Paper 3 - Social Enterprise

PowerPoint Paper 3 Summary

Paper 3 Summary

https://docs.google.com/presentation/d/1cXDSS8sSvRlceb9Q7h4SfoQRtNPxFdk-zeXWTc3K4qw/edit?usp=sharing

IB Business Exam Dates

Paper 1 Exam Date: April 26, 2024, Afternoon Session

Paper 3 Exam Date: April 26, 2024, Afternoon Session

Paper 2 Exam Date: May 1, 2024, Morning Session

Paper 3 - Social Enterprise (HL Only)

Paper 3 Format

Exam Date: April 26, 2024, Afternoon Session

1 hours 15 minutes
25 Marks
- - (2 mark, 6 mark, 17 mark)
25% of IB Mark
Based on a Social Enterprise
Based on unseen stimulus material
Must provide a recommendation (forward looking problem solving)
All five units of the syllabus can be assessed (Units 1 - 5), including HL extension topics.
Answers are to be written on separate answer sheets (like Paper 1, but unlike Paper 2).

1 Section: (3 questions)

Q1: 2 marks - Identify and describe a human need
Q2: 6 marks - Explain the potential organizational challenges facing the social entrepreneur wanting to meet this need
Q3: 17 marks - Write a decision-making document that includes a business recommendation or plan of action (worth 17 marks).

Paper 3 - Example

Paper 3 Overview from the IB

Paper 3 will be about a social enterprise and requires students to identify and describe a human need and the potential organizational challenges facing the social entrepreneur wanting to meet this need. Further to this, students are required to write a decision-making document that includes a business recommendation. Only HL students will sit this examination. The paper will consist of stimulus followed by questions. The stimulus material will consist of a short introduction to an organization, supported by a visual representation of a product, and five or six excerpts from various documents (such as emails, Twitter feeds, newspaper articles, and so on).

The paper will have the following three tiers of questions.

AO1 questions—assesses students’ ability to describe the human need in the stimulus material.
AO2 questions—assesses students’ ability to explain the key challenges facing the social entrepreneur or social enterprise in the setting of the stimulus material.
AO3/AO4 questions—assesses students’ ability to recommend a plan for the organization in meeting the identified human need. In doing so, students will be required to demonstrate knowledge and understanding, and their ability to explain, synthesize and evaluate evidence, and formulate a recommendation.

Use of examples and case studies

In order to be awarded marks in the higher markbands and levels of assessment criteria, students are expected, where appropriate, to refer to the stimulus material provided in examinations, use case studies explored in class and illustrate their answers with examples. In this way, students highlight their understanding of how business management tools and theories operate in practice. Where the stimulus material, case studies and examples are referred to, students should not simply state the information, but rather offer some explanation of how it relates to the question asked.

Use of business management terms

Students are expected to demonstrate the ability to appropriately define, use and apply the business management terms included in the “Syllabus” section.

What is a Social Enterprise?

Social enterprises or social purpose organizations (SPOs) aim to 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. Other SPOs include charities, cooperatives, and non-governmental organizations (NGOs).

Definitions of social enterprises include the following:

"a business entity that aims to achieve a social or environmental mission while also generating revenue. It combines the principles of traditional business with a focus on addressing social or environmental issues." (Social Enterprise UK)
"businesses that put the interests of people and planet ahead of shareholder gain. These businesses are driven by a social/environmental mission and reinvest profits into creating positive social change." (Social Enterprise Mark)
"combine societal goals with an entrepreneurial spirit (and) focus on achieving wider social, environmental, or community objectives." (European Commission)
"a business with primarily social objectives whose surpluses are principally reinvested for that purpose in the business or in the community, rather than being driven by the need to maximise profit for shareholders and owners." (Gov.uk)

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.

Difference between Charities, Social Enterprises and Traditional Businesses

Example: Change Please

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.

https://youtu.be/-TIccp2hg6E?si=g9MSzBCb_hqimhLR

Example: The Big Issue

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.

https://youtu.be/kYO-TeBzYWY?si=TKMvUqoQCZuP-46B

Paper 3 Time Management

Time: 1 hour 15 minutes = 75 min

Approximately 2-3 minutes per mark

Recommended Time:

Q1: 2 marks (4 min)

Q2: 6 marks (12-18 min)

Q3: 17 marks (34-53 min)

Total 25 marks (75 min)

Question 1 - Human needs (2 marks)

Example Exam Question:

Using an appropriate business management theory, describe a human need that SML meets by donating free halthy lunches to school children [2]

What human need is the social enterprise meeting?
What business management theory is it connected to?

You need to be able to identify and describe an example of a human need. This can include consideration of:

Maslow’s hierarchy of needs
Herzberg's two factor theory (hygiene and motivators)
McClelland’s theory of needs
Sustainable Development Goals and human needs
Ecological, Economic, and Social (Cultural) sustainability needs
Environmental needs
Stakeholder needs

2 Mark Question Mark Scheme

Marked as [1+1]

Award [1] for using an appropriate business management theory, eg Maslow’s hierarchy of needs, and [1] for describing a human need.

Question 2 - Organizational challenges

(6 marks)

Example Exam Question:

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

What are two potential organizational challenges facing the social enterprise?

Marked as [3+3].

Award [1] for identification of a challenge, [1] for explanation and [1] for application to SML.

You 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:

- Human resources challenges
- Sustainability challenges
- Financial resources, e.g., liquidity and budgeting
- Marketing challenges
- Operations management challenges
- Leadership and management challenges
- Change and resistance to change
- SWOT analysis (BMT)
- STEEPLE analysis (BMT), e.g., competition
- Hofstede's cultural dimensions (BMT)

6 Mark Question Mark Scheme

Marked as [3+3].

Award [1] for identification of a challenge, [1] for explanation and [1] for application to SML.

Question 2 - Structure (2 paragraphs)

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.
Explain how this is a challenge.
Apply the stimulus material to support your explanation.

Paragraph 1

Identify
Explain
Apply

Paragraph 2

Identify
Explain
Apply

Question 3 - The plan of action (17 marks)

You are required to write a recommendation or plan of action

Criterion A - Use of resource materials (worth 4 marks)
Criterion B - Business management tools and theories (worth 4 marks)
Criterion C - Evaluation (worth 6 marks)
Criterion D - Sequencing of ideas and plan of action (worth 3 marks).

Plan of action must address the need and challenges of the social enterprise from questions 1 and 2.

It must also align with the social enterprise's mission or vision

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):

Human resource action plan

A well-designed human resource plan of action is crucial for the success of any organization as it helps to attract and retain the best employees, enhance their performance, and ultimately contribute to the achievement of the social enterprise's corporate objectives.

Workforce planning
Recruitment and selection
Training and development
Retention strategies
Performance management (staff appraisals)
Financial and non-financial motivation
Motivation theory
Diversity and inclusion policies.

Marketing action plan

A well-designed marketing action plan is critical for the success of any business, as it helps the organization to reach and engage with customers, differentiate their products from those offered by competitors, and ultimately drive sales revenue and growth.

Marketing objectives
Marketing planning
Market research
Segmentation, targeting, and positioning (STP)
Sales forecasting
The marketing mix
Marketing budgets
International marketing strategies.

Operations management action plan

A well-designed operations management action plan is vital for the functioning and performance of a business as it helps to ensure that goods and/or services are produced efficiently and with consistent quality, while minimizing waste and reducing production costs.

Capacity and capacity utilization
Quality management
Inventory management (stock control)
Local and global supply chain management
Research and development (R&D)
Contingency planning
Management information systems (MIS).

Financial action plan

A well-designed finance action plan is important for the success of any business as no strategy can be executed without the necessary funds. The plan helps to ensure that the business considers the necessary financial resources to operate, grow, and make strategic decisions, while managing financial risks and providing stakeholders with transparent and accurate financial information.

Capital expenditure
Costs and revenues (including revenue streams)
Sources of finance
Financial analysis (including ratio analysis)
Investment appraisal
Budgeting (including variance analysis)
Cash flow management

17 Mark Question Mark Scheme

17 Mark Question Mark Scheme Criteria - Paper 3.pdf

https://docs.google.com/document/d/1GjwGU6xqg2aUmGeBb76wB7sZV4TmaXB26fl-AKHhZyU/edit?usp=sharing

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

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.

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, special media feeds, and newspaper articles).
use of the stimulus materials from the excerpts in an effective way to support the recommendations (plan of action), i.e., application of how the evidence provided will strengthen the recommended business strategy.

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

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.

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.

Remember that any of the 15 tools from the Business Management Toolkit (BMT) can be used, where appropriate, for this purpose. However, any relevant tools or theories beyond the BMT (but within the syllabus) can be used.

Criterion C - Evaluation (worth 6 marks)

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

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

the realistically expected impacts (short and long term) 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)
consider impact on multiple stakeholders

Top tip!

As a general rule, remember that all business decisions (the recommendations in the plan of action) will 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?

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

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.

Therefore, to score top marks, candidates must:

Use fit for purpose paragraphs (use the Paragraph Structure frameworks for this)
Have an introduction, body (analysis and evaluation), and conclusion.
Ensure the ideas and the plan of action in the essay flow in a clear, logical, and well-organized way.
The conclusion must answer the question in its entirety.

Possible structure:

In structuring the extended response question, students can use the following format:

Paragraph 1

Write a short paragraph summarizing the key points – “where is the social enterprise now?” Refer to the background (history) and current situation facing the business organization.

Paragraph 2

Write a second short paragraph that addresses “where does the social enterprise want to be?”,

i.e., what is the long-term plan and how does it support the social enterprise’s mission, vision, or business objectives? End this paragraph with an introduction to the recommendations (the plan of action).

Note: as part of your extended response, refer back to the language of the question about being

“sustainable” (i.e., to stay in business in the long term).

Body paragraphs

For each functional area mentioned, examine how the strategic option (plan of action):

● addresses a challenge mentioned in Question 2.

● supports an existing strength of the social enterprise.

● analyzes the short and long term impacts

● considers impacts on the relevant areas of the business (HR, Finance & Accounts, Marketing, Operations Management)

Note: there needs to be evidence of evaluation – consider the pros/cons that may occur within the

same functional area or across different ones.

Also consider the impacts of the plan of action on key stakeholders:

● how will different key stakeholder groups be impacted?

● is there any potential conflict (not already mentioned above)?

Conclusion

Justify your recommendation (plan of action), linking this to how it supports the objectives of the social enterprise and why it is the best strategic choice.

Note: Be sure to recap the main arguments – both pros and cons. Also, keep in mind that there should be no new information included in the conclusion. Finally, ensure that the question is answered in its entirety.