IB Diploma Programme Business Management SL, Unit 1 Introduction to business management (first assessment 2024). Unit 1 is common to SL and HL; SL is assessed by Paper 1 (the pre-released case study), Paper 2 (quantitative stimulus) and the internal business research project, with no Paper 3. This topic covers syllabus sections 1.1-1.6 in full: what a business is, types of business entities, business objectives, stakeholders, growth and evolution, and multinational companies. Unit 1 is common to SL and HL in full; the difference is depth of assessment, not content. The four course concepts — CHANGE, CREATIVITY, ETHICS and SUSTAINABILITY — run through every section and reappear as the research project's conceptual lens, and the worked examples below use one small shared firm, a bicycle-repair business, so that every number cross-checks.

Must-know for Unit 1:

A business 企业 (1.1) is an organisation that combines human, physical and financial RESOURCES to create goods or services that satisfy needs and wants. It is organised into four FUNCTIONS — human resources, finance and accounts, marketing, and operations — which are the four remaining units of the course. Businesses sit in four SECTORS: primary (extraction — farming, mining), secondary (manufacturing and construction), tertiary (services — retail, repair, transport) and quaternary (knowledge — research, software, consultancy); as economies develop, employment and output shift from primary toward tertiary and quaternary. An entrepreneur 企业家 takes the risk of starting a business; an INTRAPRENEUR does the same innovating inside an existing firm. Starting a business faces challenges (finance, lack of experience, competition, legal requirements) and opportunities (unmet demand, new technology, independence).

Types of business entity (1.2). The PRIVATE sector is owned by individuals and firms, the PUBLIC sector by the state. A sole trader 个体经营者 is one owner with unlimited liability — quick decisions, full control, all profit, but limited finance and continuity. A partnership 合伙企业 shares capital, skills and risk among two to twenty partners, still usually with unlimited liability and with the risk of disagreement. Incorporation creates a separate legal entity with LIMITED LIABILITY: a PRIVATELY HELD company sells shares privately, keeping control; a publicly held company 上市公司 sells shares on a stock exchange, raising large capital at the price of disclosure, takeover risk and shareholder pressure. A social enterprise 社会企业 pursues social or environmental aims through trading: for-profit social enterprises (private companies, public-sector companies and COOPERATIVES owned by their members) reinvest surplus in the mission; non-profit social enterprises (NGOs, charities) rely on grants and donations.

Worked example. The repair business starts as a sole trader with $20\,000$ of savings. Taking a partner who adds $20\,000$ doubles capital and shares the 40-hour week, but each partner is now liable for the other's decisions; a privately held company would protect both owners' homes, at the cost of registration and published accounts.

Objectives (1.3) form a hierarchy. The VISION statement says what the business aspires to become; the mission statement 使命宣言 says what it does, for whom and how. STRATEGIC objectives are long-term and set by senior management (market share, growth, profit, protecting shareholder value, ethical objectives); TACTICAL objectives are the shorter-term, departmental steps that deliver them. CORPORATE SOCIAL RESPONSIBILITY (CSR) makes ethical and environmental aims explicit objectives — a cost in the short run, a brand and recruitment asset over time; the concept of ETHICS asks whether an objective is right, not only profitable.

A stakeholder 利益相关者 (1.4) is any individual or group affected by the business. INTERNAL stakeholders are owners (shareholders), managers and employees; EXTERNAL stakeholders are customers, suppliers, financiers, government, competitors, pressure groups and the local community. Their interests CONFLICT: shareholders want dividends while employees want wages; customers want low prices while suppliers want high ones; the community wants quiet while the business wants to expand. Management resolves conflict by prioritising, negotiating, or redesigning the decision so that more groups gain.

Worked example. The repair business sets the strategic objective of 30% local market share in three years; the tactical objectives are opening Saturdays within six months and a customer-review target of 4.5 stars. The Saturday opening pleases customers and the owner but costs employees their weekend — a conflict settled with a rota and a weekend premium.

Growth and evolution (1.5). Economies of scale 规模经济 lower average cost as output rises — purchasing (bulk discounts), technical (bigger machines), managerial (specialists), financial (cheaper loans), marketing (spreading advertising). DISECONOMIES set in when size breeds coordination and communication problems, slower decisions and lower morale, so average cost rises again. Small firms keep flexibility, personal service and owner control; large firms gain market power, finance and resilience. INTERNAL (organic) growth expands from within — more branches, new products; EXTERNAL growth joins with others: MERGERS (two firms become one), ACQUISITIONS or TAKEOVERS (one buys another), JOINT VENTURES (a new jointly owned firm for a defined purpose), STRATEGIC ALLIANCES (cooperation without ownership) and FRANCHISING (selling the right to trade under the brand and model, for a fee and royalty).

Worked example. At $1\,000$ repairs a month total cost is $50\,000$, so average cost is 50. Opening a second workshop raises output to $2\,000$ repairs at total cost $80\,000$: average cost falls to 40 — an economy of scale of 10 per repair, worth $20\,000$ a month. If a third workshop lifted output to $3\,000$ at total cost $126\,000$, average cost would rise to 42: the diseconomy has begun, and the owner should franchise rather than expand directly.

A multinational company 跨国公司 (MNC) (1.6) operates in more than one country. For the HOST country the impacts are two-sided: jobs, investment, tax revenue, skills and technology transfer, more choice and competition — against repatriated profits, pressure on local firms, cultural and environmental costs, and influence over government policy. Evaluation weighs these for the specific host, the specific MNC and the time horizon; the concept SUSTAINABILITY frames the environmental side, CHANGE the competitive one.

• Business as a combiner of resources; the four functions and four sectors; entrepreneur vs intrapreneur; start-up challenges and opportunities (1.1).
• Private vs public sector; sole trader, partnership, privately and publicly held companies with liability and finance compared; for-profit and non-profit social enterprises incl. cooperatives (1.2).
• Vision and mission; strategic vs tactical objectives; CSR and ethical objectives (1.3).
• Internal and external stakeholders; conflicts and how management resolves them (1.4).
• Economies and diseconomies of scale with the 50 → 40 → 42 average-cost example; small vs large; internal vs external growth with the five external methods (1.5).
• MNC impacts on host countries, both sides, evaluated for the specific case (1.6).

Boundary notes: Paper 1 (pre-released context, unseen case) asks for definitions [2], explanations [4] and discussion [10]; Paper 2 is quantitative and may ask for the average-cost arithmetic above; the research project asks for a business issue analysed through a conceptual lens, so the 1.2 social-enterprise forms and the 1.4 stakeholder map are the research project's starting kit. All worked numbers are original.