Unit 4 AOS 1- The need for change

4A) Business change

Is the alteration of behaviors, policies and practices of a business

4A) Proactive change

Is a change that is planed and occurs before a business is affected by pressure in their environment

• Using results of KPIs to identify problems before they occur

• Forecasting likely future changes

4A) Reactive change

Is a change that is unplanned an occurs after the business has been affected by the pressures from its environment

• Observing the actions of competitors

• Dealing with a crisis

• Responding to forces that drive a need for change

4A) Planning -Skill

Is the ability to define business objectives and determined methods or strategies that will be used to achieve those obectives

4A) Interpersonal skills-Skill

Refers to managements ability to deal, interact or liaise with people to build positive relationships with staff

4A) Communication-Skill

Is the transfer of information from a sender to receiver

4A) Leadership-Skill

Occurs when managers endeavor to guide or motive people in the business to work to achieve business objectives

4A) Decision making-Skill

Involves identifying available options and then choosing one course of action from the alternatives

4A) Delegating-Skill

Occurs when he authority and responsibility to carry out specific activities is transferred from manager to employee

4B-C) Key performance Indicators (KPI)

Are criteria that measure how efficient and effective a business is at achieving different objectivies

4B-C) Percentage of market share

Measures the proportion of a business total sales compared to the total sales in the industry, expressed as a percentage

What it measures: Highlights how well a business is performing within their industry, quality of the product

4B-C) Net profit figures

Are calculated by deducting total expenses incurred from total revenues earned over a period of time

What it measures: Assess whether expenses are too high or revenue is too low

4B-C) Number of sales

Is the total quantity of goods/services sold by a business over a specific period of time

What it measures: Indicates that customers are satisfied with the quality and price of the good/service the business is providing

4B-C) Number of customer complaints

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

What it measures: Levels of customer satisfaction

4B-C) Rate of staff absenteeism

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

What it measures: poor corporate culture, poor training

4B-C) Level of staff turnover

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

What it measures: dissatisfaction with management style, pay, working conditions

4B-C) Number of workplace accidents

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

What it measures: How safe a workplace is, poor training, faulty equipment

4B-C) Levelof wastage

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

What it measures: efficiency, effectiveness, how well operations strategies are implemented

4B-C) Rate of productivity growth

Is the change in the total outputs produced from a given level of inputs over time, expressed as a percentage figure

What it measures: How much a business can produce, labour productivity

4B-C) Number of website hits

Is the amount of customer visits that a businesses online platform receives for a specific period of time

What it measures: effectiveness of marketing, customer interest in products

4D) Force field analysis + steps + pos/neg

is a theoretical model that determines if a business should proceed with a proposed change

1) Identify the need for change

2) Weighting

3) Ranking

4) Implementing the response

5) Evaluating the response

+ Business can examine is a proposed change can be successfully implemented

+ May lead to change being more likely to succeed positively effecting employee moral

- T-C especially if business is already aware of the need for mandatory change

- Costly to conduct analysis

4D) Weighting

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

4D) Ranking

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

4D) Implementing a response

Refers to the actions that can be taken to strengthen the driving forces, reduce or eliminate the restraining and implement the actual change

4D) Evaluating a response

The process of determining whether the business changes have been successfully implemented or not.

4E-F) Driving forces

The factors affecting the business environment that promote and support business change

4E-F) Managers- Driving

The primary objective of a manager is to ensure that the business is achieving its objectives

How is it a driving force: Performance impacts their financial and job security especially if manager owns the business

4E-F) Employees- Driving

Performs work tasks for the business and can be both a driving and resisting force for business change

How is it a driving force: In return for their contributions, employees have their own expectations

4E-F) Pursuit of profit- Driving

One of the main objectives of all business to make profit

How is it a driving force: This is one of the main

4E-F) Reduction of costs- Driving

How is it a driving force: Strategies that reduce wastage or improve productivity can reduce a business costs and improve profitability leading to an increased NPM.

4E-F) Competitors- Driving

Are other business within the same industry that sell similar goods/services

How is it a driving force: It is vital that a business responds appropriately to changes made by rival firms

4E-F) Technology- Driving

How is it a driving force: If a business fails to adopt suitable technology, it may impact their ability to compete and survive.

4E-F) Societal attitudes- Driving

The collective views values and beliefs of the general public

How is it a driving force: Business needs to align their operations with societal attitudes and behaviors

4E-F) Legislation- Driving

How is it a driving force: A business may be forced to change if new legislation is introduced

4E-F) Innovation- Driving

The process of altering and improving or creating new products or procedures

How is it a driving force: Because constant pressure from competitors, business are always improving existing products/service/ introducing new ones

4E-F) Globalization- Driving

Is increased trade between countries due to reduced trade barriers

How is it a driving force: The trend of globalisation means that more business are operating on a global scale due to trade barriers being removed.

4G) Restraining forces

Factors within or outside the business environment that resist change

4G) Managers- Restraining

The primary objective of a manager is to ensure that the business is achieving its objectives

How is it a driving force: Managers may be unwilling to introduce a business change if they do not support the change or it threatens their position

4G) Employees- Restraining

Performs work tasks for the business and can be both a driving and resisting force for business change

How is it a driving force: Employees may resist a business change if the outcome is uncertain. If may affect their job security or they fail to see a reason for a change

4G) Legislation- Restraining

How is it a driving force: Laws such as occupational health and safety laws can prevent a business from undertaking changes

4G) Time- Restraining

Because business changes often have to be completed before, within or after a certain time period.

4G) Financial consideration- Restraining

How is it a driving force: A business must ensure that their is enough funds to carry out the proposed change

4G) Organizational inertia- Restraining

The tendency for a business to maintain established ways of operating

How is it a driving force: A business many have operated in a certain manner for so long that it can be difficult to implement changes

4H) Porters generic stratergies

Describes how a business can seek to acquire a competitive advantage in its industry to increase its market share

4H) Competitive advantage

Is the conditions or attributes that place a business in a superior position compared to its immediate competitors

4H) Porters low cost stratergy

Involves a business offering customers similar or lower priced products compared to the industry average while remaining profitable by achieving the lowest cost of operations among competitors

+ Attractive to cost conscious customers

+ Reduces the expense of operations

- Customers are not loyal and would switch to a cheaper alternative immediately

- Low prices may result in customers perceiving output being of cheaper quality

4H) Reducing cost of supplies:

• Obtaining discounts by purchasing supplies in bulk

• Lowering long term costs

• Securing cheaper supplies from global sourcing of inputs

4H) Reducing internal operating costs

• Reducing expenditure on marketing and advertising

• Lowering cost of Labour through overseas manufacturing

• producing a high volume of outputs through automated production lines

4H) Porters differentiation sratergy

Involves offering customers a unique service or product features that are perceived of value to customers which results in them being sold at a high price than competitors

+ Customers are often loyal to business because of unique features not offered by competitors

+ Can charge premium prices as they aren’t available elsewhere

- New employees may require additional training to adapt their skills to match businesses point of difference

- Higher selling price can deter cost conscious customers

4H) A business can achieve this by

• Introducing new technology

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