Business management tools and theories for the IA

Some appropriate Business Management tools and theories for the IA are outlined on this webpage. Tools and
theories for the IA can come from the Business Management Toolkit (BMT) as well as any other part of the DP
Business Management syllabus.

There is a total of (at least) 40 tools and theories that students can choose from to address the demands of their
specific research question - these are all outlined in the sections below. Click on the hyperlink to these tools and
theories on the InThinking website.

Please note this is not a definitive or prescriptive list, but can be used to give students some ideas regarding the
tools, theories, and techniques they might be able to use (if specifically relevant to their research question).

Tools and theories from the BMT

Tools and theories from the Business Management Toolkit

A good starting point for selecting the most relevant tools and theories is the Business Management Toolkit (BMT).
This is a set of interrelated tools and techniques that can be used by students in different disciplinary and
interdisciplinary contexts across the contents of the new syllabus, including the Business Management IA.

Students can refer to the table below to make gain an overview of the tools in the BMT and make an initial decision
about the suitability of these tools for their specific research questions (RQ) for the IA. Click the hyperlink to access
the relevant resources for each of these tools.

Tool / theory Category Description

1. SWOT Situational SWOT analysis considers the strengths, weaknesses,
analysis tool opportunities and threats of a business at a specific
point in time. Strengths and weaknesses are internal
 factors that influence the business, while opportunities
and threats are external factors which the business
has no direct control over.
The Ansoff matrix is a framework of generic growth
strategies for a business, based of providing new or
Decision-
Ansoff's existing products in new or existing markets. These
2. making
matrix four generic growth strategies are categorised as (i)
tool
market penetration, (ii) market development, (iii)
product development, and (iv) diversification.
This framework considers factors in the external
environment that affects a business. STEEPLE refers
to the social, technological, economic, environmental,
STEEPLE Situational
3. political, legal and ethical aspects of the external
analysis tool
environment. It provides an overview of or insight into
these external factors that are largely beyond the
control of the organization.
The Boston Consulting Group (BCG) matrix allows
Situational manager to assess their organization’s product
Boston tool portfolio based on measures of relative market share
4. Consulting Decision- and market growth. It helps with long-term strategic
Group matrix making planning and decision-making based on four
tool categories of products: (i) question marks, (ii) stars,
(iii) cash cows, and (iv) dogs.
This is an official guiding document that provides
details of the organization's strategic goals and how
the business intends to achieve these, with reference
Planning
5. Business plan to the firm's human resources, finances, marketing,
tool
and operations management. It is also commonly used
to secure loans from financial lenders as well as
raising finance from investors.
This tool is a graphical representation of showing the
probable outcomes of a business decision, based on
Decision- the likelihood of success or failure of such a decision.
Decision
6. making The diagram shows the various choices faced by a
trees
tool business, including estimates of the costs and benefits
in order to determine the probable risks of a specific
courses of action.
This quantitative tool is used to summarise a given set
of data to support statistical and data analysis. The
various techniques help to present a large amount of
Decision- quantitative data in a simplified and more
Descriptive
7. making manageable format. There are eight techniques
statistics
tool specified for this tool: (i) Mean average, (ii) modal
average, (iii) median average, (iv), bar charts, (v) pie
charts, (vi) infographics, (vii) quartiles, and (viii)
standard deviation.
8. Circular Decision- These models explore how businesses create value
business making for their customers and other stakeholder groups
models tool whilst also reducing the environmental impacts of their
 operations. There are five circular business models
specified in the syllabus: (i) circular supply models, (ii)
resource recovery models, (iii) product life extension
models, (iv) sharing models, and (v) product service
system models.
This visual tool helps managers to plan and schedule
different tasks or jobs within a particular project. It
illustrates the tasks or activities, their duration, and
dependencies in order to determine the shortest time
required to complete the project and helps managers
to schedule resources to complete each task and to
keep the overall project on track to be completed on
Gantt charts Planning time.
9.
(HL only) tool
Gantt charts can be useful in supporting students to
plan their IA, enabling them to show in a visual format
the sequences of tasks needed to complete their
research project. This is not a formal requirement for
assessment purposes nor is it required for submission,
but creates an opportunity for students to put this tool
into practice.
This commonly used tool helps managers to explore
how a business can gain competitive advantages to
help determine its strategic direction. These generic
Porter's strategies comprise of: (i) cost leadership (producing
Decision-
generic at a lower cost of competitors), (ii) differentiation
10. making
strategies (HL (providing products with a distinctive or unique selling
tool
only) point), and (iii) focus (selling specialized product
aimed at specific market segments). Focus strategies
are further categorised as (i) cost focus and (ii)
differentiation focus.
This tool helps managers to understanding the cultural
similarities and differences that exist between and
across different countries. This helps them to
determine more appropriate ways to conduct their
Hofstede's
operations given different national and international
cultural Situational
11. settings. The tool suggests that countries can be
dimensions tool
categorised into one of six different cultural
(HL only)
dimensions: (i) power distance, (ii) individualism vs
collectivism, (iii) masculinity vs femininity, (iv)
uncertainty avoidance, (v) long-term vs short-term
orientation, and (vi) indulgence vs restraint.
This visual and quantitative tool is used by managers
to examine the forces for and against change to make
Situational
more-informed business decisions. It is useful during
Force field tool
the planning and decision making stages of corporate
12. analysis (HL Decision-
strategy and change management. It provides an
only) making
overview, in an easy to understand format, by
tool
illustrating and adding statistical weights to each of the
driving and restraining forces identified in the analysis.
 This planning tool helps project managers to schedule
and oversee large and complex projects to ensure
efficient resource use and for the timely completion of
the project. It maps out all the individual tasks or
Critical path
Planning activities needed to complete the project so that
13. analysis (HL
tool realistic deadlines for a project can be set. The
only)
syllabus specifies HL students need to be able to: (i)
complete and analyse a critical path diagram. (ii)
identify the critical path from a diagram, and (iii)
calculate the free and total float from a CPA diagram.
This quantitative tool is used to support business
decision-making by enabling manager to analyse and
Contribution Decision-
evaluate different cost and revenue situations. This
14. (analysis) (HL making
tool comprises of three techniques in the syllabus: (i)
only) tool
make or buy analysis, (ii) contribution costing, and (iii)
absorption costing.
This quantitative tool comprises of three techniques
used to identify, describe, and/or predict the
Simple linear Decision-
relationship between dependent and independent
15. regression making
variables under investigation. The three techniques
(HL only) tool
covered in the course are: (i) scatter diagrams, (ii) line
of best fit, and (iii) correlation/extrapolation.

Always use the right tools for the right task

Top tip 1!

Unless absolutely needed (i.e., it adds value to the business research project), conducting a SWOT analysis is
probably best avoided in the IA. SWOT analyses are often used poorly by students to address their research
question. Quite often, SWOT analyses simply represent the personal opinions of the candidate without adequate
data or evidence. In addition, there is often a lack of proper citation and referencing (C&R) of a SWOT analysis
in the business research project.

Top tip 2!

It is not always a straightforward task to classify factors into a STEEPLE analysis framework. For example,
changes in an economy's tax system or interest rates may be considered a political, legal, or economic factor.
This is rather immaterial, so long as you can justify the reasoning.
 For the IA, it is vital that you cite and reference your sources - this applies to all the points in a SWOT analysis or
STEEPLE analysis (if used).

Finally, remember that any actual analysis is considered as part of the word count, and must not be placed in the
appendices of the IA. Note that if it is not permissable for candidates to include a full STEEPLE or SWOT
analysis in the appendices and expect the moderator to read this. It is, however, acceptable if the relevant parts
of the STEEPLE or SWOT analysis are extracted and used in the written commentary itself.

In all cases, the items placed in the appendices are not read per se and cannot be used to circumvent the word
count limit.

Common mistake

Too often, HL students use force field analysis incorrectly in their Internal Assessment. Many students use
this situational and decision-making tool to list the advantages and disadvantages of a certain project or strategic
choice, and then proceed to personally assign the statistical weights to the driving and restraining forces in the
analysis. The weights in a force field analysis are frequently unsubstantiated or even missing.

The tool requires the weights to come from the perspective of the organization being investigated, not from the
perspective of the student (especially when there are no explanations or justifications provided for the allocation
of these statistical weights).

Tools and theories beyond the Business Management Toolkit

In addition to the tools and theories in the Business Management Toolkit (BMT), other tools and theories from the
syllabus that may be relevant to the Internal Assessment include the following (not an exhaustive list):

Tool / theory Description

This is the process of identifying and assessing the
interests, influence, and power of different individuals,
1.4 - Stakeholder groups, or organizations that are affected by or have an
1.
analysis impact on a business or project. It is also about developing
strategies to manage these relationships effectively to
achieve organizational goals.
This theory refers to the cost advantages that a business
can achieve by increasing the scale (size) of its operations.
1.5 - Economies of This is because fixed costs can be spread over a larger
2.
scale number of units of output, resulting in lower average costs.
This is important as it leads to competitive cost advantages
and improved profitability.
 This section of the syllabus is concerned with understanding
the factors that influence an individual's level of motivation
2.4 - Motivation and
3. or demotivation in the workplace. The theories aim to
demotivation theory
explain why people behave the way they do and what
motivates them to take action.
Organizational culture refers to the shared values, beliefs,
attitudes, behaviours, and norms (or customs) that exist
2.5 - Organizational
within an organization. The culture governs how things are
4. (corporate) culture (HL
done in the workplace and how people interact with each
only)
other. It permeates all aspects of an organization's
operations.
Sources of finance refer to the various ways businesses can
raise capital to fund their operations, including investment
and growth strategies. Without suffificent finance, it is not
3.2 - Sources of
5. possible for a business to achieve its objectives. The choice
finance
of sources of finance requires careful consideration to
ensure the business minimizes risks and maximizes returns
from its operations.
Costs and revenues are two of the most important topics in
the Business Management course as they play a crucial
3.3 - Costs and
6. role in determining a firm's profitability and financial health.
revenues
All business decisions incur costs but not all strategic
choices will lead to improved profitability.
The balance sheet helps businesses, investors, and other
stakeholders to understand a firm's financial health, liquidity,
3.4 - Final accounts - and solvency.
7. balance sheets and The profit and loss account shows a firm's revenues,
profit & loss accounts expenses, and profit over a specific trading period. It is an
essential financial statement used to assess a firm's
financial performance.
Profitability ratio analysis is a financial tool that measures a
firm's ability to generate profits relative to its revenue,
assets, and equity.

3.5 - Ratio analysis Liquidity ratio analysis is a financial tool used to measure a
8. (profitability and liquidity firm's ability to meet its short-term obligations. This is done
ratio analysis) by calculating its ability to convert assets into cash.

Ratio analysis helps businesses to evaluate their financial

performance, identify areas for improvement, and make
informed decisions.
This is an essential financial tool that provides firms with a
forward-looking view of their liquidity position (in terms of
3.7 - Cash flow cash inflows and outflows over a specific time period). It
9.
forecasts helps businesses to predict and manage their cash flows
and therefore to reduce financial risks and improve decision
making.
 3.8 - Investment This management tool helps businesses to evaluate the
appraisal - payback potential profitability and feasibility of investment
10. period, average rate of opportunities. It involves analyzing the costs, benefits, risks,
return, and net present and cash flows associated with an investment decision in
value (HL only) order to determine its potential return on investment.
This is a financial tool used by businesses to compare their
actual financial performance with their budgeted (planned or
3.9 - Variance analysis expected) performance. By identifying these areas,
11.
(HL only) businesses can take corrective actions to improve their
financial performance, such as adjusting their pricing,
reducing costs, or changing aspects of their operations.
Market share and market leadership are critical for a firm's
long-term competitive position. High market share and
4.1 - Importance of
market leadership offer interrelated advantages such as
12. market share & market
increased sales, brand loyalty, and economies of scale.
leadership (HL only)
Furthermore, they can help businesses to access greater
growth opportunities.
4.2 - Segmentation, Segmentation, targeting, and positioning (STP) are
targeting, and marketing strategies used by businesses to identify and
13.
positioning (perception target specific groups of consumers with goods or services
maps) that meet their specific needs and preferences.
This marketing strategy is crucial for businesses operating
4.2 - The importance
14. in highly competitive markets. A USP sets a business apart
of having a USP
from its rvials and helps it to attract and retain customers.
This tool is about the process of estimating future sales and
revenue for a business over a specific period of time. It
helps organizations to plan their operations, manage their
4.3 - Sales forecasting resources effectively, and make more informed business
15.
(HL only) decisions.

This topic is particular well aligned with simple linear

regression in the Business Management Toolkit (BMT).
This is the process of collecting and analyzing data to gain
4.4 - Market research - insights into changing market trends, customer preferences,
primary and and the activities of competitors. It is an essential tool for
16.
secondary market businesses as it helps them to better understand their
research techniques customers, make more informed decisions, and stay ahead
of the competition.
Branding is the process of creating a unique name, design,
4.5 - The importance and corporate image for a business or its products in order
of branding and to distinguishes it from competitors. It is a crucial aspect of
17.
product extension any business strategy that helps the firm to establish a
strategies strong identity, build customer loyalty, and differentiate itself
from the rival firms and products in the market.
18. 4.5 - Pricing methods Pricing methods are the different strategies used by
businesses to set a price for their goods and services. It is
an important theory within the course as pricing methods
can determine how attractive the firm's goods and services
 are to existing and potential customers. Different pricing
methods can help businesses achieve their strategic goals,
maximize profits, and gain a competitive advantage in the
marketplace.
Promotion is an essential component of marketing as it
helps businesses to communicate with their target
19. 4.5 - Promotion
audience, build brand awareness, enhance customer
loyalty, and increase sales.
An appropriate marketing mix is essential for the success of
all businesses as it helps them create a comprehensive
strategy that addresses all aspects of their product offering,
4.5 - Appropriate
20. be it goods and/or services. Establishing an appropriate
marketing mixes
marketing mix helps a business to creates a strong brand
identity, meets changing customer needs, differentiates the
business from its competitor, and maximizes sales revenue.
Effective methods of managing quality are essential for
businesses to ensure customer satisfaction, increase
5.3 - Methods of
operational efficiency and productivity, comply with national
21. managing quality (HL
and internal regulations and standards, enhance the
only)
corporate reputation (brand image), and drive continuous
improvement for the firm's long-term success.
5.4 - Location The location or relocation of a business can have a
and ways of significant impact on its success. This topic also covers
22.
reorganizing strategies such as outsourcing (subcontracting), offshoring,
production insourcing, and reshoring.
Break-even analysis is an important tool for businesses to
understand their cost and revenue structures in order
determine the output level at which they will begin to earn a
5.5 - Break-even
23. profit. This tool can help managers to make more informed
analysis
decision. It is an important tool for evaluating the financial
viability of new business plans, business ventures, and
product launches.
Production planning is a critical management tool that helps
businesses to optimize their production processes, increase
efficiency, and reduce production costs. It is about
5.6 - Production managing resources more efficiently and reducing or
24. planning: productivity eliminating waste.
(HL only)
This topic also covers the local and global supply chain
process, stock control, capacity utilization, and various
measures of productivity.
Management Information Systems (MIS) are computer-
based systems that provide information and support for
strategic decision-making in organizations. It is a critical
5.9 - Management
component of modern organizations as MIS provides
25. Information Systems
managers with the necessary data and information needed
(HL only)
to improve operational efficiency, enhance communications,
and enable performance measurement. This all helps to
improve a firm's competitiveness and achieve its goals.
Top Tip 1!

Whichever tools or theories are used in the IA (and these do not have to be only those listed above), you must
ensure that these are applied to the context of the business organization selected for the IA and that they are
used to help answer the research question.

For example, far too many students use SWOT and PEST (STEEPLE) analysis in the IA without real purpose or
value. These tools are rarely used effectively to answer the research question in the IA. So, unless the tools and
theories are directly relevant and add value to the IA, you should avoid using them in the IA.

Simply referring to or using terminology, tools, theories, and techniques does not justify the full 4 marks for
Assessment Criterion C (Selection and application of tools and theories). Instead, it is about how the appropriate
terminology, tools, theories, and techniques are applied competently and effectively to the research question.

As always, what is appropriate for a particular IA really depends on the research question. It’s like saying, I have
a hammer and spanner - can I use them? Not if you’re trying to change a lightbulb! Students must be advised to
use the most appropriate tools and theories that address the specific issue being investigated.

Always use the right tools for the right task

Top Tip 2!

Many teachers and students often ask about the use of STEEPLE (or PEST) analysis in the Internal
Assessment.

A potentially useful resource to help student with their PEST/STEEPLE analysis is https://pestleanalysis.com/

This website includes ready-made PEST analyses (and some SWOT analyses too) for numerous well-known
companies that may be applicable to the Internal Assessment.

However, as with all tools and supporting documents, make sure these are fit for purpose.
 Top Tip 3!

Students are reminded that they can, but are not required to, use methods of primary market research for their
IA. However, any primary market research tools and theories used must be fit for purpose (purposeful) in relation
to the specific research question.

If you are considering to use primary market research for your business research project, make sure you read
this article on InThinking first. It contains top tips for the use of primary research for the IA.

All students are advised to read / refer to Unit 4.4 (market research) of the IB Business Management syllabus
before embarking on their research for the IA.

Top Tip 4!

IBID Press (the publisher of my 5th edn IB Business Management textbook) can send you a complimentary copy
of the Internal Assessment PowerPoint. This is a really useful resource to go through with your students before
they embark on their IA.

Please contact the publisher at IBID Press (jodie@ibid.com.au) to request your free copy of the PowerPoint file.

Visit the IBID Press website for details of the PowerPoint resource pack.

Frequently asked questions - Tools and theories in the IA

FAQ 1 - Can students use tools and theories beyond the syllabus for the IA?

Students should be discouraged from using tools and theories beyond the DP Business Management syllabus.

For example, HL candidates can apply classroom theory to real-life situations by using over 40 available tools and
theories from the syllabus, focusing on their chosen organization and conducting research to investigate business
problems or decisions.

Hence, students can access the highest mark band in the assessment criteria by sticking to the contents of the
syllabus.

Note: If students do (for whatever reason) choose to use tools and theories beyond the syllabus, they are not directly
penalized if these are relevant to the investigation and research question. Doing so is not explicitly prohibited or
mentioned in the syllabus / guide. If this approach is used, students must show clear understanding and these must
be accurately applied in order to meet the assessment rubric (assessment criteria).

However, note the following two points about such an approach:

Students do not get an extra credit for going beyond the syllabus.

Doing so can actually raise concerns about academic integrity as there is no need to use tools and theories that
are not featured in the syllabus (indeed, this is one of the reasons for including the BMT in the new guide).

So, ultimately, there really is no reason for students to go beyond the IB Business Management syllabus for their HL
IA because they are able to reach the highest level descriptors without having to do more than needed. Also, and very
importantly, students must remember that the right tools, theories and techniques must be used to address the
research question. So, for example, it is not appropriate for students to ignore financial analysis for a research
question about an investment issue or decision. Similarly, relying on the use of a SWOT analysis and a force field
analysis for such an IA is also not suitable either.

A related commonly asked question - by teachers and students - is whether tools and theories beyond the SL syllabus
can be used in the IA by SL students. What do you think?

The same guidelines above also apply to SL students.

Whilst SL students are not prohibited from using HL tools and theories, such an approach is neither necessary nor
encouraged by the IB.

SL students can access the top mark bands by using only the SL tools and theories from the IB Business
Management syllabus, including relevant tools from the BMT.

Essentially, it is not recommended that students go beyond the SL syllabus by using HL tools and theories or those
beyond the IB Business Management syllabus. It does not impress any IA moderator if a student chooses to go
beyond the SL syllabus, especially if the tools and theories are not suitable to the research question and/or are
applied inappropriately.

Note: If SL students do (for whatever reason) choose to use tools and theories beyond the SL syllabus, they will not
be directly penalized if these are directly relevant to the investigation and research question. Students must show
clear understanding and the chosen tools and theories must be accurately and suitably applied in order to meet the
assessment rubric (assessment criteria).

Take this example of an SL student who used force field analysis (HL only) in the Internal Assessment about Google's
acquisition of Fitbit. There are a couple of major issues with this approach:

Google had already acquired Fitbit at the time of writing; hence the use of FFA as a situational and decision-
making tool is not appropriate.

The student would not be able to get the statistical weights for the identified driving and restraining forces from
Google (doing so is unrealistic and would require access to primary research with a Google executive). Hence,
the inclusion of FFA is unsuitable.

Typically, students who use force field analysis (SL and HL) self-assign the weights based on their own opinions. This
brings in unnecessary bias to the result and invalidates the value of the findings.

In summary, the use of tools and theories not in the syllabus carries its risks. Ultimately, there really is no reason for
students to go beyond the syllabus and such an approach should be discouraged. Beside, students are able to reach
the highest level descriptors without having to do more than needed.

FAQ 2 - Are there any specific tools or theories that students should use for the IA?

Teachers should not prescribe any tools or theories for the IA. It is not advisable to apply the same tools and theories
to be used in the IA, irrespective of the research question. Some centres have been known to use of the same tools
by all students (such as SWOT, forcefield analysis, and investment appraisal - regardless of the research question);
this simply suggests that some teachers are telling their students to use these tools, irrespective of their importance
and relevance to the research question.

Note that Criterion C requires student to apply the selected tools and theories effectively and that they are clearly
relevant to the research question
FAQ 3 - How many tools (or theories) should students use in the IA?

There is no prescribed or recommended number of tools or theories that students need to use in their IA. Teachers
should not stipulate a specific number of tools and theories - this will clearly depend on student's unique research
question. Instead, students should use those which are most relevant to their specific research question. For
example, an IA that focuses on motivation should include relevant theories of motivation and relevant examples of
financial and non-financial motivators (applicable to the business organization in question). Similarly, if the research
question is about a growth strategy then Ansoff's matrix might be an appropriate tool to use, for example.

Do not simply include tools and theories just to show that you have used a range of these (see FAQ 10 above). Also,
remember that the word count limit (WCL) of 1,800 words is very tight so you need to choose your tools and theories
wisely and apply them well in order to answer the research question. For example, conducting a STEEPLE analysis
will consume a significant proportion of the WCL.

FAQ 4 - Do students have to use at least one tool from the Business Management Toolkit (BMT)?

No, they are not required to do so. As always, students should use the more relevant tool(s) and theory(ies) that
relate specifically to their research question.

Nevertheless, the BMT can be a good starting point for students, especially at the planning stage of the IA. For SL
students, the BMT contains 8 different tools that may support them in addressing the research question; for HL
students, there are 15 tools to choose from the BMT. Ultimately, students should use whatever tool(s) or theory(ies)
are most suitable for addressing the research question.

FAQ 5 - Do all aspects (components) of a particular tool or theory, such as STEEPLE analysis or curricular business
models, have to be used in the IA?

All tools and theories used in the IA (and EE) must be fit for purpose. Therefore, students are expected to use only
the most appropriate aspects of a particular tool or theory for the specific research question, examined in the context
of the chosen business organization.

This applies to any tool or theory with multiple components, such as:

Ansoff matrix

Boston Consulting Group matrix

Circular Business Models

Descriptive statistics

Hofstede's cultural dimensions (HL only)

Marketing mix

Porter's generic strategies (HL only)

SWOT analysis

In the case of STEEPLE analysis, there is no need to refer to and use all seven components of the tool. Students
should only apply the parts that are directly relevant to the chosen business organization, i.e., how the tool/theory is
applicable to the operations of the chosen organization and written in the context of the specific research question.

In the case of circular business models, note that there are about 114 definitions of "circular economy", so there is
certainly no expectation to use every component of any theory without authentic purpose. In fact, there are only 5
circular business models that feature in the IB DP Business Management course students - these are the only ones
that students need to learn. Therefore, if students use this tool, make sure they stick to the definitions and models
used by the OECD that feature in the official BM guide - but there is no need to use/apply all five of these models in
the IA (or EE).

FAQ 6 - Should students include quantitative data and analysis in the IA?
 There is no formal requirement to include quantitative data and analysis (such as final accounts or ratio analysis). The
suitable will depend on your research question - as always, the tools and theories you use must be relevant to the
research question.

For example, if the chosen topic is about non-financial motivation and the conceptual lens is ethics, the use of
financial analyses may not be relevant. However, if your research question is about above-the-line promotion
strategies or changes to a firm's pricing methods, using quantitative tools, theories, and techniques will be far more
appropriate.

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