Unit 1: Business Organization and Environment

1.1 Introduction to business management

• The role of businesses in combining human, physical and financial resources to create goods and services

• The main business functions and their roles: human resources, finance and accounts, marketing, operations

• Primary, secondary, tertiary and quaternary sectors

• The nature of business activity in each sector and the impact of sectoral change on business activity

• The role of entrepreneurship (and entrepreneur) and intrapreneurship (and intrapreneur) in overall business activity

• Reasons for starting up a business or an enterprise

• Common steps in the process of starting up a business or an enterprise

• Problems that a new business or enterprise may face

• The elements of a business plan

1.2 Types of organizations

• Distinction between the private and the public sectors

• The main features of the following types of for-profit (commercial) organizations: sole traders, partnerships, companies/corporations

• The main features of the following types of for-profit social enterprises: cooperatives, microfinance providers, public-private partnerships (PPP)

• The main features of the following types of non-profit social enterprises: non-governmental organizations (NGOs), charities

1.3 Organizational objectives

• Vision statement and mission statement

• Aims, objectives, strategies and tactics, and their relationships

• The need for organizations to change objectives and innovate in response to changes in internal and external environments

• Ethical objectives and corporate social responsibility (CSR)

• The 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 Stakeholders

• The interests of internal stakeholders

• The interests of external stakeholders

• Possible areas of mutual benefit and conflict between stakeholders’ interests

1.5 External environment

• STEEPLE analysis of a given organization

• Consequences of a change in any of the STEEPLE factors for a business’s objectives and strategy

1.6 Growth and evolution

• Economies and diseconomies of scale

• The merits of small versus large organizations

• The difference between internal and external growth

• The following external growth methods: mergers and acquisitions (M&As) and takeovers, joint ventures, strategic alliances, franchising

• 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 Organizational planning tools (HL only)

• 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