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These are explanations and solutions for IB past papers, not the official version. For official papers, you can go to IB Follet or access them through your school.

02 Hours 30 Minutes

100 Marks

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IB BUSINESS MANAGEMENT HL, Paper 2, November, 2003, TZ0, Solved Past Paper

Master the 2003 IB November for Paper 2 Business Management HL with examiner tailored solutions and comments for TZ0

Question 1 [Explained]

Socially responsible investing is a growing trend where investors prioritize ethical practices and industry best practices over merely maximizing profits. These investors believe that companies should operate responsibly, considering the broader impact of their actions. Instead of divesting from companies that do not meet ethical standards, socially responsible investors retain their shares to influence company policies. By participating in annual general meetings (AGMs), they can vote on resolutions, ask questions to executives, and approve financial accounts, thereby exerting influence over company decisions and promoting ethical practices. This approach allows them to advocate for changes in company policies and practices, aligning them with ethical standards.

Question 1 [a] [Explanation]

This question asks you to explain the mechanisms through which socially responsible investors can influence company executives and policies during an annual general meeting (AGM). It involves understanding the role of shareholders in corporate governance and how they can use their voting rights and other powers to advocate for ethical practices and policies within a company.

Question 1 [b] [Explanation]

This question requires an analysis of the advantages and disadvantages for investment trusts that choose to invest in a socially responsible manner. It involves evaluating the potential benefits, such as long-term profitability and attracting ethical investors, as well as the challenges, such as lower short-term returns and higher administrative costs, associated with socially responsible investing.

Question 1 [c] [Explanation]

This question asks you to describe and justify four policy changes that an organization should consider if it wishes to act in a socially responsible manner. It involves identifying relevant policies related to ethical practices and providing a rationale for each policy change, considering the impact on stakeholders and the organization's reputation.

Question 1 [d] [Explanation]

This question requires a discussion of potential conflicts between socially responsible investors and two other stakeholders within an organization. It involves evaluating the possible effects of these conflicts on the organization, considering the differing interests and priorities of the stakeholders involved.

Question 2 [Explained]

The passage discusses the strategic decisions of western multinational car-makers, such as BMW, Ford, and General Motors, as they establish production facilities in Thailand. This move is part of a broader strategy to penetrate the South-East Asian automotive market, which is predominantly dominated by Japanese manufacturers. The Japanese approach involves treating each South-East Asian country as a separate market, with localized supply chains tailored to meet specific government regulations. However, this strategy has proven inefficient, leading to financial losses for companies like Toyota.

In contrast, western car-makers are preparing for a future where trade barriers across the region are eliminated, allowing for a unified market. Their vision focuses on achieving global market reach and economies of scale, with the hope that the Asian Free Trade Area (AFTA) will facilitate this by 2003. AFTA aims to reduce tariffs and other trade restrictions, thereby creating a more integrated and competitive regional market.

Question 2 [a] [i] [Explanation]

This question asks you to explain how western multinational car-makers might benefit from the establishment of an Asian Free Trade Area (AFTA). Consider how the removal of trade barriers could impact their operations and market access in the region.

Question 2 [a] [ii] [Explanation]

Outline three additional reasons why car producers might choose to establish operations in Thailand. Consider factors such as infrastructure, economic incentives, and strategic advantages.