3.6.1 Causes And Effects Of Change 🗳

Question 1

What are the five causes of change?

Answer 1

1. Changes in organisational size - This may happen as businesses expand internationally or into new markets
2. Poor business performance - If business experiences poor sales low profits low expansion 
3. New ownership - Happens when you merge or take over businesses or you’ve had a management buyout
4. Transformational leadership - May happen when new leadership is brought into business which seeks to change it
5. External factors- PESTLE (Political and economic social technological legal and environmental factors) -
   May happen if there is a new entrants to the market- (Porter’s 5 forces )
   EU expansions
   changes in the market

Question 2

How will

competitiveness
productivity
financial performance
and stakeholders

be affected by the changes in organisational size?

Answer 2

competitiveness- Increasing market share and therefore have more market control - pricing market leader

productivity-more capacity - More machinery and labour output will increase

financial performance - May improve as your business gets bigger me achieve economies of scale - It goes too quickly diseconomies the scale

stakeholders - If your organisation size grows
more job opportunities for employees
If your business grows then your shares may be worth more
May be contributing to local community more

Question 3

What are the four affects of change

Answer 3

Competitiveness
Productivity
financial Performance
stakeholders

Question 4

How will the effects of
competitiveness
productivity
financial performance and
Stakeholders
changed due to business performance?

Answer 4

Competitiveness - may increase due to good business performance but poor performance will lead to a loss

productivity- may increase if your business is performing well with large output
good use of capacity capacity utilisation - 

May fall due to sales productivity and profitability - poor capacity utilisation rise of unit costs

Financial performance may be poor poor business performance low sales and able to generate enough cash flow

Question 5

What does PESTLE stand for?

Answer 5

P olitical political leadership can require both short term and longer term business responses

E conomic change- economic growth can
impact the demand and sales of services can be difficult to predict Disposable income - If there is a boom, slump a recession or recovery ❤️‍🩹 

S ocial change long-term changes can change consumption habits cause business to put a focus on the strategy -Bored volatile changes in facilities e.g. environmental
more convenient

T echnological change- New tech - businesses being more innovative communication is more effective and convenient

Legal changes - force changes in business activities EU regulations minimum wage we have to adapt to comply

Question 6

How May PESTLE effect
competitiveness
productivity
financial performance
and stakeholders?

Answer 6

Competitiveness - depends how quickly this is able to respond to changing forces adopt adapt to meet technology faster to kiss you and needs or add her to new legislation

Productivity - new technology brings productivity and efficiency up boom or slump able to adapt to changing demand

Financial performance- increase of these external forces needs an increase in costs e.g. technology paying more tax 

Maybe good environmental change adapt quicker? - USP

Stakeholders - improve relationships with stakeholders if you adapt quicker environmental changes - pay NI for employees

new technology ? may be resistant to existing Workforce - or redundancies are made



Question 7

effects of the changes in new ownership over
competitiveness
financial performance
stakeholders
Productivity

Answer 7

Competitiveness - Increase if you have a moreDemocratic approach-Consult in employees feel more valued integrated into the business increase team working skills - High-quality products less defects

Productivity - may increase with a mergerMore capacity production process
May decrease if diseconomies of scale

Financial performance - may increase white knight - takeover to save your poor cash flow - may increase as output increases

Shareholders- clash between cultures existing employees may not benefit

customers will higher quality products for lower prices

Owners- higher capacity higher productivity low unit cost

Question 8

How many changes in effects of a transformational leadership effect

competitiveness
financial performance
stakeholders
Productivity


Answer 8

Competitiveness- democratic approach consult with employees - more ideas 💡
increase teamwork
innovate products
USP 

Financial performance may increase- autocratic versus laissez-faire-know what to do know what to produce

laissez-faire - lack of guidance maybe to wastage - wrong product made

Stakeholders- employees may feel valued with democratic approach or paternalistic approach where the welfare is prioritised

Productivity may increase with consultative democratic approach - for more motivated as their viewpoints are being taken into account

increase output as a producing things that they want to produce through type of production