UNIT 10 - MANAGING CHANGE - INTERNAL/EXTERNAL PRESSURES FOR CHANGE Flashcards
What is internal change
When Root cause of change comes from inside of a business
Busienss change for a * of reasons
variety
give examples of bs changing for a variety of reasons
2 marks
pure neccsity (must change in order to survive)
LT startegy ( leadership wants to grow company’s market share)
give 5 examples of internal change
CHANGE IN LEADER/MANAGER (E.G taken over by a competitor)
CHANGES FROM EXPANSION
NEW OBJ SET BY MANAGMENT
NEW TECH BEING IMPLEMENTED
CHANGES TO ORGANISATIONAL STRUCTURE( e.g tall to flat)
Why can a business plan for internal change
because internal changes are relativley easy for a busines to predict
explain how a change in a new manager or leader can impact a bs
2 explanations
may lead to new org structure or culture
may move away from a product based business - to one offering services
explain how changes from expansion can impact a bs
2 points, but go into depth
May lead to business entering new markets -can lead to adapting organisational structure to a regional one - as well as adapt it’s marketing mix
HR may need to recruit staff within/for new mkt (e.g more shops workers if qldi decides to locate to new zealand
what is external change
root cause of change is from outside of the busienss
which causes a change inside of the business
external change is related to
PESTLE
GIVE 3 EXAMPLES OF EXTERNAL CHANGE
Econmic change
Legal change
Change in consumer tastes
give example of external change of economic change
Interest rate increases
explainteh effect of IR increases (External change)
finance departemtn may want to reduce gearing ratio (e.g pay off debtwith cash = liquidity issue)
so therfore look to use other SOF eg share issue to overcome any funding issues as a resuilt od reducing gearing ratio
give example of external LEGAL CHANGE
BREXIT
In the example of elgal change what 2 functions did BREXIT it significantly impact
Operations
HR
EXPLAIN 2 ways HOW LEGAL CHANGE OF BREXIT AFFECTED THE OPERATIONS DEPARTMENT Q
change suppliers (to domestic/cheaper)
as imports more expensive due to tradr barriers
Move from JIT to JIC TO ENSURE SUPPLY CHANGE IS MORE SECURE - but how is it less secure due to brexit
explain how legla change o fbrexit affect hr
follow employment law trends if they change in future as no longer related to EU
what can cahnges in consumer tastes do to Demand
increase /decrease
give 2 exzmple of consumer trends(external) changing businesses
consumer s mas concerned about treatment of supplies in developing countries increasing D for fairtrade products
Consumers more willing to buy high quality organic chocolate encouraging Cadbury to take over green and blacks
+ enviro concern means increased Demand for environmentally friendly goods and services
an external factor is compeition policy , it may allow two bs to merge or takeover but on what condition
certain parts of the enlarged business are now sold
give real life example of competition policy allowing two busiensses to merge together but having to sell of certain aprts of the large bs
2 points
morrisons took voer safeway 2004 sells 53 of the latters store - why is this impactful
to provide fairer comp enviro for comp and consumers
competition policy prevents
bs being too dominant in certain mkts/regional areas at teh expense of other bs and consumers
economic climate EC can present
opps and threats
ina recession int erms of external change how would this affect a business
2 points
bs may choose to restructure to survive if demand is failing
but holds onto parts of bs that can help it survive
how can a recessions EC-EXTERNAL CHANGE present a growth opportuinty for certain bs
can present growth ops for bs providing goods and services that are inferior /countercylcial
e.g poundland
what can a growing economy lead to in terms of business confidencve as well as demand
increased output and expansion e. New branches or factories
