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1 Introduction to business activity
2 Types of organisation
3 Organisational objectives
4 Stakeholders
5 External environment
6 Growth and evolution
7 Organisational planning tools
In this first introductory unit, business management is set in context: students learn to analyse organizations’ internal environment (for example, stakeholders, strategic objectives and CSR) and external environment.
This chapter explains what a business is and what businesses do. It outlines the main business functions (or departments) and explains the differences between primary, secondary and tertiary sectors of industry.
analyses the impact on the business activity of changes in economic structure.
covers traditional business areas such as the different types of organization and the idea of economies of scale, but it also includes more contemporary topics such as the features of social enterprises, the nature of business activity in the quaternary sector and the distinction between entrepreneurship and intrapreneurship.
encompasses fundamental strategy models such as social, technological, economic, environmental, political, legal and ethical (STEEPLE) analysis as well as the strengths, weaknesses, opportunities and threats (SWOT) analysis;
overview of business management both as a topic of study (what the subject covers overall) and as a professional practice (what business managers do)
considers a range of international examples, especially in relation to issues of globalization, and to address businesses’ ethical, social or environmental obligations.

1.1
- understand what business activity involves
● identify inputs, outputs and processes of a business
● identify and explain the main business functions
● identify and explain the main sectors of industry
●  analyse the impact on
business activity of changes in economic structure.
1.2
- Distinction between the private and the public sectors
-  (commercial)
organizations:
• sole traders
• partnerships
• companies/corporations

for-profit social enterprises:
• cooperatives
• microfinance providers
• public-private partnerships
(PPP)

non-profit social enterprises:
• non-governmental
organizations (NGOs)
• charities

1.3 - Definitions and roles of vision statement and mission statement
- Explain aims, objectives, strategies and tactics, and their relationships
- Explain why organisations to change objectives and innovate in response to changes in internal and external environments
- Describe ethical objectives and corporate social responsibility. (csr)
- reasons why organizations set ethical objectives and the impact of implementing them
- The evolving role and nature of CSR
- SWOT analysis of a given organization
- Ansoff matrix for different growth strategies of a given organization
1.4
- The interests of internal stakeholders
- The interests of external stakeholders
- Possible areas of mutual benefit and conflict between stakeholders’ interests

1.5

Steeple analysis of a given organizations
Consequences of a change in any of the STEEPLE factors for a business’s objectives and strategy

1.6
The difference between internal and external growth
The following external growth methods:
mergers and acquisitions (M&As) and takeovers
joint ventures
strategic alliances
franchising
Economies and diseconomies of scale
The merits of small versus large organizations
The role and impact of globalization on the growth and evolution of businesses
Reasons for the growth of multinational companies (MNCs)
The impact of MNCs on the host countries
1.7
The following planning tools in a given situation:
fishbone diagram
decision tree
force field analysis
Gantt chart
The value to an organization of these planning tools

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Chapters include:
Sources of Finance
Costs and Revenues
Working Capital
Break Even Analysis
Investment Appraisal
Budgeting
Financial Accounts
Ratio Analysis

Brief summary of each chapter:

Sources of finance
To make money, one needs money. The production process is also in need of finance for the entrepreneur to procure the needed capital, labor or land in order to engage the production process.

Internal Finance
Organic sources of finance are a means of raising resources from within the business organization
These internal sources of finance can be from the sale of goods and services obtained through the production process, thereby raising the required liquidity.

External Finance
External sources of finance are means by which firms seek finance that are external to the business organization.
External Sources of finance may be either short-term or long term.
Grants: Grants are financial gifts from the government to support business activity.  They are typically one-time payments, and do not need to be repaid.
Debentures: Medium- to long-term debt instrument used by large companies to borrow money, at a fixed rate of interest.
Loans: Short term and long term
Crowdfunding: Funding a project or venture by raising small amounts of money from a large number of people, typically via the Internet

Costs and Revenues
Types of costs
FIxed costs (Rent,Salaries,Machinery)
Variable Costs(Electricity, Raw materials)

Revenue
Revenue is the total income from the sales of the products, without subtracting costs.

Working Capital
Current assets / Current liabilities = Working capital ratio
Assets- current asset is any asset which can reasonably be expected to be sold, consumed, or exhausted through the normal operations of a business
Liabilities- amounts due to be paid to creditors within twelve months.
Cash Flow Forecast- Predict future receipts and payments based on historical trends. The forecast thereafter is a month-by-month estimation of cash flow.
Format of Cash Flow-
Receipts  (Sales)-  all inflows the business organization receives
Payments- all the outflows from the business organization.
Net Cash Flow- Total Receipts – Total payments = Net Cash Flow
Opening Balance- value that has been carried forward from the prior period. This can be a positive or negative number.
Closing Balance- The difference between the Net Cash Flow and the Opening Balance is the Closing Balance calculated as follows: Sum of Net Cash Flow and Opening Balance = Closing Balance

Break-Even Analysis:

Provides clear visual representation of costs and revenue for business to analyse and plan the future but makes assumptions like there will be no change in prices or market conditions.
Contribution: Price - Variable Cost
Break Even Output: TR=TC (no profit/ no loss)
Margin of Safety: Level of sales - Break even point. Positive = Profit. Negative = Loss.
Method to find minimum sales to make profit.

Investment Appraisal:
Investment appraisal is the analysis done to consider the profitability of an investment over the life of an asset alongside considerations of affordability and strategic fit.
Each investment has risk - degree of risk associated with return on investment.
Creative entrepreneurs try to minimize risk and make projects feasible by combining elements of the production process.
Banks and lenders wish to see successful investment appraisals.
The practicality and time repay loan taken for investment is known as payback period which informs one of the investment's profitability and liquidity but only keeps time in mind and not the return of the investment.
Average Rate of Return (ARR): Calculates minimum requirements/ gains of investors
Average annual profit/ Initial investment = ARR

Budgeting:
Budget used to plan and control businesses, their plans and resources.
Indicates spending plans and ensures enough is there to spend the amount required.
Anticipated revenue and costs must be calculated based on history and plans to help budget (security).
Based on the fiscal year.
Types of budgets: flexible (based on fluctuating costs), static (specific to a fiscal year), objective (based on goals),  operating (allocates resources), capital (manages assets and liquidity), zero-based (need based cash provided).
Variance Analysis: Budget Variance = Actual Fixed Overhead cost – Budgeted Fixed Overhead Costs
Favourable variance : Amount spent is less than budgeted amount - allocated resources efficiently and well-planned steps.
Unfavorable variance: Amount exceeds budgeted accounts - hampers growth or goals of business and creates shortage while working capital becomes even more limited.

Ratios:
Profitability ratios
Liquidity ratios
Efficiency ratios
Investment appraisal

Capacity utilization and productivity

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Chapter 4 : Marketing

For the IB Student, Marketing is the most identifiable function of business and also what most students focus on when completing the IB Business and Management Internal Assessment.

But what exactly is Marketing. If we can agree that gaining and retaining customers are the main reason why businesses engage themselves in production, then how businesses meet the needs and wants of potential customers is the role of marketing.

There are many definitions for marketing, but most will infer that it is about identifying needs and generating wants profitably by creating, communicating and delivering value to customers. It is also about managing customer relationships to the benefit of the business and stakeholders.

Subtopics:

✴ The Role of Marketing

✴ Marketing Planning (Introduction to the four Ps)

✴ Sales Forecasting

✴ Market Research

✴ The four Ps (Product, Price, Promotion, Place)

✴ The Extended Marketing Mix of Seven P's

✴ International Marketing

✴ E-Commerce

https://docs.google.com/document/d/10lb8UzSQiyRGUXE4R_OdS5AxgKmZQwKjk3jbAIPHCms/edit

https://www.youtube.com/watch?v=oMZMrnNWY-A  - video on marketing mix

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The different methods of production, including an examination of capital and labour intensive production processes.

The different costs that are incurred by firms, the revenues accrued and the contribution made towards fixed costs and profits on a per product basis.

When a firm may expect to break-even and how much of a margin of safety is built into current production targets, as well as profit targets.

The importance of quality and the process of quality assurance, lean production methods and Kaizen processes

The quantitative and qualitative factors that influence location decisions, including the impact of globalisation on production centres.

Types, costs, benefits and goals of innovation and research & development, and how innovations can be protected through intellectual property rights

Stock control processes in production planning, with emphasis on capacity utilisation, outsourcing and subcontracting and make-or-buy decisions.

The use of network analysis (or critical path analysis) in planning, designing and implementing project management.

From the IB syllabus: Unit 5.1
Operations management and its relationship with other business functions
Operations management in organizations producing goods and/or services.

• Operations management strategies and practices for ecological, social
(human resources) and economic sustainability.

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We think that unit 2 - the chapter regarding Human Resources - in the IB Business Management textbook, encompasses giving students an overview on the organisation culture, the method in which an organisation functions, the internal department that works to ensure employee satisfaction, and organisation reactions to certain situations. It also highlights and defines organisational processes such as training, selecting, appraisal, and redundancy, that relate to the employee’s role in the organisation.

Content taken from: Cambridge IB Business Management textbook

http://abdurs.yolasite.com/resources/b%26m%20ebook.pdf

2.1 Human Resource planning

2.2 organisational structure

2.3 communication

2.4 leadership and management

2.5 motivation

2.6 organisational and corporate cultures

2.7 employer and employee relations

2.8 crisis management and contingency planning

2.1:

OBJECTIVES

Constraints and opportunities of demographic change

Significance of labour mobility

Workforce planning process

Strategies for developing future Human Resource’s

Method of recruitment, training, appraisal and redundancy

Reasons for consequences of changing workforce

Legal employment rights

Organisation theories

2.2:

OBJECTIVES

Main features of an organisational chart; levels of hierarchy, chain of command, span of control

Organisation of employees

Delegation and accountability

Bureaucracy

Centralised and decentralised structures

Forms and structures of an organisation

Outsourcing of Human Resource’s

Organisation structure theories

2.3:

OBJECTIVES

Effective communication and feedback

Different communication media

Barriers to communication

Informal communication

Importance of technology in communication

Application of different communication networks

2.4:

OBJECTIVES

Different leadership styles

Effectiveness of leadership styles

Leadership theories

Difference between leadership and management

Key functions of management

Management theories

2.5:

OBJECTIVES

What is motivation

Intrinsic and extrinsic needs

Motivational theories

Forms of financial motivation

Non-financial motivation techniques

Content and process theories

2.6:

OBJECTIVES

Influences on organisational and corporate culture

Different types of culture and their effect on motivation

Consequences of culture clashes between two organisations

2.7:

OBJECTIVES

Dynamic relations between employees, employers and their representatives

Methods used by employees to pursue their aims

Methods used by employers to pressurise employees

Sources of conflict in the workplace

Conflict resolution

2.8:

OBJECTIVES

Difference between crisis management and contingency management

Evaluation of contingency planning

Possibility of planning a crisis