Unit 1.

6 -
Growth and
evolution

Peter Simpson, Alex Smith & Paul Hoang - Prepared by:

Danyah Barqouni
Learning outcomes

• This section of the IB Business Management syllabus examines the

growth and evolution of businesses. Almost all businesses strive to
grow, whether this is measured in terms of sales revenue, profits,
number of stores / outlets, number of employees or market share.

Peter Simpson, Alex Smith & Paul Hoang - Prepared by:

Danyah Barqouni
Learning Outcomes

• Analyse the main types of economies and diseconomies of scale and apply these concepts to
business decisions
• Describe two economies and diseconomies of scale and relate it to the business
• Evaluate the relative merits of small versus large organisations (10 marks question) or features
of small or large organizations.
• Explain the difference between internal and external growth
• Analyse the advantages and disadvantages of franchising and evaluate it as a growth strategy
• Evaluate internal and external growth strategies as methods of expansion
• Discuss the impact of globalisation on business growth
• Explain reasons for the growth of multinational companies
• Evaluate the impact of multinational companies on host countries

Peter Simpson, Alex Smith & Paul Hoang - Prepared by:

Danyah Barqouni
Learning Outcomes & Assessment
Objective
• The learning outcomes (or assessment objectives) for this section of the syllabus are:
• Economies and diseconomies of scale (AO2)
• The merits of small versus large organizations (AO3)
• The difference between internal and external growth (AO2)
• The following external growth methods (AO3):
• mergers and acquisitions (M&As) and takeovers
• joint ventures
• strategic alliances
• franchising
• The role and impact of globalization on the growth and evolution of businesses (AO3)
• Reasons for the growth of multinational companies (MNCs) (AO3)
• The impact of MNCs on the host countries (AO3)

Peter Simpson, Alex Smith & Paul Hoang - Prepared by:

Danyah Barqouni
Peter Simpson, Alex Smith & Paul Hoang - Prepared by:
Danyah Barqouni
Relating 1.6 to CUEGIS
• We will encounter the following concepts throughout 1.6:
• Culture - Every organization operates in a range of environments in which its role
may be interpreted differently. These expectations affect planning, decision- making and strategy
implementation.
• Within an organization, values and backgrounds influence what stakeholders focus on and how they work.
• Globalization - A wide range of international forces (such as the increasing social, cultural, technological and
economic integration) influence business organizations. In turn, business organizations shape these forces.
Many business organizations operate across national boundaries.
• Even local businesses and consumers are influenced by global forces.
• Innovation - Incremental or radical improvements to
a business idea, or the generation of new ideas in relation to a final product, service or process, are the result
of internal or external influences.
• For many business organizations, a key challenge is bringing in ”the new” and managing the process of improvement in a
sustainable way.
• Strategy - Strategy refers to the significant long-term planning decisions that organizations make in order to
meet the needs and wants of their stakeholders.
• Strategy is about asking questions: what, why, when, how, where and who?

Peter Simpson, Alex Smith & Paul Hoang - Prepared by:

Danyah Barqouni