Important changes to the new BM programme (updated 5th October 2015)

The IB coordinator notes for September contain some significant alterations to the new Business Management guide (first assessment 2016) that affect the Standard Level internal assessment, Paper 1 (the pre-seen case study) and Paper 2, section A. An updated version of the Business management guide, relevant student samples and specimen papers are available on the OCC to reflect the following changes. SLIA A problem regularly faced by moderators is that students submit their commentary without attaching the supporting documents (SDs). In ...

Google in the Alphabet soup

At the beginning of August, Google announced that it planned to create a new public holding company: Alphabet Inc. to reflect its new operating structure. In an official Google blog, its CEO Larry Page said the business is proposing a structure in which the business funnels some profits into its more speculative ventures, like driverless cars (Google X) or Calico, which aims to extend the human lifespan. The Google name will not die. Divisions under the "Google business" will included search, ...

Working smart – Say goodbye to 9 to 5

As the demands for a 24/7 consumer culture grows, organisations are increasingly recognising the benefits of working flexibly for both their staff and their profits. Technology has been a huge driver to changing the nature of the typical workplace from one where staff arrive at nine in the morning and leave at five, to organisations that accept a range of working arrangement giving employees flexibility on how long, where and when they work. Dave Coplin, the chief envisioning office at ...

Lies, Damned Lies and Accounts

In a normal sense, an account of something means the telling of a story. What financial accounts do is to tell the story of business performance through numbers, although the story may require in-depth analysis to establish the real truth. Examination questions on accounts and finance are often avoided by students in IB examinations, but perfomance tends to be better on these 'harder' topics, than on the softer topics such a marketing and HRM, where there are no right answers. As ...

Deflation – cheaper must be better

Although inflation is often considered to be an economic concept, it is of great importance to all firms and, consequently, to business management students. Inflation is part of the macro environment, referred to as PEST or STEEPLE in the guide, and sitting under economics as an external constraint. Inflation is defined as “the rate of increase in prices for goods and services” – in other words the tendency for prices to rise in an economy. Inflation, therefore, reduces the value of ...

Google facing European competition inquiry

The European Union (EU) has accused Google of abusing its market position to distort Internet search results, in favour of its Google Shopping service.  The European Commission has sent a Statement of Objections to Google outlining its view that Google users do not necessarily see the most relevant results in response to search queries – to the detriment of consumers and rival comparison shopping services, as well as stifling innovation. The case is the first time that antitrust charges have been ...

Ketchup on hotdogs

US food giant Heinz is to merge with Kraft Foods Group, creating the third-largest food and beverage company in the US. Heinz shareholders will own 51% of the combined company with Kraft shareholders owning a 49% stake. The “mega deal” will create the world’s fifth-largest food and beverage company.  Its brands will include Kraft, Heinz, and hotdog maker Oscar Mayer, with combined sales worth some $29bn and a portfolio that includes eight $1 billion-plus brands.  Regulators and shareholders from Kraft ...

Why? It’s what we do…

Most firms publish their mission and a vision statements. A mission statement defines an organisation’s purpose and primary objectives, stating ‘who we are and what we do’. Mission statements are targeted at internal and external stakeholders. By publishing the firm’s mission statement it is believed that everybody will know what their business is and relate to its purpose. As a result, employees should be motivated and fired up to achieve. This only works, however, if everybody understands and relates to the ...

Cash Flow is King

Profit dominates business-related headlines. This month, Apple announced the biggest quarterly profit ever made by a public company. Apple reported a net profit of $18bn in its fiscal first quarter, exceeding the $15.9bn made by ExxonMobil in the second quarter of 2012. Net profit after interest and tax, or the ‘bottom line’ (the last line on an income statement), is a key figure for a business. Firms naturally emphasise the ‘bottom line’, because this is the sum available for distribution ...

Humbug – Xmas giving is uneconomic

We all receive them - those presents that do not quite match our Christmas expectations - the socks from Grandma or the out-of-date chocolates. According to Joel Waldfogel, a neo-classical economist, Christmas giving is economically inefficient. This inefficiency arises because the gift giving is done by someone other than the final consumer and so the present might not satisfy the recipient’s preferences. Waldfogel estimates that giving 'destroys' between 10% and 30% of the value of a gift.  His measurement of satisfaction ...