4.1 transforming a business Flashcards
(24 cards)
what is business change?
is the alteration of behaviours, policies, and practices of a business to improve performance. Businesses are constantly evolving and adapting to improve their performance in certain areas. Changes within a business can impact every area or just one part of the business.
what is the impact of business change
- outcomes of business changes can be both positive and negative
- All businesses need to undergo change to remain competitive.
- Managers and management can be proactive or reactive in managing change.
define proactive approach to business change
approach is where a change occurs before a business is affected by pressures in their environment to avoid future problems or take advantage or an opportunity to gain a competitive advantages.
what is an example of proactive change
- could involve a business fulfilling a gap in the market, recognising a change I market trends or investing in new technology to avoid becoming outdated
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define reactive approach to business change
is when a business undertakes change in response to a situation or crisis and it occurs when a change takes place after the business has been affected by the pressures from its environment.
why do business sometimes avoid reactive change
- change is usually undertaken in a manner that is more urgent and unplanned
- It is less effective in managing change
-potentially causing a loss in productivity or sales due to failure to recognise that the change was imminent.
similarities between proactive and reactive change
- both are approaches that are utilised by a manager of business to implement change
- the both involve undertaking change for future benefits, such as growth and progression and improve reputation
advantages of reactive change
- because its a response a pressure, a business can learn and know it the change is effective and works (effective)
- because it is responding to a pressure the business can see what other competitors are doing as an example.
disadvantages of reactive change
- because the problem has already occurred the negative impact has already caused damage
- there is less control and time
disadvantages of proactive change
-may caused productivity to fall as it may not nesasarily work
- can add to a business cost and time
advantages of proactive change
there is more planning time and therefor a higher change for it to be effective
increased competisse advantage
differences between proactive and reactive change
- practice change is planned and reactive change is not and made under pressure
- the timing is different as proactive change is before an event where as reactive change is after an event
what are the KEY PERFORMANCE INDECATORS (KPIs)
- Percentage of market share
- Net profit figures
- Rate of productivity growth
- Number of sales
- Rate of staff absenteeism
- Level of staff turnover
- Level of wastage
- Number of customer complaints
- Number of website hits
- Number of workplace accidents
define Percentage of market share
define Net profit figures
Net profit figures is the measurement of a company’s profit once operating costs, taxes, interest and depreciation have all been subtracted from its total revenue.
define Rate of productivity growth
Productivity is a measure of performance that indicates how many inouts (resources) it takes to produce an output (goods and services).
Rate of productivity growth is the change in productivity in one year compared to the previous year
define Number of sales
The number of sales of a product is a measure of the mount of goods or services (products) sold by the business in a given period of time.
Rate of staff absenteeism
The rate of staff absenteeism measures the number if worker who do not turn up for work when they are scheduled to do so. A rising rate of absenteeism may indicate problems at work between the employer and the employees.
Level of staff turnover
Staff turn over is the number or rate of employees who are leaving the business over a specific period of time and need to be replaced by new employees
- The level of staff turnover can also be used as an indicator of the degree of staff satisfaction.
- Some staff over is to always be expected as employees move onto new businesses for a variety of reasons, but a hugh or increasing level of staff turnover is problematic and suggests that enployees are not satisfied with working conditions
Level of wastage
All businesses have a production process that generates a certain amount of waste, this is measured but the level of waste which considers the amount of unwanted or unusable material created by the production process of a business.
- A business manages resources more efficiently by reducing waste, which can cut production costs.
Number of customer complaints
The number of customer complaints refers to the number of customers who contact the business to express their disappointment with the business, the good or service purchased, the quality, price or the customer service received.
Number of website hits
A ‘hit’ on a website is a request to a web server for a file such as a web page or image. Servers can monitor website activity and register whenever a web page receives a visitor (or a hit).
Number of workplace accidents
The number of workplace accidents refers to any unplanned event that results in personal injury or property damage at the workplace that is reported to management.
- An unsafe workplace impacts on the productivity of the business for several reasons. E.g. Staff members who feel unsafe may not be motivated to work efficiently while accidents can actually stop production
- WorkSafe and workplace health and safety legislation require that workplace injuries are recorded
