Theme 3.6.1 Causes and effect of change

Question 1

What issues occur due to changes in organisational size?

Answer 1

• Maintaining the company culture
• Motivating staff during expansion
• Increased labour costs with hiring of new staff
• Training of new staff

Question 2

What are the issues due to poor business performance?

Answer 2

• The business will need new objectives and a new direction
• New strategies to compete
• Look at what is necessary to improve performance e.g. redundancies

Question 3

What are the issues with new ownership?

Answer 3

• Significant role duplication so there may be redundancies
• Clash of cultures
• Issues of communication between the two businesses as they change and merge

Question 4

What are the issues with transformational leadership?

Answer 4

• The business will need to reinvent itself to achieve competitive advantage
• A new business culture which challenges managers to develop new ways of thinking
• The business encourages the development of new ideas

Question 5

What are the issues with the change of market and other external factors (pestle)?

Answer 5

• The business may need to respond by increasing their research and development budget to introduce more innovative products to their portfolio
• They may need to change the corporate objectives

Question 6

What may a business undergoing change may need to do? - Change on competitiveness

Answer 6

• Be aware of competitors actions and be prepared to react to them
• Benchmark with similar businesses to make sure they are keeping up
• Invest in R+D to keep innovating and bringing new products to the market
• Investigate new and emerging markets e.g. expanding trade blocs

Question 7

What may a business undergoing change on productivity need to do?

Answer 7

• Invest in new equipment and machinery
• Change production methods e.g. batch to flow
• Change the quality management methods e.g. quality control to TQM
• Retrain managers so their skills meet the new technology

Question 8

What may a business undergoing financial performance change need to do?

Answer 8

• Compare sales forecasts with available production capacity
• Production floor layout adapted for necessary increases in production
• Produce new cash flow forecasts

Question 9

What is the effect of change on internal stakeholders?

Answer 9

• Employees may feel unsure about their future and promotion prospects
• Managers may be worried about duplicate roles and redundancies, or possibly see the change as positive with new opportunities

Question 10

What are the effects of change on external stakeholders?

Answer 10

• 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
• Shareholders may be concerned that changes will be expensive and have a negative impact on profit.