Unit 10

Question 1

What is strategic drift?

Answer 1

Occurs when a business’ strategy is no longer appropriate for its business environment ( because it’s changing).

Question 2

What causes strategic drift?

Answer 2

PESTLEC.

Question 3

What is the model used for strategic drift?

Answer 3

Johnson and Scholes model.
- Shows the amount of environmental change (Y-axis) to time (X-axis).
- The bigger gap between the environmental change and business change the bigger the strategic drift.

Question 4

What are the four phases of the Johnson and Scholes model?

Answer 4

Phase 1: Incremental changes
Phase 2: Strategic drift (environmental change has increased)
Phase 3: Flux - The business has recognised the issue but has no solution to solve it. This leads to loss of competitive advantage due to failure to keep up with trends.
Phase 4: Either transformational change or demise. Business either finds a solution or goes out of business. E.g Blockbuster, Nokia, Kodac.
Or Netflix.

Question 5

What is Handy’s organisational culture model and what are the types?

Answer 5

It’s a way to understand and categorise the different types of culture that can exist within an organisation.
- Power Culture
- Role culture
- Task Culture
- Person culture

Question 6

What is power culture?

Answer 6

• A centralised culture, decisions made by a select few
• Employees seek guidance and report to them
• Quick decision-making
• In a fast-growing business communication may breakdown

Question 7

What is role culture?

Answer 7

• A hierarchal structure
• Formalised roles, jobs and procedures
• People in a role culture have specific roles and responsibilities, and there are clear expectations and job descriptions. It’s about following procedures and getting things done systematically.
• Medium/large businesses with a stable environment may benefit

Question 8

What is task culture?

Answer 8

A matrix structure
- Focus on specific tasks/projects
- Individuals are brought in to solve issues in different departments
A task culture is focused on getting the job done. It’s more team-oriented, with people working together in groups to solve specific problems. There’s an emphasis on expertise and competence rather than hierarchy or rigid roles.
- E.g in advertising agencies
- May be a good response to strategic drift

Question 9

What is internal change?

Answer 9

Factors within a business that have caused a change in the business, e.g a new manager has new ideas

Question 10

What is external change?

Answer 10

Pressures on business from outside the company for example ; PESTLEC factors
(if interest rates rise then the cost of borrowing rises and customers may prefer to save instead of spend) linked to strategic drift

Question 11

What is incremental change?

Answer 11

(Kaizen)
Small changes that aim to modify, improve, adjust and refine existing practices and processes

Question 12

What is disruptive change?

Answer 12

irreversible changes that may alter the future of the business
e.g the introduction of smartphones has changed the way we consume media
- however disruption opens up opportunities to create massive new markets

Question 13

What is Lewin’s force field analysis?

Answer 13

2 opposing forces, one FOR change and one AGAINST
- change will happen if the driving forces for change are stronger than the obstacles
- change will also happen if the restraining forces are reduced, like if new production technology has become available to improve quality issues