U4A1 (b) business change

Question 1

10 driving forces

Answer 1

managers
employees
competitors
legislation
pursuit of profit
reduction of costs
globalisation
technology
innovation
societal attitudes

Question 2

how managers drive change

Answer 2

personal desire to intiate and maintain the momentum of change. inspire others to change.

Question 3

how employees drive change

Answer 3

can influence others and have an active role in change.

Question 4

how competitors drive change

Answer 4

respond to the actions of competitors so they can respond quickly to avoid losing market share.

Question 5

how legislation drives change

Answer 5

businesses must change based on local, state and federal governments who may bring in legislation to address.

Question 6

how pursuit of profit drives change

Answer 6

profit is a key objective of a business and must be sustained over time.

Question 7

how reduction of costs drive change

Answer 7

reducing costs is often the quickest way to improve profitability.

Question 8

how globalisation drives change

Answer 8

allows for increased access to markets. faster business growth due to more trading relationships.

Question 9

how technology drives change

Answer 9

technology changes at an increasing rate, putting pressure on businesses to initiate change.

Question 10

how innovation drives change

Answer 10

when something already established is improved upon, the business gains competitive advantage.

Question 11

how societal attitudes drive change

Answer 11

society moves at a fast pace, so businesses must continuously re-examine the workforce and change accordingly.

Question 12

6 restraining forces

Answer 12

managers
employees
time
organisational inertia
legislation
financial considerations

Question 13

how managers restrict change

Answer 13

managers may not believe change is in the best interest of the business. prevent change occuring if it threatens their position.

Question 14

how employees restrict change

Answer 14

employees who do not feel appreciated in the business may oppose the change.

Question 15

how time restricts change

Answer 15

businesses that have not planned change will be unable to respond quickly.

Question 16

how organisational inertia restricts change

Answer 16

businesses that are not open or receptive to change. change cannot be introduced easily.

Question 17

how legislation restricts change

Answer 17

government body can stop change happening, or businesses may struggle managing and adjusting to change.

Question 18

how financial considerations restrict change

Answer 18

change may be too expensive. financial instutions reluctant to lend without strong security.

Question 19

porter’s 2 generic strategies

Answer 19

lower cost strategy
differentiation strategy

Question 20

summarise lower cost strategy

Answer 20

business goal is to become the lowest-cost producer of a product.

Question 21

advantages of lower-cost strategy

Answer 21

• competitive advantage in markets with price conscious consumers
• beneficial for large businesses who can buy in bulk

Question 22

disadvantages of lower-cost strategy

Answer 22

• customer may associate lower cost with lower quality
• standardised goods will not meet unique demands of customers.

Question 23

summarise differentiation strategy

Answer 23

business goal is to make their good/service have a unique point of difference from competitors.

Question 24

advantages of differentiation strategy

Answer 24

• competitive advantage in markets with brand loyalty
• beneficial for large businesses looking to create an image

Question 25

disadvantages of differentiation strategy

Answer 25

• features can be copied by producers, taking away competitive advantage
• not good for price sensitive consumers or markets.

Question 26

according to the force field analysis theory, what is the current state of the business called?

Answer 26

equilibrium or status quo

Question 27

benefits of the force field analyses theory

Answer 27

• managers can assess the situation and make a plan of action
• gives an objective view of the change before it is initiated
• allows business to identify and strengthen driving forces
• allows business to identify and minimise restraining forces
• allows a timeline to be developed and resources to be obtained