YY VCE Business Management Unit 4 AOS 1 Overview

Business Change

Alteration of behaviours, policies, and practices of a business to move to a new state of operation.

Proactive Approach

Planned change to avoid future problems or use opportunities for competitive advantage.

Reactive Approach

Change made in response to a crisis or problem.

Key Performance Indicators (KPIs)

Criteria that measure a business's efficiency and effectiveness in achieving objectives.

Percentage of Market Share

Business's sales compared to industry total.

Net Profit Figures

Revenue minus total expenses over a period.

Rate of Productivity Growth

Output per input.

Number of Sales

Quantity of goods/services sold.

Number of Customer Complaints

Measures customer dissatisfaction.

Rates of Staff Absenteeism

Average number of absent days.

Level of Staff Turnover

% of employees leaving.

Number of Workplace Accidents

Records safety issues and OH&S effectiveness.

Level of Wastage

Inputs/outputs discarded during production.

Number of Website Hits

Customer engagement with online platform.

Force Field Analysis (Kurt Lewin)

Model showing driving forces pushing for change and restraining forces resisting change.

Driving Forces

Factors promoting change.

Restraining Forces

Factors resisting change.

Weighting

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

Ranking

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

Implementing a response

action that can be taken to strengthen the driving forces, reduce or eliminate the restraining forces

Evaluating

determining whether or not this change has been successfully implemented.

Managers (driving force)

Motivated by job security, bonuses, reputation.

Employees (driving force)

Driven by job security, financial gain, career development.

Pursuit of Profit (driving force)

Central driver, fuels shareholder returns and sustainability.

Reduction of Costs (driving force)

Lower expenses = higher profit.

Strategies for Cost Reduction (driving force)

Lean management, JIT, outsourcing, waste minimisation.

Competitors (driving force)

Force innovation, pricing, marketing changes.

Legislation (driving force)

Legal compliance drives change (e.g., OH&S, COVID-19 laws).

Globalisation (driving force)

Access to new markets, cheaper labour, global competition.

Technology (driving force)

Improves efficiency, customer experience (e.g., automation, AI).

Innovation (driving force)

New ideas/processes/products (e.g., Tesla EVs).

Societal Attitudes (driving force)

Trends in sustainability, ethics, equality, WFH.

Employees (Restraining Forces)

Fear job loss, lack of training, tech change.

Time (Restraining Forces)

Limited planning causes mistakes and stress.

Organisational Inertia (Restraining Forces)

is the tendency for a business to maintain established ways of operating.

Financial Considerations (Restraining Forces)

High costs deter change, especially for small firms.

Porter's Generic Strategies

Developed by Michael Porter (1985) to gain competitive advantage.

Lower Cost Strategy

Goal: Be the lowest-cost producer while maintaining acceptable quality.

Methods for Lower Cost Strategy

Lean production, bulk purchasing, outsourcing, supply chain control.

Differentiation Strategy

Goal: Unique/superior products to justify premium price.

Methods for Differentiation Strategy

Quality, innovation, brand image, customer service.

Coles Case Study

Automated Customer Fulfilment Centre (CFC) in Truganina using AI and robotics.

Reasons for Change (Coles)

Reduce customer complaints, increase sales, lower wastage, boost productivity, maintain market share.

Driving Forces (Coles)

Technology, Innovation, Pursuit of Profit, Globalisation, Societal Attitudes, Competitors.

Restraining Forces (Coles)

Financial ($1B investment), Managers/Employees (fear new roles), Organisational Inertia, Time.

Change

Any alteration in internal or external business environments.

Proactive Change

Planned in anticipation of pressures.

Reactive Change

Response to external events.

Efficiency

Productive use of resources.

Effectiveness

Degree to which objectives are achieved.

Innovation (Definition)

Developing new products/processes.

Globalisation (Definition)

Global interconnection and competition.

CSR

Acting ethically and sustainably.