AOS 1 U4

Question 1

Define business change

Answer 1

the adoption of a new idea or behaviour by a business

Question 2

Define change

Answer 2

any alteration in the internal or external environments

Question 2

Define competitive advantage

Answer 2

refers to the ability of a business to gain a superior position in the market compared to its rivals. This advantage allows the business to generate more sales, attract more customers, or achieve lower costs and higher profitability than competitors.

Question 3

Define Proactive

Answer 3

when a business initiates change before it becomes necessary rather than simply reacting to events

Question 4

2 Disavantages of Proactive

Answer 4

1. Higher costs and resource use: Proactive strategies often require investment without a guaranteed return.
2. Risk of misjudgement: If the anticipated change doesn’t occur, the business may waste resources.

Question 5

2 Advantages of Proactive

Answer 5

1. Competitive advantage: Acting before competitors can allow the business to gain market share, improve brand reputation, or introduce innovation first.
2. Better planning and contro: Allows for well-thought-out strategies, reducing the risk of rushed decisions and errors.

Question 6

2 Disavantages of Reactive

Answer 6

1. Loss of competitive edge – Waiting too long to act can result in losing market share to faster competitors.
2. Rushed decision-making – The need to act quickly may lead to poorly planned or inefficient changes

Question 7

2 Advantages of Reactive

Answer 7

1. Resource efficiency – The business avoids spending money until a change is necessary, which can be cost-effective in the short term.
2. Responds to actual data – Decisions are based on real events, not predictions, which can reduce unnecessary risks.

Question 8

Define Reactive

Answer 8

when a business responds to change after it occurs, instead of anticipating issues or trends

Question 9

Define Efficency

Answer 9

how well a business uses resources to achieve objectives

Question 10

Define Effectiveness

Answer 10

the degree to which a business has achieved its stated objectives

Question 11

Define key performance indicators

Answer 11

specific criteria used to measure the efficiency and/or effectiveness of a business’s performance

Question 12

Define level of wastage

Answer 12

the amount of unwanted or unusable material created by the production process of a business
- Typically used by the operations area of management
- Reducing wastage improves efficiency and lowers production costs

Question 12

Define net profit figures

Answer 12

the amount of income remaining once operating costs, taxes, interest and depreciation have all been subtracted from its total revenues
- Indicates overall financial performance and profitability.
- A declining net profit may reflect rising costs or poor sales performance.

Question 13

Define number of customer complaints

Answer 13

the number of customers expressing their dissatisfaction with the business, products and services in either spoken or written form
- Helps identify quality or service issues that need to be addressed.
- High complaint levels may harm brand reputation and customer loyalty

Question 14

Define number of sales

Answer 14

total quantity of products or services sold over a specific time period
- Measuring the number of sales helps a business evaluate its performance, especially its marketing strategies and operations management (quality).
- A rising number of sales usually indicates strong demand and business growth.

Question 15

Define number of workplace accidents

Answer 15

the recorded number of incidents that result in injury or harm to employees while at work
- Indicates how safe the workplace is for employees.
- High accident rates may suggest inadequate training or poor safety procedures.

Question 16

Define organisational inertia

Answer 16

a business’s tendency to maintain established practices and resist change, even when improvement is needed
- Can slow down or block necessary business transformation.
- Overcoming inertia is key for successful change implementation.

Question 17

Define rate of productivity growth

Answer 17

the change in productivity in a specific time period compared to the previous time period
- Growth in the rate of productivity indicates that the business is using resources more efficiently
- Can result from innovation, training, or improved technology

Question 18

Define percentage of market share

Answer 18

a measure of the business’s share of the total industry sales for a particular good or service, expressed as a percentage
- It is calculated by dividing a business’s sales (from that market) by the total sales of all businesses in that market and expressing this as a percentage
- Increasing market share can indicate successful competitive strategies.

Question 19

Define productivity

Answer 19

a measure of performance that indicates how many inputs are required to produce an output
- Higher productivity means more outputs are produced with fewer inputs.
- Linked to efficiency improvements in operations management.

Question 20

Define rate of staff absenteeism

Answer 20

the number of workers 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
- High absenteeism affects productivity and team morale.

Question 21

Define staff turnover

Answer 21

The rate at which employees leave a business and must be replaced over a specific time period
- Important indicator for the human resources area of management and can also be used as an indicator of the degree of staff satisfaction
- High turnover may reflect poor culture, low morale, or inadequate training.

Question 21

Define Force Field Analysis

Answer 21

outlines the process of determining which forces drive and which forces resist a proposed change

Question 22

Define driving forces

Answer 22

factors that support, encourage or push a business toward change.

Question 23

Define Restraining Forces

Answer 23

factors that work against change, creating resistance and making it more difficult for a business to successfully implement change

Question 24

3 Advantages of Force Field Analysis

Answer 24

1. Weighs Pros and Cons: Allows a business to evaluate the driving forces and restraining forces, helping to assess whether the change is worth undertaking 2. Highlights System Weaknesses: Pinpoints inadequate processes or systems, enabling re-design or improvement to support successful change 3. It allows a timeline to be developed and additional resource requirements to be identified.

Question 25

3 Disadvatanges of Force Field Analysis

Answer 25

1. Time Consuming: Process requires considerable time and resources, especially if many stakeholders are involved in the analysis 2. Subjectivity in Weighting: Assigning numerical values to forces is subjective and can reflect personal biases rather than accurate influence 3. Unreliable Timelines: Timeframes developed from the analysis can be subjective and may not consider unexpected internal or external disruptions

Question 26

Define Managers

Answer 26

individuals responsible for overseeing parts of the business and making strategic decisions to help achieve business objectives - Managers can influence change by supporting innovation, allocating resources, and leading others - They drive change through their vision, planning, and communication skills

Question 27

Define Employees

Answer 27

people who work for the business and are directly affected by change - Employees can drive change by suggesting improvements and embracing new practices - A motivated workforce is more likely to support and contribute to successful change

Question 28

Define Competitors

Answer 28

rival businesses that offer similar products or services in the same market - Changes in pricing, innovation, or strategy by competitors can force a business to adapt - Competitor pressure can lead to changes in operations, marketing or customer service

Question 29

Define legislation

Answer 29

laws and regulations that businesses must comply with - Changes in legislation may require businesses to change processes, policies or products - Failure to adapt to legal requirements can result in penalties or reputational damage

Question 30

Define pursuit of profit

Answer 30

the drive to increase financial returns for the business - Businesses may implement cost-cutting measures, introduce new products or expand markets - Profit pressure can lead to innovation or restructuring to improve efficiency

Question 31

Define reduction of costs

Answer 31

minimising expenses to improve financial performance - Businesses may change suppliers, outsource tasks, or implement new technology - Reducing waste and improving productivity are common cost-reduction strategies

Question 31

Define globalisation

Answer 31

the movement across nations of trade, investment, technology, finance and labour brought about by the removal of trade barriers - Leads to increased competition and pressure to adapt to international standards - Can drive change through access to global markets, supply chains and ideas

Question 32

Define technology

Answer 32

The practical application of science to develop tools, systems, or processes that improve the efficiency and/or effectiveness of business operations - Drives change by enabling faster production, improved quality and better communication - Businesses must adapt to technological advancements to stay competitive

Question 33

Define innovation

Answer 33

a process that occurs when something already established is improved upon - Drives change by improving products, services or business operations - Helps a business gain or maintain a competitive advantage in a changing environment

Question 34

Define societal attitudes

Answer 34

the values, beliefs, and views held by the community - Businesses may change practices to meet expectations around sustainability or diversity - Failure to respond to societal trends can result in public backlash or reduced sales

Question 35

Define time

Answer 35

the availability of sufficient time to plan and implement change successfully - Poor timing or limited time can make it difficult to coordinate change effectively - Urgency can result in rushed decisions or lack of staff preparation

Question 36

Define Organisational Inertia in relation to Restraining Forces

Answer 36

a business’s tendency to maintain established practices and resist change, even when improvement is needed - Businesses may favour the stability of existing operations over the uncertainty of change - Strong traditions, routines or culture can block transformation efforts

Question 37

Define Financial considerations

Answer 37

the financial cost of implementing major changes can be substantial - Significant costs may include new equipment, staff training or restructuring - Limited budgets or uncertainty about return on investment may prevent action

Question 38

Define Lower Cost Strategies

Answer 38

is a business approach where a company aims to become the lowest-cost producer in its industry, allowing it to offer goods or services at a lower price than competitors and gain a competitive advantage

Question 39

3 Advantages of Lower Cost Strategies

Answer 39

1. Increased Market Share: Lower prices can attract more price-sensitive customers, helping the business gain a larger share of the market. 2. Increased Profits: Profit made per unit can be increased as products are produced at lower costs 3. Competitive Advantage: Being able to offer the lowest prices gives the business an edge over competitors who may not be able to match them

Question 40

3 Disadvantages of Lower Cost Strategies

Answer 40

1. Reduced Product Quality: Cutting costs too aggressively may lead to lower quality products or services, affecting customer satisfaction 2. Difficult to Sustain Long-Term: Competitors may eventually find ways to cut their own costs, making it harder to maintain the lowest price position over time 3. Lack of Product Differentiation: Focusing on low costs may mean the product lacks unique features or innovations, making it less attractive to customers seeking quality or variety

Question 40

Define Differentiation Strategies

Answer 40

is a competitive approach where a business aims to make its product or service unique or superior in some way that is valued by customers, allowing the business to charge a premium price.

Question 41

3 Advantages of Differentiation Strategies

Answer 41

1. Increased Customer Loyalty: Unique features or superior quality can build strong customer loyalty, reducing the likelihood of customers switching to competitors. 2. Increased Profits – Due to the Ability to Charge Premium Prices: Because the product or service is seen as higher value, customers are often willing to pay more, increasing profit margins. 3. Increased Market Share: By developing customer loyalty due to increased quality and by offering unique features

Question 42

3 Disadvantages of Differentiation Strategies

Answer 42

1. Higher Costs: Developing unique features or improving quality often increases production, marketing, and research costs. 2. Imitation by Competitors Can Reduce Point of Difference: If the point of difference is not protected (e.g. through patents), other businesses may copy it, reducing the competitive advantage. 3. Narrower Customer Base: Not all customers are willing to pay more for unique features, so the strategy may not attract price-sensitive consumers.