possible effects of change

Question 1

how does competitiveness affect change?

Answer 1

• competitors actions
• compare with similar businesses to make sure they are keeping up
• Invest in R&D to keep innovating and bringing new products to market
• Investigate new and emerging markets e.g. BRIC economies, expanding EU

Question 2

how does productivity affect change?

Answer 2

• Invest in new equipment and machinery
• Change production methods
• Change quality management methods
• Retrain managers so their skills meet the new technologies used

Question 3

how does financial performance affect change?

Answer 3

• Compare sales estimate with available production capacity
• Budget for necessary increases in staff and capacity
• Produce new cash flow forecasts
• Discuss how to raise any extra capital

Question 4

how are shareholders affected by the change?

Answer 4

• Employees may feel unsure about their future
• Managers may be worried about duplicate roles and redundancies or possibly see the change as positive with new opportunities
• Shareholders may be reluctant to invest while there is a period of change happening until circumstances are more settled within the business
• Customers may be delighted with the new range of products and improved quality
• Suppliers may see the change as an opportunity to renegotiate old contracts with more favourable terms