IB Business Management Questions and Correct Answers
1. Business Plan ANSWER The document that sets out the business idea, its goals and objectives, and
other details of how the business will operate (such as its marketing, operations, and finance). It is often a crucial
part of an attempt to raise external sources of finance.
2. Businesses ANSWER Organizations involved in the production of goods and/or the provision of services.
3. Consumers ANSWER The people or organizations who actually use a product.
4. Customers ANSWER The people or organizations that buy the product.
5. Entrepreneurs ANSWER Owners or operators of an organization who manage, organize, and plan the
other three factors of production. They are risk takers who exploit business opportunities in return for profits.
6. Intrapreneurship ANSWER The act of behaving as an entrepreneur but as an employee within a large
business organization. They work in an entrepreneurial capacity, with authority to create innovative products or new
processes for the organization.
7. Needs ANSWER The basic necessities that a person must have to survive, e.g. food, water, warmth, shelter, and
clothing.
8. Primary Sector ANSWER Businesses involved in the cultivation or extraction of natural resources, e.g.
farming, mining, quarrying, fishing, oil exploration, and forestry.
9. Product ANSWER Both goods and services. Goods are physical , e.g. cars, books, and food.
Services are intangible , e.g. haircuts, bus rides, education,
and health care.
10. Quaternary Sector ANSWER A subcategory of the tertiary sector, where businesses are involved in
intellectual, knowledge-based activities that generate and share information, e.g. information communities
technology and re- search organizations.
11. Secondary Sector ANSWER The section of the economy where business activity is concerned with the
construction and manufacturing of products.
12. Sectoral Change ANSWER A shift in the relative share of gross domestic product (or national output)
and employ- ment that is attributed to each business sector.
13. Tertiary Sector ANSWER The section of the economy where business activity is concerned with the
provision of services to customers.
14. Wants ANSWER People's desires, i.e. the things they would like to have, e.g. a larger home, a new
smartphone, or to go on an overseas holiday.
15. Charities ANSWER Non-profit social enterprises that provide voluntary support for good causes (from
society's point of view), such as protection of children, animals, and the natural environment.
16. Cooperatives ANSWER For-profit social enterprises set up, owned, and run by their members, who might
, IB Business Management Questions and Correct Answers
be employ- ees and/or customers.
, IB Business Management Questions and Correct Answers
17. Company (or Corporation) ANSWER A business that is owned by shareholders. It has been issued a
certificate of incorporation, giving it a separate legal identity from its owners.
18. Deed of Partnership ANSWER The legal contract signed by the owners of a partnership. The formal
deeds specify the name and responsibilities of each partner and their share of any profits or losses.
19. Incorporation ANSWER There is a legal ditterence between the owners of a company and the business
itself. This ensures that the owners are protected by limited liability.
20. Initial Public Offering (IPO) ANSWER It occurs when a business sells all or part of its business to
shareholders on a stock exchange for the first time.
21. Limited Liability ANSWER A restriction on the amount of money that owners can lose if their business goe
bankrupt,
i.e. shareholders cannot lose more than they invested in the company.
22. Microfinance ANSWER A type of financial service aimed at entrepreneurs of small businesses, especially
females and those on low incomes.
23. Non-Governmental Organizations (NGO) ANSWER Private sector not-for-profit social
enterprises that operate for the benefit of others rather than primarily aiming to make a profit, e.g. Oxfam and
Friends of the Earth.
24. Partnerships ANSWER A type of private sector business owned by 2-20 people (known as partners).
They share the responsibilities and burdens of running and owning the business.
25. Private Limited Company ANSWER A business owned by shareholders with limited liability but
whose shares cannot be bought by or sold the general public.
26. Aims ANSWER The long-term goals of a business, often expressed in the firm's mission statement. They
are a general statement of a firm's purpose or intentions and tend to be qualitative in nature.
27. Ansoff Matrix ANSWER An analytical tool to devise various product and market growth strategies,
depending on whether businesses want to market new or existing products in either new or existing markets.
28. Corporate Social Responsibility (CSR) ANSWER The conscientious consideration of ethical
and envi- ronmental practices related to business activity. A business that adopts acts morally towards
its various stakeholder groups and the well-being of society as a whole.
29. Ethical Code of Practice ANSWER The document of beliefs and philosophies of an organization.
30. Ethics ANSWER The moral principles that guide decision-making and strategy. Morals are concerned
with what is considered to be right or wrong, from society's point of view.
31. Mission Statement ANSWER The declaration of an organization's overall purpose. It forms the
foundation for setting the objectives of a business.
, IB Business Management Questions and Correct Answers
32. Objectives ANSWER The relatively short-term targets of an organization.
33. SMART Objectives ANSWER Target that are specific, measurable, achievable, realistic, and ti
constraint.
1. Business Plan ANSWER The document that sets out the business idea, its goals and objectives, and
other details of how the business will operate (such as its marketing, operations, and finance). It is often a crucial
part of an attempt to raise external sources of finance.
2. Businesses ANSWER Organizations involved in the production of goods and/or the provision of services.
3. Consumers ANSWER The people or organizations who actually use a product.
4. Customers ANSWER The people or organizations that buy the product.
5. Entrepreneurs ANSWER Owners or operators of an organization who manage, organize, and plan the
other three factors of production. They are risk takers who exploit business opportunities in return for profits.
6. Intrapreneurship ANSWER The act of behaving as an entrepreneur but as an employee within a large
business organization. They work in an entrepreneurial capacity, with authority to create innovative products or new
processes for the organization.
7. Needs ANSWER The basic necessities that a person must have to survive, e.g. food, water, warmth, shelter, and
clothing.
8. Primary Sector ANSWER Businesses involved in the cultivation or extraction of natural resources, e.g.
farming, mining, quarrying, fishing, oil exploration, and forestry.
9. Product ANSWER Both goods and services. Goods are physical , e.g. cars, books, and food.
Services are intangible , e.g. haircuts, bus rides, education,
and health care.
10. Quaternary Sector ANSWER A subcategory of the tertiary sector, where businesses are involved in
intellectual, knowledge-based activities that generate and share information, e.g. information communities
technology and re- search organizations.
11. Secondary Sector ANSWER The section of the economy where business activity is concerned with the
construction and manufacturing of products.
12. Sectoral Change ANSWER A shift in the relative share of gross domestic product (or national output)
and employ- ment that is attributed to each business sector.
13. Tertiary Sector ANSWER The section of the economy where business activity is concerned with the
provision of services to customers.
14. Wants ANSWER People's desires, i.e. the things they would like to have, e.g. a larger home, a new
smartphone, or to go on an overseas holiday.
15. Charities ANSWER Non-profit social enterprises that provide voluntary support for good causes (from
society's point of view), such as protection of children, animals, and the natural environment.
16. Cooperatives ANSWER For-profit social enterprises set up, owned, and run by their members, who might
, IB Business Management Questions and Correct Answers
be employ- ees and/or customers.
, IB Business Management Questions and Correct Answers
17. Company (or Corporation) ANSWER A business that is owned by shareholders. It has been issued a
certificate of incorporation, giving it a separate legal identity from its owners.
18. Deed of Partnership ANSWER The legal contract signed by the owners of a partnership. The formal
deeds specify the name and responsibilities of each partner and their share of any profits or losses.
19. Incorporation ANSWER There is a legal ditterence between the owners of a company and the business
itself. This ensures that the owners are protected by limited liability.
20. Initial Public Offering (IPO) ANSWER It occurs when a business sells all or part of its business to
shareholders on a stock exchange for the first time.
21. Limited Liability ANSWER A restriction on the amount of money that owners can lose if their business goe
bankrupt,
i.e. shareholders cannot lose more than they invested in the company.
22. Microfinance ANSWER A type of financial service aimed at entrepreneurs of small businesses, especially
females and those on low incomes.
23. Non-Governmental Organizations (NGO) ANSWER Private sector not-for-profit social
enterprises that operate for the benefit of others rather than primarily aiming to make a profit, e.g. Oxfam and
Friends of the Earth.
24. Partnerships ANSWER A type of private sector business owned by 2-20 people (known as partners).
They share the responsibilities and burdens of running and owning the business.
25. Private Limited Company ANSWER A business owned by shareholders with limited liability but
whose shares cannot be bought by or sold the general public.
26. Aims ANSWER The long-term goals of a business, often expressed in the firm's mission statement. They
are a general statement of a firm's purpose or intentions and tend to be qualitative in nature.
27. Ansoff Matrix ANSWER An analytical tool to devise various product and market growth strategies,
depending on whether businesses want to market new or existing products in either new or existing markets.
28. Corporate Social Responsibility (CSR) ANSWER The conscientious consideration of ethical
and envi- ronmental practices related to business activity. A business that adopts acts morally towards
its various stakeholder groups and the well-being of society as a whole.
29. Ethical Code of Practice ANSWER The document of beliefs and philosophies of an organization.
30. Ethics ANSWER The moral principles that guide decision-making and strategy. Morals are concerned
with what is considered to be right or wrong, from society's point of view.
31. Mission Statement ANSWER The declaration of an organization's overall purpose. It forms the
foundation for setting the objectives of a business.
, IB Business Management Questions and Correct Answers
32. Objectives ANSWER The relatively short-term targets of an organization.
33. SMART Objectives ANSWER Target that are specific, measurable, achievable, realistic, and ti
constraint.
