Business Management Unit 4 AOS 1

Business change

is the adoption of a new idea or behaviour by a business.

To be proactive

is to initiate change by foreseeing pressures in the dynamic environment and implementing change to take advantage.by foreseeing pressures in the dynamic environment and implementing change to take advantage.

To be reactive

is where the business is impacted by pressures from the business environments and then responds as a result

Effectiveness

is the degree to which a business has achieved its stated objectives.

Efficiency

refers to how well a business uses resources to achieve objectives.

Key performance indicators

are specific criteria used to measure the efficiency and effectiveness of the business's performance.

Percentage of market share

refers to the business's share of the total sales in an industry for a particular good or service, expressed as a percentage.

Net profit

is what remains when expenses are deducted from the revenue earned.

Productivity

measures the amount of output produced from a given number of inputs

The rate of productivity growth

measures the rate of change of a business's ability to transform inputs in outputs.

The number of sales

is the number of goods or services (products) purchased by customers in a specific period of time.

Rate of staff absenteeism

a percentage indicating the number of workdays lost due to unscheduled staff absence from work, especially without good reason.

Level of staff turnover

is the number of employees that leave a business in a year and have to be replaced.

The level of wastage

is the amount of excess and unused inputs that have not been converted into outputs.

Number of customer complaints

is the amount of customers who express their dissatisfaction of a product provided by a business.

Number of website hits

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

The number of workplace accidents

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

Force Field Analysis

it is a tool that is used to understand the change process and the impact different forces have on the business.

Principles of force field analysis

Weighting

Ranking

Implementing a response

Evaluating the response

Driving forces

are those forces that initiate, support and encourage the change to occur

Driving force - Managers

The people who have the responsibility for successfully achieving the objectives of the business.

Driving force - employees

The people who work for the business and expect to be paid fairly, trained properly and treated ethically in return for their contribution.

Driving force - competitors

Other businesses or individuals who offer rival or competing goods or services to the ones offered by the business.

Driving force - legislation

Legislation is when new laws are passed and business must comply with the new legislative requirements.

Driving force - pursuit of profit

All businesses regardless of size need to earn a profit, of which they return a portion to its owners/shareholders.

Driving force - reduction in cost

It is the process of minimising costs in order to increase profit.

Driving force - Globalisation

is the movement across nations of trade, investment, technology, finance and labour brought about by the removal of trade barriers.

Driving force - Innovation

is a process that occurs when something already established is improved upon.

Driving force - technology

Technology involves adopting various hardware and software programs to improve operations, for example, electronic banking, EFTPOS & automated systems.

Driving force - societal attitudes

The values of society, which can impact the decision made by a business.

Restraining forces

are those forces that work against the change and create resistance, making it difficult for the change to be successfully implemented.

Restraining force - Organisational inertia

refers to an unenthusiastic response from management to proposed change.

Restraining force - employees

Employees who do not feel appreciated will usually make change difficult to introduce and will be resistant to the change.

Restraining force - time

If a business is under pressure to implement change quickly, they may not have enough time to plan and execute the change effectively.

Restraining force - managers

If a managers lacks strong leadership and is not supportive during the change then it can act as a force against the change

Managers could also be scared about change, especially if it threatens their current position, power or role.

Restraining force - legislation

Laws can either prevent the change from occurring or legal costs make the change unviable.

Restraining force - financial considerations

Change can be very costly and can work against the change from being successful.

Competitive advantage

A competitive advantage is the conditions or attributes that places a business in a superior position compared to its competitors.

Lower Cost

Lower cost strategy is a competitive advantage gained through reducing or altering the costs of the business

Differentiation

is where the business aims to be unique in its industry in a way that is valued by customers

the 10 KPIs

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