THEME 3: SECTIONE 6 (MANAGING CHANGE) Flashcards

1
Q

what internal factors can lead to (cause) change in a business?

A
  • organisational size changes
  • organisational culture
  • new ownership
  • poor business performance
  • transformational
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

How can organisational size growing effect a business negatively?

A
  • If the change was due to the business expanding through inorganic growth
  • if the business cannot manage new employees then diseconomies of scale could occur and increased production time
  • Becomes harder to communicate as the structure expands = reduced productivity = employee turnover rising
  • not managing cash flow effectively = issues with working capital
  • Shareholders sell there shares on and the businesses value decreases
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

How can organisational size growing effect a business Positively?

A
  • Increased workforce , if managed well = reduced labour costs and economies of scale = lower costs = lower prices
  • More employees can mean more flexible working = increase motivation
  • shareholders receive larger dividends
  • less unemployment = more disposable income
  • New technology being introduced to help employees
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

How can a decrease in an organisations size affect the business positively?

A
  • Possible better communication within the business
  • Better manager delegation
  • Reduced costs
  • More opportunities for remaining employees, so staff motivation could increase
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

How can a decrease in an organisations size affect the business negatively ?

A
  • Loss of economies of scale = increased costs = increased prices
  • Shareholders receive less dividends
  • Loss of jobs = decreased motivation of remaining employees = lower productivity = high turnover = recruitment costs
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

How can changes to the organisations culture affect the business (positively) ?

A
  • If the culture has been causing absenteeism / turnover to be high = could decrease = less costs = increased motivation
  • new cultures to increase efficiency = increased production = increased supply
  • can increase competitive advantage
  • will allow for future changes to have decreased resistance
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

How can changes to the organisations culture affect the business (negatively) ?

A
  • means changing attitudes and behaviours = employee resistance
  • increased costs
  • short term loss of profit
  • can be time consuming to implement effectively
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

How can changes to ownership affect the business (negatively) ?

A
  • new cultures , ideas, training = resistance = less productivity
  • change in responsibilities / possible loss of jobs = decreased motivation
  • sharing profit (if changing to a limited company or merger )
  • customer loyalty lost if products change
  • diseconomies of scale
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

How can changes to ownership affect the business (positively) ?

A
  • increased input and ideas = possible comp adv = increased value
  • access to new customers or economies of scale ( if through merger / takeover)
  • Increased investment and funding = more opportunities for growth
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

How can poor business performance affect a business (negatively) ?

A
  • reduced competitiveness = poor financial performance
  • reduced productivity =inefficiency = increased costs
  • redundancies = reduced moral
  • poor quality items or frequent mistakes = reduced loyalty and demand
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

How can transformational leadership affect a business

(positively)?

A
  • motivate employees to make changes = decrease resistance
  • new strategies and aims
  • improved roles within the firm
  • improved quality = benefit stakeholders and shareholders
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

How can transformational leadership affect a business (negatively)?

A
  • Increased resistance
  • unsuccessful = increased costs and possible failure
  • Managers not agreeing = disputes
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

what external factors can lead to (cause) change in a business?

A
  • Political, Economic, Social , Technological , Legal , Environmental
  • The market = buyer / supplier power
  • Competition = barriers to entry / rivalry
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

3 ways the business can deal with external forces causing change ?

A
  • scenario planning, continuity planning , succession planning
  • change its objectives
  • market research to anticipate change
  • ## try to act quickly to mitigate issues
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What key factors determine the businesses reaction to change ?

A
  • size of organisation
  • organisational culture
  • Speed /Time of change
  • How resistance is managed
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

How does the size of an organisation effect the reaction to change?

A
  • large firms have poorer communication = can mean its harder to explain changes to employees
  • harder to motivate if they dont understand
  • small firms may lack the finance, skills or recourses needed for effective change
17
Q

How does the culture of an organisation effect the reaction to change?

A
  • Open cultures will see it as a way to improve
  • closed / resistant ones wont agree
  • subcultures in large firms may have different reactions to the change
  • the cultures involved in mergers / takeovers may not be compatible
18
Q

How does Speed /Time of change effect the reaction?

A
  • can be incremental = gradual and involving lots of small changes over time to minimise disruption
  • disruptive change = forces a quick response, possibly at a time when the business is not financially prepared
19
Q

How can resistance be managed?

A
  • raise awareness
  • involve key stakeholders
  • listen to concerns
  • bargain
  • manipulate
20
Q

Define the term scenario planning

A

scenario planning = considering specific events that may be in the future and plan how they can operate if it occurred
- planning for: natural disasters , It failure , loss of employees

21
Q

What are the 4 ways a firm can mitigate risks ?

A
  • risk acceptance = not creating a plan
  • risk avoidance = simply avoiding
  • risk limitation = reduce the impact it can have
  • Risk transference = transferring to a third party
22
Q

Define continuity planning

A

continuity planning = much more general than scenario planning, aiming to mitigate risks and keep the firm working by providing a recovery plan in order to resume business
- business determines the minimum possible output and the resources needed that they can to keep the business running

23
Q

Define succession planning

A

Succession planning = one employee taking on the role or responsibility of another once they have left the role

  • training this employee for the role to prepare them (Job rotation)
  • can make transition smoother with less disruption
24
Q

Disadvantages of scenario planning

A
  • time consuming and expensive

- specialist are often needed