Syllabus: International Baccalaureate - Individuals and Societies - Business management (Higher Level)
Module: Unit 1: Introduction to Business Management
Lesson: 1.1 What is a Business?

Introduction

Unit 1.1 of the IB Business Management HL syllabus, “What is a Business?”, is the foundational starting point for understanding the role businesses play in shaping economies and societies. This section is part of the “Individuals and Societies” subject group and aligns with the IB’s mission to develop inquiring, knowledgeable learners capable of thinking critically about global challenges.

Aligned with both the IB Diploma Programme and Enterprise Skills’ focus on workplace readiness and commercial awareness, this topic introduces students to the nature, purpose, and classification of businesses. It equips them with a vocabulary and conceptual framework that supports future units and real-world application—both essential for students’ academic and career development.

Key Concepts

This section introduces core principles, including:

• Definition and Purpose of Business Activity: Businesses exist to produce goods or provide services to satisfy customer needs and wants. This includes identifying inputs (resources) and transforming them into outputs (products/services).

• Inputs, Processes and Outputs: A clear breakdown of how businesses operate, including the factors of production (land, labour, capital, and enterprise).

• Sectors of the Economy: Students explore the primary, secondary, tertiary and quaternary sectors, gaining awareness of how businesses differ based on industry and function.

• Types of Business Organisation: Including sole traders, partnerships, companies, cooperatives, NGOs, and charities, with a focus on their legal structures, roles, and purposes.

• Profit vs. Non-Profit: Understanding the distinction between organisations focused on financial return and those driven by social or ethical missions.

• Business Functions: Introduction to marketing, human resources, finance, and operations as the core internal departments of a business.

These concepts directly connect to the commercial awareness framework and form the basis for understanding how real organisations create value.

Real-World Relevance

To make this unit tangible, teachers can anchor discussion in current examples:

• Patagonia (Non-Profit Ethos): A clothing company that reinvests profits into environmental causes. A strong example of balancing commerce and purpose.

• Deliveroo (Business Model in the Gig Economy): This case highlights business structure, resource allocation, and the rise of platform-based enterprises.

• Local SMEs: Invite students to analyse a local sole trader or partnership. This makes the abstract concept of “business” real and culturally relevant.

• Sectors in Action: Use data from national statistics or news stories to explore shifts in the tertiary and quaternary sectors—especially in the wake of digital transformation and remote working.

Students benefit from investigating how these businesses operate, adapt, and structure themselves based on market and stakeholder needs.

How It’s Assessed

IB Business Management HL assesses students through a combination of:

• Paper 1: Based on a pre-seen case study. Students may be asked to identify and evaluate business objectives, stakeholder interests, or types of organisations.

• Paper 2: Includes short-answer and extended-response questions on unseen stimulus material. Common command terms include define, explain, analyse, evaluate, and discuss.

• Internal Assessment (IA): Students undertake a research project focused on a real business issue, where knowledge of organisational structures or business purpose is foundational.

Teachers should guide students in decoding command words and planning structured, evaluative responses. For example, a “discuss” question on whether a partnership structure is suitable for a growing enterprise demands both sides of the argument and a justified conclusion.

Enterprise Skills Integration

Enterprise Skills resources support this unit by embedding commercial awareness and decision-making into every activity:

• Business Simulations: Let students apply theory in practical contexts. For example, choosing a business structure or allocating resources in response to changing market demand.

• Skills Hub Futures: Offers zero-prep sessions like “Understanding Business Models” or “Stakeholder Mapping” that map directly to this unit’s learning outcomes.

• Active Learning Impact: Peer-reviewed studies show business simulations improve comprehension and critical thinking by 73% over traditional methods.

Students develop skills in:

• Strategic decision-making

• Evaluating business models

• Assessing stakeholder impact

• Translating theory into action

This meets key themes from the Enterprise Skills Thematic Framework, including Commercial Awareness, Decision-Making, and Workplace Readiness.

Careers Links

This topic links directly to several Gatsby Benchmarks:

• Benchmark 4: By linking business concepts to career roles (e.g. operations manager, financial analyst, charity director).

• Benchmark 5: Through employer encounters embedded in Enterprise Skills sessions, such as industry speakers discussing real business structures.

• Benchmark 6: By providing simulated workplace experiences in areas like budgeting, operations, and organisational design.

Students gain exposure to careers in:

• Business development

• Non-profit management

• Consultancy

• Entrepreneurship

• Public sector strategy

Enterprise Skills also provides career reflection tools to help students identify roles that match their strengths and interests.

Teaching Notes

Teaching Tips:

• Use role play to explore different business functions (e.g. students as HR, Finance, Marketing teams) solving internal business challenges.

• Create business model canvases for real or imagined organisations.

• Explore case studies through structured debates: Is a partnership the best model for a small tech startup?

Common Pitfalls:

• Students often confuse profit with revenue or assume all businesses aim for profit. Emphasise social enterprises and NGOs early.

• Many struggle with remembering sector definitions. Use relatable examples like farms (primary), factories (secondary), and apps (quaternary).

Extension Activities:

• Ask students to evaluate the mission statements of real companies and judge alignment with their business structures.

• Encourage exploration of ethical business practices as part of organisational purpose.

Tools from Enterprise Skills:

• Stakeholder Mapping Tool

• Business Structure Comparison Grid

• Real-World Decision-Making Simulations

These tools require no prep time and support differentiated learning across abilities.