IB Business Management Paper 1 November 2025

IB Business Management Paper 1 – November 2025: Full Exam Review (HL and SL)

Target Question:

What came up in IB Business Management Paper 1 November 2025?

IB Business Management Paper 1 November 2025 was based on Walkway Ltd (WW), a company making electricity-generating floor tiles branded as Telec. Section A covered: purposes of a mission statement (Q1, 2 marks); the definition of economies of scale (Q2, 2 marks); sources of finance used by WW including crowdfunding, an overdraft, and a business angel (Q3, 4 marks); advantages and disadvantages of product orientation for WW (Q4, 4 marks); why QQ Tiles uses batch rather than flow production (Q5, 2 marks); and two circular business models used by WW (Q6, 6 marks).

Section B offered a choice between a Maslow-based motivation question (Q7) and a discussion of whether WW should accept an offer from AIXA to purchase 25% of its shares (Q8), each worth 10 marks.

Secondary Target Questions:

What circular business models does WW use in the November 2025 exam?

What is the AIXA share offer in IB BM Paper 1 November 2025?

What did Maslow's theory question in IB Business Management November 2025 ask?

How do you answer a "discuss" question in IB Business Management?

What is the difference between batch and flow production in IB BM?

IB Business Management Paper 1 is the same paper for both Higher Level and Standard Level candidates. The November 2025 sitting was based on Walkway Ltd (WW), a company founded in Country Y by engineering graduate Nkita Otino. WW designs and sells floor tiles - branded as Telec - that generate electricity when walked on. The case study explores a business grappling with rapid growth, outsourcing, workforce motivation, sustainability commitments, and a significant external investment offer.

This review covers every question in Section A and both Section B options, drawing on the mark scheme to explain what examiners were looking for, where marks were typically dropped, and how to structure responses effectively. As always with Paper 1, success hinges on linking theory to the stimulus/reference material with precision - general answers, however accurate, are penalised by the mark scheme.

Paper Format at a Glance

• Duration: 1 hour 30 minutes

• Total marks: 30

• Same paper for HL and SL: Yes - Paper 1 is not differentiated by level

• Calculator permitted: Yes

• Section A: Answer all questions (Questions 1–6, 20 marks total)

• Section B: Answer one question from a choice of two (Questions 7 and 8, 10 marks each)

• Pre-released statement: Walkway Ltd (WW) - floor tiles that generate electricity through footfall

The pre-released statement flagged the following terminology for candidates to research: carbon footprint, carbon neutral, exit interview, first-mover advantage, footfall, landfill, and solar panels. All of these terms appeared in the full case study.

Section A - Compulsory Short-Answer Questions

Question 1 - Purposes of a Mission Statement [2 marks]

Command term: State - No explanation required. Simply identify two valid purposes.

This was a straightforward recall/remember theory question. Candidates were asked to state two purposes of a mission statement, with one mark awarded per purpose stated. There is no requirement to link to WW for this question.

The mark scheme accepted any relevant purpose, including: communicating the business's aims or goals to stakeholders; providing direction for decision-making; helping the business remain focused; and motivating employees by giving them a shared sense of purpose.

WW's mission statement was included in the case study: "To be an inclusive employer that provides clean sustainable energy to power the world through movement." This provided a useful anchor for candidates who wanted to illustrate their points, though doing so was not required for full marks.

Lawrence's note: The most common error here is writing too much, more than needed. "State" means identify - one sentence per purpose is sufficient. Candidates who wrote extended explanations wasted valuable time without gaining additional marks.

Question 2 – Define Economies of Scale [2 marks]

Command term: Define - A precise, two-part definition is required.

This is a classic Paper 1 definition question. The mark scheme awarded marks in two parts: one mark for linking economies of scale to an increase in output or scale of production, and a second mark for explicitly stating that average cost (or unit cost) falls as a result.

A complete definition needed both elements. Stating only that "costs fall as a business grows" without specifying average cost, was insufficient for full marks. Equally, a response that said "economies of scale arise from increased production" without including the average cost element scored only one mark.

Mark scheme note: Examples of economies of scale (e.g., "bulk buying discounts") could not substitute for a definition. Contextual relevance to WW was not required or rewarded for this question.

Lawrence's notes: The key word is average. Total costs may rise as output increases - it is the average cost per unit that falls. Candidates who omitted this detail regularly dropped the second mark.

Question 3 - Sources of Finance Used by WW [4 marks]

Command term: Describe - Identification and a sufficient explanation, applied to WW.

This was a [2+2] question. For each source of finance, candidates needed one mark for identification and one mark for a correct description applied to WW's context.

The case study provided three sources of finance for WW: crowdfunding (used to finance the development of the Telec tiles), an overdraft (also used to finance development), and the sale of shares to a business angel (Nkita sold 40% of her shares to raise additional finance in 2021). Any two of these three could be used to answer the question.

The mark scheme was strict: candidates who described a source of finance not mentioned in the case study received no marks, even if the description was technically accurate. This is a consistent feature of Paper 1 marking - application to the stimulus/reference material is not optional.

Lawrence's notes: A surprisingly common error was describing the business angel as simply an "investor" without explaining what that means - i.e., an external individual who provides capital in exchange for a share of ownership and influence over strategic decisions. Surface-level identification without description awarded many candidates a maximum of one mark per source.

Question 4 - Product Orientation: One Advantage and One Disadvantage for WW [4 marks]

Command term: Explain - Requires identification plus developed reasoning applied to WW.

This was a [2+2] question. For each side, candidates needed one mark for identification of the advantage or disadvantage and one mark for a contextualised explanation using the stimulus/reference material.

For the advantage, the mark scheme pointed to WW's ability to focus on producing a high-quality product rapidly without needing to accommodate every customer preference - which enabled Nkita to achieve first-mover advantage. The stimulus provided the application: within 18 months of identifying the market opportunity, Nkita had designed, tested, and launched the Telec tile.

For the disadvantage, the mark scheme focused on the risk of ignoring consumer demand - specifically, that a product-orientated business may produce something that does not meet all customer preferences and consequently lose orders. The application was clear in the case study: Nkita refused orders from customers wanting tiles in different sizes, and a competitor, QQ Tiles, entered the market offering exactly four sizes. QQ Tiles was therefore able to meet the demand that WW had declined.

Lawrence's notes: The most common error was giving a valid theoretical point without linking it explicitly to WW. "Product-oriented businesses may ignore consumer needs" is a one-mark answer. Adding the specific context - the refusal of different-size orders and QQ Tiles' subsequent market entry - was exactly what secured the second mark on the disadvantage side.

Question 5 - Why QQ Tiles Uses Batch Rather Than Flow Production [2 marks]

Command term: Explain - Requires a reason plus application to QQ Tiles.

This was a focused two-mark explanation question. The reasoning required was: flow production is best suited to making a single, standardised product at high volume, while batch production enables a business to produce a variety of similar products by switching between different batches. Since QQ Tiles sells tiles in four different sizes, batch production allows the company to produce each size separately without committing to continuous production of a single type.

One mark was awarded for explaining why batch production is more appropriate than flow production in some circumstances, and a second mark for applying that reasoning to QQ Tiles and its four-size product range.

Lawrence's notes: Candidates who simply defined batch and flow production without comparing them or without applying the comparison to QQ Tiles' specific situation typically scored only one mark. The question was asking why batch suits QQ - not just what batch production is.

Question 6 - Two Circular Business Models Used by WW [6 marks]

Command term: Explain - Requires naming each model, explaining how it works, and applying it to WW.

This was a [3+3] question. For each circular business model, candidates needed: one mark for naming a relevant model, one mark for explaining how that model works in principle, and one mark for applying it specifically to WW.

The case study described three circular business models in use at WW, any two of which could be selected:

Circular supply model: This involves a business using renewable or recyclable inputs to reduce dependence on virgin raw materials. WW uses solar panels and Telec tiles to generate 20% of the electricity it consumes, and uses renewable resources where possible.

Resource recovery model: This involves recovering secondary materials from waste products or end-of-life goods to re-enter the production process. WW offers customers 10% off future orders if they return tiles they want to replace, and then recycles the plastic from those returned tiles - reducing waste sent to landfill.

Product life extension model: This involves extending the useful life of a product beyond its standard lifecycle. WW designs the Telec tile so that the electronic components of older tiles can be upgraded as technology advances, meaning tiles in low-footfall areas may last considerably longer than expected while generating increasing amounts of electricity.

Mark scheme note: Candidates who could not explicitly name the models by their technical terms could still earn up to two marks per model if they described an appropriate model and applied it to WW.

Lawrence's notes: This was the highest-value question in Section A and arguably the most discriminating. Many candidates correctly identified WW's sustainability activities but could not name the corresponding circular model - limiting themselves to two marks per model. Knowing the three model names (circular supply, resource recovery, product life extension) and being able to pair each with its WW example was the difference between 4/6 and 6/6.

Section B - Extended Response (Answer One Question)

Question 7 - Maslow's Motivation Theory and Nkita's Retention Plan [10 marks]

This question asked candidates to discuss, using Maslow's hierarchy of needs, whether the retention plan Nkita wrote would reduce the number of employees leaving WW.

The case study gave candidates a vast amount of information to work with: exit interview data revealing why employees left (lack of recognition, limited promotion, poor facilities, isolation, ideas ignored by Nkita), and the four elements of Nkita's plan (salary increase, Employee of the Year trophy, monthly team dinner, opportunities to work in teams). The HR manager's disagreement with parts of the plan also offered a prompt for providing evaluative balance.

What Maslow's theory required: Candidates needed to map each element of Nkita's plan onto the correct level of Maslow's hierarchy and then assess whether that element would adequately address the corresponding reason employees left.

• Salary increase → Physiological needs (Level 1). The case study noted that salaries were already above the industry average, and no employee cited pay as a reason for leaving. A salary increase addresses needs that were already being met - it is unlikely to be a significant driver of retention.

• Employee of the Year trophy → Esteem needs (Level 4). This partially addresses the exit interview finding that achievements were rarely recognised. However, as only one employee can win per year, the impact on overall staff motivation is limited.

• Monthly team dinner → Love and belonging (Level 3). This may reduce some of the social isolation employees reported. However, it does not address the root cause of isolation, which is working alone at individual workstations with noise levels that prevent conversation.

• Working in teams → Love and belonging (Level 3). This is arguably the most directly responsive element of the plan, addressing the isolation issue identified in exit interviews. It also provides some social fulfilment in the workplace, not just outside it.

What remained unaddressed by Nkita's plan: The plan does not tackle the lack of promotion opportunities (safety/esteem needs), the autocratic management style that left employees feeling their ideas were ignored (esteem and self-actualisation needs), or the poor physical facilities (safety needs). These gaps are the basis for the HR manager's disagreement and should form part of any evaluative conclusion.

Mark caps to be aware of:

• Maximum [4] if no reference is made to Nkita's plan

• Maximum [4] if no reference is made to Maslow's theory

• Maximum [8] if the response is one-sided (no engagement with why some elements may not work)

• Maximum [10] only if the response is balanced, theory and stimulus are integrated effectively, and limitations of the case study are acknowledged

Need to mention limitations to access top marks: The case study does not specify by how much salaries already exceed the industry average, nor does it indicate the scale of the salary increase proposed - both would affect the validity of any judgement about whether the pay rise is meaningful.

Lawrence's notes: The most common reason candidates did not reach band 9–10 was failing to engage critically with the plan's weaknesses. Discussing only the elements that would work - or only the elements that would not - is a one-sided response. The question uses the command term "discuss," which explicitly requires the introduction of a balanced argument. The strongest responses acknowledged what Nkita got right (teamwork, recognition), what she got wrong (salary increase as priority when pay was not the issue), and what she missed entirely (management style, promotion, facilities).

Question 8 - Should WW Accept AIXA's Offer to Purchase 25% of Shares? [10 marks]

This question asked candidates to discuss whether WW should accept the offer from AIX Airports (AIXA) to purchase 25% of WW's shares for $1.25 million, with a guaranteed order of 30,000 Telec tiles and advertising exposure across AIXA's portfolio.

Arguments in favour of accepting:

• Financial: The $1.25 million provides most of the $1.75 million WW needs to expand its factory. Expanding would allow WW to cancel its outsourcing contract with DVC and reduce unit manufacturing costs by 20% - increasing profit per tile from $200 to $300.

• Revenue: The guaranteed order of 30,000 tiles at $700 per tile generates $9 million in revenue and, at the new margin, $9 million in gross profit (assuming the 20% cost saving is fully applied). This is transformational for a business of WW's current scale.

• Brand visibility: AIXA's offer to feature Telec tiles in all its advertising would dramatically increase awareness of WW. Only 1% of large businesses were aware of WW at the time of the case study - airport advertising exposure could change this rapidly.

• Market diversification: WW's current customer base consists entirely of shopping centres. Airports represent a high-footfall new market with strong alignment to the Telec tile's core value proposition.

Arguments against accepting:

• Ownership and control: Accepting AIXA's offer would reduce Nkita's shareholding from 60% to 35%. With a business angel holding 40% and AIXA 25%, Nkita would no longer hold a majority. The business angel and AIXA together could, in principle, outvote her on strategic decisions.

• CSR conflict: AIXA claims to be carbon neutral but investigators found this claim excludes the significant carbon footprint of petrol-powered vehicles operating within its airports. This selective reporting is inconsistent with WW's own mission statement and Nkita's stated commitment to CSR - associating with AIXA could damage WW's sustainability credentials.

• Reputational risk: AIXA is involved in a high-profile legal dispute over gender pay inequality, with demonstrations by female employees appearing on national television. Given that Nkita explicitly values creating meaningful employment opportunities for women and has built WW's workforce with 20 of 25 employees being female, a formal partnership with AIXA is directly at odds with these values.

• Lost dividends: Selling 25% of shares reduces the proportion of future dividends Nkita will receive - a significant personal financial cost if WW's profitability increases substantially in the short or medium term.

Evaluative conclusion: The financial case for accepting is strong - particularly the factory expansion, cost savings, and revenue guarantee. However, the reputational and ethical risks are substantial and directly threaten WW's brand identity. A top-band response acknowledges both and reaches a supported judgement, noting that ultimately the decision depends on whether Nkita is willing to compromise her stated values in exchange for the financial advantages the deal would provide.

Mark caps to be aware of:

• Maximum [3] if the response is entirely one-sided (only arguments for or only arguments against)

• Maximum [4] if no reference is made to the stimulus material

• Maximum [8] for a balanced analytical response that uses stimulus but does not acknowledge limitations

• Maximum [10] for a balanced, stimulus-integrated response that identifies what information is missing from the case study

Mention the case study's limitations for top marks: The case study does not specify the exact terms of AIXA's share purchase (e.g., voting rights attached), the timeline for the factory expansion, or how WW's current cash flow position would affect bridging the remaining $0.5 million gap between AIXA's offer and the expansion cost.

Lawrence's notes: Many candidates discussed either the financial benefits or the ethical concerns but not both. The gender pay dispute, in particular, was frequently overlooked - candidates who engaged with it and linked it to Nkita's mission and values consistently scored high grades. Note also that the question does not ask for a recommendation - it asks candidates to "discuss," so a well-reasoned conclusion that weighs both sides is more valuable than a definitive yes or no.

Case Study in Context: Walkway Ltd (WW) - Key Themes:

The November 2025 Paper 1 case study featured a comprehensive amount of IB Business Management syllabus areas within a single, coherent company narrative. The following were the dominant themes:

• Entrepreneurship and business organisation: Sole shareholder setup, business angel finance, crowdfunding, evolution from sole trader to growing SME

• Human resource management: Exit interviews, Maslow's hierarchy, autocratic leadership, labour turnover, employee motivation

• Operations management: Batch vs. flow production, outsourcing, circular economy models, product life extension, economies of scale

• Finance: Sources of finance, share capital, expansion financing, profit margins, unit cost analysis

• Marketing: Product orientation vs. market orientation, branding, first-mover advantage, niche markets

• Ethics and CSR: Sustainability, carbon neutrality claims, gender pay equity, mission statement alignment

Frequently Asked Questions: IB Business Management Paper 1 November 2025

Is IB Business Management Paper 1 the same for HL and SL?

Yes. Paper 1 is identical for both Higher Level and Standard Level candidates. The difference between HL and SL takes place in Paper 2, where HL candidates sit a longer paper with additional marks and more complex calculations.

How long should I spend on each section in Paper 1?

With 90 minutes and 30 marks available, a rough guide is 3 minutes per mark. That gives approximately 60 minutes for Section A (20 marks) and 30 minutes for Section B (10 marks). Many candidates underestimate how long a well-developed 10-mark response takes to write and run out of time.

What does the command term "discuss" require in IB Business Management?

In IB Business Management, "discuss" requires candidates to offer a considered and balanced review of an issue, including arguments for and against, with reference to evidence from the stimulus/reference material. One-sided responses are explicitly capped in the mark scheme at a maximum of [3] marks in Section B questions.

What is a circular business model in IB Business Management?

A circular business model is a system designed to eliminate waste and keep resources in use for as long as possible. The three models assessed in this examination were: the circular supply model (using renewable or recycled inputs), the resource recovery model (recovering materials from used or returned products), and the product life extension model (designing products that can be upgraded or repaired rather than replaced).

What is first-mover advantage and why does it matter for IB Business Management?

First-mover advantage refers to the competitive benefit gained by a business that enters a new market or introduces a new product before its competitors. First movers can establish brand recognition, secure customer loyalty, and set industry standards before competitors arrive. In the November 2025 case study, WW's rapid product launch gave it early market position, though this was subsequently challenged by QQ Tiles.

What is the difference between batch production and flow production?

Flow production involves the continuous, high-volume manufacture of a single standardised product - it is most efficient when producing large quantities of one item. Batch production involves producing a set of identical items before switching to a different product or variant - it is better suited to businesses that need to produce multiple versions of a similar product, such as different sizes or specifications.

How do I reach band 9–10 in a Paper 1 Section B question?

To reach the top mark band, candidates must: address all demands of the question; use relevant business management theory accurately; integrate evidence from the stimulus material effectively (not just name the company); offer balanced arguments; and explicitly acknowledge the limitations of the case study - what information is missing that would allow a more precise evaluation.

Related IB Business Management Resources

Paper 1 draws from the entire syllabus. The following resources on The IB Trainer cover each unit, key theories, and the Business Management Toolkit in depth - use them to build the broad subject knowledge that Paper 1 demands.

Module 1 - Business Organisation & Environment

Module 2 - Human Resource Management

Module 3 - Finance & Accounts

Module 4 - Marketing

Module 5 - Operations Management

Business Management Toolkit

Paper 1 - May 2026 Pre-Release Case Study Guide

IB Business Management Paper 1 Guide

IB Business Management Activity Book case study exam practice and case study activities, including IB standard model answers and IB standard marking schemes covering the entire IB Business Management syllabus.

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