UNIT 4 - AOS1 Transforming a Business Flashcards
Define Business change
The concept of business change refers to transitioning individual employees, working teams, function or the whole business to a new state of operations. Change can take many forms from being widespread, impacting on every area of the business such as having new senior management or moving locations, to just small changes is one area, such as a new meeting schedule for managers.
Give some examples of business change
replacing gold equipment changing layout changing supplier changing location new management
Define key performance indicators
A key performance indicator is a type of measurement that helps you understand how your business is achieving objectives and in a certain area compared to its previous performance. To be effective, a KPI must be well defined and quantifiable, give you a clear insight into the area of the business you are concerned with and be calculated properly and consistently. A KPI should give you data, facts, figures etc. to analyse. Examples are percentage of
Key points Mark allocation
market share or a growth in the rate of productivity.
What are the financial indicators
Number of sales
percentage of market share
Net profit figures
Rate of productivity growth
What are the non financial indicators
Rate of staff absenteeism Level of staff turnover Number of workplace accidents Level of wastage Number of customer complaints
What is number of sales
Measuring the number of sales helps an organisation evaluate its performance, especially its market strategies. Sales can be measured as a physical count (eg. large or expensive item like cars) or in dollar terms. If the number of sales is rising compared to the pervious year, it suggests the customers are interested in the product.
What is percentage of market share
Percentage o market share is the promotion of total sales a business has compared to other businesses in that industry. It is expressed as a percentage. Market share allows a business to compare to its competitors. An increase in market share suggests the organisation is performing successfully and has a competitive advantage.
What is Net profit figures
Net profit is the figure remaining after the revenue earned from operations is misused from the expenses incurred in earning that revenue. Net profit figures allow a business to see where their money is being spent and what costs may need to be cut back.
What is the rate of productivity growth
Productivity compares the amount o output produced with the amount of inputs going into production. Productivity improves if an organisation uses fewer inputs for the same level of outputs of if more outputs are produced from he same level of inputs.
What are rates of staff absenteeism
The rate of staff absenteeism refers to the number of workers who neglect to turn up to work when they are scheduled to do so. This suggests they are not committed, loyal and motivated by the workplace.
What is level of staff turnover
Staff turnover measures the number of staff who re leaving the organisation. If turnover is high it may suggest staff are dissatisfied with the workplace and that morale and productivity is less likely to be under pressure.
What is number of workplace accidents
An unsafe workplace impacts on productivity of the organisation because it effects employee morale, may hinder production, may result in insurance premium levels (work cover) and may result in civil action for damages. Reducing the number of accidents will reverse all the negatives that cause accidents. Workplace accidents may be a sign the business’ machinery need to be updated or more safety procedures need to be put in place.
Level of wastage
All organisations have operations which generate a certain amount of waste, whether it be in the form of raw materials, time, money, or some other resource. An organisation is seen as managing their resources efficiently if they can reduce waste which in turn reduces cost and increases profitability.
Number of customer complaints
When customers complain it often indicates that they are not satisfied with some aspect of the organisations performance. Successful organisations aim to maximise satisfaction which would suggest they try to minimise customer complaints. This can be measured by changes in the number of complaints over time or compared to competitors. It may also indicate the business needs to train staff or redesign products.
Describe Lewins force field theory
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What are driving forces
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how are employees a driving force for change
If employees support and are happy with the change they can be a great force for ‘driving’ change throughout a business. They are able to influence others and through empowerment or employee centred management styles and skills, can have an active role in pursuing change.
How are competitors driving forces
A business needs to monitor and respond to the actions of competitors. Knowledge of such changes enables a business strategies and activities. The pursuit of a competitive edge is a constant driving force.
how is the legislation a driving force for change
A business needs to respond to local, state and federal governments who may bring in legislation that they need to address - for example, minimum wages, equal opportunity, OH&S etc. Also court rulings can charge legislation which again business’ are forced to comply with and respond to, Any laws requires a business to make immediate change because the business cannot ignore it.
How is the pursuit of profit
Profit is one of the key objectives of a business and therefore the pursuit of its major driving force for the business’ managers and owners. This additionally applies to public listed companies where the owners (shareholders) want the business to pursue profit to provide for dividends and also to promote capital gain of share prices.
