3.6 Causes and effects of change Flashcards
Change management
Involves the process that ensures a business responds to the environment in which it operates.
Internal causes of change
A change in business size
Poor performance
New ownership
A change in business size why might a business grow?
Grow organically as they sell more products.
Increase in size with merger or takeover.
A change in business size why might a business decrease in size?
Become smaller because of a divestment.
Poor performance what might a business do?
Business may make changes to leadership to take a new direction.
Poor performance How should a business adapt?
Change because of poor performance should be quick to avoid repetitional damage or loss of customers.
What does new ownership do?
Change in ownership bring significant change to aims and objectives.
External causes of change
Changes in market
Economic change
Technological change
What changes in market may occur?
A new competitor may enter or an existing competitor may change their method.
What can economic change do?
Economic growth can change demand for goods and services and it can be difficult to predict.
What has rapid technological change led to?
Businesses needing to adapt but also offering significant opportunity.
What effect does a change on competitiveness have on a business?
A positive effect on a business.
Why can a change on competitiveness have a positive effect on a business?
Since it brings management and employees together and their efforts coordinate.
What effect does internal change have on productivity?
As it begins likely to be reduced but as it settles business can maintain and improve productivity.
What effect does external change have on productivity?
External change creates unstable levels of productivity.
