Unit 4: AOS 1 Flashcards
1
Q
What is business change?
A
- Adoption of new idea or behaviour
- Business’ feel the need to change as a result of business environment pressures
2
Q
What are business environment pressures?
A
- Economy
- Employee’s
- Customers
- Competitors
- Technology
3
Q
What are incremental changes?
A
- Small continuous changes
- Occur regularly in the business
e. g. new process to improve efficiency
4
Q
What are transformational changes?
A
- Significant changes
- Impact whole business
e. g. merger
5
Q
What is proactive management?
A
- Foreseeing changes in the environment and taking advantage
6
Q
What is reactive management?
A
- Letting business pressure impact the business before making a change
7
Q
What is effectiveness?
A
- Degree in which a business achieves set objectives
8
Q
What is efficiency?
A
- Degree in which the business best uses resources to achieve set objectives
9
Q
What is percentage of market share?
A
- Business’ share of total sales in an industry for a particular good or service
- Expressed as a percentage
10
Q
What is net profit?
A
- Money left over after expenses have been deducted from revenue earned
11
Q
What is rate of productivity growth?
A
- Amount of outputs produced compared to the amount of inputs used
AND - The rate in which it increases over time
12
Q
What is number of sales?
A
- Amount of goods/services sold in a specific period of time
13
Q
What is rate of staff absenteeism?
A
- Number of employee’s that do not turn up to work when they are expected to be there
14
Q
What is level of staff turnover?
A
- Rate in which people leave the business and need to be replaced
15
Q
What is level of wastage?
A
- Amount of resources and finished goods discarded throughout the production process
16
Q
What is number of customer complaints?
A
- Amount of people dissatisfied with the business and/or its products
- Have notified the business
17
Q
What is number of workplace accidents?
A
- Amount of people injured or nearly injured at work
- Due to unplanned events
18
Q
What is the force-field analysis?
A
- Process of identifying and analysing the forces that will drive and those that will resist proposed changes
19
Q
Benefits of force-field analysis?
A
- Managers can identifying and analyse the for/against change
- Helps determine whether change is worth pursuing
- Allows managers to develop ways of reducing restraining forces
20
Q
Driving force for change: Managers
A
- Managers make decisions about the future direction of the business
- Managers that are strong leaders can drive the business toward change
21
Q
Driving forces for change: Employees
A
- Can drive change through innovation
- Can place demands on the business to change conditions, policies and processes
22
Q
Driving forces for change: Competitors
A
- Many industries are highly competitive
- Competition can drive a business to implement changes to gain a competitive advantage
23
Q
Driving forces for change: Legislation
A
- Changes to laws can force a business to implement change
24
Q
Driving forces for change: Pursuit of profit
A
- Businesses looking to increase profits may implement business change
e. g. marketing campaigns
25
Driving forces for change: Reduction of costs
- Reducing costs can help a business to become more profitable
- A business that has high costs can initiate change
26
Driving forces for change: Globalisation
- Allows business to take control of international markets
| - Increases global competition
27
Driving forces for change: Technology
- Businesses may need to implement technology to remain competitive
28
Driving forces for change: Innovation
- Adopting something new or something that already exists
| e. g. new production processes
29
Driving forces for change: Societal attitude
- Societal attitudes are constantly changing
| - Businesses that fail to keep up with these attitudes risk falling behind
30
Restraining forces for change: Managers
- Managers may not be able to lead a business through change
- Middle/lower managers may not support changes proposed by senior managers
31
Restraining forces for change: Employees
- Change can bring on fear or anxiety causing resistance
| - If employees haven't been consulted or do not feel appreciated they may resist change
32
Restraining forces for change: Time
- Businesses may find a lack of time to successfully implement change
- May be under pressure by competitors and need to act quickly
33
Restraining forces for change: Organisational inertia
- Management that is unenthusiastic to change make it difficult to gather momentum toward change
- Business' lack of ability to respond to pressures and embrace change
34
Restraining forces for change: Legislation
- May block or make it difficult to implement change
| - ACCC may block a proposed merger if it feels it will reduce competition in the market
35
Restraining forces for change: Financial considerations
- Immediate or long term costs of a proposed change may make it difficult for change to be implemented successfully
36
What is a restraining force?
- Those that work against change and aim to create resistance.
- A range of different forces which work against change
- Such as time and financial considerations
37
What is a driving force?
- Those that work toward encouraging and initiate change
| - A range of different forces aim to push change such as managers, employee's and legislation
38
5 Competitive Forces
- Supplier power: how easy it is for suppliers to rive costs up
- Buyer power: how powerful buyers are in driving prices down
- Competitive rivalry: looks at te number and capability of competitors
- Threat of substitution: how easy it is for customers to find a similar good or service
- Threat of new entry: how easy it is for new competitors to enter the market
39
What is lower cost strategy?
- Business looks to gain a competitive advantage by reducing costs in primary and support activities
- Business' will look at all activities and determine where costs can be reduced
40
What is differentiation?
- Business looks to offer something unique to its customers
- By creating unique goods/service it will increase demand within consumers as they will not be able to get the features elsewhere
