactive diagrams, quizzes, exam-style papers with mark schemes and a personal study planner. Open Business Management in FortyFive →

FAQ

What topics are in IB Business Management?

IB Business Management (SL / HL) is organised into: Unit 1 · Introduction to business management; Unit 2 · Human resource management; Unit 3 · Finance and accounts; Unit 4 · Marketing; Unit 5 · Operations management.

Are these IB Business Management notes free?

Yes. The topic pages, key terms and the first lesson are free. The full lessons, interactive diagrams and exam-style practice papers with mark schemes are in the FortyFive app, which you can start for free.

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