Paper 2

SWOT analysis

A tool used which looks at both the internal and external elements of a business.

Strengths - Internal factors that benefit the business.

Weaknesses - Internal factors that harm the business.

Opportunities - External factors that can benefit the business.

Threats - External factors that can harm the business.

PESTLE analysis

A tool which focuses on the external factors effecting the business.

Political - Political stability, tax, trade unions.

Economic - Inflation, disposable income, tax.

Social - Cultures, trends, demographics.

Technological - AI, innovation, research.

Legal - Laws, regulatory body.

Environmental - Sustainability, climate change, carbon footprint.

Kotter change management theory

An eight step framework created to help organisations successfully implement lasting change.

1. Create a desire for change

2. Assemble the team

3. Develop a clear vision

4. Share the vision with others

5. Identify and clear barriers

6. Celebrate short-term wins

7. Keep motivation high

8. Make the change permanent

Nudge theory

Uses subtle changes to guide employees to new behaviours without the need of force.

Lewin’s change management model

A three step frame work to help businesses transition with ease.

Unfreeze - prepare for a change

Change - implement the change

Refreeze - make change permanent

McKinsey 7-S model

A tool which helps organisations evaluate how well their internal goals align with the business goals. It looks at seven aspects of the business and sees how well each factor align with the new goals.

1. Strategy

2. Structure

3. Systems

4. Shared values

5. Style

6. Staff

7. Skills

ADKAR model

A goal orientated change management framework that guides a business through change using five steps.

Awareness - educating why the change is needed.

Desire - motivating staff to want the change.

Knowledge - understanding how to implement the change.

Ability - turning knowledge into action.

Reinforcement - making the change long-term.

Kubler-Ross theory

Helps a business understand the psychological changes employees may go through when responding to change. It’s represented on a change curve and includes:

Shock and denial

Anger

Bargaining

Depression

Acceptance

Six Sigma project management tool

A data-driven methodology that uses statistics to eliminate defects, reduce process variation and achieve almost perfect quality. It uses the DMAIC framework to improve existing business processes:

Define - identify core problem.

Measure - collect current data to create a baseline.

Analyse - examine data to find root cause.

Improve - implement and test solutions.

Control - monitor the new process to ensure long-term success.

PRINCE2 project management tool

A methodology designed to provide a structured step-by-step framework for delivering projects on time within budget. It relies on three elements to work: principles, themes and processes.

Agile project management tool

A project management approach that breaks down large project into small manageable cycles, called sprints, to continuously deliver value and adapt to change.

SCRUM project management tool

An agile framework that helps teams manage complex work by breaking down large projects into smaller, repeatable work cycles called sprints.

Policy

A set of guidelines used to guide an individual on how to complete a task.

Procedure

The steps needed to fulfil a policy.

Key performance indicator

A tool used to measure employee performance against business goals.

Cost-effect analysis

A tool used so the business can compare the cost of an activity with its effectiveness.

Features of a policy

Clear and concise

Identify its purpose

When it was created and last reviewed

Features of a procedure

Explain which job role its suitable for

Clear on how to complete the task

Identify the beginning and end of the task

Net profit

A calculation of how a business is performing.

Gross profit

The difference between how much it costs to make a product or service and what a business sells it for.

Liabilities

Debts a business has insured whilst trading such as loans and expenses.

Break-even point

The point a business is no longer at a loss and starts to make a profit.

Income statement

Summarises all of the income and expenses, and states if a profit or loss has been made.

It’s also known as a profit and loss account.

Balance sheet

Details a snapshot of the business’s financial position, it includes what the business owns and what it owes.

It’s also known as a statement of financial position.

Equity

The net worth of a company. It represents the owners and shareholders stake in a business.

Forms of expenditure

Staff payroll

Variable costs

Fixed costs

Bank fees

Interest fees

Gross profit - equation

Sales revenue - Cost of goods sold

Net profit - equation

Sales revenue - (Cost of good sold + Expenses)

Gross profit margin - equation

Gross profit / Sales revenue x100

Net profit margin - equation

Net profit / Sales revenue x100

Break-even - equation

Fixed costs / (Selling price - Variable costs)

Quality assurance

A process followed to ensure the quality of service or products is being maintained and meets quality standards.

Quality improvement

The process in which every staff member aims to ensure the quality of what they and the organisation do is continuously improved.

Kaizen

A Japanese concept which focuses on gradual continuous improvement.

Plan Do Study Act

A method based on Kaizen to improve the quality and efficiency process.

Plan - identify changes needed.

Do - implement changes.

Study - analyse the results of the change.

Act - make the change permanent or adjust where needed.

British standards institution

Helps to improve the quality and safety of products, services and systems.

International organisation of standardisation

Brings together national experts from around the world to see if standards of products and services are compatible and will work together.

Regulatory body

People appointed by governments to set standards that organisations are required to meet, through laws passed by parliament.