Business Unit 4: Business in a Changing World Review

Comprehensive vocabulary flashcards covering change management theories, risk assessment, international trade, and globalisation from the Business Unit 4 course notes.

Internal Cause of Change: Change in Business Size

Growth occurring through internal (organic) means or external means like mergers and takeovers, which can create pressure on operations and finance management.

Internal Cause of Change: Change in Business Ownership

Occurs when new owners or shareholders seek to improve profitability through cost-cutting, potentially altering the business's unique selling points.

Internal Cause of Change: Changes in Leadership Style

The introduction of a new ethos, culture, or way of working by new managers, which may face initial worker resistance.

External Cause of Change: Changes in Consumer Tastes

Shifts in consumer demand patterns that require businesses to adapt products or risk losing market opportunities.

External Cause of Change: Developments in Technology

The introduction of new production techniques or communication tools that force businesses to adapt to maintain productivity and quality.

External Cause of Change: Changes in the Workforce

Impacts from policies such as National Minimum Wage, Employment Protection, or Immigration that affect labor market costs and composition.

External Cause of Change: Changes in the Economy

Cyclical factors including taxation levels, inflation, exchange rates, and interest rates that impact business operations.

External Cause of Change: Introduction of New Legislation

Government laws designed to limit activity or encourage prosperity, often causing increased compliance costs for businesses.

Planned Change

Internally created change that is structured, timetabled, and easier to manage with established objectives and clear timelines.

Unplanned Change

Change occurring in response to a shock to the business, which is often unstructured, under-resourced, and more likely to be resisted by workers.

Shorter Product Life Cycles

An effect of change where businesses focus on quick investment returns rather than long-term investments due to shifting demand risks.

Research and Development (R&D)

The process of focusing on market research and creating new products to bring to market at the right time in response to shorter life cycles.

Worker Resistance

Resistance arising from fears of redundancy, increased workload, or loss of social structure due to a fear of the unknown during change.

Kaizen

The strategy of making small changes on a regular basis to reduce the need for large-scale, difficult-to-manage changes.

Lewin’s Three Step Process

A change theory consisting of three stages: 1. Unfreezing, 2. Introduction of Change, and 3. Refreezing.

Unfreezing

The first stage of Lewin's process where employees are prepared for change, the necessity is explained, and motivation is created.

Introduction of Change

The second stage of Lewin's process where workers transition to new ways of working and require management support and training.

Refreezing

The final stage of Lewin's process where stability is established, and new methods are fully ingrained as the new norm.

Negotiated Total Package

One of Storey’s methods where management and workers across all locations negotiate a major change, often involving trade unions and rewards.

Negotiated Piecemeal Initiatives

A gradual approach to change where implementation is negotiated at each stage, often ad-hoc and in exchange for extra payments.

Imposed Piecemeal Initiatives

Change imposed by senior management in stages rather than all at once, sometimes using incentive payments to alleviate resistance.

Imposed Total Package

A major change introduced quickly by leaders without consultation, ensuring a clear vision but often facing high worker resistance.

Business Risk

A circumstance or factor, often expressed as uncertainty, that may have a significantly negative impact on operations or profitability.

Quantifiable Risk

Risks that can be measured and predicted, meaning the likelihood and impact of the event can be calculated.

Insurable Risk

Quantifiable risks for which a business can take out insurance to protect against financial losses.

Business Interruption Insurance

Insurance covering the risk of an incident that prevents a business from operating, helping it return to operations as soon as possible.

Uninsurable Risk

Risks that arise when the probability of the event occurring is impossible to quantify accurately.

Risk Assessment

A process involving the identification, analysis, measurement of likelihood, and potential impact of risks, followed by preventative action.

Contingency Plan

A set of actions designed to be followed during an emergency or crisis to prevent total destruction or significant disruption of business.

Contingency Funds

Reserves of cash held back by a business to deal specifically with the financial implications of a crisis.

International Trade

The exchange occurring because countries specialize in efficient production and trade surpluses to obtain goods they cannot produce themselves.

Tariff

A tax placed on imported goods, also known as customs duties, used to raise revenue or restrict imports by increasing consumer prices.

Quota

A physical limit on the quantity of a specific good that can be imported into a country.

Free Trade Area

Refers to regions where there are no tariffs or quotas on trade between members, but there is no common external tariff for outside goods.

Single Market

An area with no tariffs or quotas, the free movement of capital and people, and a common external tariff on goods entering from outside.

Protectionism

An economic policy of restraining trade between countries through the imposition of barriers such as tariffs or quotas.

Dumping

When foreign producers sell goods at less than cost price in another country's market to drive domestic producers out of business.

Voluntary Export Restraint (VER)

A type of quota imposed by the exporting country itself to avoid potentially harsher terms from tariffs or quotas.

Embargos

The partial or complete prohibition of commerce and trade with a particular country.

Globalisation

The process of the world becoming increasingly interconnected due to increased international trade and cultural exchanges.

Emerging Markets

Developing countries with growing economies and consumption populations, moving away from traditional agriculture toward industrial capacity.

Global Branding

Establishing a strong identity that allows products to be introduced worldwide using a single advertising campaign and packaging approach.

Glocalisation

A strategy of reaching global customers while adapting products and marketing to account for local tastes, customs, and traditions.

Multinational Company (MNC)

A business that owns and controls facilities or fixed assets in at least one country other than its home country.