3.6.1 Causes and effects of change

Question 1

When does Change occur?

Answer 1

Change occurs when a business alters its structure, size or strategy to respond to internal or external influences

Question 2

For change to be achieved with maximum positive outcomes and minimum negatives it is necessary to ———?

Answer 2

to manage it

Question 3

Change might be necessary to help a business meet its?

Answer 3

Aims and Objectives

Question 4

What can Change create?

Answer 4

Oppertunities and Threats

Question 5

How can Growth be Achieved by?

Answer 5

Organic Growth (Product development, diversification)
Inorganic Growth (mergers and takeovers)

Question 6

What is Internal Contraction?

Answer 6

Delaying

Closing down unprofitable ventures

Question 7

What is External Contraction?

Answer 7

Selling of elements of the business

Question 8

What might new owenrs result in?

Answer 8

• Takeover REMEBER
• Merger REMEBER
  Management Buy Out (MBO)
  Next generation
• Newly appointed directors REMEMBER
  Flotation on the Stock Exchange

Question 9

What are some reasons why new owners will want to make changes?

Answer 9

Own vision or mission
-- Change in corporate objectives
Cultural differences
-- Personal leadership style
Make a difference – fresh ideas
Bringing together 2 companies policies and procedures
-- Turn around poor performance
Self glorification
Remeber 3