9/12/23, 9:48 AM DP Business Management: Paper 3 (HL)

Yamini 
Account details
Sitemap
Student access
Teacher accounts
My favorites
Messages
Help
Recommendations
Subscribe / Renew

Log out

Paper 3 (HL)

Paper 3 - Social enterprises (HL only)

Source: TradeKindness

Paper 3 (1 hour and 15 minutes)

Paper 3 (HL only) is based on unseen stimulus material about a social enterprise. The purpose is to assess
important business management knowledge and skills (such as strategic analysis and evaluation) within the
context of a social enterprise as a business entity. Paper 3 is forward-looking, providing students the
opportunity to develop and demonstrate their problem solving abilities and decision making skills.

The rationale for the specific focus on social enterprises is in line with the objectives of the new course (to
enable students to develop as confident, creative and compassionate business leaders, entrepreneurs, social
entrepreneurs and as change agents, page 17 of the guide). It also aligns well with the CAS programme as
well as the IB mission statement.
https://www.thinkib.net/businessmanagement/page/44014/paper-3-hl 1/11
9/12/23, 9:48 AM DP Business Management: Paper 3 (HL)
Social enterprises are an example of social purpose organizations (SPOs). They aim to primarily provide a
solution to important social or environmental issues. They exist to to create a better world due to the role they
play to improve society overall. As they are not always revenue-generating, SPOs often need financial funding
and suitable human resources. Other SPOs include charities, cooperatives, and non-governmental
organizations (NGOs).

Whilst there are several competing definitions, unlike traditional for-profit businesses, social enterprises
combine social and commercial agendas in order to achieve their social and environmental agenda. Their
activities, by definition, create social benefits.

Types of social enterprise explicitly featured in the IB Business Management syllabus:

For-profit social enterprises (AO3): (i) Private sector companies, (ii) Public sector companies, and (iii)
Cooperatives.

Non-profit social enterprises (AO3): (iv) Non-governmental organizations (NGOs)

Note that social enterprises can, and often are, for-profit organizations. However, the difference is their
existence (or social purpose) is beyond profitability as its very existence generates social benefits. In
other words, profit follows as a consequence of its social and environmental goals, rather than as a result
of its commercial activities. Also, it is important to understand that a social enterprise is not a charity.

 Take the example of Change Please, founded in 2015. The company sells coffee but uses 100% of its
profits to tackle to social and economic problems associated with homelessness.

Change Please NEW Summary Video

https://www.thinkib.net/businessmanagement/page/44014/paper-3-hl 2/11
9/12/23, 9:48 AM DP Business Management: Paper 3 (HL)

 A second example is The Big Issue, which helps the homeless and people in vulnerable housing to restart
their lives. Established in 1991, The Big Issue is the UK's largest street newspaper and is now published in
four continents.

What is The Big Issue?

Some differences between social enterprise, traditional commercial (for-profit business entities), and
charitable organizations are outlined below.

Charities Social enterprises Traditional businesses

Mission driven (charitable Purpose driven (social Vision driven (commercial

mission) purpose) vision)

Funded by owners, investors,

Funded by internal and
Funded by donations and
external sources
internal and external sources

Profits distributed to owners

Surplus reinvested Profits reinvested
and/or redistributed

Corporate social
Purely charitable Focus on social benefits
responsibilities*

Focus on social impact and

Focus on societal gains Focus on financial returns
financial gains

Social enterprises have three main sustainable business objectives, commonly referred to as ‘the triple bottom
line’. The triple bottom line, a business management model developed by John Elkington (b.1949), comprises
of the following:

Economic sustainability (profit) - to earn a profit to fund its activities and growth in a sustainable way.

Social or cultural sustainability (people) - to provide social gains for members of local communities,
such as providing job opportunities and support for less-privileged members of society.

Environmental sustainability (planet) - to manage and operate the business in such a way as to
protect the ecological (natural) environment, i.e., behaving in an environmentally sustainable and
https://www.thinkib.net/businessmanagement/page/44014/paper-3-hl 3/11
9/12/23, 9:48 AM DP Business Management: Paper 3 (HL)
responsible manner.

So, in addition to striving to earn a profit or financial surplus, social enterprises are driven foremost by social
and/or environmental objectives and socially responsible practices. Some examples of these are outlined in
the table below.

Environmental (ecological) sustainability

Social (cultural) sustainability practices
practices

Social enterprises being led by women Fair trade practices

Diversity in management representation Business practices that address climate change

Paying employees fair and decent wages Circular business models

Transparency in approaches to environmental

Operating in the most deprived communities
protection

Driven by an authentic social mission Driven by an authentic environmental mission

Adding a third paper for HL means reducing the time needed for the other papers, previously 2 hours 15
minutes each.

The stimulus material in Paper 3 will consist of:

a short introduction

a visual representation of a product, and

about 5 or 6 excerpts from various documents (such as emails, Twitter feeds, and newspaper articles)

Students need to answer the one compulsory structured set of questions based on the unseen stimulus
material. Unlike in previous IB Business Management exams, students will need to write all answers
succinctly in the boxed area of the Answer Booklet. This paper is worth 25 mark in in total.

Note that a 4-function calculator is permitted for this examination paper.

The Paper 3 examination also requires students to do three main things:

1. Identify and describe a human need (worth 2 marks)

2. Explain the potential organizational challenges facing the social entrepreneur wanting to meet
this need (worth 6 marks), and

3. Write a decision-making document that includes a business recommendation or plan of action

(worth 17 marks).

An example is shown below:

Using an appropriate business management theory, describe a human

1. [2 marks]
need that SML meets by donating free healthy lunches to school children.

2. Explain two possible challenges facing SML. [6 marks]

https://www.thinkib.net/businessmanagement/page/44014/paper-3-hl 4/11
9/12/23, 9:48 AM DP Business Management: Paper 3 (HL)

Using all the resources provided and your knowledge of business

3. management, recommend a possible plan of action to ensure the [17 marks]
sustainability of SML for the next five years.

Please note that all five units of the syllabus can be assessed (Units 1 - 5), including HL extension
topics.

The overall weighting of Paper 3 (HL only) is 25%.

Paper 3 (HL only) answers are to be written on separate answer sheets (like Paper 1, but unlike Paper
2).

Question 1 - Human needs

For part (a) of Paper 3, students need to be able to identify and describe an example of a human need. This
can include consideration of:

Maslow’s hierarchy of needs

McClelland’s theory of needs

Sustainable Development Goals and human needs

Ecological, Economic, and Social (Cultural) sustainability needs

Stakeholder needs.

Question 2 - Organizational challenges

For part (b) of Paper 3, students must also be able to explain the potential organizational challenges facing
the social entrepreneur wanting to meet the human need that is identified and described in part (a). Examples
of organizational challenges include:

SWOT analysis (BMT) Financial resources, e.g., liquidity and budgeting

STEEPLE analysis (BMT) Marketing

Hofstede's cultural dimensions (BMT) Operations management

Human resources Leadership and management

 Top tip 1!
When structuring your answers to this question in Paper 3, use the following format for each of the two
challenges (you do not need to exceed two paragraphs for this).

Identify the challenge facing the organization

Describe how this is a challenge

Apply the stimulus material to support your description.

Paragraph 1

Identify

Describe

https://www.thinkib.net/businessmanagement/page/44014/paper-3-hl 5/11
9/12/23, 9:48 AM DP Business Management: Paper 3 (HL)
Apply

Paragraph 2

Identify

Describe

Apply

Question 3 - The plan of action (recommendation)

For part (c), the final section of Paper 3, students are required to write a decision-making document that
includes a business recommendation or plan of action. This extended response question is worth 17 marks
(that's not a typo!)

There are four assessment criteria for the extended response question in part (c):

1. Criterion A - Use of resource materials (worth 4 marks)

2. Criterion B - Business management tools and theories (worth 4 marks)

3. Criterion C - Evaluation (worth 6 marks)

4. Criterion D - Sequencing of ideas and plan of action (worth 3 marks).

 Top tip 2!

A useful way to remember the above assessment criteria is the acronym ATES:

Application (Criterion A - Use of resource materials)

Tools & theories (Criterion B - Business management tools and theories)

Evaluation (Criterion C - Evaluation)

Sequencing (Criterion D - Sequencing of ideas and plan of action)

 Top tip 3!
For the extended response question in Paper 3, you are expected to demonstrate your knowledge,
understanding, and the capacity to explain, summarize, and evaluate the evidence provided in the
stimulus material in order to provide a recommendation (business strategy or plan of action) for the social
enterprise.

https://www.thinkib.net/businessmanagement/page/44014/paper-3-hl 6/11
9/12/23, 9:48 AM DP Business Management: Paper 3 (HL)

 Top tip 4!
When structuring your answers to part (c) in Paper 3, make sure your answer to the 17-mark essay
contains the following:

Introduction - include any key terms that may need to be defined.

Body - three or four main paragraphs that address the demands of the question.*

Conclusion - answer the question in its entirety.

Fit for purpose paragraph - use the PEEL framework (each paragraph is about one point, contains
examples and explanations, and is directly linked to the question).

* The body of the extended response should have elements of an action plan that address each of the
two challenges you explained in part (b) of Paper 3.

 Top tip 5!
What exactly is a plan of action?

Note that a plan of action is not a strategy used in isolation. An action plan will have numerous elements
to it, i.e., it is essentially a business plan. Therefore, a well-designed plan of action may include relevant
aspects of the following (depending on the specific case study in question):

Element of
Description Examples of content
action plan

Workforce planning, Recruitment

A well-designed human resource plan of
and selection, Training and
action is crucial for the success of any
development, Retention
Human organization as it helps to attract and retain
strategies, Performance
resource the best employees, enhance their
management (appraisals),
action plan performance, and ultimately contribute to
Financial and non-financial
the achievement of the social enterprise's
motivation, Motivation theory,
corporate objectives.
Diversity and inclusion policies.

Marketing objectives, Marketing

A well-designed marketing action plan is
planning, Market research,
critical for the success of any business, as it
Segmentation, targeting, and
Marketing helps the organization to reach and engage
positioning (STP), Sales
action plan with customers, differentiate their products
forecasting, The marketing mix,
from those offered by competitors, and
Marketing budgets, International
ultimately drive sales revenue and growth.
marketing.

Capacity and capacity utilization,

A well-designed operations management
Quality management, Inventory
action plan is vital for the functioning and
management (stock control),
performance of a business as it helps to
Operations Local and global supply chain
ensure that goods and/or services are
management management, Research and
produced efficiently and with consistent
action plan development (R&D),
quality, while minimizing waste and
Contingency planning,
reducing production costs.
Management information
systems (MIS).

Finance action A well-designed finance action plan is Capital expenditure, Costs and
plan important for the success of any business revenues (including revenue
as no strategy can be executed without the streams), Sources of finance,
necessary funds. The plan helps to ensure Financial analysis (including
that the business considers the necessary ratio analysis), Investment
financial resources to operate, grow, and appraisal, Budgeting (including
make strategic decisions, while managing

https://www.thinkib.net/businessmanagement/page/44014/paper-3-hl 7/11
9/12/23, 9:48 AM DP Business Management: Paper 3 (HL)
financial risks and providing stakeholders variance analysis), Cash flow
with transparent and accurate financial management.
information.

Therefore, it is worthwhile revising BMT 5 - Business Plans prior to tackling any Paper 3 practice
questions.

 Top tip 6!

Although it is not a formal requirement to include a key concept in the Paper 3 extended response
question, it may be useful to consider the concept of sustainability or ethics when evaluating the plan of
action, i.e., the extent to which your plan of action is sustainable and/or ethical.

Paper 3 extended response question - Understanding the assessment criteria

Criterion A – Use of resource materials (Application)

This assessment criterion assesses the extent to which the candidate uses the stimulus materials to
effectively support the recommended plan of action. It is worth up to 4 marks.

Marks Level descriptor

0 The response does not reach a standard described by the descriptors below.

The response makes limited reference to the resource materials provided or the resources
1
identified have been used ineffectively to support the recommended plan of action.

The response makes some reference to the resource materials provided or the resources
2
identified have been used in a superficial way to support the recommended plan of action.

The response makes reference to most of the resource materials provided to support the
3
recommended plan of action.

The response makes reference to all resource materials provided to effectively support the
4
recommended plan of action.

So, to score top marks, the student must show evidence of the following throughout their written response:

reference to all stimulus materials provided in the exam, namely all 5 or 6 excerpts from various
documents (such as emails, Twitter feeds, and newspaper articles)

using the stimulus materials from the excerpts in an effective way to support the recommendations (plan
of action).

Criterion B – Business Management tools and theories (Tools and theories)

https://www.thinkib.net/businessmanagement/page/44014/paper-3-hl 8/11
9/12/23, 9:48 AM DP Business Management: Paper 3 (HL)
This assessment criterion assesses the extent to which a candidate’s plan of action (recommendations)
effectively apply appropriate business management tools and theories. It is also worth up to 4 marks.

Marks Level descriptor

0 The response does not reach a standard described by the descriptors below.

The response demonstrates limited application of appropriate business management tools and
1
theories.

2 The response superficially applies appropriate business management tools and theories.

3 The response satisfactorily applies appropriate business management tools and theories.

4 The response effectively applies appropriate business management tools and theories.

As this is an academic piece of work, the response must demonstrate clear, appropriate, and effective use of
relevant business management tools and theories, throughout the extended response question. Do remember
that any of the fifteen tools from the Business Management Toolkit (BMT) can be used, where appropriate,
for this purpose.

Criterion C – Evaluation (Evaluation)

This assessment criterion assesses the extent to which the candidate effectively evaluates the expected
impact of their plan of action on the relevant areas of the social enterprise. It is worth up to 6 marks (about
35% of the marks for the extended response question in Paper 3).

Marks Level descriptor

0 The response does not reach a standard described by the descriptors below.

The response is largely descriptive with limited analysis or evaluation of the expected impact of
1-2
their plan of action. There is limited reference to the relevant areas of the business.

The response analyses the expected impact of their plan of action with some reference to the
3-4
relevant areas of the business. There is some evidence of evaluation but it is not sustained.

The student effectively evaluates the expected impact of their plan of action on the relevant
5-6
areas of the business and considers the trade-offs between those areas.

So, to score top marks, students must demonstrate evidence of evaluation of:

the realistically expected impacts of their recommendations (plan of action)

reference to the relevant areas of the business that are likely to be impacted, such as human resource,
finance and accounts, operations management and/or marketing functions of the social enterprise.

the probable opportunity costs (sacrifices or trade-offs) due to the recommendations (plan of action).

 Top tip 6!
As a general rule, remember that all business decisions (recommendations in the plan of action) have at
least two wider implications on an organization:

The impact on human resources - Students should consider how their recommendations (in the
plan of action) are likely to affect employees, perhaps in terms of training needs or their level of
motivation and productivity.

The impact on finances - Every business decision / plan of action / strategy will have a direct
impact on the organization's finances. Students should consider how their recommendations (in the
plan of action) will affect the organization's finances. For example, are the recommendations viable
(realistic) given the firm's budgets and current financial position?

https://www.thinkib.net/businessmanagement/page/44014/paper-3-hl 9/11
9/12/23, 9:48 AM DP Business Management: Paper 3 (HL)

Criterion D – Sequencing of ideas and plan of action (Sequencing)

This final assessment criterion for Question 3 assesses the extent to which the candidate’s ideas and plan of
action are sequenced in a clear and coherent manner. This assessment criterion is worth up to 3 marks.

Marks Level descriptor

0 The response does not reach a standard described by the descriptors below.

1 The response is limited in its sequencing of ideas and plan of action.

The response consists of ideas and a plan of action but these are not always sequenced in a
2
clear manner.

The response effectively sequences appropriate ideas and a plan of action in a clear and
3
coherent manner.

Therefore, to score top marks, candidates must use fit for purpose paragraphs and ensure the ideas and the
plan of action in the extended response answer flow in a logical and well-organized way.

Teachers can access a full Paper 3 exam practice paper, plus full mark scheme, based on the social
enterprise Change Please by clicking the link here.

Teachers can also access a second full Paper 3 exam practice paper, plus full mark scheme, based on
the social enterprise Power of Active Love (PAL) by clicking the link here.

https://www.thinkib.net/businessmanagement/page/44014/paper-3-hl 10/11
9/12/23, 9:48 AM DP Business Management: Paper 3 (HL)

Return to the the external assessments homepage

All materials on this website are for the exclusive use of teachers and students at subscribing schools for the period of their subscription. Any unauthorised copying or posting
of materials on other websites is an infringement of our copyright and could result in your account being blocked and legal action being taken against you.

Click the 'Copy URL' button to copy link to another learning platform (e.g. Google Classroom.).

 Copy URL

×
 Paper 3 (HL)
Send to:
Select deadline

Optional instructions

Cancel  Processing...  Send task

Your session has expired

You will have to reload and log in again.

 Reload

https://www.thinkib.net/businessmanagement/page/44014/paper-3-hl 11/11