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  3. Command terms and answer technique

Command terms and answer technique

Read every command term as an instruction about depth, write full-mark definitions and “explain two” answers, use the case beyond names, and spend your time in proportion to the marks.

  • IB Business Management
  • Exam skills
  • SL and HL

28 min readLast reviewed 15 Oct 2026

What every exam question is made of

Every question in Business Management has the same four parts. A command term tells you what to do (“define”, “explain”, “evaluate”). The content tells you which idea from the course to use (“franchising”, “the current ratio”, “democratic leadership”). The context tells you which organisation, in the case study or stimulus material, the answer must be about. The mark allocation in square brackets tells you how much to write.

Most lost marks come from misreading one of these parts: explaining when a judgment was asked for, writing a general answer when a business was named, or writing a page for 2 marks and running out of time for 10. Answer technique is the habit of reading all four parts before writing a word.

Part of the question

Example

What it decides

Command term

Explain two advantages…

The type of thinking and the depth: knowledge, reasons, a judgment or a calculation.

Content

…of growing by franchising…

Which concept, tool or theory the answer must use, with its correct terminology.

Context

…for Tamarind Table…

The organisation the answer must be applied to, using its facts and figures.

Marks

[4]

How many developed points are wanted and how long to spend.

Exam tip

Before writing, underline the command term, circle the content and write the business’s name and the marks in the margin. It takes ten seconds and prevents the commonest mistake of all: answering a different question from the one set.

The four assessment objectives

The IB groups the skills it assesses into four assessment objectives (AOs). Each command term belongs to one of them, so the command term is a signal of which skill the examiner is looking for. The objectives form a ladder: each one builds on the skills below it, so an evaluation still needs accurate knowledge and analysis inside it.

Definition

Assessment objectives (AOs): the four groups of skills the course assesses: AO1 knowledge and understanding, AO2 application and analysis, AO3 synthesis and evaluation, and AO4 the use of appropriate skills such as calculating and constructing.

Objective

What it tests

Command terms

Typical marks

AO1 Knowledge and understanding

Knowing terms, tools, theories and features accurately.

Define, describe, identify, list, outline, state

[1]–[2]

AO2 Application and analysis

Using knowledge on the case: reasons, causes, effects and links.

Analyse, apply, comment, demonstrate, distinguish, explain, suggest

[2]–[6]

AO3 Synthesis and evaluation

Weighing arguments and evidence to reach a supported judgment.

Compare, contrast, compare and contrast, discuss, evaluate, examine, justify, recommend, to what extent

[10] (and Paper 3’s plan)

AO4 Use of appropriate skills

Calculating, drawing and organising data correctly.

Annotate, calculate, complete, construct, determine, draw, label, plot, prepare

[1]–[6]

AO3 questions in Paper 1 and Paper 2 are almost always the 10-mark extended response questions in Section B, and in Paper 3 (HL) the final plan of action. AO1, AO2 and AO4 fill the structured questions in Section A and the first parts of Section B. Paper 2 leans on AO4, because its stimulus is built around numbers, charts and statements.

A command term can go lower than the topic, never higher

Each topic in the course is taught to a particular depth. A topic taught to AO2 depth, such as the reasons for resistance to change, can be examined with “explain” or “describe”, but never with “evaluate” or “discuss”. A topic taught to AO3 depth, such as leadership styles, can be examined with any command term from “define” to “to what extent”.

The rule tells you which topics can appear as a 10-mark question (growth methods, leadership styles, sources of finance, investment appraisal, the marketing mix, location and the other AO3 topics), so you can prepare evaluation for those.

Common mistake

Writing an evaluation for an “explain” question. A paragraph of “however, it depends on…” earns nothing in a 4-mark explain question, because the markscheme has no marks for judgment there, and it uses time the 10-mark question needs. Answer exactly at the level of the command term.

AO1 command terms: knowing and stating

AO1 command terms ask you to show that you know something accurately. They do not ask for reasons, effects or opinions. The answers are short, but they must be precise: in a 1- or 2-mark question there is no room for a vague word.

Command term

Meaning

What a good answer looks like

Define

Give the precise meaning of a word, phrase or concept.

One or two sentences that would identify the term to someone who has never met it. No example needed.

Describe

Give a detailed account.

The main features of something, with enough detail that a reader could picture it, but no reasons.

Identify

Pick out an answer from a number of possibilities.

A word or phrase, often taken from the case or the data (“Identify two stakeholders of X”).

List

Give a sequence of brief answers with no explanation.

Single words or short phrases, one per point.

Outline

Give a brief account or summary.

Usually two linked points: what it is, plus one feature or consequence.

State

Give a specific name, value or brief answer without explanation or calculation.

A word, a phrase or a number.

Define: what makes a 2-mark definition

“Define” is the most common command term in Section A, usually worth 2 marks and often taken from a word in the case (“Define the term franchise (line 14)”). The markscheme gives 1 mark for a definition that shows partial understanding and 2 marks for one that is full and precise. Most students lose the second mark because their definition is vague or incomplete.

A full definition has two parts. The first places the term in its category (“an agreement”, “a measure”, “a source of finance”, “a leadership style”). The second gives the feature that separates it from everything else in that category. “A franchise is a business” has a category but nothing distinctive; “a franchise is when a business uses another firm’s name” has a feature but no category and leaves out the payment that defines the deal.

Term

1-mark answer (partial)

2-mark answer (full)

Franchise

When a company lets other people open shops with its name, like McDonald’s.

An agreement in which a business (the franchisor) sells another business (the franchisee) the right to trade using its brand, products and methods, in return for a fee and usually a share of revenue (royalty).

Market share

How much of the market a business has.

A business’s sales revenue (or sales volume) as a percentage of the total sales of the market in a given period.

Liquidity

Having enough money.

The ability of a business to pay its short-term debts (current liabilities) as they fall due, by turning its current assets into cash.

Delegation

Giving work to other people.

The passing of authority to make decisions or complete tasks from a manager to a subordinate, while the manager remains responsible for the outcome.

Stakeholder

Someone involved in the business, such as a shareholder.

An individual or group with an interest in, or who is affected by, the activities and decisions of an organisation.

The partial answers share three faults: vagueness (“how much”, “enough money”), an example in place of a meaning (“like McDonald’s”), and in the liquidity answer the wrong idea altogether, since “having money” describes cash, not the ability to meet short-term debts.

Common mistake

Defining a term with the same word: “a market share is the share of the market a business has”. A circular definition explains nothing and earns at most 1 mark. Replace the word with what it means: “sales as a percentage of total market sales”.

Tip

Learn definitions as “category + distinguishing feature”. When revising a term, first write its category in one or two words (agreement, ratio, style, cost, strategy), then the feature that separates it from the others in that group. If a definition still makes sense with the term removed, it is precise enough.

Worked example

[2 marks] The case says that Kirra Surf Co. is “a sole trader with unlimited liability” (hypothetical case). Define the term unlimited liability.

Show a model answer

Model answer. Unlimited liability means that the owner of a business is personally responsible for all of its debts, so if the business cannot pay, the owner’s personal assets, such as a house or savings, may be used to repay them.

Why it scores 2. It names the category (the owner’s legal responsibility for debts), states the distinctive feature (no limit: personal assets are at risk) and adds the consequence in a short clause. It does not repeat the case or add an example, because neither is needed for a definition.

Exam tip

Definitions are the cheapest marks on the paper. Keep a list of every key term you meet, with a full definition, and test yourself on it each week. In the exam, write the definition in one or two sentences and move on: a definition that runs to a paragraph usually means you are unsure and trying several meanings at once.

Describe, outline, state and identify

These terms differ mainly in how much detail they ask for. “State” and “identify” want the bare fact: a name, a value, a word from the case. “Outline” wants a short account, usually two linked points for 2 marks. “Describe” wants a fuller account of the features, still without reasons. None of them needs analysis or a judgment. A useful test is the word “because”, which an answer to “describe” rarely needs and an answer to “explain” almost always does.

AO2 command terms: applying and analysing

AO2 command terms ask you to use what you know on a particular situation. Every AO2 answer needs reasons (how and why something happens) and application (why it happens for this business); an answer that could have been written without reading the case is capped below full marks.

Command term

Meaning

What a good answer looks like

Explain

Give a detailed account including reasons or causes.

A point, the reason for it and its effect, linked to the business in the case.

Analyse

Break down to bring out the essential elements or structure.

The parts of an issue and how they link: causes, effects and the chain between them, often with a tool or a calculation.

Apply

Use an idea, principle or theory on a given problem.

The theory named, then each part matched to evidence in the case.

Comment

Give a judgment based on a statement or the result of a calculation.

What the figure means for this business: good or bad, compared with what, and why it matters.

Demonstrate

Make clear by reasoning or evidence, with examples.

A claim supported step by step with evidence from the case.

Distinguish

Make clear the differences between two or more items.

Each difference stated for both items, side by side.

Suggest

Propose a solution or possible answer.

A realistic option for the business, with the reason it would help.

Explain: the chain of reasoning

An explanation is a chain: a point, a reason and a consequence. The connecting words show the chain to the examiner: “because”, “so”, “this means that”, “which leads to”, “as a result”. A list of points without these links is a description, however many points it has.

Compare two answers to “Explain one disadvantage for Kirra Surf Co. of being a sole trader.” The first says: “Sole traders have unlimited liability, which is risky.” The second says: “As a sole trader, the owner of Kirra Surf Co. has unlimited liability, so if the shop’s planned expansion into surfboard repairs fails and debts cannot be paid, she could lose personal assets such as her home. This risk may make her unwilling to borrow for the expansion, which slows the business’s growth.” The second has the point, the reason, the consequence and the case.

Definition

Command term: a word or phrase at the start of an exam question, such as define, explain or evaluate, that tells the student what kind of answer is wanted and how deep it must go.

“Explain two…” [4]: the most common Section A question

A question such as “Explain two advantages for X of…” [4] is usually marked as two separate halves of 2 marks. Each half earns 1 mark for a relevant point that is explained and a second mark when that point is developed and applied to the business in the case. Two general points earn about 2 marks; two applied points earn 4.

Write the two points in separate paragraphs so the examiner sees two distinct points, make sure they really are different (“lower costs” and “higher profit” are usually one point seen twice), and spend about the same time on each half.

Worked example

[4 marks] Orbit Couriers is a parcel delivery business in Nairobi with 120 drivers (hypothetical case). Drivers complete the same routes every day and labour turnover is high. The operations manager plans to introduce job rotation, so drivers change routes and also spend some days in the sorting centre.

Explain two advantages for Orbit Couriers of introducing job rotation.

Show a model answer

Advantage 1. Job rotation moves employees between tasks, which reduces the boredom of repeating the same route every day. Because Orbit’s drivers currently do identical work daily, more variety may raise their motivation and so reduce the high labour turnover, cutting the cost of recruiting and training new drivers.

Advantage 2. Drivers who also work in the sorting centre learn several jobs, so Orbit gains a multi-skilled workforce. If drivers are ill or parcel volumes rise in one area, the manager can move staff to cover routes or sorting, which keeps deliveries on time and protects Orbit’s reputation with customers.

Why it scores 4. The two advantages are distinct (motivation; flexibility), each is explained with a reason and a consequence, and each uses facts from the case (identical daily routes and high turnover; the sorting centre). The answer does not evaluate, because “explain” does not ask for a judgment.

Common mistake

Giving two points that are really one. “Job rotation increases motivation” and “job rotation makes employees happier” describe the same effect, so the second earns nothing extra. Check the two points by asking whether each could be true without the other.

Analyse, distinguish, suggest and comment

“Analyse” asks for more structure than “explain”. A good analysis breaks the issue into its parts, often with a tool such as SWOT analysis or a calculation, and shows how the parts affect each other. “Distinguish” wants the differences between two things, each stated for both: “A sole trader has unlimited liability, whereas a shareholder in a privately held company has limited liability.” “Suggest” asks for a sensible proposal with a reason; there is rarely one right answer, so what earns the marks is a proposal that fits the case.

“Comment” usually follows a calculation (“Comment on your answer to (b)” [2]). The examiner wants a judgment about what the number means, not a repeat of it. A strong comment compares the figure with something (last year, a competitor, a benchmark such as a current ratio of 1.5–2) and says what it means for the business in the case.

Worked example

[2 marks] Fennel & Fig, a small grocery chain (hypothetical case), has calculated its current ratio as 0.8. Last year it was 1.4. The business plans to open two new stores next year using its own cash. Comment on the current ratio of Fennel & Fig.

Show a model answer

Model answer. A current ratio of 0.8 means Fennel & Fig has only $0.80 of current assets for every $1 of current liabilities, well below last year’s 1.4 and below the usual benchmark of 1.5–2, so it may struggle to pay its short-term debts. This is a concern because the business plans to fund two new stores from its own cash, which would weaken its liquidity further; it may need external finance or to delay one opening.

Why it scores 2. It interprets the number (what 0.8 means), compares it with last year and a benchmark, and links it to the case (the plan to use its own cash).

AO3 command terms: reaching a judgment

AO3 command terms ask you to weigh things up and decide. They are the terms of the 10-mark extended responses, and they share three demands: arguments on more than one side, evidence from the case behind each argument, and a clear judgment at the end that follows from what came before. The differences between them are mainly in what the judgment is about.

Command term

Meaning

What the judgment is about

Discuss

A balanced review of a range of arguments or factors, with a clear conclusion supported by evidence.

Which side of the issue is stronger for this business, and why.

Evaluate

An appraisal that weighs up strengths and limitations.

How good a decision, strategy or method is, all things considered.

Examine

Consider an argument or concept in a way that uncovers its assumptions and interrelationships.

What the issue depends on and what has been taken for granted.

Recommend

Present an advisable course of action, with supporting evidence and reasons.

Which option the business should choose, and under what conditions.

Justify

Give valid reasons or evidence to support an answer or conclusion.

Why a given choice or conclusion is right.

To what extent

Consider the merits or otherwise of an argument, with conclusions supported by evidence and sound argument.

How far a claim is true: fully, largely, partly or hardly at all.

Compare / contrast / compare and contrast

Similarities, differences, or both, referring to both items throughout.

How alike or different two items are, with each point made about both.

A judgment answers the exact question (“should”, “how far”, “which”), gives the main reason and states what the decision depends on. “To what extent” wants a degree (“to a large extent, because…”); “recommend” wants an option and its conditions. Building a full answer around these demands is covered in “The 10-mark extended response”.

Exam tip

A question can name a key concept (“With reference to ethics, discuss…”). The concept is then part of the content, not decoration: define it briefly, use it in the analysis on both sides, and bring it back in the conclusion. Ignoring a named concept keeps an answer out of the top markbands, however good the rest is.

AO4 command terms: skills with numbers and diagrams

AO4 command terms ask you to carry out a skill: work out a figure, draw a chart, put data into a statement. These questions appear mostly in Paper 2. They are marked for accuracy and for the method shown, so the presentation of the working is part of the answer.

Command term

Meaning

What earns the marks

Calculate

Obtain a numerical answer, showing the relevant stages of the working.

The formula, the figures put into it, the answer with its unit ($, %, days, units) and rounding as asked.

Construct

Display information in a diagrammatic or logical form.

A complete chart: title, labelled axes with scales, labelled lines and the key points marked (for example a break-even chart or an organisation chart).

Prepare

Put given data into a suitable format.

The correct layout, such as the IB layout for a statement of profit or loss or a cash flow forecast, with every line named and subtotals correct.

Draw

Represent by an accurate, labelled diagram or graph, to scale.

A ruler for straight lines, points plotted correctly, labels on every line.

Complete

Add missing information or data.

The gaps in a table, network or chart filled in correctly.

Label / annotate

Add labels; add brief notes to a diagram.

Every requested feature named, and short notes where asked.

Plot

Mark the position of points on a diagram.

Points placed accurately against the scale.

Determine

Obtain the only possible answer.

The single correct value or item, with the reasoning that leads to it.

The formula sheet gives the ratio and investment appraisal formulas, but many others are not on it, including break-even quantity, margin of safety, market share and the payback period. These must be learnt. A full list of the formulas, with worked examples, is in “Formulae and calculations”.

Common mistake

Writing only the final number. If the answer is wrong, a bare number scores nothing; if the formula and the figures put into it are shown, most of the marks are usually still available. Write the formula, the substitution, the answer and its unit: “Break-even quantity = 40,000 ÷ (25 − 15) = 4,000 units”.

One topic at five depths

The quickest way to feel the difference between command terms is to answer the same topic at several depths. The five questions on Tamarind Table all use the same invented case.

Tamarind Table (hypothetical case) runs three Malaysian restaurants in Kuala Lumpur, owned by two sisters as a privately held company. Its signature dishes have won awards and it has a loyal following, but the sisters lack the finance to open more restaurants themselves. They want 30 outlets across Malaysia within five years and are considering growth by franchising. Their head chef has warned that “our food is only as good as the people who cook it”.

State [1]

Worked example

State one source of income for Tamarind Table if it grows by franchising. [1]

Show a model answer

Model answer. A royalty paid by each franchisee, based on its sales revenue.

One fact is all that is asked. Adding reasons earns nothing.

A “state” question is answered in a phrase; the only risk is vagueness (“money from franchisees” instead of naming the royalty).

Describe [2]

Worked example

Describe how franchising would work for Tamarind Table. [2]

Show a model answer

Model answer. Tamarind Table, as franchisor, would sell independent owners the right to open restaurants under its name, using its recipes, menu and methods. Each franchisee would pay an initial fee and ongoing royalties, finance and run its own restaurant, and follow the standards and training set by Tamarind Table.

Two features are given in detail (the rights sold; the payments and obligations), in the case’s terms, with no reasons or evaluation.

The description gives detail but no reasons, which is exactly what “describe” asks for.

Explain [4]

Worked example

Explain one advantage and one disadvantage for Tamarind Table of growing by franchising. [4]

Show a model answer

Advantage. Franchisees finance their own restaurants, so Tamarind Table can open many outlets without the capital it currently lacks. This makes the target of 30 restaurants in five years realistic, which would be very hard through internal growth funded by the sisters alone.

Disadvantage. Tamarind Table would have less control over how each restaurant is run, because franchisees employ and manage their own cooks. As the head chef warns, the food depends on the people cooking it, so poor quality at one franchise could damage the award-winning brand at every outlet.

Each half has a point, a reason, a consequence and a fact from the case.

Analyse [4]

Worked example

Analyse the impact on Tamarind Table’s brand of growing by franchising. [4]

Show a model answer

Model answer. Franchising affects the brand through two linked channels. First, reach: 30 outlets across Malaysia would make the name known far beyond Kuala Lumpur, and each new restaurant advertises the others, so brand awareness and customer numbers should rise faster than with three outlets.

Second, consistency: the brand’s value rests on award-winning food, and that depends on cooks the sisters would no longer employ. The two channels pull against each other, because the faster the chain grows, the more franchisees must be recruited and trained, and the harder quality is to check. The overall impact on the brand therefore depends on how strong Tamarind Table’s training, recipes and inspections are compared with the speed of expansion.

Analysis breaks the issue into parts (reach and consistency) and shows how they interact. It ends by naming what the outcome depends on, but it does not decide whether franchising is right for the business. That decision belongs to AO3.

Evaluate [10]

Worked example

Evaluate whether Tamarind Table should grow by franchising. [10]

Show an answer plan

Answer plan. Define franchising and external growth briefly. Arguments for: franchisees provide the finance the sisters lack; fast growth towards 30 outlets; local franchisees know their markets; risk shared. Arguments against: loss of control over quality (the head chef’s warning); royalties are only a share of each restaurant’s revenue, so profit per outlet is lower than owning it; a failing franchisee can harm the whole brand. Alternatives: slower internal growth funded by loans, or a few company-owned flagships plus franchising later.

Judgment. Franchise, but only with strict standards: a central training kitchen, a fixed menu and regular inspections, and growth paced so quality can be checked. This depends on whether the recipes can be standardised and on finding franchisees who share the sisters’ values. Limitations of the case: no figures on franchise fees, the cost of internal growth or demand outside Kuala Lumpur.

Only the evaluation reaches a decision: it weighs the arguments, considers an alternative, gives a conditional judgment and admits what the case does not say.

Command term

Marks

Length (roughly)

Contains reasons?

Uses the case?

Reaches a judgment?

State

1

A phrase

No

Sometimes

No

Describe

2

2–3 sentences

No

Yes

No

Explain

4

2 short paragraphs

Yes

Yes, in every point

No

Analyse

4

2 paragraphs

Yes, with links between parts

Yes, in every point

No (states what the outcome depends on)

Evaluate

10

About 1–1.5 pages

Yes

Yes, throughout

Yes, justified, with conditions

Add to your notes: one topic you find hard, answered at the five depths (state, describe, explain, analyse, evaluate) in the style of the Tamarind Table answers. Writing the same content five ways fixes the difference between the command terms better than memorising their definitions.

How the command term limits the depth

The command term sets a ceiling as well as a floor. An answer below the level asked for (a description for “explain”) is capped; an answer above it (an evaluation for “explain”) gets no extra marks and costs time another question needed.

Short questions are marked against a short list of points; once those points are made, the answer is complete. The time saved is worth most in the 10-mark question, where planning and balance decide the markband.

If the question says…

Stop when you have…

Don’t add…

Define [2]

Given the category and the distinguishing feature.

Examples, advantages, history of the term.

Describe / outline [2]

Given two linked features.

Reasons or judgments.

Explain two… [4]

Explained and applied two distinct points.

A third point, or a conclusion.

Calculate [2]

Shown the formula, working, answer and unit.

Comment, unless the question asks for it.

Analyse [4]–[6]

Shown the parts of the issue and how they link, applied to the case.

A final verdict.

Discuss / evaluate [10]

Weighed both sides with evidence and reached a justified, conditional judgment.

A list of every theory you know.

Exam tip

When you finish a short answer, reread the command term and ask: “Have I done exactly this, no less and no more?” If the answer is yes, move on, even if you know more about the topic.

Using the case or stimulus

Every question with a named business must be answered for that business. Examiners call this application: showing how a concept works in the particular situation of the case. In the 10-mark markbands, the use of the case is one of the main things that separates the bands, and the lower bands describe a use that is “superficial” or limited to names.

Putting the business’s name into a general sentence is not application: if the name can be swapped for “Nike” and the sentence still works, the case has not been used. Application uses the facts that make this case different: its figures, problems, objectives, people and market.

Level

Example (on Tamarind Table)

Why

Name only

Franchising allows Tamarind Table to grow quickly.

True of any business. Earns little beyond the knowledge shown.

Fact from the case

Franchising allows Tamarind Table to grow despite the sisters lacking finance.

Uses a feature of this case, so the point is now applied.

Fact used in the argument

Because franchisees fund their own restaurants, the sisters’ lack of finance no longer blocks the 30-outlet target, which would take far longer through internal growth.

The fact drives the reasoning and supports a conclusion: this is effective use of the case.

Fact questioned

The case does not say whether the recipes can be taught to cooks outside the business, so the speed of growth may be limited by training, not finance.

Shows the limits of the information given, which the top markband rewards.

Ways to bring the case into every answer

  • Quote figures and work with them. “Sales fell from $2.4m to $1.9m, a fall of about 21%” uses the data; “sales fell” only reports it.

  • Use line references when the case has numbered lines in Paper 1 (“the head chef’s warning (line 23)”). They show the examiner exactly which evidence an argument rests on.

  • Use the business’s objectives and constraints. A recommendation that ignores a stated objective (“to remain family-owned”) or constraint (“limited cash”) is not applied, even if it is sensible in general.

  • Infer carefully. Reasonable inferences are rewarded (“with only three restaurants, the sisters probably supervise each one”), but don’t invent facts.

YouTube
tutor2u explains how to give examiners effective application in Business answers (made for A-level, but the skill is the same); watch for how each point is tied to a specific fact about the business rather than its name.

Common mistake

Copying long passages of the case into the answer. Quoting a phrase as evidence is useful; rewriting paragraphs of the case is not analysis and uses time. Refer to the evidence briefly and spend the words on what it means.

In Paper 1, part of the case is released in advance in the pre-released statement, so you can prepare its industry and context. In Paper 2 the stimulus is unseen and mostly numerical, so application often means using the data you have just calculated. In both, real-world examples you know (a company that grew by franchising, a brand damaged by poor quality) can support a point, but they add to the case rather than replace it.

Definition

Stimulus material: the text, data, tables or images given in an exam paper about an organisation, which answers must use as their context.

Terminology

Precise business terms are part of the content being assessed. The markbands for extended responses refer to correct terminology, and many short-answer marks depend on one exact word. Using “profit” when the answer needs “cash”, or “shareholders” when it needs “stakeholders”, changes the meaning and often makes the point wrong.

Use the IB’s term for each concept consistently (statement of financial position, stock, debtors, sales revenue, cost of sales), and avoid everyday words where a business term exists: “the workers will be happier” is weaker than “employee motivation is likely to rise”.

Often confused

The difference

Profit / cash

Profit is revenue minus costs over a period; cash is the money the business actually holds. A profitable business can run out of cash if customers pay late.

Stakeholder / shareholder

A stakeholder is anyone with an interest in the business; a shareholder is one kind of stakeholder, who owns part of a company.

Revenue / profit

Revenue is the value of sales; profit is what remains after costs. Rising revenue can come with falling profit.

Productivity / production

Production is the total output; productivity is output per unit of input (per worker or per hour).

Liquidity / profitability

Liquidity is the ability to pay short-term debts; profitability is profit relative to sales or capital.

Market share / market size

Market share is one business’s part of the market; market size is the whole market’s sales.

Common mistake

Treating profit and cash as the same thing. “The business is making a profit, so it can pay its suppliers” is a common error in both papers. Check which one the question or the data is about before writing.

Time per mark

The marks in brackets are also a time budget. Paper 1 works out at three minutes a mark overall, but about a quarter of an hour of that goes on reading and annotating the case, which leaves a little over two minutes a mark for writing. Paper 2 gives a little over two minutes a mark, and its stimulus is read in parts as you go.

Question

Paper 1 (after reading the case)

Paper 2

Typical length

Define [2]

4–5 min

3–4 min

1–2 sentences

Explain two… [4]

8–9 min

7–8 min

2 short paragraphs

Calculate [2]

—

3–4 min

Formula, working, answer

Construct [4]

—

8–10 min

A complete, labelled chart or statement

Extended response [10]

About 30 min (including planning)

20–22 min (including planning)

About 1–1.5 pages

On Paper 1 (20 marks in Section A, 10 in Section B), a reasonable split is about 10 minutes reading and annotating after the reading time, 45 minutes for Section A, 30 for Section B and 5 to check. If a short question goes badly, leave a space and come back: an unfinished 10-mark answer loses far more than a missing definition.

Tip

Write the finishing time for each section on the question paper during reading time (for example “Section A by 10:00”). Checking the clock against a written target is easier than working out remaining time under pressure.

Exam tip

Answer the questions in the order that suits you, but number them clearly. Most students answer Section A first, which means the case is familiar by the time they reach Section B. Whatever the order, protect the full 30 minutes for the 10-mark question.

A routine for every question

A fixed routine turns answer technique into a habit, so that under pressure the right steps happen automatically.

  1. Read the command term and decide the depth: knowledge, reasons, judgment or a skill.

  2. Circle the content: the concept, tool or theory the question is about. If two concepts are named, both must be used.

  3. Check the context: which business, and which facts in the case relate to this question.

  4. Check the marks and set the time and length.

  5. Plan briefly for anything worth 4 marks or more: two points for “explain two”, both sides and a judgment for 10 marks.

  6. Write, using business terms and case evidence in every point.

  7. Reread the command term and check that the answer does exactly what it asks.

The command term decides what earns marks. The same knowledge of franchising scores 1 mark, 4 marks or 10 marks depending on whether it is stated, explained or evaluated, and it scores well only when it is applied to the business in the case.

Practice: identify what each question wants

Try the routine on five questions from different units. Every business named in them is invented.

Worked example

For each question, name the assessment objective, say whether it needs a judgment, and give the number of developed points expected.

  1. Outline two features of a cooperative. [2]

  2. Explain two reasons why Hana Tea might use penetration pricing for its new bottled tea. [4]

  3. Calculate the margin of safety for Velo Parts if it sells 6,000 units. [2]

  4. Distinguish between primary research and secondary research. [4]

  5. With reference to sustainability, to what extent should Andes Textiles move production to a cheaper country? [10]

Show the answers

Question

AO

Judgment?

What is expected

1 Outline

AO1

No

Two features, one short sentence each.

2 Explain two

AO2

No

Two distinct reasons, each explained and applied to Hana Tea.

3 Calculate

AO4

No

Working from break-even quantity to margin of safety, with “units”.

4 Distinguish

AO2

No

Two differences (for example source of the data; cost and time), each stated for both types of research.

5 To what extent

AO3

Yes

Arguments for and against, sustainability used throughout (economic, social, environmental), and a judgment of degree with conditions.

Answer technique checklist

  • To do:

    I can name the assessment objective of every command term and the depth it asks for.

  • To do:

    I can write a full 2-mark definition: category plus distinguishing feature, with no example and no repetition of the term.

  • To do:

    I can answer “explain two…” with two distinct points, each explained and applied to the case.

  • To do:

    I can comment on a calculated figure by comparing it and saying what it means for the business.

  • To do:

    I can use facts and figures from the case in every point, beyond the business’s name.

  • To do:

    I can stop at the depth the command term asks for and save time for the 10-mark question.

  • To do:

    I can use the correct term for each concept and avoid the commonly confused pairs.

  • To do:

    I can plan my time using the marks: a little over two minutes a mark for writing on either paper, after reading the case in Paper 1.

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More IB Business notes

  • T.15 Simple linear regressionThe page before this. HL only.
  • The 10-mark extended responseThe next page.
  • Business assessmentEach Business paper, the internal assessment and grade boundaries.
  • IB BusinessThe Business syllabus, how it is assessed and every notes page.

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