Paper 2 - Business IB HL Full Study
Guide Latest Updated
business - ANS-decision making org that uses input to make output to meet needs and
desires of customers
business sectors - ANS-primary - raw materials
secondary - manufacturing
tertiary - service
quaternary - knowledge based
sectoral change - ANS-shift in national output and employment distributed to each
sector
entrepreneur - ANS-individual who plans, organises, manages, an org while taking on
financial risks
- rewarded with profit, failure incurs personal cost
intrapreneur - ANS-act of being an entrepreneur but as an employee within an org
- rewarded with pay, failure is absorbed by org
steps in starting a business - ANS-write business plan
obtain start-up capital
obtain business registration
open business bank account
marketing
private sector - ANS-controlled by individuals, focus/aim = profit
public sector - ANS-controlled by gov, focus/aim = social change
commercial businesses - ANS-for-profit businesses in private sector
social entreprise - ANS-business with social objectives in public sector
unincorporated - ANS-owner = business, no legal distinction between org and owner -
full responsibility
incorporated - ANS-owner & business = separate entities - distributed responsibility
sole trader - ANS-individual who runs and owns personal business
,+ few legal formalities, direct profit taking, autonomy, personalised service with
customer
- unlimited liability, limited source of finance, low economies of scale
partnership - ANS-owned by 2+ people, sleeping partner = pool money but don't make
decisions
+ division of labor, financial strength, cost-effective
- unlimited liability, prolonged decision making, lack harmony, profit is shared
companies / joint - stock companies - ANS-owned by shareholders
2 types: private limited or public limited
2 documents required in companies - ANS-memorandum of association - fundamental
details of org
articles of association / incorporation - internal regulations of org
private limited companies - ANS-sell shares to family and friends - conservative
+ limited liability, shares sold privately = more control, better decision making, tax
benefits
- profit is shared, finance published publically but can't sell shares to public - limited
source of finance
public limited companies - ANS-sell shares to the general public via stock exchange
+ shares sold to public, limited liability, possibility of market dominance, tax benefits
- complex due to bureaucratic nature, accounts are published publically, loss of control,
compliance costs
flotation - ANS-occurs when org first sells shares to its shareholders
IPO - ANS-initial public offering - when org acquires the right to sell stocks in stock
market
for-profit social entreprise - ANS-revenue-generating orgs with social objectives
3 types: cooperatives, microfinance providers, public-private partnerships
cooperatives - ANS-owned & run by its members, user of service = owner
, + employees have decision making power, high incentive to work, social benefits, public
support
- slow decision making, limited finance
PPP (private-public partnership) - ANS-gov & private sector work to jointly provide
goods or services
microfinance providers - ANS-financial service aimed at low income groups to stop
poverty cycle
+ social benefit, public support, job creation, social well being incentive
- immorality (providers benefit from the poor), limited finance and eligibility
non-profit social entreprise - ANS-run in commercial-like manner but without profit being
the main goal
2 types: NGOs & charity
+ social benefit, public support, tax exemption, limited liability
- bureaucracy, charity fraud, lack of profit motive thus low source of finance
vision statement - ANS-org's aspirations in distant future - how they want to be
perceived
mission statement - ANS-declaration of org's underlying purpose of existence and its
core values
types of objectives - ANS-strategic - senior leadership, involves whole org
tactical - middle management, involves departments
operational - lower management, involves teams
factors that change org's objectives - ANS-size & type of org, corporate culture, private
vs public sector, age of business, finance, risk profile, crisis management, technology
CSR (corporate social responsibility) - ANS-attempt to act morally and ethically towards
stakeholders & accept moral obligations to society and not just investors
+ improve corporate image, customer loyalty, staff motivation and morale
- compliance costs, low profit, shareholder conflict
SWOT analysis - ANS-strengths, weaknesses, opportunities, threats
Guide Latest Updated
business - ANS-decision making org that uses input to make output to meet needs and
desires of customers
business sectors - ANS-primary - raw materials
secondary - manufacturing
tertiary - service
quaternary - knowledge based
sectoral change - ANS-shift in national output and employment distributed to each
sector
entrepreneur - ANS-individual who plans, organises, manages, an org while taking on
financial risks
- rewarded with profit, failure incurs personal cost
intrapreneur - ANS-act of being an entrepreneur but as an employee within an org
- rewarded with pay, failure is absorbed by org
steps in starting a business - ANS-write business plan
obtain start-up capital
obtain business registration
open business bank account
marketing
private sector - ANS-controlled by individuals, focus/aim = profit
public sector - ANS-controlled by gov, focus/aim = social change
commercial businesses - ANS-for-profit businesses in private sector
social entreprise - ANS-business with social objectives in public sector
unincorporated - ANS-owner = business, no legal distinction between org and owner -
full responsibility
incorporated - ANS-owner & business = separate entities - distributed responsibility
sole trader - ANS-individual who runs and owns personal business
,+ few legal formalities, direct profit taking, autonomy, personalised service with
customer
- unlimited liability, limited source of finance, low economies of scale
partnership - ANS-owned by 2+ people, sleeping partner = pool money but don't make
decisions
+ division of labor, financial strength, cost-effective
- unlimited liability, prolonged decision making, lack harmony, profit is shared
companies / joint - stock companies - ANS-owned by shareholders
2 types: private limited or public limited
2 documents required in companies - ANS-memorandum of association - fundamental
details of org
articles of association / incorporation - internal regulations of org
private limited companies - ANS-sell shares to family and friends - conservative
+ limited liability, shares sold privately = more control, better decision making, tax
benefits
- profit is shared, finance published publically but can't sell shares to public - limited
source of finance
public limited companies - ANS-sell shares to the general public via stock exchange
+ shares sold to public, limited liability, possibility of market dominance, tax benefits
- complex due to bureaucratic nature, accounts are published publically, loss of control,
compliance costs
flotation - ANS-occurs when org first sells shares to its shareholders
IPO - ANS-initial public offering - when org acquires the right to sell stocks in stock
market
for-profit social entreprise - ANS-revenue-generating orgs with social objectives
3 types: cooperatives, microfinance providers, public-private partnerships
cooperatives - ANS-owned & run by its members, user of service = owner
, + employees have decision making power, high incentive to work, social benefits, public
support
- slow decision making, limited finance
PPP (private-public partnership) - ANS-gov & private sector work to jointly provide
goods or services
microfinance providers - ANS-financial service aimed at low income groups to stop
poverty cycle
+ social benefit, public support, job creation, social well being incentive
- immorality (providers benefit from the poor), limited finance and eligibility
non-profit social entreprise - ANS-run in commercial-like manner but without profit being
the main goal
2 types: NGOs & charity
+ social benefit, public support, tax exemption, limited liability
- bureaucracy, charity fraud, lack of profit motive thus low source of finance
vision statement - ANS-org's aspirations in distant future - how they want to be
perceived
mission statement - ANS-declaration of org's underlying purpose of existence and its
core values
types of objectives - ANS-strategic - senior leadership, involves whole org
tactical - middle management, involves departments
operational - lower management, involves teams
factors that change org's objectives - ANS-size & type of org, corporate culture, private
vs public sector, age of business, finance, risk profile, crisis management, technology
CSR (corporate social responsibility) - ANS-attempt to act morally and ethically towards
stakeholders & accept moral obligations to society and not just investors
+ improve corporate image, customer loyalty, staff motivation and morale
- compliance costs, low profit, shareholder conflict
SWOT analysis - ANS-strengths, weaknesses, opportunities, threats
