3.6.1 causes and effects of change

Question 1

change management

Answer 1

the process that ensures a business responds to the environment in which it operates

Question 2

management

Answer 2

coping with complexity

Question 3

leadership

Answer 3

coping with change

Question 4

causes of change

Answer 4

changes in organisational size.
poor business performance.
new ownership.
transformational leadership.
the market
external factors

Question 5

effects of change on competitiveness

Answer 5

being aware of competitors actions.
benchmark with similar businesses.
invest in research and development.
investigate new emerging markets.

Question 6

effects of change on productivity

Answer 6

invest in new equipment and machinery.
change production methods.
change quality management methods.
retrain managers so their skills meet the new technologies used.

Question 7

effects of change on financial performance

Answer 7

compare sales estimate with available production capacity.
budget for necessary increases in staff and capacity.
produce new cash flow forecasts.
discuss how to raise any extra capital.

Question 8

effects of change on stakeholders

Answer 8

employees may feel unsure about their future.
managers may be worried about duplicate roles and redundancies.
shareholders may be reluctant to invest where there is a period of change.