Practice 2.3 Leadership and management with authentic IB Business Management exam questions for both SL and HL students. This question bank mirrors Paper 1, 2, 3 structure, covering key topics like systems and structures, human behavior and interaction, and sustainability and ethics. Get instant solutions, detailed explanations, and build exam confidence with questions in the style of IB examiners.
Paper
Level
Question 1
HLPaper 3
LuminaCare
Resource 1 – Company profile and financial context
LuminaCare is a Ghana-based, for-profit social enterprise that manufactures solar-powered medical devices for rural clinics and maternal health centers across Sub-Saharan Africa. Its flagship product is a solar fetal heart monitor, which allows midwives to detect complications during pregnancy without relying on grid electricity. The company raised seed capital from impact investors but has now reached an inflection point: demand has grown by 300%, and LuminaCare must decide whether to pursue a $2.5M Series A equity round or take on $1.2M in concessional debt from a development bank.
Resource 2 – CFO’s internal memo (Finance)
“Our burn rate is steady, but we’ve reached our credit limit with suppliers. We operate on 90-day payment terms with clinics, so cash flow is always tight. Series A equity gives us the scale to meet demand and build a second facility—but would dilute founder control and introduce board-level oversight. The concessional loan is low-interest and non-dilutive but comes with covenants: quarterly EBITDA targets, strict capex limits, and donor-style reporting. Any miss could trigger loan restructuring or early repayment.”
Resource 3 – HR performance dashboard (Q1–Q2 2025)
| Metric | Value |
|---|---|
| Staff turnover (last 6 months) | 22% |
| Time to fill technical roles | 49 days (↑ 24%) |
| % of roles with formal job descriptions | 58% |
| Managerial span of control | Avg. 12 direct reports |
| Avg. team engagement score | 67/100 (↓ from 78) |
| The head of HR notes that burnout and unclear career paths are leading to attrition, especially among product engineers and field deployment staff. |
Resource 4 – Marketing team proposal
“Clinics love our mission—but most have no idea who we are until we show up at trade shows. We need to invest in inbound marketing, including a multilingual website, CRM tools, and a referral rewards program for midwives. More crucially, we’re perceived as a donor-funded nonprofit, not a serious tech company. To attract hospital procurement officers and larger buyers, we must reposition the brand to emphasize product quality, not just affordability and ethics.”
Resource 5 – Email thread: CEO to CFO and Marketing Lead
Resource 6 – Feedback from key field partners
“We rely on LuminaCare’s devices, but their response time for repairs has worsened.” “Sometimes we get different pricing from different reps. There’s no standard process.” “I love the mission—but our procurement officer wants a brand that feels serious. A logo change isn’t enough.”
1.[2]
With reference to Resource 3, describe one HR issue that may be impacting LuminaCare’s ability to scale sustainably.
2.[6]
Explain one financial challenge and one marketing challenge LuminaCare may face if it accepts the concessional loan.
3.[17]
Using all the resources provided and your knowledge of business management tools and theories, recommend a possible plan of action for LuminaCare over the next five years.
Question 2
HLPaper 3
SolvoHealth
Resource 1 – Business model and service offering
SolvoHealth is a rapidly growing mobile health company based in Vietnam. It operates a network of telehealth pods—solar-powered kiosks placed in rural communities that allow patients to consult doctors remotely, order basic diagnostics, and schedule medicine delivery.
Each pod includes a screen, smart diagnostic tools, and a local “health navigator” who guides users. SolvoHealth employs:
40 health navigators (frontline staff)
15 remote doctors (contracted)
30 staff at its operations HQ in Ho Chi Minh City (marketing, product, supply chain, HR)
SolvoHealth positions itself as affordable, hyper-local, and technology-enabled. The leadership team now plans to launch 60 pods in Indonesia and Bangladesh over the next 18 months.
Resource 2 – Internal HR report
“Navigator turnover remains high at 28% annually. Interviews cite poor training, emotional fatigue, and a disconnect between field roles and central ops decisions. Navigators receive basic onboarding but no career pathway or local adaptation in training. They also report being treated more as hardware support than as care professionals.
Headquarters recently introduced a CRM-linked performance bonus system based on call completion and upsell conversions—but this has increased pressure on already fatigued staff.”
Resource 3 – Weekly Ops Brief (March 2025)
Visual suggestion: This operations table can be converted into a bar chart or dashboard screenshot to test interpretation skills.
| Metric | Vietnam (live) | Indonesia (pilot) |
|---|---|---|
| Avg. pod uptime | 94% | 71% |
| Avg. medicine delivery time | 26 hours | 61 hours |
| Navigator-reported escalations | 9.2/week | 18.4/week |
| Inventory out-of-stock events | 3.1/week | 7.5/week |
Resource 4 – Brand perception audit (external)
In Vietnam, SolvoHealth scores high for accessibility and usefulness, but low for empathy and personalisation. Many patients feel “talked to” by doctors, not “heard.”
In Indonesia (pilot), users were confused by medical terms and unable to complete video sessions. 47% believed the navigator was “just a receptionist.”
A competitor, SehatNow, offers similar services but invests heavily in navigator-patient relationship-building and community health workshops to build trust.
Resource 5 - Email from Head of Marketing to CEO
Resource 6 – Slack thread
@Linh (HR): “One navigator resigned mid-shift—said she felt like a vending machine operator.”
@Dara (Marketing): “How are we still pushing bonuses on upsells when trust is crumbling?”
@Tung (Ops): “I’ll review the KPIs. But we can’t rebuild loyalty with posters.”
@Dara: “Maybe not. But we can’t scale a service that feels robotic either.”
*Note Slack is an internal team communications tool
1.[2]
With reference to Resource 2, describe one HR issue that may impact SolvoHealth’s service performance.
2.[6]
Explain one marketing challenge and one operations challenge SolvoHealth may face as it expands across Indonesia and Bangladesh.
3.[17]
Using all the resources provided and your knowledge of business management tools and theories, recommend a possible plan of action for SolvoHealth over the next five years.
Question 3
SLPaper 2
FlexBottle Ltd.
FlexBottle Ltd. is a sustainable consumer goods company that produces reusable, collapsible water bottles aimed at eco-conscious travellers and students. As the company scaled, it shifted from a flat to a functional organisational structure, appointing department heads to oversee operations, marketing, and finance. However, recent employee feedback from the production department suggests growing dissatisfaction due to a lack of communication and involvement in company-wide decisions.
To prepare for the launch of its latest product — a customisable bottle with modular parts — the marketing team developed a new marketing plan, changing several elements of the marketing mix, including pricing, packaging, and point-of-sale materials. The CEO, known for a laissez-faire leadership style, believes teams work best with minimal interference, though motivation among junior staff appears to be declining.
The finance department has prepared a draft statement of profit or loss for Q1 2024, and tasked the marketing and operations interns with completing the missing values using the available data.
Table 1: Financial data for FlexBottle Ltd. (Q1 2024)
| Item | Amount ($) |
|---|---|
| Units sold | 6,000 |
| Selling price per unit | 8.00 |
| Variable cost per unit | 3.00 |
| Salaries (operations + marketing) | 45,000 |
| Advertising and promotion | 30,000 |
| Logistics and warehousing | 12,000 |
| Office rent and utilities | 18,000 |
| Tax rate | 20% |
| Dividends paid | 8,000 |
Figure 1: Statement of profit or loss (partially completed)
FlexBottle Ltd . Statement of profit or loss for the quarter ended 31 March 2024
| Item | $ |
|---|---|
| Sales revenue | __________ |
| Cost of sales | __________ |
| Gross profit | __________ |
| Expenses: | |
| - Salaries | (45,000) |
| - Advertising and promotion | (30,000) |
| - Logistics and warehousing | (12,000) |
| - Office rent and utilities | (18,000) |
| Profit before tax | __________ |
| Tax (20%) | __________ |
| Profit for period | __________ |
| Dividends | (8,000) |
| Retained profit | __________ |
1.[2]
Explain how the current organisational structure might affect internal communication at FlexBottle Ltd.
2.[2]
Suggest one way the leadership style at FlexBottle Ltd. could affect employee motivation.
3.[2]
Using Table 1, calculate the missing fields of the statement of profit or loss in Figure 1. Show all your working.
4.[2]
Comment on what the completed profit and loss account reveals about FlexBottle Ltd.'s cost and revenue structure.
5.[2]
Outline one element of the marketing mix that FlexBottle Ltd. has changed, and how this change may support the product launch.
Question 4
HLPaper 3
Global Solar Solutions (GSS)
Resource 1 – Background of the social enterprise
Three years ago, electrical engineer and entrepreneur Nadira Khan founded Global Solar Solutions (GSS) as a social enterprise in Morocco. Her goal was to provide affordable, modular solar lighting kits to off-grid rural communities. These kits, manufactured at GSS’s urban facility, include rechargeable LED lights and mobile charging ports. GSS reinvests 100% of profits into R&D and local hiring.
GSS operates in partnership with local NGOs and community councils. Its workforce includes 40 technicians and 20 community trainers who educate households about solar usage and maintenance. GSS applies lean production, Kaizen, and maintains a strong internal emphasis on quality control and after-sales support.
Resource 2 – Recent internal report on workforce issues
"High staff turnover and trainer burnout have increased over the past 12 months. Trainers, who work in remote villages for weeks at a time, report fatigue and a lack of recognition. Some have requested additional health support and clearer promotion opportunities."
The HR department suggested non-financial incentives such as increased job rotation and monthly feedback sessions but reported mixed engagement.
Resource 3 – Email from the Director of Rural Development (DRD)
To: nadira.khan@GSS.org
Subject: Expansion proposal
Dear Ms. Khan,
We are impressed by GSS’s impact. The Ministry would like to propose a contract to expand the solar program to 80,000 homes across North and West Africa over five years. Your team would need to train local technicians and build capacity in three new countries. Please note, the contract requires local sourcing of at least 60% of parts.
We will require an initial trial rollout in 5,000 homes and evidence of social impact.
Regards,
Director, DRD
Resource 4 – Extract from a marketing audit summary
GSS currently relies on word-of-mouth and NGO referrals. Its brand is associated with trust and affordability. However, a 2024 brand perception survey in new markets revealed low awareness and concerns about product durability compared to larger multinationals such as SolarX.
GSS’s marketing team is small (3 staff) and has no formal digital strategy. There is also no localized messaging for francophone West African markets.
Resource 5 – Operations update from the Head of Production
Our current facility is operating at 92% capacity. To meet a major scale-up, we would need to either expand production or outsource subassembly. We have identified two regional partners with experience in sustainable component manufacturing. However, we are concerned about quality assurance if we lose full process control.
Resource 6 – Excerpt from a local newspaper article
“Access to solar power has transformed daily life in remote villages. Children now study at night, families charge phones to access mobile banking, and kerosene usage has dropped. However, NGOs report that replacement parts for some GSS kits have been slow to arrive, creating frustrations in isolated regions.”
1.[2]
With reference to business management motivation theory, describe one need that GSS satisfies for rural households requiring solar lighting.
2.[6]
Explain one human resource challenge and one operations challenge GSS may face if it accepts the DRD expansion contract.
3.[17]
Using all the resources provided and your knowledge of business management tools and theories, recommend a possible plan of action for GSS over the next five years.
Question 5
SLPaper 2
PrintWise Ltd.
PrintWise Ltd. is a medium-sized business that offers custom printing services for schools and local businesses. The company uses a tall organizational structure with multiple layers of management. The managing director has an autocratic leadership style and prefers to give instructions rather than involve employees in decision-making.
Important updates are usually communicated through memos and notice boards. Recently, some employees complained that they were not informed about schedule changes, which affected their work performance.
Table 1 shows selected financial data from PrintWise Ltd.’s final accounts.
Table 1: Selected financial data for PrintWise Ltd. for 2024
| Item | Amount ($) |
|---|---|
| Revenue | 250,000 |
| Gross profit | 100,000 |
| Net profit | 40,000 |
| Current assets | 80,000 |
| Current liabilities | 40,000 |
1.[2]
Identify two features of a tall organizational structure.
2.[2]
State two characteristics of autocratic leadership
3.[2]
Calculate the net profit margin for PrintWise Ltd. Show all your working.
4.[2]
Calculate the current ratio for PrintWise Ltd. Show all your working.
Question 6
SLPaper 2
GlowBar
GlowBar is a newly opened skincare business run by two friends. The business offers handmade soaps and facial products using natural ingredients. Before launching, the owners conducted primary market research by interviewing potential customers at local health food stores.
GlowBar’s co-founders use a democratic leadership style, encouraging their small team to participate in decisions. To keep staff motivated, they offer flexible working hours and recognition for good performance.
To finance the launch, the owners used their own savings and borrowed money from a microfinance provider.
Table 1 shows GlowBar’s financial data for its first month.
Table 1: Financial data for GlowBar (Month 1)
| Item | Amount ($) |
|---|---|
| Fixed costs | 4,000 |
| Variable costs | 3,000 |
| Revenue | 12,000 |
1.[2]
State two features of a democratic leadership style.
2.[2]
Identify two non-financial methods of motivation used at GlowBar.
3.[2]
Calculate GlowBar’s profit for the first month.
Show all your working.
4.[2]
Identify two elements of the marketing mix that GlowBar used when launching its products.
5.[2]
State one primary and one external source of finance mentioned in the case.
Question 7
SLPaper 2
BlinkLens Ltd.
BlinkLens Ltd. is a private limited company that produces high-quality camera lenses for both amateur and professional photographers. The company uses a tall organizational structure with multiple layers of authority, and decision-making is mostly centralized. Its production manager follows an autocratic leadership style, often giving instructions with little input from staff.
Recently, BlinkLens Ltd. has experienced declining employee motivation and productivity. Some workers feel their contributions are undervalued, and there is little opportunity for job enrichment or promotion.
To address this, the company is reviewing its internal management style and has launched a new marketing campaign to reposition its products toward the growing smartphone photography market. The marketing plan involves changes to product packaging and distribution channels to appeal to younger consumers.
Table 1 shows selected financial data for BlinkLens Ltd. over the past two years.
Table 1: Financial data for BlinkLens Ltd.
| Item | Year 1 ($) | Year 2 ($) |
|---|---|---|
| Revenue | 400,000 | 450,000 |
| Cost of goods sold | 200,000 | 225,000 |
| Expenses | 150,000 | 180,000 |
| Net profit | ? | ? |
| Current assets | 100,000 | 120,000 |
| Current liabilities | 50,000 | 80,000 |
1.[2]
Identify two features of a tall organizational structure.
2.[2]
Outline one possible effect of an autocratic leadership style on employee motivation at BlinkLens Ltd.
3.[2]
Calculate the net profit for both years. Show all your working.
4.[2]
Calculate the net profit margin for Year 2. Show all your working.
5.[2]
Explain one reason why motivation is important for productivity in a company like BlinkLens Ltd.
Question 8
SLPaper 2
EcoHeat Ltd.
EcoHeat Ltd. is a company that manufactures solar-powered water heating systems. The business is currently planning to open a second production facility and is considering two possible locations:
- Location A: Near a port, with high rent but excellent access to suppliers and export markets
- Location B: In a rural area, with lower rent but limited transport infrastructure and fewer skilled workers
The operations director, who follows a democratic leadership style, has asked team leaders to involve employees in the decision-making process. However, recent internal reports show declining employee motivation, and communication between departments has been inconsistent.
To support the location decision, the finance team produced a break-even chart for the new facility.
Figure 1: Break-even chart for proposed facility
1.[2]
Using Figure 1, identify the break-even level of output for EcoHeat Ltd.
2.[2]
Explain one advantage of involving employees in location decisions through democratic leadership.
3.[2]
Outline one way that poor communication between departments could impact the success of the new facility.
4.[2]
Explain one non-financial method EcoHeat Ltd. could use to improve employee motivation during the expansion process.
5.[2]
Using Figure 1, calculate the profit or loss if EcoHeat Ltd. produces and sells 7,000 units.
Show all your working.
Question 9
SLPaper 2
NovaShades Ltd.
NovaShades Ltd. produces customisable smart sunglasses that adjust tint based on sunlight. The company is in its third year of operations and is seeking to expand its presence into two new markets. A recent round of market research revealed a growing demand among athletes and frequent travellers, prompting changes to the marketing plan, including new promotional strategies and adjusted pricing.
To fund the launch, the business secured a short-term bank loan and reinvested a portion of last year’s retained profit. The leadership team promotes a task-oriented management style, focused on achieving efficiency, though recent internal feedback shows that some employees feel undervalued and disconnected from the company’s vision.
The finance team has provided partial data for Q2 2024 and asked the marketing interns to complete the missing values in the statement of profit or loss using the table below.
Table 1: Financial data for NovaShades Ltd. (Q2 2024)
| Item | Amount ($) |
|---|---|
| Units sold | 2,000 |
| Selling price per unit | 120.00 |
| Variable cost per unit | 45.00 |
| Salaries (marketing + operations) | 40,000 |
| Advertising and promotion | 18,000 |
| Office rent and utilities | 15,000 |
| Loan interest | 2,500 |
| Tax rate | 25% |
| Dividends paid | 10,000 |
**Figure 1: NovaShades Ltd. statement of profit or loss for the quarter ended 30 June 2024
| $ | |
|---|---|
| Sales revenue | _______ |
| Cost of sales | _______ |
| Gross profit | _______ |
| Expenses: | |
| Salaries | (40,000) |
| Advertising and promotion | (18,000) |
| Office rent and utilities | (15,000) |
| Profit before interest and tax | _______ |
| Interest | (2,500) |
| Profit before tax | _______ |
| Tax (25%) | _______ |
| Profit for the period | _______ |
| Dividends | (10,000) |
| Retained profit | _______ |
1.[2]
Suggest one possible reason why the leadership style at NovaShades Ltd. might be contributing to employee demotivation.
2.[2]
Explain how the findings from NovaShades Ltd.’s market research could be used to adjust its marketing planning.
3.[2]
Outline one element of the marketing mix that appears to have been updated based on the case and how it supports the new market strategy.
4.[2]
Using the data in Table 1, construct the full statement of profit of loss in Figure 1. Show your working.
5.[2]
Suggest whether the business appears financially stable based on its retained profit and reliance on short-term finance.
Question 10
SLPaper 2
AromaTech Ltd.
AromaTech Ltd. is a company that manufactures essential oil diffusers. As the company expanded, it shifted from a flat to a tall organizational structure to improve coordination and oversight. The operations director follows a paternalistic leadership style, often making decisions based on what he believes is best for employees while still seeking limited input.
In response to declining productivity, the business introduced a recognition program to reward top-performing staff, aiming to increase motivation without raising wages.
Table 1 shows selected financial data for the most recent quarter.
Table 1: Financial data for AromaTech Ltd.
| Item | Amount ($) |
|---|---|
| Revenue | 500,000 |
| Cost of goods sold | 300,000 |
| Expenses | 120,000 |
| Net profit | ? |
| Current assets | 150,000 |
| Current liabilities | 100,000 |
1.[2]
Identify two features of a tall organizational structure.
2.[2]
Calculate the net profit for the quarter. Show all your working.
3.[2]
Calculate the current ratio. Show all your working.
4.[2]
Explain one benefit of using a paternalistic leadership style in a growing business.
5.[2]
Explain one way non-financial motivation can improve employee performance.