Business Unit 4 AOS1 - Reviewing Performance

business change

any alteration or adoption of new idea or behaviour in a business, in response to continual shifting of the internal and external environment

proactive approach

situation where a change is planned and occurs before a business is affected by pressures in their environment

reactive approach

situtation where a change is unplanned and takes place after the business has been affected by pressures in the environment

KPI -key performance indicator

specific criteria used to measure the efficiency and effectiveness of a business that is measurable, timely, comparable

percentage of market share

refers to the business’s portion of the total industry sales for a particular good or service, expressed as a percentage.

net profit figures

what remains when expenses related to operating the business and taxes are deducted from the revenue earned

rate of productivity growth

a measure of how many inputs it takes to produce an output in one year compared to that of the previous year

number of sales

a measure of the amount of goods or services sold by the business in a given period of time

rate of staff absenteeism

measures the number of workers who do not turn up for work when they are scheduled to do so

level of staff turnover

measures the number of employees who are leaving the business over a specific period of time, for whatever reason, and need to be replaced

level of wastage

the amount of unwanted or unusable material created by the production process of the business

number of customer complaints

refers to the amount of customers who contact the business to express their dissatisfaction with the business, in spoken or written form

number of website hits

a request to a web server for a file such as a web page or image, shows potential customers who visit or engage with a business’s site following an advert or link from social medica

number of workplace accidents

refers to any unplanned event that results in personal injury or property damage that is reported to management

driving force

push a business to alter how they operate, these factors initiate, support and encourage transformation

globalisation

the movement across nations of trade, investment, tech, finance and labor brought about by the removal of trade barriers. ability to operate in a world market

societal attitudes

the widely held beliefs and values shared by groups of people

innovation

a process that occurs when something already established is improved upon

organisational inertia

the business tendency to resist making internal changes and stick to existing routines when faced with significant external changes

restraining force

factors that work against the change, they create resistance and hinder the achievement of the goal

force field analysis

a model developed by psychologist Kurt Lewin that describes how a business can determine which forces drive and resist a proposed change

FFA key principles

weighting, ranking, implementing a response, review and evaluation

1) weighting

identify the driving and restraining forces for the change, for each force assign a score relative to its strength, a low score (1) suggests the force is weak, while a high score (5) suggest a strong force

2) Ranking

prioritise the top 3 to 5 most driving forces and most 3 to 5 restraining forces

3) Implementing a Response

based on ranking, list the actions required to be completed to strengthen driving forces and attempt to weaken restraining forces

4) Review and Evaluation

an ongoing evaluation should occur to determine the relative strength of driving and restraining forces, once it is determined driving forces are stronger, the change can be implemented

porter’s generic strategies

a theory developed by michael porter, a professor at harvard business school, on how businesses may seek future growth by pursuing competitive advantage over other businesses

cost advantage

a competitive advantage gained through reducing costs of the business, allowing it to operate with larger profit margins compared to market rivals, involves business seeking to become the lowest cost in its industry

differentiation advantage

a competitive advantage gained through making their good or service unique or superior to others in the market, to become a leader or innovator in that industry. can be use of brand names, delivery method, advertising to establish differences between substitutable products