U4 AOS1 T2

Question 1

list the 10 driving forces

Answer 1

managers
employees
competitors
legislation
pursuit of profit
reduction of costs
globalisation
technology
innovation
social attitudes

Question 2

what is a managers (driving) responsibility

Answer 2

Managers have the responsibility of operating a profitable or successful business, through the use of various management styles and skills.

Question 3

drive that a manager (driving) provides

Answer 3

The personal “drive” that a manager provides to initiate and maintain the momentum of the change.

Question 4

what does a manager(driving) share

Answer 4

They will also share their vision and try and get others inspired to change by being role models.

Question 5

eg. of managers (driving) being a driving force

Answer 5

For example, when Wesfarmers Limited took over the poorly performing Coles in 2007, management implemented a five-year recovery process.

Question 6

how will employees (driving) be a great force for change

Answer 6

If employees support and are happy with the change

Question 7

how will employees (driving) be important in a change

Answer 7

They are able to influence others and through empowerment, or employee centred management styles and skills, can have an active role in pursuing change.

Question 8

what are the employee (driving) expectations

Answer 8

Employees working for a business expect to be paid fairly, trained properly and treated ethically in return for their vital contribution to production, Empowerment and performance related pay.

Question 9

when can innovative employees (driving) thrive

Answer 9

Some innovative employees can thrive in a laizzes-faire/participative environment, if they are disciplined and have knowledgable of the change.

Question 10

with competitors, what is needed to be done by the business, and what drives that force

Answer 10

A business needs to respond to the actions of competitors or risk being left out of the industry. The pursuit of a competitive edge is a constant driving force.

Question 11

to determine the effect that competitors have in the market what is needed to be done

Answer 11

Businesses need to monitor the activities of their competition and determine what effect they may be having in the marketplace.

Question 12

what are competitors useful for

Answer 12

Competitors are used for comparison and benchmarks. marketing such as Pricing strategies and advertising campaigns, adoption of new technologies,

Question 13

how is legislation a driving force + eg

Answer 13

Businesses need to respond to local, state and federal governments who may bring in legislation that they need to address. E.g. minimum wages, equal opportunity, anti-discrimination, OH&S legislation. And
these court rulings, can change legislation which again businesses are forced to comply with and respond to.

Question 14

how is pursuit of profit a driving force

Answer 14

Profit is one of the key objectives of a business and therefore the pursuit of it is a major driving force for business managers and owners. Also All businesses, regardless of size, need to earn a profit, of which they return a portion to owners/shareholders.

Question 15

what needs to be done when the pursuit of profit is not being succeeded

Answer 15

If the profit levels of a business are not as high as the management team have identified as their goal it is likely they would need to make changes to either generate more revenue or decrease their costs to earn the pro t that allows them to achieve their goals.

Question 16

how is the reduction of costs a driving force

Answer 16

Reduction in costs in marketing, production, human resources, raw materials, staffing etc. are often a key driver of change and can create quick improvements to the bottom line.

Question 17

what may drive the business to change (reduction of costs)

Answer 17

If costs are rising then profit will be negatively impacted and as such may drive the business to change

Question 18

strategies for changing the reduction of costs for the best 3

Answer 18

source cheaper materials/supplier
local supplier ~ avoid import payments
reduce wages ~ downsize or replace labour with tech

Question 19

how is globalisation a driving force

Answer 19

The increase in global trade, communication and transportation on a global scale creates many drivers for business to change.

Question 20

how does globalisation lead to change

Answer 20

Some businesses may be exposed to global competitors, or have global opportunities to expand into global markets through free trade agreements, and expanding internet and electronic communication channels. And
Others may be driven to seek global manufacturing options to reduce labour costs, outsourcing or obtain raw materials from around the globe based on quality and price

Question 21

how is technology a driving force

Answer 21

Technology allows a business to operate its processes and practices more efficiently and effectively, cutting costs and improving productivity. As such technology, and any advances in technology, should be considered as a driving force for change.

Question 22

why is adapting to technology important

Answer 22

If a business is slow to exploit technology, a business is likely to fail, because its competitors will strive to capture greater market share and develop a sustainable competitive advantage.

Question 23

examples of adopting to technology for manufacturing companies

Answer 23

Manufacturing – robots / automation / 3D printing / Airbus / car manufacture

Question 24

examples of adopting to technology for a service company

Answer 24

Services & External Communication – internet / mobile phones, GPS, applications – Facebook, augmented / virtual reality

Question 25

what is innovation and how is it a driving force

Answer 25

Is the introduction of new products, modifying existing ones, adapting business methods or business activities and is a major source of competitive advantage for business and therefore a strong driving force for change.

Question 26

how can innovation be driven

Answer 26

can be driven by technological advances and by globalisation.

Question 27

what can innovation be a result of

Answer 27

Innovation can result from research and development undertaken by businesses or through individuals identifying areas for improvement. can also result from the identification of a niche market.

Question 28

what are societal attitudes

Answer 28

Society’s attitudes to what is right and wrong are constantly changing and this affects the ways in which businesses operate.

Question 29

how are societal attitudes a driving force

Answer 29

Society requires that large businesses sell acceptable products and treat staff with respect.

Question 30

what is a niche market

Answer 30

is a narrowly selected market segment within a larger market.

Question 31

what is an internal environment

Answer 31

internal environment refers to the factors inside the business.

Question 32

what is an external environment

Answer 32

includes those things over which the business has little control. It may be divided into an operating environment and a macro environment.

Question 33

what is the operating environment

Answer 33

refers to the outside factors with which the business directly interacts in the course of conducting its business.

Question 34

what is the macro environment

Answer 34

is made up of the broad factors in the economy and society within which the business operates

Question 35

how can a manager be a restraining force

Answer 35

If a manager is not convinced by the change, or fear it may threaten their position they can act to seriously inhibit the chances of its success, by negatively influencing the employees, not prioritising the change tasks, or ignoring them completely.

Question 36

ways managers can be restraining forces

Answer 36

Some managers may make hasty decisions that are poorly timed and unclear. Other managers may be indecisive and put off making a decision, creating uncertainty. Either of these situations may eventually cause employees to lose confidence in the decision- making abilities of management.

Question 37

what changes have the strongest resistance and what does it result in

Answer 37

Changes that threaten to eliminate jobs usually face strong resistance. For example, most business restructuring involves the elimination of some middle management positions. Consequently, middle managers may resist restructuring.

Question 38

how can employees be a restraining force 5

Answer 38

This can be a major source of resistance if employees: • fear for the unknown • fear for their job security • fail to see a reason to change. + cannot adapt to the new procedures, which threaten established work routines

Question 39

why is communication and support (interpersonal skills) essential in change

Answer 39

Change can be emotional and disorientating and the appropriate level of communication training and support need to be given to employees to overcome this force.

Question 40

The introduction of a major change, such as a merger or acquisition, may result in:

Answer 40

a complete breakdown of the existing corporate culture. This can create a feeling of mistrust and suspicion among the employees.

Question 41

how can time be a restraining force

Answer 41

sometimes businesses do not have the time to plan the change as efficiently and effectively as they would like and In some circumstances, not enough time is allowed for people to think about the change, accept it, and implement it. In other situations, the timing is poor.

Question 42

why is time an impossible barrier eg.

Answer 42

If a competitor moves into an industry then ideally the business would like to respond as quickly as possible. However sometimes the time required to change business operations, procedures or even products and services can be significant.

Question 43

what is organisational inertia

Answer 43

refers to management’s inactivity or lack of response when faced with proposed changes.

Question 44

when does operational inertia occur

Answer 44

This often occurs in stable, traditional businesses where holding on to long held traditions make it too hard to bring about change.

Question 45

how is organisational inertia a restraining force

Answer 45

Some managers resist change because it requires moving outside and away from their ‘comfort zones’.

Question 46

how is legislation a restraining force

Answer 46

Legislation can sometimes make it hard for businesses to change in they way they may want to. An example of this is foreign ownership laws preventing Australian businesses seeking major overseas investment.

Question 47

when does legislation being a restraining force occur

Answer 47

This occurs when the legislation places restrictions on certain operational practices and procedures. For example, a mining company wanting to exploit a new mineral resource will have to do so within the limitations of current environmental protection legislation.

Question 48

how is financial considerations a restraining force

Answer 48

A very obvious restraining force is that whilst the business may have the intentions to change, if it can’t find the finances to pay for these changes then the changes themselves are unlikely to occur as envisioned. This can be especially true for small businesses.

Question 49

Even given sufficient finances, a business contemplating change must weigh up the costs and benefits of the change such as:

Answer 49

purchasing new equipment Redundancy payments retraining the workforce reorganising plant layout

Question 50

what is the proactive approach known as strategic management

Answer 50

Businesses can wait to see how driving and restraining forces build around them and respond to them in a reactive way. However businesses can also seek to “shape their own destiny” and plan for the future they want to position themselves in. This proactive approach is called strategic management and one example of such an approach is Porter’s generic strategies.

Question 51

what is Michael Porter's strategic management theory

Answer 51

Michael Porter’s theory is a strategic management theory which describes how a business can seek to acquire a competitive advantage in its industry or market and therefore dominate that industry or increase its market share in it. It is therefore a very proactive theory which has two underlying concepts

Question 52

what are the two underlying concepts of Michael Porter's strategic management theory

Answer 52

The first is that this is a generic strategy which means that it can be applied to any business or industry. The second is that a business needs to identify, focus and build on its strengths. These are its “competitive advantages” and tend to be in one of two categories:

Question 53

what are the two competitive advantage categories

Answer 53

lower cost | differentiation

Question 54

what two avoid when selecting one of porter's strategies

Answer 54

porter states that they should select one strategy rather than risk being mediocre at both this is called being “suck in the middle’ where businesses are mediocre at both

Question 55

how does lower cost offer a competitive advantage

Answer 55

This will give them a competitive advantage in that they can now sell their products at a cheaper more “customer attractive” price than their rivals whilst still maintaining their profit margins and thus increasing sales and market share. This appeals to “price conscious” consumers.Eg. Aldi, Costco

Question 56

what can happen if the lower cost strategy is successful

Answer 56

can become a cost leader and change the prices that is near the industry average

Question 57

how can businesses undergo the lower cost strategy

Answer 57

business can assess each activity in the value chain to see where costs can be reduced In order to achieve this “competitive advantage” managers must look a range of cost saving measures

Question 58

examples of the business undergoing the lower cost strategies 9

Answer 58

Economics of scale Eg. bulk buying - Aldi high volumes of standardised goods/services “no frills” - jetstar, Ikea new tech to produce goods services quicker/cheaper/less waste - CUB Lean production strategies global sourcing overseas manufacturing dismiss employees ~ less overheads materials management strategies - JIT Preferential access to raw materials

Question 59

advantage of lower cost strategy (1

Answer 59

• Strong competitive advantage in markets with “price conscious” consumers.

Question 60

disadvantages of lower cost strategy (3

Answer 60

Potentially lower customer loyalty as customers are only price sensitive. • Potentially customers may associate lower price with lower quality. • Standardised goods and services will not meet the demands of customers who want unique, customer specific offerings, or who want something “different”.

Question 61

what is the strategy of differentiation

Answer 61

A business manager decides that their strength is to be more innovative and creative than their competitors and create goods and services that have a unique point of difference to their competitors. This differentiation will make their goods or services more “customer attractive” thus increasing sales and subsequently market share.

Question 62

how can the differentiation strategy be created through (9

Answer 62

innovation leading to new goods and services eg apple New product features e.g. extend product durability warranties and after sales services the way in which sold eg LV Marketing approach, separates business from others high quality materials Patents Relationships e.g. nike and LeBron unique training

Question 63

advantages of the differentiation strategy 4

Answer 63

Strong competitive advantage in markets with “brand loyalty”. • Can charge premium pricing as the cost is not such an important consideration to consumers. • Can work with large businesses who have money to create a brand image. • Can work with small businesses who create a unique point of difference.

Question 64

disadvantages of differentiation strategy (3

Answer 64

Is not good for “price sensitive” consumers / markets. • The “unique features” can be copied / mimicked by other producers domestically or overseas which destroys your competitive advantage. • Can be hard to protect your intellectual property, copyright, etc.

Question 65

when deciding which strategy to implement, Porter states that

Answer 65

business should understand the competitive forces that make up their industry.

Question 66

what are the 5 forces

Answer 66

supplier power buyer power competitive rivalry threat of substitution threat of new entry

Question 67

what is supplier buying power + what is this driven by 4

Answer 67

how easy it is for suppliers to drive up the price of the item they supply to a business. This is driven by: number of suppliers of each essential input, uniqueness of their product or service, relative size and strength of the supplier, cost of switching from one supplier to another

Question 68

what is buyer power

Answer 68

Businesses need to consider how powerful their buyers or customers may be. They need to conduct an assessment of how easy it is for buyers to drive prices down.

Question 69

what is competitive rivalry

Answer 69

number and capability of competitors in the market. If a business is operating in a market with many competitors, most of whom are offering undifferentiated products and services, then a business may find they have a reduced market attractiveness.

Question 70

what is threat of substitution

Answer 70

how easy it is for customers to find a similar goof pr service like Coke and Pepsi are often considered close substitutes, as are banks with regards to interest rates on home loans.

Question 71

what is threat of new entry

Answer 71

how easy it is for new competitors to enter the market

Question 72

what is a SWOT analysis

Answer 72

A SWOT analysis involves the identification and analysis of the internal strengths and weaknesses of the business, and the opportunities in, and threats from, the external environment.

Question 73

what is a competitive advantage

Answer 73

occurs when a rm, industry or economy has a lower cost price structure than its rivals. In this situation, goods and services can be sold more cheaply, undercutting competitors, and expanding domestic and foreign sales. The concept can
also be extended to product quality range and flexibility in adapting
to new trends in the market.

Question 74

eg of societal attitudes

Answer 74

Migration • Workforce education increasing • Millennial workforce expectations, Aging workforce • Increased participation of women in the workforce • Changing family make up,

Question 75

types of management skills 6

Answer 75

``` communication skills Delegation skills planning skills Leading skills Decision-making skills Interpersonal skills ```

Question 76

how is communication good for change

Answer 76

Clear communication required in order progress change, as the changes will appear as clear for all staff to understand.

Question 77

how i delegation skills good for change

Answer 77

Managers can oversee all aspects of the change, passing authority ensuring everyone is working toward goals

Question 78

how is planning skills g for change

Answer 78

Plan is required to ensure that there are clear goals to achieve from the change

Question 79

leading skills good for change

Answer 79

required to help influence staff to accept any change and thus work towards new objectives. the leadership determines how effectively the change is implemented and how quickly and successfully any resistance is overcome.

Question 80

how is decision making skills g for change

Answer 80

During the change process decisions will need to be made putting the business in the best position changing the organisation in the most efficient and effective way possible.

Question 81

how is interpersonal skills g for change

Answer 81

change may have a negative impact for employees and managers need to relate and empathise with employees and any other stakeholder impacted by the change.

Question 82

management skills

Answer 82

``` Autocratic persuasive consultative participative Laissaiz - faire ```

Question 83

what is the force field analysis

Answer 83

Psychologist Kurt Lewin developed a useful model for understanding the change process. Known as Force Field Analysis, the model describes how you can determine which forces drive and which resist a proposed change.

Question 84

performance management strategies 5

Answer 84

``` employee observation performance appraisal management by objectives employee self evaluation performance feedback ```

Question 85

on the job training

Answer 85

When employee needs to learn skill that usually occurs within working environment eg. Equipment, machinery + documents

Question 86

off the job training

Answer 86

Training away from workplace - Individuals sent to specialised training institutes (TAFE/uni) - To gain qualifications = to assist with performance

Question 87

types of performance related pay

Answer 87

``` Pay increase, bonuses, commissions, share plans, profit sharing ```

Question 88

what is Porter's lower cost strategy

Answer 88

Lower cost strategies involve a business seeking to become the business with the lowest costs in its industry. This will allow the business to become more pro table as it can increase its margin

Question 89

what are the Three steps of Porter's generic strategies

Answer 89

step 1 Carry out a SWOT analysis Step 2 Porter's 5 force analysis step 3 compare the SWOT with the results of the 4 forces

Question 90

what is step 1 in Porter's generic strategy

Answer 90

Carry out a SWOT (Strengths, Weaknesses, Opportunities and Strengths) for each of the two strategies. businesses should consider undertaking a SWOT analysis in regular intervals to evaluate the impact of future change. 

Question 91

what is step 2 in Porter's generic strategy

Answer 91

A business should use this as a tool to understand where power lies in a business situation. The tool can be used to identify weather new products, services or businesses have the potential to be profitable. 

Question 92

explain step three in Porter's generic strategy

Answer 92

A Business should select the generic strategy that provides the strongest set of options