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business component three > business change > Flashcards

business change Flashcards

(52 cards)

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1
Q

what is change?

A
  • dynamic nature of the market which needs to be carefully managed.
  • change is usually met with resistance.
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2
Q

what are some common causes of change?

A
  • changing business size
  • change in ownership
  • new technology
  • legislation
  • economic change
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3
Q

what can cause internal causes of change?

A

management policies and styles, business culture, employee attitudes
-business have degree of control

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4
Q

how can a business identify threats and opportunities?

A

sufficient business strategies

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5
Q

what are factors of the internal environment?

A
  • resources
  • corporate culture
  • stakeholder goals
  • employee mix
  • management style
  • corporate objectives
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6
Q

what are benefits of changes in business size?

A

benefit from labour and managerial economies of scale

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7
Q

what are the downsides to changes in business size?

A

risk of staff being alienated and lack of communication

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8
Q

what are the two types of growth?

A

organic and inorganic (internal and external)

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9
Q

what is organic growth?

A

internal growth

  • slowly add to product range
  • investing in new tech
  • developing distribution channels
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10
Q

what can organic growth prevent?

A

cash flow problems and limits firms exposure to risk

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11
Q

what is inorganic growth?

A

external growth, through a merger or takeover

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12
Q

what can inorganic growth put pressure on?

A

liquidity, debtor management and staff (need to develop new skills).

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13
Q

how is external growth usually financed?

A

through external investors, which may lead to new management structures and corporate objectives

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14
Q

what can new leaders bring to a business?

A

new firm culture, new strategic direction (but this depends upon level of business support).

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15
Q

what are external causes of change?

A

factors outside direct influence and control of a business (PESTEL)

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16
Q

what is PESTEL?

A
  • political
  • economical
  • social
  • technological
  • environmental
  • legal
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17
Q

what does a business need to have to adapt to change and identify SWOT?

A

flexible and dynamic strategies

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18
Q

what is the most significant external change in recent years?

A

globalisation i.e., growth of China and India

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19
Q

what are the factors of the external business environment?

A
  • population change
  • economic change
  • technology change
  • market change
  • legislation change
  • consumer change
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20
Q

what has driven a lot of market change?

A

development of technology i.e., CDS to digital streaming

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21
Q

how can competition change the structure of a market? (example)

Study These Flashcards
A

growth of European union, emergence of free trade areas changed structure of markets.

22
Q

how do changes in population encourage change in markets?

Study These Flashcards
A

changes to potential supply of labour, ageing in countries could result of shortage of workers and change in demand.

23
Q

how do changes in consumer tastes result in changes in the market?

Study These Flashcards
A

creates constant opportunities and threats that a business has to prove themselves responsive to.

24
Q

what can changes in the economy cause for a business?

Study These Flashcards
A

significant impact on success or ultimate failure

  • i.e., 2008 crash caused thousands of people to lose their jobs
  • demise of businesses left gaps in market of money conscious customers i.e.m Aldi, Poundland
25
how do businesses view change?
-prefer stability, acknowledge its inevitability, focus on pace of change
26
what is rapid change?
unplanned change such as volcanic eruption causing travel chaos and restricting access to supplies, firms should have contingency plans. -response to change
27
what is incremental change?
planned change enabling managers to anticipate impact of changes and minimise adverse effects through consultation with employees, suppliers and other investors. -structured and timetabled
28
what is disruptive change?
occurs when industry undergoes radical change that modifies how all firms operate i.e., Uber on taxi industry
29
what are the effects of change?
``` new production methods development of new products having to satisfy new legislation retraining the workforce identification of new markets ```
30
what are the effects of changing production methods? (job to batch)
- cost of equipment - additional working capital - staff demotivation - loss of USP
31
what are the effects of changing production methods? (job or batch to flow)
- cost of equipment - production delays - cash flow problems
32
what are the effects of changing production methods? (from batch or flow to cell)
- expensive CAM methods | - recruitment of flexible and adaptable staff, staff training
33
what is needed by a business for development of new products?
strategic planning from a business (assessment of economic changes, greater R+D)
34
what are common areas of change in legislation?
health and safety pensions national minimum and living wage childcare schemes
35
how can technology bring about change in the workforce?
need for staff to be trained (expensive) automation replacing jobs employees will need to become multi-skilled
36
what are methods of effective change management?
employee preparation increased R+D spending additional capital investment
37
what is implementation?
process of bringing about change and the strategies a business needs to employ to maximise chances of any change being successful
38
what is J. Storey's 4-Stage Model?
a model identifying some of the different strategies that a firm's leadership can use when implementing change.
39
what are the four stages of J. Storey's Four Approaches?
- total imposed package (seniors impose restructuring straight away) - imposed piecemeal initiatives (seniors impose change in stages) - negotiated total packages (change agreed via negotiation w staff). - negotiated piecemeal packages (gradual implementation will be negotiated at each stage).
40
what are the pros and cons of a total imposed package?
+rapid change +clear vision -lack of consultation -significant resistance to change
41
what are the pros and cons of imposed piecemeal initiatives?
+staff have more time to adapt +reduces resistance -takes longer to implement
42
what are the pros and cons of negotiated total packages?
+reduces level of resistance to change +staff will be able to cope better -can be constraints on the extent of change
43
how may staff be resistant to change?
- concerned with implications of change for themselves | - may fear the unknown
44
what may happen if the organisational culture is not flexible and adaptable?
employees will become reluctant to adopt changes.
45
why may shareholders become resistant?
- fear that change will harm their profits - may need convincing as change may be costly - senior managers may need to reassure investors
46
why may suppliers become resistant?
- might increase costs - small suppliers may have no choice but to accept - communication is key
47
what should managers do to support employees through change?
- try to involve workers from beginning - clearly explain reasons for change - have a clear strategy, direction and vision for change.
48
why was Lewin's three step process created?
- idea of re-enforcing change really mattered. | - ensuring that the change continued into the future.
49
what are the three steps of Lewin's three step process?
- unfreeze (remove the belief that current way is working, create a 'safe' environment, provide clear rationale for change). - change (management support staff during change, communicate all changes). - freeze (re-establish stability, ensure work methods are the 'norm', staff given time to engrain change).
50
how can leaders help with change?
must be seen to lead change - place new methods of working in and support these with relevant changes. - effectively communicating to all staff - identify resistant staff - convince employees survival of business depends on change.
51
what are the pros of change?
- businesses are dynamic in nature - the rate of change is accelerating - change is both an opportunity and a threat
52
what are the cons of change management?
- change is never easy to implement - sig. change may force a business to reconsider its mission and vision statements. - 65-70% of business change results in failure

business component three (7 decks)

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