IB Business Management SL and HL

Learn 200 IB Business Management words for explaining case evidence, interpreting figures and justifying a recommendation. Each entry gives a clear meaning and an example you can adapt.

IB Business Management Paper 1 lasts 90 minutes at SL and HL. Paper 2 lasts 90 minutes at SL and 105 minutes at HL. HL also takes a 75-minute Paper 3 on a social enterprise, including a 17-mark recommendation task.

200 words and examples
Exam requirements and worked examples
Fencing Method
Practice exercises

200 essay vocabulary words and examples

Finance, operations and business performance

liquidity — ability to meet short-term financial obligations as they come due. delayed customer payments may reduce liquidity.
cash flow — movement of cash into and out of a business over time. forecast cash flow before committing to expansion.
working capital — current assets minus current liabilities. inventory and receivables tie up working capital.
gross profit — sales revenue minus cost of sales. lower unit production costs may improve gross profit.
profit margin — a chosen profit measure expressed as a share of sales revenue. state which profit margin the data show.
contribution — revenue minus variable costs, expressed per unit or in total. higher unit contribution helps cover fixed costs.
break-even — the point where total revenue equals total costs. compare forecast demand with break-even output.
margin of safety — how far actual or expected sales exceed break-even sales. a small margin of safety makes a fall in demand more consequential.
capacity utilization — actual output as a proportion of available capacity. low capacity utilization can leave costly machinery idle.
bottleneck — a constraint that limits throughput. packing speed is the bottleneck on the production line.
economies of scale — reductions in average cost associated with increasing scale. bulk purchasing may create economies of scale.
quality assurance — processes designed to prevent defects and maintain standards. training can improve quality assurance before inspection.
contingency plan — a plan prepared for a possible disruption or alternative outcome. the contingency plan names a backup supplier.
outsourcing — contracting an activity to an outside provider. outsourcing can reduce fixed commitments while weakening direct control.
inventory — materials or goods held for production or sale. extra inventory can cushion a supplier delay.
lead time — elapsed time from initiating a process or order to its completion or delivery. a long lead time can make a stockout harder to resolve.
benchmarking — comparing practices or performance with a reference point. benchmarking can reveal a gap in delivery reliability.
variance — a difference between an actual and planned figure in budgeting. investigate the unfavorable cost variance.
payback period — time required for cash inflows to recover an initial outlay. a short payback period may matter when cash is tight.
sensitivity analysis — testing how results change when an assumption changes. use sensitivity analysis to test a lower sales forecast.

Strategy, people and social enterprise

social enterprise — an organization trading to pursue a social or environmental purpose. judge how expansion affects the social enterprise’s mission.
mission drift — a shift away from an organization’s original purpose. rapid expansion may create mission drift.
stakeholder — a person or group affected by or able to affect an organization. compare the likely impact on workers and customers as stakeholders.
trade-off — a gain in one objective that involves a cost to another. explain the trade-off between reach and service quality.
differentiation — making an offering distinct in ways valued by customers. differentiation may justify a higher price.
segmentation — dividing a market into groups with shared characteristics or needs. segmentation identifies customers who value flexible delivery.
positioning — the place an offering is intended to occupy in customers’ minds. positioning depends on a consistent promise.
customer retention — the ability to keep existing customers over time. more reliable support may improve customer retention.
competitive advantage — an ability or resource that helps a business outperform rivals. trained staff can support a competitive advantage.
delegation — assigning responsibility or authority to others while retaining overall accountability. delegation allows local managers to resolve problems quickly.
centralization — concentrating decision authority near the top of an organization. centralization can make standards more consistent.
span of control — the number of employees reporting directly to a manager. a wider span of control may reduce time for coaching.
staff turnover — the rate at which employees leave an organization over a period. high staff turnover can raise training costs.
productivity — output produced per unit of input. measure productivity using output per paid hour.
organizational culture — shared assumptions and practices that shape how people work. the existing organizational culture may resist a new incentive.
change management — planning and supporting transition from current practices to new ones. change management includes training and feedback.
pilot — a small trial before wider implementation. a pilot tests the delivery model in one area.
scalability — ability to expand output or reach while sustaining performance. scalability depends on training and supplier capacity.
impact measurement — tracking evidence of outcomes that matter to an organization’s purpose. impact measurement can separate enrollment from completion.
key performance indicator — a measure used to track progress toward a defined objective. choose a key performance indicator tied to service reliability.

Business decisions, performance and strategy

revenue — income from sales before deducting costs in the usual trading context. higher sales volume can increase revenue.
scarcity — limited resources in relation to wants. scarcity requires a choice.
margin — a measure of profit or contribution relative to sales, depending on the measure. compare operating profit margins.
opportunity cost — the value of the best alternative forgone. evaluate the opportunity cost of a subsidy.
elasticity — responsiveness of one variable to a change in another. price elasticity affects the fall in quantity demanded.
inelastic — relatively unresponsive to a change in a specified variable. inelastic demand for a necessary input.
gearing — the extent to which a business is financed through debt under a stated measure. higher gearing can increase exposure to interest costs.
equilibrium — a position where opposing forces balance in the model. a new market equilibrium.
utilisation — the proportion of available capacity being used. capacity utilisation may rise with demand.
surplus — an excess or a gain beyond a reference point, depending on context. a fall in consumer surplus.
shortage — an excess of quantity demanded over quantity supplied at a given price. a binding ceiling can create a shortage.
marginal — relating to the next unit or a small additional change. compare marginal social cost with marginal social benefit.
externality — a cost or benefit affecting a third party outside the transaction. congestion can create a negative externality.
incidence — the distribution of an economic burden or benefit. the incidence of a tax depends on relative elasticities.
subsidy — financial assistance that can change incentives or costs. a subsidy reduces the effective cost of an activity.
retention — keeping customers or employees over time. training may improve employee retention.
rationing — allocating a limited quantity among competing users. price rationing allocates available supply.
diversification — entering new product and market areas in the Ansoff framework. diversification increases the demands on management.
implementation — putting a decision or strategy into practice. implementation depends on staffing and systems.
contingency — an alternative arrangement prepared for a possible disruption. a contingency plan covers supplier delays.

Market structure and policy mechanisms

deadweight loss — a loss of total surplus relative to an efficient allocation. identify the deadweight loss from underproduction.
price ceiling — a legal maximum price. a binding price ceiling can create excess demand.
price floor — a legal minimum price. a binding price floor can create excess supply.
tradable permit — an authorisation that can be exchanged and allows a specified activity. tradable permits place a price on emissions.
internalise — bring an external cost or benefit into a decision-maker’s incentives. a charge may internalise an external cost.
excludability — the ability to prevent people from using a good. excludability affects how a service can be financed.
rivalry — the extent to which one person’s use reduces what others can use. rivalry increases when a road is congested.
free rider — someone who benefits without contributing to the cost. a free rider may still benefit from street lighting.
moral hazard — a change in behaviour after protection alters the cost of taking risks. insurance can create moral hazard.
adverse selection — a distortion in who participates when one side has hidden information. adverse selection can change the mix of people insured.
sunk cost — a cost already incurred that cannot be recovered. sunk costs may deter market entry.
monopoly — a market with a single seller, or dominant market power in relevant usage. evaluate the consequences of monopoly power.
normal profit — the minimum return needed to keep resources in their present use. normal profit is included in economic cost.
supernormal profit — profit above normal profit. barriers can help sustain supernormal profit.
price discrimination — charging different prices for comparable units when differences are not explained by cost. price discrimination requires some ability to separate customers.
derived demand — demand for an input arising from demand for its output. demand for labour is derived from demand for its product.
marginal revenue — the addition to total revenue from selling an extra unit. a firm compares marginal revenue with marginal cost.
transfer payment — a payment made without receiving current goods or services in return. a transfer payment can change disposable income.
trade creation — a shift to a lower-cost partner producer following trade integration. trade creation can lower production costs.
trade diversion — a shift to a higher-cost partner producer because of preferential treatment. trade diversion can offset gains from integration.

Taking a position

claim — a statement you want the reader to accept. make a claim.
stance — your position on a question. take a clear stance.
thesis — the central position or interpretation your response develops. support the thesis.
premise — an idea the argument starts from. question the premise.
assumption — something treated as true without being established. test the assumption.
assert — state a position firmly. assert that access matters.
argue — give reasons in support of a position. argue for a trial.
maintain — continue to hold or defend a view. maintain that the policy is fair.
contend — put forward a position that can be challenged. contend that the proposal is workable.
justify — give sufficient reasons for a decision or judgement. justify the expense.
advocate — publicly support an action or change. advocate for reform.
defend — answer criticism of a view or choice. defend a decision.
qualify — limit a statement so it applies only where warranted. qualify the conclusion.
concede — acknowledge a valid point made by the other side. concede that costs may rise.
rebut — answer an opposing claim with reasoning or evidence. rebut the objection.
counterargument — a reasoned objection to a position. address a counterargument.
reservation — a concern that makes agreement incomplete. express a reservation.
distinguish — show what makes two things different. distinguish cost from value.
criteria — standards used to judge something. agree on the criteria.
verdict — a final judgement reached after consideration. reach a verdict.

Using evidence and reasoning

evidence — information that helps establish a claim. draw on evidence.
example — a specific case that makes a general point clearer. give a concrete example.
illustrate — make an idea clearer through a case or detail. illustrate the difficulty.
demonstrate — show how or why something is true. demonstrate a connection.
substantiate — support a claim with convincing information. substantiate the allegation.
corroborate — provide independent support for an existing account. corroborate the witness’s account.
infer — draw a conclusion from available clues. infer a motive from the wording.
imply — suggest a meaning without saying it directly. imply that change is possible.
interpret — explain what something means in context. interpret a figure in context.
analyse — examine how parts work together. analyse the writer’s choices.
evaluate — judge the strength, quality or value of something. evaluate the proposal.
plausible — reasonable enough to believe given what is known. a plausible explanation.
credible — worthy of belief or trust. a credible source.
relevant — directly connected to the issue being considered. relevant to the question.
sufficient — enough for the purpose or conclusion at hand. sufficient for a limited trial.
representative — typical enough to reflect a larger group. a representative sample.
anecdote — a brief account of a particular incident. open with an anecdote.
limitation — something that restricts what a method or claim can establish. acknowledge a limitation.
contradict — state or show something incompatible with another claim. contradict the earlier finding.
synthesise — combine ideas from separate sources into a new account. synthesise competing accounts.

Connecting ideas

whereas — introduces a clause that contrasts with another. whereas the first option costs less.
although — introduces a fact that qualifies the main statement. although demand may rise.
however — signals a contrast or change in direction. however, costs remain uncertain.
nevertheless — signals that a point still holds despite a difficulty. nevertheless, the trial could go ahead.
conversely — introduces a contrasting relationship in the reverse direction. conversely, lower demand can free capacity.
similarly — points out a meaningful likeness. similarly, smaller groups need space.
likewise — shows that a similar point applies elsewhere. likewise, evening users need lighting.
consequently — introduces a result of what came before. consequently, the queue grew.
therefore — introduces a conclusion or result that follows. therefore, a trial is justified.
furthermore — adds a supporting point. furthermore, the existing room is free.
specifically — narrows the discussion to a precise detail. specifically, the plan would add two sessions.
instead — signals a replacement or different choice. instead, use the current building.
alternatively — introduces another option. alternatively, change the timetable.
otherwise — indicates what happens under different conditions. book early, otherwise places may fill.
provided — introduces a condition when used with a following clause. provided that staffing is adequate.
despite — introduces something that fails to prevent the main outcome. despite the delay.
unlike — marks a difference between two things. unlike the previous scheme.
respectively — matches items with values in the same stated order. costs were $5 and $8, respectively.
overall — signals a judgement about the whole picture. overall, the benefits are modest.
ultimately — identifies what matters after other factors are considered. ultimately, the decision depends on demand.

Explaining cause and effect

cause — produce or bring about an outcome. cause avoidable delays.
contribute — play a part in bringing about an outcome. contribute to overcrowding.
trigger — set a process or reaction in motion. trigger a review.
accelerate — make a process happen faster. accelerate the transition.
intensify — make something stronger or more severe. intensify competition.
exacerbate — make an existing problem worse. exacerbate existing inequalities.
mitigate — reduce the severity or harmful effect of something. mitigate the harm.
prevent — stop something from happening. prevent further damage.
deter — discourage someone from taking an action. deter people from taking risks.
enable — make an action possible. enable students to attend.
facilitate — make an action or process easier. facilitate access to training.
reinforce — strengthen an effect, belief or behaviour. reinforce an existing pattern.
undermine — weaken something, often gradually. undermine public trust.
sustain — keep something going over time. sustain the improvement.
displace — push something or someone out of an existing place or role. displace smaller operators.
redistribute — change how something is shared. redistribute public funds.
consequence — an outcome that follows an action or event. an unintended consequence.
mechanism — the process through which an effect occurs. identify the mechanism.
correlation — a pattern in which two things vary together. observe a correlation.
constraint — a condition that limits what can be done. work within a budget constraint.

Comparing options and weighing costs

benefit — a useful or favourable effect. a long-term benefit.
drawback — a feature that makes an option less attractive. a potential drawback.
monopsony — a market with a single buyer, or dominant buyer power in relevant usage. a firm with monopsony power can influence wages.
priority — something that deserves attention before competing needs. give priority to public health.
alternative — another way of achieving a goal. offer an alternative to driving.
feasible — possible to carry out with the available resources. a feasible timetable.
viable — capable of working successfully over time. a viable business model.
practical — suited to what can actually be done. a practical solution.
effective — able to produce the intended result. an effective response to congestion.
efficient — able to achieve a result with relatively little waste. efficient use of limited funds.
affordable — within the means of the people expected to pay. affordable childcare.
accessible — easy or possible for the intended users to reach or use. accessible public transport.
equitable — fair in light of differing needs and barriers. equitable access to training.
proportionate — appropriate in scale to the problem. a proportionate penalty.
substantial — large enough to matter. a substantial reduction in waste.
governance — how institutions make and carry out decisions. local governance shapes enforcement.
outweigh — be more important than something on the other side. the benefits outweigh the costs.
offset — counterbalance part or all of an effect. offset part of the expense.
allocate — assign money, time or resources to a purpose. allocate funds to local schools.
compromise — an arrangement that meets competing needs only in part. reach a workable compromise.

Education and work

curriculum — the planned content and goals of a programme of study. revise the curriculum.
literacy — ability to read and write, or competence in a named area. teach financial literacy.
numeracy — ability to understand and use numbers. build basic numeracy.
attainment — the level a learner has reached. raise educational attainment.
compulsory — required by a rule or law. compulsory schooling.
vocational — concerned with skills for a particular occupation. vocational training.
apprenticeship — training that combines work with learning a trade. complete an apprenticeship.
credential — a qualification used to show competence or eligibility. gain a recognised credential.
transferable — usable in another situation or role. develop transferable skills.
employability — the skills and qualities that help someone secure and retain work. improve graduate employability.
oligopoly — a market dominated by a few firms. strategic interaction in an oligopoly.
automation — the use of systems to perform tasks with reduced manual input. invest in automation.
flexibility — ability to adjust schedules, methods or arrangements. offer flexibility in working hours.
incentive — something that encourages a particular action. provide an incentive to train.
jurisdiction — the area or matters over which an authority has legal power. within the regulator’s jurisdiction.
turnover — the rate at which people leave and are replaced in a workforce. reduce staff turnover.
workload — the amount of work someone is expected to do. manage a heavy workload.
specialise — concentrate on one area of study or work. specialise in engineering.
reskill — learn different skills for a new kind of work. reskill for a different role.
collaborate — work jointly towards a shared result. collaborate on a project.

Exam requirements and worked examples

Find the extended response on each paper

Paper 1 combines a pre-released context statement with an unseen case study. Section A contains compulsory structured questions. In Section B, choose one of two 10-mark extended responses. Paper 2 gives unseen material with a quantitative focus. Its Section B options combine shorter questions with an extended response. Read the figures together with the written material so that your analysis addresses the situation the organization faces.

Paper 3 is HL only. It is a compulsory case about a social enterprise with three tasks worth 2, 6 and 17 marks. The longest task asks for a plan for meeting an identified human need. Work out which resources support each step and how the plan can remain viable. The guide also describes a separately assessed business research project. Its requirements differ from those of the timed papers.

Papers 1 and 2 each count for 35% at SL, with the research project accounting for 30%. At HL the papers count for 25%, 30% and 25% respectively, with the research project accounting for 20%.

Official exam and example sources

Worked case about a social enterprise

Imagine a social enterprise that refurbishes laptops and trains young people in device repair. A partner offers access to a second training site, but the enterprise has one experienced supervisor and irregular donations of repairable devices. The human need is access to practical training for young people who face barriers to entry. The operating question is how to reach more learners while preserving supervision and reliable access to equipment.

A staged plan might begin with one small cohort at the second site. The supervisor could train an assistant at the original workshop before the trial opens. The enterprise could confirm the supply of suitable devices and set a minimum stock of training materials. It could track attendance, completion and cost per learner, as well as whether the first site maintains its output. Each measure links to a decision about continuing, modifying or pausing the pilot.

Consider the alternative of opening both sites immediately at full capacity. It reaches more learners sooner if staffing and device supply can keep up. Under the stated constraints, it increases pressure on supervision and could interrupt both sites. A reasoned recommendation is to pilot the second site first and expand only after staffing, stock and learning measures meet the enterprise’s agreed thresholds. The thresholds would need to be justified by evidence in an actual case.

Fencing Method for a case-based term

Begin with There is a bottleneck. Add a case detail. One experienced supervisor is available for both sites. Refine the tone. Supervisory capacity may become the main bottleneck during expansion. Add logic. When both sites need the same person at once, a shortage of supervision limits the number of learners who can practise safely and receive feedback. Transfer this reasoning by locating the step that constrains throughput in a delivery business.

Apply the same process to mission drift. Name the original purpose, then describe the activity that could pull the business away from it. A rise in repair revenue can strengthen the training program if the work finances supervision. The same rise can squeeze learning time if supervisors have to meet commercial deadlines. Use the case to decide which pathway is more plausible and what data would show the difference.

Move from a calculation to a decision

Suppose a small workshop charges 80 dollars per repair and spends 45 dollars in variable costs per repair. Unit contribution is 35 dollars. With fixed costs of 2,100 dollars for the relevant period and a single service at those assumptions, break-even output is 60 repairs. Explain the meaning in a sentence. At 60 repairs, revenue equals total costs for that period under the assumptions used.

Add a realistic uncertainty. If the supply of suitable devices is unstable, expected volume may fall below break-even even though the price and variable cost figures are unchanged. If variable cost rises, recompute before claiming that the original threshold still holds. Compare your calculation with the organization’s cash position, capacity and mission. A correct number matters most when the next sentence explains how it affects the choice.

Compare stakeholders using a common decision

Write one option at the top of a page and list the groups affected. For each group, record a plausible gain, a cost and a condition. Learners might gain access nearer home, while staff might face extra travel and preparation. A partner may value increased enrollment, while managers need to track completion and costs. Use the same option throughout so that the comparison stays coherent.

Finish with a priority decision. If the organization’s immediate problem is reliable training delivery, explain why supervision should carry more weight than the number of people enrolled during the pilot. If the case shows that demand is the binding problem, you may reach a different conclusion. This approach turns stakeholder vocabulary into reasoning about who benefits, who bears risk and what managers can do about it.

Common questions about business responses

Do I need to name a tool in every paragraph? Choose a tool when it clarifies the issue and interpret its output using the case. Can I give a qualified recommendation? Yes. State which option to take, under which conditions and how progress would be checked. Should I mention every resource? Use the resources and figures that materially affect your argument, while following the specific prompt and instructions.

Make a recommendation check before time ends

Read your recommendation as if you were the person expected to act on it. Circle the first step, underline the resource it depends on and mark the point when results will be reviewed. Then look back at the evidence for each choice. If a step could be copied into any business case, strengthen it with a detail about this organization. If the proposed measure would reward the wrong outcome, replace it with one tied to the human or commercial objective.

Check the time horizon of each claim

Put an immediate effect and a later effect beside each option. Training an assistant uses supervisory time now but could increase the number of groups the enterprise can support later. Leasing equipment may reduce the initial cash outlay while creating recurring payments. Write the period each statement describes so that the costs and gains can be compared.

If a recommendation depends on future savings, state how the organization will cover the intervening cash requirements. Look for a figure or fact in the case that makes the plan feasible. If that fact is missing, make the recommendation conditional and identify what managers should verify before proceeding.

Top 200 Vocabulary Word List for IB Diploma Programme Business Management (SL and HL) | Essay Writing