CB3 - Business Management: organisations, people, markets and change
CB3 (Business Management) tests whether you can apply management theory to a live scenario - an insurer, a growing consultancy, a manufacturer - instead of reciting definitions. Examiners want diagnosis, justified action and measurable outcomes.
Organisational context and environment
- Structures: functional (efficient, siloed), divisional (product or geography focus, duplicated overheads), matrix (dual reporting, flexible resourcing, ambiguous accountability).
- Span of control, centralisation versus decentralisation and the informal organisation determine how quickly decisions travel.
- Scan with PESTLE (political, economic, social, technological, legal, environmental); judge industry attractiveness with Porter's five forces - rivalry, new entrants, substitutes, buyer and supplier power.
Managing and motivating people
- Herzberg: hygiene factors (pay, conditions) only prevent dissatisfaction; motivators (achievement, recognition, growth) create it. Vroom's expectancy theory: effort must credibly lead to performance and to a valued reward. Adams' equity: people compare input–outcome ratios.
- Leadership styles - autocratic, democratic, laissez-faire, transformational - fit urgency, team competence and risk.
- Tuckman: forming, storming, norming, performing, adjourning.
Marketing, operations and strategy
- Marketing: segment, target, position; 4Ps (product, price, place, promotion) extend to 7Ps (people, process, physical evidence) for services.
- Operations: matching capacity to demand, queuing, quality (TQM, Six Sigma), lean and supply-chain risk.
- Strategy: SWOT feeds Ansoff's matrix - market penetration, product development, market development, diversification.
- Change: Lewin's unfreeze–change–refreeze, and Kotter's sequence - urgency, coalition, vision, short wins, consolidation.
Worked example
A claims unit shows rising complaints and 40% annual staff turnover. Reasoning: turnover plus complaints points to hygiene failures and role ambiguity, not pay alone, so review job design and span of control; a PESTLE scan reveals a new regulator's turnaround rules driving volume; Kotter builds urgency and an early win, Lewin refreezes the new triage routine; success is measured by complaint cycle time and engagement score.
Traps that cost marks
- Naming Maslow or Ansoff without linking it to case facts.
- Calling Herzberg's hygiene factors motivators.
- Choosing diversification where existing products go to new segments - that is market development.
- Equating management (planning, control) with leadership (vision, direction).
- Ignoring stakeholders: regulator, staff, customers.