Section 3.10 - Managing Change

Question 1

Reasons for change

Answer 1

When the business environment changes, managers must change the way the business is run to suit the new circumstances.

Might change:
> staffing levels
> location
> product range
> might start spending more on R&D, staff training and new machinery

Question 2

Internal factors

Answer 2

• a change in leadership/management - e.g. a new director may have different ideas about how the business should be run - could leads to changes in organisation culture or structure of the business
• better than expected performance could lead to a decision to expand the business, in order to take advantage of the increased profits.
• Changes to staff could mean that the business no longer has the requires skills and further changes need to be made - recruitment and retraining, or outsource their work
• business growth - expanding into international markets may have to adapt its product range to match the needs of customers in other countries
• type of business - if a business is innovative, may keep coming up with better methods of doing things, may continually change to use these new methods

Question 3

External factors

Answer 3

• availability of new tech can cause change - might change their production methods if new tech means production can be faster or cheaper
• consumer taste changes
• economy slows
• changes in law
• changes in ethical views and social awareness of customer may result in companies purchasing their ethically sourced products from fair trade suppliers
• changes in competition - may result in a business losing a lot of its market shares in particular products