IBDP Business Management: Core Concepts & Finance

Front

Distinguish between private and public sector organizations.

Back

The **private sector** comprises businesses owned by private individuals with the primary aim of profit maximization (e.g., Tesco, Apple). The **public sector** consists of organizations owned and controlled by the state or government, funded by taxation, and aiming to provide services for the public good rather than profit (e.g., NHS, public schools).

Front

Define a social enterprise.

Back

A **social enterprise** is a business with primarily social or environmental objectives. Surpluses are reinvested into the business or community rather than distributed to owners as profit. Examples include The Big Issue (magazine) and TOMS (shoes), focusing on 'trading for a common good' while covering costs.

Front

Explain the importance of stakeholder conflict.

Back

Stakeholders (e.g., shareholders vs. employees) often have diverging interests. For example, shareholders may want **profit maximization** (dividends), while employees want **higher wages** and better working conditions. Managers must analyze these conflicting interests to make ethical decisions and balance short-term returns with long-term sustainability.

Front

Compare internal and external growth strategies.

Back

**Internal (organic) growth** involves expansion from within a business using retained earnings to open new outlets or develop new products; it is slower but lower risk. **External (inorganic) growth** involves integrating with other firms (mergers or takeovers); it is faster but carries high risk, cost, and potential culture clashes (integration issues).

Front

Define 'Span of Control'.

Back

The **Span of Control** refers to the number of subordinates directly reporting to a single manager. A **wide span** (flat structure) implies many subordinates per manager, empowering staff but potentially stretching management time. A **narrow span** (tall structure) implies few subordinates, allowing close supervision but potentially slowing communication.