unit 4 aos1 the need for change

Question 1

change

Answer 1

any alterations in the external or internal environments

Question 2

business change

Answer 2

the adoption of a new idea or behaviour by a business

Question 3

competitive advantage

Answer 3

occurs when a firm, 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 4

a proactive approch

Answer 4

when a business changes to avoid future problems or take advantage of an opportunity to gain a competitive advantage.

Question 5

a reactive approach

Answer 5

is when a business undertakes change in response to a situation or crisis.

Question 6

2 similarities between a proactive and reactive approach to change

Answer 6

Both approaches are utilised by a manager or business to implement change.

Both approaches involve the business undertaking change for future benefits, such as growth, progression, and to improve or restore its brand image.

Question 7

2 benefits of reactive approaches to change

Answer 7

Businesses that wait for other businesses to drive change can benefit from the proactive business’s mistakes by learning from the errors and instituting the change correctly the first time.
Statistical evidence can be available to substantiate the need for the change, therefore customers, management, employees need less convincing of the need for change.

Question 8

1 limitation of reactive approach to change

Answer 8

However, reactive approach is often less effective than proactive approach. Can lead to loss of productivity, competitive advantage/competitiveness, time.

Question 9

2 benefits of the proactive approach to change

Answer 9

Opportunity to increase market share and net profit as competitors are lagging behind

Reputation for innovation can lead to increased customer and employee loyalty

Question 10

1 limitation to the proactive approach to change

Answer 10

a proactive business doesn’t have the mistakes of other businesses to learn from when implementing change. They may plan for change based on something that doesn’t eventuate, wasting resources.

Question 11

what are 3 things that could happen if change is managed poorly?

Answer 11

Increase employee resistance
Increase tension between employers and employees
Decrease productivity

Question 12

why do businesses need to change?

Answer 12

If performance is not at the desired level (such as sales revenue, profit, market share, brand value, and cash position), then the business needs to change to improve performance against set objectives. Businesses that can manage, embrace and adapt to change are more successful than those that are resistant to change.

Question 13

key performance indicators

Answer 13

are criteria that measure a business’s efficiency and effectiveness in achieving its different objectives.

Question 14

what are the 10 KPIs

Answer 14

percentage of market share, net profit figures, rate of productivity growth, number of sales, number of customer complaints, rates of absenteeism, level of staff turnover, number of workplace accidents, level of wastage, number of website hits.

Question 15

percentage of market share

Answer 15

measures the proportion of a business’s total sales, compared to the total sales in the industry, expressed as a percentage figure.

Question 16

net profit figures

Answer 16

are calculated by subtracting total expenses incurred from total business revenue earned, over a specific period of time

Question 17

rate of productivity growth

Answer 17

is the change in the total output produced from a given level of inputs over time, expressed as a percentage figure.

Question 18

number of sales

Answer 18

is the total quantity of goods and services sold by a business over a specific period of time.

Question 19

number of customer complaints

Answer 19

is the number of customers who notified the business of their dissatisfaction over a specific period of time.

Question 20

rates of staff absenteeism

Answer 20

are the average number of days employees are not present when scheduled to be at work, for a specific period of time.

Question 21

level of staff turnover

Answer 21

is the percentage of employees that leave a business over a specific period of time and must be replaced.

Question 22

number of workplace accidents

Answer 22

measures the amount of injuries and unsafe incidents that occur at a work location over a specific period of time.

Question 23

level of wastage

Answer 23

is the amount of inputs and outputs that are discarded during the production process.

Question 24

number of website hits

Answer 24

is the amount of customer visits that a business’s online platform receives for a specific period of time.

Question 25

force field analysis

Answer 25

is a theoretical model that determines if businesses should proceed with a proposed change. outlines the process of determining which forces drive and which forces resist a proposed change

Question 26

what are the 4 steps of a force field analysis?

Answer 26

weighting, ranking, implementing a response, evaluating a response

Question 27

weighting

Answer 27

is the process of scoring and attributing a value to the driving and restraining forces.

Question 28

ranking

Answer 28

involves arranging the forces in order of value and determining the total score of driving and restraining forces.

Question 29

implementing a response

Answer 29

After ranking the forces, a business should implement a response dependent on whether driving forces or restraining forces are stronger. During the actual execution of the change, an action plan that details what needs to be done, who is responsible, the resources required, and deadlines for task completion can be created to support the implementation of the change

Question 30

evaluating a response

Answer 30

involves determining whether or not the change has been successfully implemented. The principle of evaluating the response refers to comparing the actual change to the anticipated change and determining whether further action needs to be taken

Question 31

2 benefits of a force field analysis

Answer 31

* Businesses are able to weigh up the factors ‘for and against’ and whether the change is worth undertaking. * It allows a business to identify and strengthen the driving forces supporting the change and to take action to reduce or eliminate the restraining forces.

Question 32

2 limitations of a force field analysis

Answer 32

* The identification of the driving and restraining forces may omit some forces. They may not be clearly identifiable at the time and may emerge during the change or the person completing the analysis may not have identified the force. * The weightings of the forces are subjective. Biases can emerge when determining the importance of a particular force.

Question 33

driving forces

Answer 33

are factors affecting the business environment that promote and support business change. Driving forces push a business toward necessary and often beneficial changes. When these forces are strong, and outweigh any restraining forces, businesses are more likely to implement successful change.

Question 34

what are the 10 driving forces

Answer 34

owners, managers, employees, pursuit of profit, reduction of costs, competitors, legislation, globalisation, technology, innovation, societal attitudes.

Question 35

owners as a driving force

Answer 35

Owners are key decision-makers with a strong personal and financial interest in the success of their business. They may initiate or support change to stay competitive and ensure long-term sustainability.

Question 36

managers as a driving force

Answer 36

Managers implement business objectives and oversee operations. Their leadership and attitude toward change influence its success.

Question 37

employees as a driving force

Answer 37

Employees can drive change that improves their work environment, wages, and productivity. Their insights and creativity can lead to innovation.

Question 38

pursuit of profit as a driving force

Answer 38

Businesses aim to increase profitability and may change strategies to adapt to market conditions.

Question 39

reduction of costs as a driving force

Answer 39

Cost-cutting measures improve efficiency and profitability. Businesses may change suppliers, processes, or workforce structures.

Question 40

competitors as a driving force

Answer 40

Businesses must adapt to rival actions (e.g. price changes, new products, marketing). Competitors influence business strategies to maintain competitiveness.

Question 41

legislation as a driving force

Answer 41

Businesses must adapt to rival actions (e.g. price changes, new products, marketing). Competitors influence business strategies to maintain competitiveness.