A full set of slides and activities that reference the core textbook. More resources covering the below syllabus points are available in our shop: Business and its environment (AS Level) The Cambridge International AS Level material has its emphasis on an understanding of business concepts and their application to business situations, although some analysis of some issues is expected together with some evaluation. Emphasis should be on the importance of enterprise, business objectives/ structure/size and stakeholders. All sizes of businesses should be considered (including multinationals). 1.1 Enterprise 1.1.1 The nature of business activity 1.1.2 The role of the entrepreneur 1.1.3 Socialenterprise • purpose of business activity • the concept of creating value • the nature of economic activity, the problem of choice and opportunity cost • business environment is dynamic • what a business needs to succeed • why many businesses fail early on • qualities an entrepreneur is likely to need for success • the role of business enterprise in the development of a business and a country • the range and aims of social enterprises • triple bottom line – economic (financial), social and environmental targets Business and its environment (AS Level) continued 1.2 Businessstructure 1.2.1 Economicsectors 1.2.2 Legalstructures • primary, secondary and tertiary sector businesses • the public and private sectors • main features of different types of legal structure, including ability to raise finance • appropriateness of legal structure: sole trader, partnership, private limited companies, public limited companies, franchises, co-operatives, joint ventures • concept of limited liability and its importance • problems resulting from changing from one legal structure to another 1.3 Size of business 1.3.1 Measurements of business size 1.3.2 Significance of small businesses 1.3.3 Internalgrowth • different methods of measuring the size of a business (profit is not an acceptable measure of business size) • advantages and disadvantages of being a small business • strengths and weaknesses of family businesses • the importance of small businesses and their role in the economy • the role of small businesses as part of the industry structure in some industries • why and how a business might grow internally 1.4 Businessobjectives 1.4.1 Business objectives in the private sector and public sector 1.4.2 Objectives and business decisions • the nature and importance of business objectives at corporate, departmental and individual levels • corporate social responsibility (CSR) as a business objective • relationship between mission statement, objectives, strategy and tactics • the different stages of business decision making and the role of objectives in the stages of business decision making • how objectives might change over time • translation of objectives into targets and budgets • the communication of objectives and their likely impact on the workforce • how ethics may influence business objectives and activities Business and its environment (AS Level) continued 1.5 Stakeholders in a business 1.5.1 Businessstakeholders 1.5.2 The importance and influence of stakeholders on business activities • individuals or groups interested in the activities of business, e.g. owners/shareholders, managers, employees, customers, suppliers, lenders, government and the local community • roles, rights and responsibilities of stakeholders • impact of business decisions/actions on stakeholders, and their reactions • how and why a business needs to be accountable to its stakeholders • how conflict might arise from stakeholders having different aims • how changing business objectives might affect its stakeholders 2.1 Management and leadership 2.1.1 Management and managers 2.1.2 Leadership 2.1.3 Choice of leadership style 2.1.4 EmotionalIntelligence/ Emotional quotient (EQ) • the functions of management, including Mintzberg’s roles of management • functions, roles and styles • the purpose of leadership • leadership roles in business (directors, managers, supervisors, worker representatives) • qualities of a good leader • leadership styles: autocratic, democratic, laissez-faire • McGregor’s leadership styles • Goleman’s four competencies of emotional intelligence: self-awareness, social awareness, self-management and social skills 2.2 Motivation 2.2.1 Motivation as a tool of management and leadership 2.2.2 Humanneeds 2.2.3 Motivationtheories 2.2.4 Motivation methods in practice: financial motivators, non- financial motivators • the need to motivate employees to achieve the objectives of a business • a simple explanation of human need • how human needs may or may not be satisfied at work • ideas of the main content theorists (Maslow, Taylor, Mayo, Herzberg) and process theorists (McClelland, Vroom) • the theories in practical situations • different payment methods (time based, salary, piece rates, commission, bonuses, profit sharing, performance related pay) • different types of non-financial motivators (training, induction, opportunities for promotion, development, status, job re-design, team working, empowerment, participation, fringe benefits/perks) • ways in which employees can participate in the management and control of business activity 2.3 Human resource management (HRM) 2.3.1 Purpose and roles of HRM 2.3.2 Recruitment and selection 2.3.3 Job descriptions, person specifications, job advertisements 2.3.4 Employmentcontracts 2.3.5 Redundancy and dismissal 2.3.6 Staff morale and welfare 2.3.7 Stafftraining • the role of HRM in meeting organisation objectives: recruitment, selection, training, induction, advice, guidance, workforce planning • labour turnover, methods of recruitment and selection • purposes of job descriptions, person specifications and job advertisements • main features of a contract of employment • difference between redundancy and dismissal • relationship between HRM, staff morale and welfare in a business including the concept of work-life balance • policies for diversity and equality • the purpose of staff development/training as a means of securing required skills and motivating the workforce 3.1 What is marketing? 3.1.1 Role of marketing and its relationship with other business activities 3.1.2 Supply and demand 3.1.3 Features of markets: location, size, share, competitors, growth 3.1.4 Industrial and consumer markets 3.1.5 Niche versus mass marketing 3.1.6 Marketsegmentation • the link between marketing objectives and corporate objectives • marketingobjectives • factors influencing the supply and demand for the products/ services of a business • interactions between price, supply and demand • how markets may differ: such as consumer/producer markets; national, regional and international markets • difference between product and customer (market) orientation • problems associated with measuring market share and market growth • implications of changes in market share and growth • classification of products • how marketing might differ for different types of goods and services • reasons for and benefits/limitations of mass marketing and niche marketing • benefits and limitations of market segmentation • methods of market segmentation including geographic, demographic and psychographic 3.2 Marketresearch 3.2.1 Primary and secondary research 3.2.2 Methods of information gathering 3.2.3 Samplingmethods 3.2.4 Market research results 3.2.5 Costeffectiveness • purpose of market research in determining customer characteristics/consumer profiles, wants and needs • distinction between primary (field) and secondary desk research, and the main features of each • methods of primary research and their advantages and disadvantages including focus groups and surveys • sources of secondary information including printed, paid for and web-based sources of information • random, stratified and quota sampling; the appropriateness of each to given situations • limitations of sampling • the reliability of data collection • analysis of results obtained from market research • interpretation of information • cost effectiveness of market research in given situations (treated descriptively) 3.3 The marketing mix 3.3.1 The elements of the marketing mix (the 4Ps) 3.3.2 The role of the customer (the 4Cs) 3.3.3 Product 3.3.4 Product Life Cycle 3.3.5 Types of pricing strategies 3.3.6 Price elasticity of demand 3.3.7 Promotionmethods 3.3.8 Channels of distribution 3.3.9 Using the Internet for the 4Ps/4Cs 3.3.10 Consistency in the marketing mix • the 4Ps: Product, Price, Promotion, Place (distribution channels) • the relationship between the customer and the business (the 4Cs): Customer solution, Cost to customer, Communication with customer, Convenience to customer • ways in which customer relations can be improved • how the 4Cs relate to the 4Ps • goods,services • recognising that products have a combination of tangible and intangible attributes • the importance of product development • product differentiation and USP (Unique Selling Point) • how Product Life Cycle stage influences marketing activities • product portfolio analysis as a way of achieving marketing objectives • decisions about extension strategies • use and value of alternative pricing strategies including competitive, penetration, skimming, price discrimination, cost-based pricing • define, calculate and interpret price elasticity of demand and suitable prices • usefulness of price elasticity of demand when making pricing decisions • above the line and below the line promotion • the role of packaging in promotion • branding as part of product/promotion • choosing between alternative types of channel of distribution • online advertising, catalogues, sales, dynamic pricing, distribution (download of digital products), social media, viral marketing, e-commerce • the need for the marketing mix to be consistent with the business, the product type and the market 4.1 The nature of operations 4.1.1 Inputs, outputs and the transformation process 4.1.2 Effectiveness, efficiency and productivity 4.1.3 Valueadded 4.1.4 Capital versus labour intensity • operations encompasses products and services • process: from idea/need to final product/service • resources: land, labour, capital (including intellectual capital) • difference between effectiveness and efficiency • productivity: measuring efficiency • how ‘value added’ is linked to marketing, the operations process and operations decisions • benefits and limitations of capital and labour intensive processes 4.2 Operationsplanning 4.2.1 Operationsdecisions 4.2.2 Flexibility and innovation 4.2.3 Operationsmethods: job, batch, flow, mass customisation 4.2.4 Location 4.2.5 Scale of operation • the influence of marketing, availability of resources and technology (e.g. CAD and CAM) on operations decisions [Note: Candidates are expected to know what is meant by Computer Aided Design and Computer Aided Manufacture. They must understand how CAD and CAM can be applied in a business, including the advantages and disadvantages.] • the need for flexibility with regard to volume, delivery time and specification • process innovation – changing current processes or adopting new ways of producing products (e.g. automation/ robotics) or delivering services (e.g. improving workflow) • differences between methods – advantages and disadvantages of each method • problems of changing from one method to another • factors that determine (a) location and (b) relocation: geographic, demographic, legal, political, resources, infrastructure, marketing • differences between local, regional, national and international location decisions • factors that influence the scale of a business • causes and examples of internal/external economies/ diseconomies of scale • links between economies/diseconomies of scale and unit costs 4.3 Inventorymanagement 4.3.1 Purpose, costs and benefits of inventory 4.3.2 Managinginventory • purpose of inventory within a business (raw materials, work in progress, finished products) • costs and benefits of holding inventory • buffer inventory, reorder level and lead time • interpretation of simple inventory control charts • inventory control methods including buffer inventory and Just in Time (JIT) 5.1 The need for business finance 5.1.1 Start up capital, capital for expansion 5.1.2 Workingcapital • why businesses need finance to start up and to grow • why different needs for finance might mean different sources are appropriate • the meaning and significance of working capital as a source of finance • significance of the distinction between revenue expenditure and capital expenditure 5.2 Sources of finance 5.2.1 Legal structure and sources of finance 5.2.2 Short term finance and long term finance 5.2.3 Internalsources 5.2.4 Externalsources 5.2.5 Factors influencing the sources of finance 5.2.6 Selecting the source of finance • the relationship between the legal structure of a business and its sources of finance • distinction between short and long term sources of finance • internal sources of finance: retained earnings, sale of unwanted assets, sale and leaseback of non-current assets, working capital • external sources of finance: share capital, new partners, venture capital, overdrafts, leasing, hire purchase, bank loans, mortgages, debentures, micro-finance, crowd funding and government grants • factors influencing the choice of sources of finance in a given situation: cost, flexibility, need to retain control, the use to which it is put, level of existing debt [but note, at Cambridge International AS Level, candidates will not be expected to know the term ‘gearing’] • the appropriateness of each possible source in a given situation 5.3 Costs 5.3.1 Costinformation 5.3.2 Uses of cost information 5.3.3 Break-evenanalysis • the need for accurate cost data • types of costs: fixed, variable, marginal; direct and indirect • problems of trying to allocate costs in given situations • cost information for decision making purposes, e.g. average, marginal, total costs • how costs can be used for pricing decisions • how costs can be used to monitor and improve business performance, including using cost information to calculate profits • determining the minimum level of production needed to break even or the profit made • define, calculate and interpret the margin of safety • uses and limitations of break-even analysis 5.4 Accountingfundamentals 5.4.1 Incomestatement 5.4.2 Statement of financial position 5.4.3 Liquidityratios 5.4.4 Profitabilityratios 5.4.5 Practical use of ratio analysis 5.4.6 Main users of accounts 5.4.7 Limitations of published accounts • contents of an income statement including: cost of sales, gross profit, operating profit, profit for the year, retained earnings • contents of a statement of financial position including: non- current assets, current assets, current liabilities, working capital, net assets, non-current liabilities, reserves and equity • acid test ratio, current ratio • gross profit margin, profit margin • how each of these ratios is used • reasons for the results obtained • ways that businesses might try to improve ratio results, including reducing working capital problems • comparison of ratios results between businesses • limitations of these accounting ratios • identification of the kind of information that individual stakeholder groups might seek • limitations of the usefulness of published accounts: historical, may not reflect the future, may be out of date, does not reflect qualitative aspects of a business, possibility of ‘window dressing’, may not have details of the performance of individual parts of a business [Note: Knowledge of specific Accounting Standards is not required.] 5.5 Forecasting and managing cash flows 5.5.1 Purposes of cash flow forecasts 5.5.2 Cash flow forecasts in practice 5.5.3 Methods of improving cash flow • difference between cash and profits • the need to hold a suitable level of cash within a business, and the consequences of not doing so • uses of cash flow forecasts • construction of cash flow forecasts, including recognising the uncertainty of cash flows • interpretation of simple cash flow forecasts from given data • amendment of cash flow forecasts in the light of changes in business circumstances • how reducing costs or improving the management of trade receivables and trade payables can improve cash flow • further methods of improving cash flows: debt factoring, sale and leaseback, leasing, hire purchase • recognition of situations in which the various methods of improving cash flow can be used 1.1 Enterprise No content beyond Cambridge International AS Level. 1.2 Businessstructure 1.2.1 Local, national and multinational businesses 1.2.2 Multinationals 1.2.3 Privatisation • main differences between local, national and multinational businesses • the growing importance of international trading links and their impact on business activity • benefits and disadvantages that a multinational might bring to a country • possible relationships between multinationals and the state • advantages and disadvantages of privatisation in a given situation 1.3 Size of business 1.3.1 Externalgrowth • the different types of merger and takeover: horizontal, vertical (backward and forward), conglomerate, friendly merger, hostile takeover • impact of a merger/takeover on the various stakeholders • why a merger/takeover may or may not achieve objectives e.g. synergy • the importance of joint ventures and strategic alliances as methods of external growth 1.4 Businessobjectives No content beyond Cambridge International AS Level. 1.5 Stakeholders in a business No content beyond Cambridge International AS Level. 1.6 External influences on business activity 1.6.1 Political and legal 1.6.2 Economic constraints and enablers 1.6.3 Social 1.6.4 Technological(including the Internet) 1.6.5 Otherbusinesses 1.6.6 Demographic 1.6.7 Environmental • how a government might use the law to seek to control: employment, conditions of work (including health and safety), minimum wage, marketing behaviour, competition, location decisions, particular goods and services • how international agreements might have an impact on businesses • how the state might intervene to help businesses (small and large) • how the state might intervene to constrain businesses (small and large) • how the state might deal with market failure • the key macroeconomic objectives of governments: low unemployment, low inflation, stable exchange rates, growth, transfer of wealth • how these macroeconomic objectives can have an impact on business activity • how a government might place a different emphasis on macroeconomic objectives from time to time • policy instruments used to achieve macroeconomic objectives, e.g. monetary, fiscal and exchange rate policies • how changes in macroeconomic performance and policies may affect business behaviour • the impact of and issues associated with corporate social responsibility (CSR), e.g. accounting practices, paying incentives for the award of contracts, social auditing • why businesses need to consider the needs of the community including pressure groups • problems of introducing technological change • how businesses are constrained by and rely on other businesses • how a business might react to a given demographic change • how (physical) environmental issues might influence business behaviour 2.1 Management and leadership No content beyond Cambridge International AS Level. 2.2 Motivation No content beyond Cambridge International AS Level. 2.3 Humanresource management (HRM) 2.3.1 Approaches to HRM 2.3.2 Labourlegislation 2.3.3 Cooperationbetween management and workforce 2.3.4 Workforceplanning 2.3.5 Role of trade unions in HRM • the difference between ‘hard’ and ‘soft’ HRM • flexibility e.g. advantages and disadvantages of temporary contracts or flexible contracts, e.g. zero hours contracts and part-time against full-time workers • the measurement, causes and consequences of poor employee performance • strategies for improving employee performance • Management by Objectives (MBO) – implementation and usefulness • the need for labour legislation and the broad principles that often underlie it • how cooperation between management and the workforce can be of benefit to both • reasons for and role of a workforce plan • the benefits to employers and employees of trade union involvement in the workplace including their role in collective bargaining 2.4. Organisationalstructure 2.4.1 Relationship between business objectives, people and organisational structure 2.4.2 Types of structure: functional, hierarchical (flat and narrow), matrix 2.4.3 Formal and informal organisations 2.4.4 Delegation and accountability 2.4.5 Control, authority and trust 2.4.6 Centralisation 2.4.7 Line and staff • purpose and attributes of an organisational structure such as flexibility, meet the needs of the business, permit growth and development • advantages and disadvantages of the different types of structure • why some organisations are structured by product and others by function or geographical area • the reasons and ways structures change e.g. with growth or delayering • features of a formal structure: levels of hierarchy, chain of command, span of control, responsibility, authority, delegation/accountability, centralised/decentralised • relationship between delegation and accountability • processes of accountability in a business • advantages and disadvantages of delegating • the impact of delegation on motivation • relationship between span of control and levels of hierarchy • difference between authority and responsibility • conflicts between control and trust that might arise when delegating • advantages and disadvantages of centralisation for stakeholders • examples of and distinctions between line and staff management; conflict between them 2.5 Businesscommunication 2.5.1 Purposes of communication 2.5.2 Methods of communication 2.5.3 Channels of communication 2.5.4 Barriers to communication 2.5.5 The role of management in facilitating communication • situations in which communication is essential • standard methods of communication: interpersonal, general to and within groups; spoken, written, electronic, visual • strengths and weaknesses of the different methods of communication • how communication works within an organisation • difference between one- and two-way communication; difference between vertical and horizontal communication • problems associated with different channels of communication • barriers to communication: attitudes, perceptions, noise, language, inappropriate medium, etc. • the role of informal communications within a business • ways in which communication can influence the efficiency of a business • ways of improving communication in a given situation 3.1 What is marketing? No content beyond Cambridge International AS Level. 3.2 Marketresearch No content beyond Cambridge International AS Level. 3.3 The marketing mix No content beyond Cambridge International AS Level. 3.4 Marketingplanning 3.4.1 Marketplanning 3.4.2 Elasticity 3.4.3 Productdevelopment 3.4.4 Forecasting 3.4.5 Coordinated marketing mix • the detailed marketing plan; associated benefits • income elasticity, promotional elasticity, cross elasticity; usefulness of the concept of elasticity in its various forms • product development as a process from original conception to launch and beyond • sources of new ideas for product development • the importance of Research and Development • the need to forecast marketing data • calculation and use of moving average method to forecast sales • the need for and development of a coordinated marketing mix • development of marketing strategies that are focused towards achieving specific marketing objectives 3.5 Globalisationand international marketing 3.5.1 Globalisation 3.5.2 Strategies for international marketing • economic globalisation within the context of the broader concept of ‘globalisation’ • the implications for marketing of increased globalisation and economic collaboration, e.g. BRICS • the importance of international marketing for a specific business/situation • international markets – identification, selection and entry • whether a business in a given situation should develop an international market through pan-global marketing or maintain local differences • choosing a strategy, in a given situation, to develop a global market • factors influencing the method of entry into international markets 4.1. The nature of operations No content beyond Cambridge International AS Level. 4.2 Operationsplanning 4.2.1 Enterprise resource planning (ERP) • main features of an ERP programme • how ERP can improve a business’ efficiency in relation to: inventory control, costing and pricing, capacity utilisation, responses to change, management information 4.3 Inventorymanagement No content beyond Cambridge International AS Level. 4.4 Capacityutilisation 4.4.1 Measurement and significance of capacity 4.4.2 Increasing capacity utilisation 4.4.3 Outsourcing • how capacity utilisation can be measured • implications of operating under or over maximum capacity • choosing methods of improving capacity utilisation (e.g. through rationalisation, sub-contracting) • benefits of outsourcing in a given situation 4.5 Lean production and quality management 4.5.1 Leanproduction 4.5.2 Kaizen 4.5.3 Just in Time (JIT) 4.5.4 Quality control and assurance 4.5.5 Total Quality Management 4.5.6 Benchmarking • links between lean production and inventory control, quality, employees roles, capacity management and efficiency • Kaizen (continuous improvement) in the context of lean production • JIT in the context of lean production • implications and justification of adopting a JIT approach • quality in terms of what the customer demands • the importance of quality assurance • methods of quality control: inspection, testing, random sampling, involving the workforce in quality control • the link between quality and training • aims and effectiveness of TQM • the potential of Kaizen in TQM • the importance of benchmarking in quality control 4.6 Projectmanagement 4.6.1 The need for projects and project management 4.6.2 Networkdiagrams 4.6.3 Critical Path Analysis (CPA) • projects as a response to the need for change • reasons and impact of project failure, including examples • main elements of a network diagram: activities, dummy activities, nodes • construction of a network from given data • finding the minimum project duration and the critical path • calculation of total and free float • interpretation of the results of the analysis of a network • how minimum duration and floats might be used in project management • CPA as a management tool 5.1 The need for business finance No content beyond Cambridge International AS Level. 5.2 Sources of finance No content beyond Cambridge International AS Level. 5.3 Costs 5.3.1 Approaches to costing: full, contribution 5.3.2 Solutions to costing problems • differences between full and contribution costing • uses and limitations of the full costing method • the nature of the technique of contribution costing • the difference between contribution and profit • limitations of contribution costing • situations in which contribution costing would be and would not be used • solution of numerical problems involving costing methods • using contribution costing to help with ‘accept/reject’ order decisions 5.4 Accountingfundamentals No content beyond Cambridge International AS Level. 5.5 Forecasting and managing cash flows No content beyond Cambridge International AS Level. 5.6 Budgets 5.6.1 The purposes of budgets 5.6.2 Variances: adverse, favourable • measuringperformance • benefits and drawbacks from the use of budgets • how budgets might be produced • use of flexible budgets and zero budgeting • purposes of budgets for allocating resources, controlling and monitoring of a business • role of budgets in appraising business • the meaning of variances • calculation and interpretation of variances [but not price/ volume variances] 5.7 Contents of published accounts 5.7.1 The income statement 5.7.2 The statement of financial position 5.7.3 Inventoryvaluation 5.7.4 Depreciation • amendment of an income statement from given data • the impact on the income statement of a given change • amendment of a statement of financial position from given data • the relationships between items in the income statement and the statement of financial position • the impact on the statement of financial position of a given change in valuing non-current assets or inventories • the difficulties of valuing inventory • the net realisable value method [Note: LIFO and FIFO will not be examined] • the role of depreciation in the accounts • the impact of depreciation (straight line method only) on the statement of financial position and the income statement 5.8 Analysis of published accounts 5.8.1 Profitabilityratio 5.8.2 Financial efficiency ratios 5.8.3 Gearingratio 5.8.4 Investorratios 5.8.5 Practical use of ratio analysis • return on capital employed • inventory turnover, days’ sales in receivables • all the usual definitions of gearing are acceptable, e.g. Debt/ Equity and Debt/(Debt + Equity). It is the interpretation of the calculation that is important when selecting a source of finance • dividend yield, dividend cover, price/earnings ratio • how each of these ratios is used • reasons for the results obtained • strategies that businesses might adopt to improve ratio results • comparison of ratios results between businesses • limitations of these accounting ratios 5.9 Investmentappraisal 5.9.1 The concept of investment appraisal 5.9.2 Basic methods: payback, accounting rate of return (ARR) 5.9.3 Discounted cash flow methods: discounted payback, net present value (NPV), internal rate of return (IRR) 5.9.4 Qualitative factors in investment appraisal • the need for investment appraisal • the significance of risk in investment decisions • the meaning, calculation and interpretation of payback and ARR • the meaning, calculation and interpretation of discounted payback and NPV • the meaning and interpretation [but not the calculation] of IRR • qualitative factors that might influence an investment decision in a given situation • comparison of the investment appraisal methods, including their limitations 6.1 What is strategic management? 6.1.1 Understanding what strategic management is • the meaning of corporate strategy, tactics and strategic management • the need for strategic management • Chandler’s assertion that strategy should determine organisational structure • how business strategy determines competitive advantage in an increasingly competitive world 6.2 Strategicanalysis 6.2.1 SWOTanalysis 6.2.2 PEST or External Environment analysis 6.2.3 Businessvision/mission statement and objectives 6.2.4 BostonMatrix 6.2.5 Porter’s Five Forces 6.2.6 CoreCompetencies • undertake and interpret SWOT (strengths, weaknesses, opportunities, threats) analysis in a given situation • development of the outcome of a SWOT analysis into strategic objectives • undertake and interpret PEST (political, economic, social, technological) analysis in a given situation • evaluation of the role of business vision/mission statements and objectives in strategic analysis • undertake and interpret Boston Matrix analysis on the product portfolio of a business • use Porter’s Five Forces analysis as a framework for business strategy • use Prahalad and Hamel’s Core Competencies analysis as a framework for business strategy 6.3 Strategicchoice 6.3.1 The Ansoff Matrix 6.3.2 Force Field Analysis 6.3.3 Decisiontrees • the structure of the Ansoff Matrix and how it analyses the link between business strategy and risk • use of the Ansoff Matrix to analyse and evaluate different business strategies in a given situation • the use of simple Force Field Analysis as a means of making strategic choices in a given situation • construction of simple decision trees from information given • calculation of the expected monetary values from decision trees and use of the results to assist in selecting the most appropriate strategy • the usefulness of decision trees including an assessment of the accuracy of the data they contain 6.4 Strategicimplementation 6.4.1 Businessplans 6.4.2 Corporate culture and strategic implementation 6.4.3 Developing a change culture 6.4.4 Managing and controlling strategic change 6.4.5 Contingency planning and crisis management • key elements of business plans • the value of business plans for large and small, established and start-up businesses • different types of corporate culture such as power, entrepreneurial and task • importance of corporate culture in strategic implementation in a given situation • importance of developing a change culture to allow effective implementations of new strategies • the importance of leading and managing change • techniques to implement and manage change successfully • development of a strategy to manage change in a given situation • importance of contingency planning and crisis management Business and its environment • Enterprise • Businessstructure • Size of business • Businessobjectives • Stakeholders in a business • Businessstructure • Size of business • External influences on business activity Peoplein organisations • Management and leadership • Motivation • Human resource management • Human resource management • Organisationalstructure • Businesscommunication Marketing • What is marketing? • Marketresearch • The marketing mix • Marketingplanning • Globalisation and international marketing Operations and project management • The nature of operations • Operationsplanning • Inventorymanagement • Operationsplanning • Capacityutilisation • Lean production and quality management • Projectmanagement Financeand accounting • The need for business finance • Sources of finance • Costs • Accountingfundamentals • Forecasting cash flows and managing working capital • Costs • Budgets • Contents of published accounts • Analysis of published accounts • Investmentappraisal Strategic management What is strategic management? • Strategicanalysis • Strategicchoice • Strategicimplementation

A bundle of resources that cover modules 1-6 of the CIE Business Syllabus - which will also cover most of the IB syllabus too. Includes Chinese keywords at points, these can be removed if required. Syllabus points covered: Understanding business activity 1.1 Business activity 1.1.1 The purpose and nature of business activity: • Concepts of needs, wants, scarcity and opportunity cost • Importance of specialisation • Purpose of business activity • The concept of adding value and how added value can be increased 1.2 Classification of businesses 1. 1.2.1 Business activity in terms of primary, secondary and tertiary sectors: o Basis of business classification, e.g. by using examples o Reasons for the changing importance of business classification, e.g. in developed and developing economies 1.2.2 Classify business enterprises between private sector and public sector in a mixed economy 1.3 Enterprise, business growth and size 1. 1.3.1 Enterprise and entrepreneurship: o Characteristics of successful entrepreneurs o Contents of a business plan and how business plans assist entrepreneurs o Why and how governments support business start-ups, e.g. grants, training 1.3.2 The methods and problems of measuring business size: o Methods of measuring business size, e.g. number of people employed, value of output, capital employed (profit is not a method of measuring business size) o Limitations of methods of measuring business size 1.3.3 Why some businesses grow and others remain small: o Why the owners of a business may want to expand the business o Different ways in which businesses can grow o Problems linked to business growth and how these might be overcome o Why some businesses remain small 1.3.4 Why some (new or established) businesses fail: • Causes of business failure, e.g. lack of management skills, changes in the business environment • Why new businesses are at a greater risk of failing 1.4 Types of business organisation 1.4.1 The main features of different forms of business organisation: • Sole traders, partnerships, private and public limited companies, franchises and joint ventures • Differences between unincorporated businesses and limited companies • Concepts of risk, ownership and limited liability • Recommend and justify a suitable form of business organisation to owners/management in a given situation • Business organisations in the public sector, e.g. public corporations 1.5 Business objectives and stakeholder objectives 1. 1.5.1 Businesses can have several objectives – and the importance of these can change: o Need for business objectives and the importance of them o Different business objectives, e.g. survival, growth, profit and market share o Objectives of social enterprises 1.5.2 The role of stakeholder groups involved in business activity: o Main internal and external stakeholder groups o Objectives of different stakeholder groups o Use examples to illustrate these objectives and how they might conflict 1.5.3 Demonstrate an awareness of the differences in the aims and objectives of private sector and public sector enterprises People in business 2.1 Motivating workers 1. 2.1.1 The importance of a well-motivated workforce: o Why people work and what motivation means o The concept of human needs – Maslow’s hierarchy o Key motivational theories: Taylor and Herzberg 2.1.2 Methods of motivation: o Financial and non-financial rewards and methods o Recommend and justify appropriate method(s) of motivation in given circumstances 2.2 Organisation and management 1. 2.2.1 Draw, interpret and understand simple organisational charts: o Simple hierarchical structures: span of control, hierarchy, chain of command and delegation o Roles, responsibilities and inter-relationships between people in organisations 2.2.2 The role of management: o Functions of management – planning, organising, co-ordinating, commanding and controlling o Importance of delegation; trust versus control 2.2.3 Leadership styles: o Features of the main leadership styles – autocratic, democratic and laissez-faire o Recommend and justify an appropriate leadership style in given circumstances 2.2.4 Trade unions: What a trade union is and the benefits of workers being union members 2.3 Recruitment, selection and training of workers 1. 2.3.1 The methods of recruiting and selecting workers: o Recruitment and selection o Difference between internal and external recruitment o Main stages in recruitment and selection of staff o Benefits and limitations of part-time and full-time workers 2. 2.3.2 The importance of training and the methods of training: o Importance of training to a business and workers o Benefits and limitations of induction training, on-the-job training and off-the-job training 3. 2.3.3 Why reducing the size of the workforce might be necessary: o Difference between dismissal and redundancy with examples to illustrate the difference o Understand situations in which downsizing the workforce might be necessary, e.g. automation or reduced demand for products o Recommend and justify which workers to recruit/make redundant in given circumstances 4. 2.3.4 Legal controls over employment issues and their impact on employers and employees: Legal controls over employment contracts, unfair dismissal, discrimination, health and safety, legal minimum wage 2.4 Internal and external communication 1. 2.4.1 Why effective communication is important and the methods used to achieve it: o Effective communication and its importance to business o Benefits and limitations of different communication methods including those based on information technology (IT) o Recommend and justify which communication method to use in given circumstances 2. 2.4.2 Demonstrate an awareness of communication barriers: How communication barriers arise and problems of ineffective communication; how communication barriers can be reduced or removed 3.1 Marketing, competition and the customer 1. 3.1.1 The role of marketing: o Identifying customer needs o Satisfying customer needs o Maintaining customer loyalty; building customer relationships 2. 3.1.2 Market changes: o Why customer/consumer spending patterns may change o The power and importance of changing customer needs o Why some markets have become more competitive o How business can respond to changing spending patterns and increased competition 3. 3.1.3 Concepts of niche marketing and mass marketing: Benefits and limitations of each approach to marketing 3.1.4 How and why market segmentation is undertaken: • How markets can be segmented, e.g. according to age, socio-economic grouping, location, gender • Potential benefits of segmentation to business • Recommend and justify an appropriate method of segmentation in given circumstances 3.2 Market research 1. 3.2.1 The role of market research and methods used: o Market-oriented businesses (uses of market research information to a business) o Primary research and secondary research (benefits and limitations of each) o Methods of primary research, e.g. postal questionnaire, online survey, interviews, focus groups; the need for sampling o Factors influencing the accuracy of market research data 2. 3.2.2 Presentation and use of market research results: Analyse market research data shown in the form of graphs, charts and diagrams: draw simple conclusions from such data 3.3 Marketing mix 1. 3.3.1 Product: o The costs and benefits of developing new products o Brand image – impact on sales and customer loyalty o The role of packaging o The product life cycle: main stages and extension strategies; draw and interpret a product life cycle diagram o How stages of the product life cycle can influence marketing decisions, e.g. promotion and pricing decisions 2. 3.3.2 Price: o Pricing methods: cost plus, competitive, penetration, skimming and promotional; their benefits and limitations o Recommend and justify an appropriate pricing method in given circumstances o Understand the significance of price elasticity: difference between price elastic demand and price inelastic demand; importance of the concept in pricing decisions (knowledge of the formula and calculations of PED will not be examined) 3. 3.3.3 Place – distribution channels: o Advantages and disadvantages of different channels o Recommend and justify an appropriate distribution channel in given circumstances 4. 3.3.4 Promotion: o The aims of promotion o Different forms of promotion and how they influence sales, e.g. advertising, sales promotion o The importance of the marketing budget in making promotion decisions; need for cost effectiveness in spending the marketing budget 5. 3.3.5 Technology and the marketing mix: o Define and explain the concept of e-commerce o The opportunities and threats of e-commerce to business and consumers o Use of the internet and social networks for promotion 3.4 Marketing strategy 1. 3.4.1 Justify marketing strategies appropriate to a given situation: o Importance of different elements of the marketing mix in influencing consumer decisions in given circumstances o Recommend and justify an appropriate marketing strategy in given circumstances 2. 3.4.2 The nature and impact of legal controls related to marketing: Impact of legal controls on marketing strategy, e.g. misleading promotion, faulty and dangerous goods 3.4.3 The opportunities and problems of entering new markets abroad: • Growth potential of new markets in other countries • Problems of entering foreign markets, e.g. cultural differences and lack of knowledge • Benefits and limitations of methods to overcome such problems, e.g. joint ventures 4. Operations management 4.1 Production of goods and services 1. 4.1.1 The meaning of production: o Managing resources effectively to produce goods and services o Difference between production and productivity o Benefits of increasing efficiency and how to increase it, e.g. increasing productivity by automation and technology, improved labour skills o Why businesses hold inventories (stocks) o Concept of lean production; how to achieve it, e.g. just-in-time inventory control and Kaizen; benefits of lean production 2. 4.1.2 The main methods of production: o Features, benefits and limitations of job, batch and flow production o Recommend and justify an appropriate production method for a given situation 3. 4.1.3 How technology has changed production methods, e.g. using computers in manufacturing and design 4.2 Costs, scale of production and break-even analysis 1. 4.2.1 Identify and classify costs: o Classifying costs – fixed, variable, average, total; use examples to illustrate these o Use cost data to help make simple cost-based decisions, e.g. to stop production or continue 2. 4.2.2 Economies and diseconomies of scale: The concepts of economies and diseconomies of scale; examples of both 4.2.3 Explain, interpret and use a simple break-even chart: • The concept of break even • Construct, complete or amend a simple break-even chart • Interpret a given chart and use it to analyse a situation • Use a chart to help make simple decisions, e.g. impact of higher price • Understand the limitations of break-even charts 4.3 Achieving quality production 4.3.1 Why quality is important and how quality production might be achieved: • What quality means; why it is important for all businesses • Concept of quality control and how businesses implement quality control • The concept of quality assurance 4.4 Location decisions 4.4.1 The main factors influencing the location and relocation decisions of a business: • Factors relevant to the location decision of manufacturing businesses and service businesses • Factors that a business could consider when deciding which country to locate operations in • The role of legal controls on location decisions • Recommend and justify an appropriate location for a business in given circumstances Financial information and decisions 5.1 Business finance: needs and sources 1. 5.1.1 The need for business finance: o The main reasons why businesses need finance, e.g. start-up capital, capital for expansion and additional working capital o Understand the difference between short-term and long-term finance needs 5.1.2 The main sources of capital: o Internal sources and external sources with examples o Short-term and long-term sources with examples, e.g. debt or equity for long-term finance o Importance of micro-finance in developing economies o The main factors considered in making the financial choice, e.g. size and legal form of business, amount required, length of time, existing loans o Recommend and justify appropriate source(s) of finance in given circumstances 5.2 Cash flow forecasting and working capital 1. 5.2.1 The importance of cash and of cash-flow forecasting: o Why cash is important to a business o What a cash-flow forecast is, how a simple one is constructed and the importance of it o Amend or complete a simple cash-flow forecast o How to interpret a simple cash-flow forecast o How a short-term cash-flow problem might be overcome, e.g. increasing loans, delaying payments, asking debtors to pay more quickly 5.2.2 Working capital: The concept and importance of working capital 5.3 Income statements 1. 5.3.1 What profit is and why it is important: o How a profit is made o Importance of profit to private sector businesses, e.g. reward for risk taking/enterprise, source of finance o Difference between profit and cash 5.3.2 Income statements: o Main features of an income statement, e.g. revenue, cost of sales, gross profit, profit (‘profit’ was known as ‘net profit’ in the 2014 and previous syllabuses) and retained profit o Use simple income statements in decision making based on profit calculations (constructing income statements will not be examined) 5.4 Balance sheets 1. 5.4.1 The main elements of a balance sheet: o The main classifications of assets and liabilities o Examples to illustrate these classifications 2. 5.4.2 Interpret a simple balance sheet and make deductions from it, e.g. how a business is financing its activities and what assets it owns, sale of inventories to raise finance (constructing balance sheets will not be examined) 5.5 Analysis of accounts 1. 5.5.1 How to interpret financial statements by calculating and analysing accounting ratios: o Gross profit margin o Profit margin (‘profit margin’ was known as ‘net profit margin’ in the 2014 and previous syllabuses) o Return on Capital Employed o Current ratio o Acid test ratio 2. 5.5.2 Liquidity: The concept and importance of liquidity 5.5.3 Why and how accounts are used: • Needs of different users of accounts and ratio analysis • How users of accounts and ratio results might use information to help make decisions, e.g. whether to lend to or invest in the business 6. External influences on business activity 6.1 Government economic objectives and policies 6.1.1 How government control over the economy affects business activity: • Government economic objectives, e.g. increasing Gross Domestic Product (GDP) • Main stages of the business cycle; growth, boom, recession, slump • How changes in taxes and government spending can affect business activity • How changes in interest rates can affect business activity • How businesses might respond to these changes 6.2 Environmental and ethical issues 6.2.1 Environmental concerns and ethical issues as both opportunities and constraints for businesses: • How business activity can impact on the environment, e.g. global warming • The concept of externalities; possible external costs and external benefits of business decisions • Sustainable development – how business activity can contribute to this • How/why business might respond to environmental pressures and opportunities; pressure groups • The role of legal controls over business activity affecting the environment, e.g. pollution controls • Ethical issues a business might face; conflicts between profits and ethics • How business might react and respond to ethical issues, e.g. child labour 6.3 Business and the international economy 1. 6.3.1 The importance of globalisation: o The concept of globalisation and the reasons for it o Opportunities and threats of globalisation for businesses o Why some governments might introduce import tariffs and quotas 2. 6.3.2 Reasons for the importance and growth of multinational companies (MNCs): o Benefits to a business of becoming a multinational o Potential benefits to a country and/or economy where a MNC is located, e.g. jobs, exports, increased choice, investment o Potential drawbacks to a country and/or economy where a MNC is located, e.g. reduced sales of local businesses, repatriation of profits 3. 6.3.3 The impact of exchange rate changes: o Depreciation and appreciation of an exchange rate o How exchange rate changes can affect businesses as importers and exporters of products, e.g. prices, competitiveness, profitability (exchange rate calculations will not be examined)