20. Key Factors in change Flashcards
<p>How is Organisational Change defined?</p>
<p>A process in which a large company or organisation changes its working methods or aims, for example in order to develop and deal with new situations or markets</p>
<p>How is Transformational Leadership defined?</p>
<p>Where new leadership such as a new CEO brings about change with the purpose of improving business performance</p>
<p>What are the Potential Causes of Change in a Business?</p>
<p>- Changes to organisational size
<br></br>- Poor business performance
<br></br>- New ownership
<br></br>- Transformational leadership
<br></br>- The market and other external factors (PESTLE)</p>
<p>How can Changes in Organisational Size affect Competitiveness?</p>
<p>There are significant advantage to growth in the form of EoS, brand recognition and financial security</p>
<p>How can Changes in Organisational Size affect Productivity?</p>
<p>- Firms are certainly more productive as they grow in size
<br></br>- However, in order to capitalise on size a business will have to alter the scale and methods of production
<br></br>-For some organisation this may require investment in automated production facilities and the loss of a highly skilled small workforce</p>
<p>How can Changes in Organisational Size affect Financial Performance?</p>
<p>- With growth comes the need to invest
<br></br>- This investment could come from the reinvestment of profits, but more often than not, a firm will need to finance growth through borrowing
<br></br>- A highly geared business is a risky business
<br></br>- Nevertheless, growth will often bring with it increased profit in real term and this is likely to please shareholders</p>
<p>How can Changes in Organisational Size affect Stakeholders?</p>
<p>- Growth brings with it new opportunities for employees through bonuses and promotion prospects
<br></br>- It may also be necessary to recruit new employees and this is another important change to manage, individual workers might be concerned that they will no longer work with 'friends', or may be moved to a job that they dislike
<br></br>- As a firm grows there is danger of losing connections with its customer base
<br></br>- Larger organisation sometimes find it more difficult to offer a personal service
<br></br>- Trying to maintain a personal service has been focus of many high street banks
<br></br>- The expansion of business can also create pressures for local communities</p>
<p>Why does a Business Organisational Size change?</p>
<p>- The size of an organisation will naturally change as it seeks to grow
<br></br>- growth is a key corporate objective as it allows a firm to satisfy shareholders and create security for its stakeholders
<br></br>- One of the most significant drivers of change as a business grows is the need to restructure and adopt policies and processes to manage expansion
<br></br>- Sometimes a business will look to grow externally by merger or takeover
<br></br>-This can bring a very sudden change to all aspects of the business
<br></br>- How an organisation manages growth can be difference between success and failure
<br></br>- Most businesses are unable to operate as thy once did where they were a small business, which can be lost as companies grow</p>
<p>How can Poor Business Performance lead to Business Change?</p>
<p>- This poor performance of an organisation will invariably bring with it a period of change as the company strives to regain customers, sales , profit or reputation
<br></br>- Often the change after a period of poor performance will happen quickly as the business leaders try to 'turn the tide' and improve the fortunes of the company before failure and possible closure
<br></br>- For this reason, change will often be very quick and may focus on corporate strategy
<br></br>- Sometimes when a large business has a period of poor performance, a change of higher management or the CEO is made
<br></br>- New leadership usually bring significant change as the new boss attempts to assert themselves and strike a new course for the business</p>
<p>How can Poor Business Performance affect Competitiveness?</p>
<p>Poor performance will often go hand in hand with a loss of competitiveness</p>
<p>How can Poor Business Performance affect Productivity ?</p>
<p>With poor performance comes a fall in sales, productivity and profitability
<br></br>- A fall in production will leave the business with a low rate of capacity utilisation
<br></br>-the key question is hoe will the firm manage its excess capacity and the threat of rising unit costs?
<br></br>- Business must take account of changes in their human resource planning
<br></br>- This could mean employing a more flexible workforce that could be changed quickly to meet the needs of the business for example , employing part-time workers, introducing job sharing.
<br></br>- It might also mean employing workers in low-cost countries, such as in call centres abroad</p>
<p>How can Poor Business Performance affect Financial Performance?</p>
<p>- A firm going through a period of poor performance is likely to be subject to liquidity problems
<br></br>-A reduction is sales will result in a reduction in cash flow and this might lead to cost cutting
<br></br>-In times of financial difficulty it is important for a business to find ways of being leaner and more efficicent</p>
<p>How can Poor Business Performance affect Stakeholders?</p>
<p>- Poor performance brings uncertainty and this can have a negative impact on motivation within the workforce
<br></br>- A firm can find itself manage low morale and giving reassurances
<br></br>- Nevertheless, poor performance sometimes signals redundancies and this can be an extremely difficult process to manage
<br></br>- All corporations are answerable to their shareholders and a poor performing company is likely to lose value on the stock markets</p>
<p>How does Technology change Business?</p>
<p>- The introduction of new technology can affect a business in many ways
<br></br>- Advances in even more powerful computer components
<br></br>- Telecommunications and the power of handheld devices change not only how businesses communicate with their customers and suppliers, but also the pace of innovation and business processes</p>
<p>How does Social factors change Business?</p>
<p>- Businesses must be prepared for changes in the tastes of consumers e.g. include the increasing demand for environmentally friendly products, the desire for greater knowledge and products or the need for more convenient methods of shopping , such as purchasing via the internet
<br></br>- Population changes will also affect the age and make-up of the workforce
<br></br>- The ageing of the population in the UK in the early part of the twenty-first century is likely to result in changing recruitment policies for businesses
<br></br>- A falling population is also likely to change how a business plans its human resources</p>
<p>How does the Law change Business?</p>
<p>- Government legislation can force changes in business activity,
<br></br>- Taxation of pollution for instance, would affect the production methods of many firms.
<br></br>- Safety standards, such as EU regulations, the minimum wage or the governance of zero hour contracts are likely to determine how businesses operate</p>
