Practice IB Business Management Topic 2.6 Communication with authentic exam-style questions for both SL and HL students. This question bank focuses on the exact syllabus content for 2.6 Communication and mirrors Paper 1, 2, 3 style where relevant.
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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 $1.2M in concessional debt from a development bank.
With reference to Resource 3, describe one HR issue that may be impacting LuminaCare’s ability to scale sustainably.
Explain one financial challenge and one marketing challenge LuminaCare may face if it accepts the concessional loan.
Using the resources and relevant business management tools and theories, recommend a plan of action for LuminaCare over the next five years. Your plan must make a clear recommendation on financing (choose Series A now, choose the concessional loan now, or propose a staged sequence using both at different times) and justify your choice.
BeanBar Ltd.
BeanBar Ltd. is a medium-sized company that sells gourmet coffee beans online and in retail stores. The business recently launched a new premium coffee blend and carried out primary market research to better understand customer preferences before the launch. The findings helped inform the company's updated marketing plan, which included promotional discounts and revised packaging.
Although initial sales were strong, the marketing manager is concerned that poor internal communication between the finance and sales teams may be affecting financial performance. The finance team has noted rising costs, while the operations team wants to reinvest in product development.
Table 1 shows selected financial data for the past two months.
Table 1: Selected financial data for BeanBar Ltd. for 2024
| Item | Month 1 ($) | Month 2 ($) |
|---|---|---|
| Revenue | 100,000 | 90,000 |
| Cost of sales | 40,000 | 42,000 |
| Expenses | 30,000 | 35,000 |
| Net profit | ? | ? |
| Current assets | 60,000 | 50,000 |
| Current liabilities | 30,000 | 40,000 |
Calculate the net profit for Month 1 and Month 2. Show all your working.
Calculate the current ratio for Month 2. Show all your working.
Explain one reason why a fall in net profit might concern the finance team.
Identify one method of primary market research.
Outline one problem that may arise from poor internal communication between departments.
VerdeLeaf
VerdeLeaf is a worker co-operative that produces compostable packaging for small food businesses. All employees are members who share in profits and help make decisions. As the business grew, VerdeLeaf introduced a more formal functional organisational structure, which has created friction between departments.
The business’s original objective was to remain local and values-driven, but it has recently started supplying national chains. While some members support this shift, others worry it goes against VerdeLeaf’s founding purpose. Recent feedback suggests rising demotivation in the production team, especially due to poor communication across departments and inconsistent involvement in decision-making.
The finance team has provided partial data for Q1 2024 and tasked a trainee to complete the statement of profit or loss.
Table 1: Financial data for VerdeLeaf – Q1 2024
| Item | Amount ($) |
|---|---|
| Units sold | 4,000 |
| Selling price per unit | 6.50 |
| Variable cost per unit | 2.10 |
| Salaries (production + sales) | 38,000 |
| Marketing and promotion | 14,000 |
| Office rent and overheads | 16,000 |
| Tax rate | 25% |
| Dividends paid to members | 12,000 |
Figure 1: Statement of profit or loss (partially completed)
VerdeLeaf Statement of profit or loss
for the quarter ended 31 March 2024
| Item | $ |
|---|---|
| Sales revenue | __________ |
| Cost of sales | __________ |
| Gross profit | __________ |
| Expenses: | |
| - Salaries | (38,000) |
| - Marketing and promotion | (14,000) |
| - Office rent and overheads | (16,000) |
| Profit before tax | __________ |
| Tax (25%) | __________ |
| Profit for period | __________ |
| Dividends | (12,000) |
| Retained profit | __________ |
Outline one challenge VerdeLeaf may face as it grows from a local co-operative to a national supplier.
Identify one external stakeholder and who may be interested in VerdeLeaf’s current situation.
Using the data in Table 1, calculate the blanks in the statement of profit or loss shown in Figure 1. Show all your working.
Explain what the statement of profit or loss suggests about VerdeLeaf's cost and revenue structure.
Suggest one way VerdeLeaf could improve internal communication to support motivation among staff.
EcoStruct Ltd. is a Scandinavian firm that designs and manufactures modular eco-housing units. The company has a strong person-oriented corporate culture, emphasising collaboration, open communication, and sustainability. However, after expanding into Eastern Europe, the firm experienced growing tensions between senior managers and factory workers over wage structures and shift allocations.
The operations director believes that poor communication across sites and a lack of clarity in decision-making have worsened the situation. Local labour unions have begun to raise concerns, and there are early signs of deteriorating industrial relations, with threats of formal disputes if pay equity issues are not addressed.
The board is evaluating a proposed investment in a new automated timber-cutting line to improve production efficiency. The finance team has provided the following data to assist in evaluating performance and decision-making.
Table 1: Financial Data – EcoStruct Ltd (2024)
| Item | Amount (€) |
|---|---|
| Revenue | 9,000,000 |
| Cost of sales | 5,400,000 |
| Operating expenses | 2,900,000 |
| Net profit | 700,000 |
| Capital employed | 5,600,000 |
| Average stock | 1,100,000 |
| Initial investment (machinery) | 2,200,000 |
| Net cash inflow (Years 1–4) | 700,000 p.a. |
Explain one way organizational culture can influence employee response during periods of industrial tension.
Calculate the return on capital employed (ROCE). Use net profit as the numerator. Show all your working.
Calculate the payback period for the proposed investment in the timber-cutting line. Show all your working.
Analyse how internal communication and employee relations could impact the implementation of the new machinery.
Suggest one action EcoStruct’s leadership could take to uphold its culture and improve operational efficiency simultaneously.
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 | __________ |
Explain how the current organisational structure might affect internal communication at FlexBottle Ltd.
Suggest one way the leadership style at FlexBottle Ltd. could affect employee motivation.
Using Table 1, calculate the missing fields of the statement of profit or loss in Figure 1. Show all your working.
Comment on what the completed statement of profit or loss reveals about FlexBottle Ltd.'s cost and revenue structure.
Outline one element of the marketing mix that FlexBottle Ltd. has changed, and how this change may support the product launch.