Example 1 — Distinguishing ownership types, applied

Distinguish between a privately held and a publicly held company. [4]

In a privately held company such as Kesme, shares are not traded on a stock exchange and can only be sold with the existing owners' agreement, whereas in a publicly held company shares are freely traded by the public. ✓✓ This means Kesme's founding family currently retains control of decisions, whereas on conversion the family's stake would be diluted and outside shareholders could influence or outvote them, with the company also exposed to takeover. ✓ Conversely, a publicly held company can raise far larger amounts of capital — the €12 million Kesme needs — whereas a private company is largely limited to retained profits, bank finance and existing owners' funds. ✓

4/4.

Every point names Kesme. The same three distinctions written generically would score around 2 — the content would be right and the application absent. Note also the "whereas" construction doing the work that distinguish requires.

Example 2 — Stakeholder conflict

Analyse the impact of the proposed automation on two stakeholder groups. [6]

Employees. Around 30 of Kesme's 140 staff would be made redundant, and many have worked there for over a decade, so the loss is of long-tenured jobs in a district where Kesme is the largest employer — meaning re-employment locally is unlikely. ✓✓ Those remaining face uncertainty and may need retraining to operate the new equipment, and morale and productivity among survivors commonly fall after redundancies, which could partly offset the 18 % cost saving. ✓

Shareholders. The 18 % reduction in production costs should raise profit margins on flat revenue, which is the clearest route to improved returns given three years without growth. ✓✓ However, existing family shareholders would see their control diluted by the public share issue, and would bear the risk that the €12 million investment does not deliver the projected saving. ✓

6/6.

Analyse means cause and effect, not description. Each point traces a chain: automation → redundancy → in this district → limited re-employment. And the strongest single sentence is the one linking falling morale back to the cost saving, because it shows the two stakeholder impacts interacting rather than sitting in separate boxes.

Example 3 — Using a toolkit tool properly

Using a force field analysis, comment on Kesme's proposed automation. [5]

Driving forces: an 18 % reduction in production costs, directly addressing three years of flat revenue (strong); access to €12 million of capital only available through public listing (strong); competitive pressure to modernise machining capacity (moderate).

Restraining forces: 30 redundancies among a long-tenured workforce and the resulting damage to morale and industrial relations (strong); reputational cost in a district where Kesme is the largest employer (strong); loss of family control through dilution (moderate); the risk that projected savings are not realised (moderate).

Comment. The driving forces are financially concrete while the restraining forces are largely social and reputational — which is precisely why they are easy to underweight. On balance the change is likely to proceed because the financial case is measurable and the costs fall on stakeholders with least power, but Kesme could materially reduce the restraining forces by redeploying and retraining rather than making redundancies, converting the strongest objection into a moderate one.

5/5.

What makes this score is the final paragraph. A force field analysis that stops at two lists is a description of a tool. The marks are for weighing the forces and saying what follows — here, that the restraining forces can be reduced rather than merely accepted. Note also that the forces are drawn from the stimulus, not invented.

Example 4 — A "recommend" answer

Recommend whether Kesme should convert to a publicly held company. [5]

The case for. Kesme needs €12 million it cannot raise privately: revenue has been flat for three years, so retained profit is limited, and €12 million is a large debt burden for a 140-employee manufacturer. A public listing raises equity without repayment obligations, and the resulting 18 % cost reduction addresses the underlying problem directly.

The case against. Conversion is effectively irreversible and dilutes family control permanently, exposing Kesme to takeover and to shareholder pressure for short-term returns — pressure that would make future decisions about the workforce harder to resist. Listing itself is expensive and imposes ongoing disclosure obligations on a firm of this size.

Recommendation. Kesme should not convert at this stage. It should first seek a bank loan or a strategic investor for a smaller, phased automation programme, retaining family control while testing whether the projected 18 % saving is actually achieved. If the first phase delivers, the case for a full listing becomes far stronger and the company negotiates it from a position of demonstrated performance rather than of flat revenue. Conversion is a decision that cannot be undone; phasing preserves the option.

5/5.

A recommendation must choose. This one does, and it justifies the choice against the alternative — which is the part candidates omit. It also gives a condition under which the rejected option becomes right, which shows judgement rather than preference.

The most common failure on "recommend" is a balanced essay with no decision at the end. Balance is necessary but not sufficient; the last paragraph must commit.

Educerie · original worked examples written against the published IB syllabus structure for Business Management Unit 1, first assessment 2024. Kesme Ltd is a fictional business created for this material. Last reviewed 5 September 2026.