The Paper 3 Assessment:
HL only
HL only
Paper 3 will be about a social enterprise and requires students to identify and describe a human need and the potential organizational challenges facing the social entrepreneur wanting to meet this need. Further to this, students are required to write a decision-making document that includes a business recommendation. Only HL students will sit this examination. The paper will consist of stimulus followed by questions. The stimulus material will consist of a short introduction to an organization, supported by a visual representation of a product, and five or six excerpts from various documents (such as emails, Twitter feeds, newspaper articles, and so on).
Paper 3 Assessment HL
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Markscheme for Paper 3 Assessment HL
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Time
1 hour 15 minutes
Weighting
25%
Scope of the paper
This is a new external paper to be assessed for the first time in 2024. The paper is designed to assess important business management skills such as strategic analysis and evaluation within the context of a social enterprise.
It is a forward-looking examination paper that aims to develop students' ability to problem solve and to act as change agents. It also clearly aligns to the IB mission and the aims of the business management course.
Defining a social enterprise
The idea of a social enterprise is a recent and evolving development in business management and operational thinking. Currently, there are several competing definitions. Figure 10 below provides a visual overview of the differences between a traditional charity, a social enterprise and a traditional business.
Figure 10
Social enterprises: A hybrid spectrum. Source adapted from J. Kingston Venturesome, CAF Venturesome and the European Venture Philanthropy Association (2015).
1 hour 15 minutes
Weighting
25%
Scope of the paper
This is a new external paper to be assessed for the first time in 2024. The paper is designed to assess important business management skills such as strategic analysis and evaluation within the context of a social enterprise.
It is a forward-looking examination paper that aims to develop students' ability to problem solve and to act as change agents. It also clearly aligns to the IB mission and the aims of the business management course.
Defining a social enterprise
The idea of a social enterprise is a recent and evolving development in business management and operational thinking. Currently, there are several competing definitions. Figure 10 below provides a visual overview of the differences between a traditional charity, a social enterprise and a traditional business.
Figure 10
Social enterprises: A hybrid spectrum. Source adapted from J. Kingston Venturesome, CAF Venturesome and the European Venture Philanthropy Association (2015).
The following can be said of social enterprises, traditional charities and traditional businesses.
appropriate differentiation between the three types of organizations is in their own local or national
environment, especially with respect to charities and social enterprises. There could, for example, be
different tax treatments with respect to profits in their own countries.
Social enterprise: A range of views
To gain a range of views as to the evolving role and nature of a social enterprise, teachers are in the first
instance strongly advised to visit the Social Enterprise World Forum (SEWF) and Enactus websites to gain
some initial understanding.
The SEWF posits that there are six aspects that characterise a social enterprise. They are listed here for
brevity. A full explanation is available on their website (sewfonline.com/about/about-social-enterprise/).
A social enterprise:
social enterprise. The following are taken from the SEA website (socialenterprise.us/about/socialenterprise/).
Social enterprises span the spectrum of non-profit to for-profit entities. The SEA recognizes three general
social enterprise models.
unmet needs and fostering genuinely “triple-bottom-line” organizations—those simultaneously seeking
profits, social impact, and environmental sustainability. It’s certainly not the only solution.
Examples of social enterprises from New Zealand and Australia
Akina
Akina.org is a social enterprise that advises and guides social entrepreneurs on how they can become more sustainable. They are organized and driven by a strong set of Maori or indigenous cultural values. These values are very critical in the development of Akina’s business model and drive their mission and consequently impact on a range of stakeholders.
Thankyou
Thankyou is driven by strong impact goals. It produces a range of cosmetic products. Thankyou began its operations with bottled water, the passion of one individual wanting to make a difference. This social enterprise sees itself as an organization that promotes and drives change. Its ownership model is “100% community focused” and run by a charitable trust, which distributes funds to its “change makers”.
Thankyou prides itself on very strong ethical and sustainable credentials and business transparency in all aspects of its operations. Thankyou’s customers, on purchasing a product, are given a unique code that allows them to track the impact of the sale of the product. Customers then have confidence that Thankyou is delivering on its promises to make an impact.
The Cookie Project
The Cookie Project is a social enterprise which seeks to make an impact through Sustainable Development Goals (SDGs)—specifically, number 8 (decent work and economic growth) and number 10 (reduced inequalities). Its aim and mission is to raise awareness on the power and potential of individuals with learning support needs and/or disabilities by treating them as employees first, to give them confidence, life skills and an employment opportunity.
In New Zealand the employment rate for individuals with learning support needs is only 22%, compared to 70% for those who are non-disabled. The Cookie Project wishes to educate employers and employees who are non-disabled to the opportunities of supporting someone who is.
au.whogivesacrap.org
This energetic and quirky toilet paper (the name is bound to get attention) company’s mission is to provide funds to support those individuals who do not have access to a safe “dignified” toilet—in other words a basic human right. It has raised nearly $6million in providing clean safe toileting facilities and most importantly have a B Corp certification. This is an important metric to allow organizations to measure their impact on a range of stakeholders from an independent accredited source, thus enhancing credibility and transparency.
Figure 11
Certified B Corporation—Building a Better Business (bcorporation.net/)
- Social enterprises can be both not-for-profit and for-profit.
- Social enterprises, unlike traditional charities, are funded by trading activities for the majority of their income rather than donations, allowances and government grants.
- Traditional for-profit organizations do “good things through their actions” but this is explicitly linked to corporate social responsibility (CSR). CSR can form part of traditional business operations, but CSR is not their most important impact. Delivering shareholder value or owner profitability is still the main driver. Of course, CSR can be a method to drive operations to raise profitability and a number of traditional businesses have begun to use the triple bottom line to illustrate sustainability goals.
- For social enterprises, their impact on stakeholders drives their mission with any surpluses (profits) being used to sustain this. Achieving a mission or working towards a vision is the critical impact objective of social enterprises.
appropriate differentiation between the three types of organizations is in their own local or national
environment, especially with respect to charities and social enterprises. There could, for example, be
different tax treatments with respect to profits in their own countries.
Social enterprise: A range of views
To gain a range of views as to the evolving role and nature of a social enterprise, teachers are in the first
instance strongly advised to visit the Social Enterprise World Forum (SEWF) and Enactus websites to gain
some initial understanding.
The SEWF posits that there are six aspects that characterise a social enterprise. They are listed here for
brevity. A full explanation is available on their website (sewfonline.com/about/about-social-enterprise/).
A social enterprise:
- is mission focused
- has its surplus (profit) invested in its mission
- has an ownership model tied to its mission with wide community involvement
- is ethically transparent and accountable to its stakeholders
- has trade generated income (up to 75% of its annual revenue)
- has own assets “locked” (if feasible) so that the social enterprise cannot be purchased by a private
- equity firm or taken over by another entity.
social enterprise. The following are taken from the SEA website (socialenterprise.us/about/socialenterprise/).
Social enterprises span the spectrum of non-profit to for-profit entities. The SEA recognizes three general
social enterprise models.
- Opportunity employment: organizations that employ people who have significant barriers to mainstream employment.
- Transformative products or services: organizations that create social or environmental impact through innovative products and services.
- Donate back: organizations that contribute a portion of their profits to non-profits that address basic unmet needs.
unmet needs and fostering genuinely “triple-bottom-line” organizations—those simultaneously seeking
profits, social impact, and environmental sustainability. It’s certainly not the only solution.
Examples of social enterprises from New Zealand and Australia
Akina
Akina.org is a social enterprise that advises and guides social entrepreneurs on how they can become more sustainable. They are organized and driven by a strong set of Maori or indigenous cultural values. These values are very critical in the development of Akina’s business model and drive their mission and consequently impact on a range of stakeholders.
Thankyou
Thankyou is driven by strong impact goals. It produces a range of cosmetic products. Thankyou began its operations with bottled water, the passion of one individual wanting to make a difference. This social enterprise sees itself as an organization that promotes and drives change. Its ownership model is “100% community focused” and run by a charitable trust, which distributes funds to its “change makers”.
Thankyou prides itself on very strong ethical and sustainable credentials and business transparency in all aspects of its operations. Thankyou’s customers, on purchasing a product, are given a unique code that allows them to track the impact of the sale of the product. Customers then have confidence that Thankyou is delivering on its promises to make an impact.
The Cookie Project
The Cookie Project is a social enterprise which seeks to make an impact through Sustainable Development Goals (SDGs)—specifically, number 8 (decent work and economic growth) and number 10 (reduced inequalities). Its aim and mission is to raise awareness on the power and potential of individuals with learning support needs and/or disabilities by treating them as employees first, to give them confidence, life skills and an employment opportunity.
In New Zealand the employment rate for individuals with learning support needs is only 22%, compared to 70% for those who are non-disabled. The Cookie Project wishes to educate employers and employees who are non-disabled to the opportunities of supporting someone who is.
au.whogivesacrap.org
This energetic and quirky toilet paper (the name is bound to get attention) company’s mission is to provide funds to support those individuals who do not have access to a safe “dignified” toilet—in other words a basic human right. It has raised nearly $6million in providing clean safe toileting facilities and most importantly have a B Corp certification. This is an important metric to allow organizations to measure their impact on a range of stakeholders from an independent accredited source, thus enhancing credibility and transparency.
Figure 11
Certified B Corporation—Building a Better Business (bcorporation.net/)
“Certified B Corporations are businesses that meet the highest standards of verified social and environmental performance, public transparency, and legal accountability to balance profit and purpose. ... B Corps form a community of leaders and drive a global movement of people using business as a force for good.”
(B Lab 2021)
The above social enterprises are merely a selection of a growing number of organizations who see that their mission and vision should be governed by profit and purpose and who also believe in the triple bottom line. The very essence of the preferred impact of a social enterprise.
The triple bottom line
The triple bottom line (or otherwise noted as TBL or 3BL) is a framework with three key parts: social, environmental (or ecological) and financial. Some organizations have adopted the triple bottom line framework to evaluate their performance on a broader perspective to create greater organizational value.
In essence, triple bottom line refers to the following three “pillars”.
Social enterprises and SDGs
Not all social enterprises will be able to satisfy all 17 SDGs but to provide meaningful impact and credibility in their mission, the SDGs provide a framework to measure progress. Aligning with the SDGs gives the social enterprise a degree of additional credibility if they wish to satisfy the needs of triple-line accounting and other important impact goals.
Structure
Stimulus material based on a fictious social enterprise will be provided. The stimulus material will consist of a short introduction to an organization, supported by a visual representation of a product or service, and excerpts from various documents (For example, emails, Twitter feeds, newspaper articles, and so on).
After the stimulus there will be three compulsory questions that students should answer. The structure of
these questions will be as follows.
Content
Questions in this paper can be drawn from the five units of the syllabus.
The paper is strategic in scope so any of the business management tools (for example, Ansoff matrix, Boston Consulting Group (BCG) matrix and Porters’ generic strategies) could be used to recommend an appropriate plan of action for the social enterprise in question 3.
Overall advice for writing answers: Paper 3
Specific writing advice for question 3
Given the nature of paper 3 as a strategic and forward-looking paper, and the high mark allocation for question 3 at 17 marks, students should be encouraged to adequately plan for their response.
(B Lab 2021)
The above social enterprises are merely a selection of a growing number of organizations who see that their mission and vision should be governed by profit and purpose and who also believe in the triple bottom line. The very essence of the preferred impact of a social enterprise.
The triple bottom line
The triple bottom line (or otherwise noted as TBL or 3BL) is a framework with three key parts: social, environmental (or ecological) and financial. Some organizations have adopted the triple bottom line framework to evaluate their performance on a broader perspective to create greater organizational value.
In essence, triple bottom line refers to the following three “pillars”.
- People (social)—where an organization practises fair and equitable treatment of its employees and other internal and external stakeholders.
- Planet (environmental)—a firm’s commitment to minimize the environmental impact of its business operations.
- Profit (financial)—which is achievable without comprising any of the previous pillars. Profit is the reward for successful entrepreneurial activity, but any social or environment negative impacts should be included when reporting profitability.
Social enterprises and SDGs
Not all social enterprises will be able to satisfy all 17 SDGs but to provide meaningful impact and credibility in their mission, the SDGs provide a framework to measure progress. Aligning with the SDGs gives the social enterprise a degree of additional credibility if they wish to satisfy the needs of triple-line accounting and other important impact goals.
Structure
Stimulus material based on a fictious social enterprise will be provided. The stimulus material will consist of a short introduction to an organization, supported by a visual representation of a product or service, and excerpts from various documents (For example, emails, Twitter feeds, newspaper articles, and so on).
After the stimulus there will be three compulsory questions that students should answer. The structure of
these questions will be as follows.
- Question 1 is worth 2 marks and assesses the students’ ability to describe the human need in the stimulus material. This should be linked to an appropriate business management theory, such as motivation.
- Question 2 is worth 6 marks and assesses the students’ ability to explain the key challenges facing the social entrepreneur or social enterprise in the setting of the stimulus material. There will typically be two challenges, with each challenge worth 3 marks.
- Question 3 is worth 17 marks and assesses the students’ ability to recommend a future plan of action for the organization.
Content
Questions in this paper can be drawn from the five units of the syllabus.
The paper is strategic in scope so any of the business management tools (for example, Ansoff matrix, Boston Consulting Group (BCG) matrix and Porters’ generic strategies) could be used to recommend an appropriate plan of action for the social enterprise in question 3.
Overall advice for writing answers: Paper 3
- Students should answer the question asked (and focus on it) and not the question that they would like to have been asked.
- Avoid irrelevance.
- Students should not repeat the question.
- Draw diagrams and tables with a dark pencil and use a ruler where required. Label diagrams and tables fully, providing titles where appropriate.
- With longer responses, A02 or A03 or questions worth more than two marks, explain or justify every point where required.
- Qualify statements, where appropriate (for example, with “usually”, “probably” or “perhaps”).
- Avoid colloquial or emotive language. Students should write as though they are business analysts.
- Avoid numbered lists or bullet points. Students should answer with proper sentences and paragraphs.
- Read the question again once the answer is written. Sometimes one line needs to be added to present a clear answer to the question asked.
- Answer questions fully, but do not write more than the demands of the command term. The command term “state”, for example, requires no explanation or description.
- For questions with an A02 command term, the response must be applied to the stimulus, which is the case study. Responses without appropriate application are typically limited to 50% of the potential marks.
Specific writing advice for question 3
Given the nature of paper 3 as a strategic and forward-looking paper, and the high mark allocation for question 3 at 17 marks, students should be encouraged to adequately plan for their response.
- The planning will not be marked as part of the final answer. This planning could involve re-reading the whole stimulus material and analysing issues facing the organization and the possible ways forward through the use of a SWOT analysis, for example.
- The question is sufficiently broad to allow for a multitude of responses within a strategic focus. There is no “definitive” plan of action.
- It is expected that for higher marks, students will need to fully familiarize themselves with the topmost descriptors in each of the four assessment criteria (criterion A to D), which includes the use of all the stimulus material effectively in their response.
- There should also be the acknowledgement that further research may be required before a final judgement can be made and the nature of that additional research in the context of the case study.