UNIT 4 AOS2 - SAC 2 TB

Question 1

Explain leadership (part of the importance of leadership).

Answer 1

Leadership is the ability to influence and motivate individuals to achieve business objectives.

• Change can be a difficult process for many stakeholders as the business moves to a new unfamiliar state.
• Some stakeholders may lack belief in the change or fear they will be negatively impacted, causing resistance.
• Leadership is important in motivating and influencing stakeholders towards the change, giving a greater chance of success.

Question 2

List the factors of effective leadership.

Answer 2

During change, effective leaders may:
- Communicate clearly
- Demonstrate the need for change
- Be transparent
- Have empathy for those finding change challenging
- Provide support for those having difficulty adapting
- Celebrate successes
- Empower employees and be patient
- Overcome resistance

Question 3

List the factors of the importance of leadership.

Answer 3

Having effective leadership during times of change is vitally important because it:
- Inspires others to work toward the change
- Helps the team overcome challenges
- Maintains momentum toward the change
- Allows the business to overcome resistance
- Reduces stress and anxiety
- Ultimately, helps the business implement the changes successfully

Question 4

List the management strategies to respond to KPIs and/or seek new business opportunities.

Answer 4

1. Staff training
2. Staff motivation
3. Change in management styles or management skills
4. Increased investment in technology
5. Improving quality in production
6. Cost cutting
7. Initiating lean production techniques
8. Redeployment of resources (natural, labour and capital)
9. Innovation
10. Global sourcing of inputs
11. Overseas manufacture
12. Global outsourcing

Question 5

Explain staff training.

Answer 5

Training: is the process of enhancing the skills and knowledge of employees to boost efficiency and effectiveness.

KPIs: Addresses issues such as staff turnover, workplace accidents, and productivity growth.

Business opportunities: Improved skills can lead to product quality enhancements, better service, and business reputation boosts, leading to new products being developed and more customers.

Question 6

Explain staff motivation.

Answer 6

Motivation: the drive that encourages employees to perform and work towards business objectives.

KPIs: Productivity growth, customer complaints, staff absenteeism, staff turnover, net profits.

Business opportunities: Motivated employees can lead to improved performances, helping drive new innovations, market expansion and a greater share of the market.

Question 7

Explain the change in styles and skills.

Answer 7

Styles & Skills: influence how decisions are made within the business, the relationships between managers and employees and the overall culture

KPIs: Net profit figures, sales numbers, market share percentage, staff turnover might dictate a style/skill change.

Business opportunities: Varied styles can lead to better employee morale and market growth.

Question 8

Explain investment in technology.

Answer 8

Technologies change business operations, making them more efficient.

KPIs: Productivity growth, wastage levels, workplace accidents, net profits. an

Business opportunities: Technologies may enable a business to access new markets (e.g. global markets through online platforms). Could enable new product developments.

Question 9

Explain improving quality in production.

Answer 9

Improving the quality of production, improves the standard of the end good or service that reaches the consumer.

The quality strategies we studied were quality control, quality assurance and total quality management

KPIs: Customer complaints, sales, wastage, market share.

Business opportunities: Superior quality can make a product stand out, gaining a competitive advantage, helping capture more market share.

Question 10

Explain cost cutting.

Answer 10

• Reducing the expenses within the business without compromising product/service value.
• Every activity a business performs comes at a cost. Businesses will look at all activities to see where costs can be saved

KPIs: Net profit, productivity growth, wastage, number of sales.

Business opportunities: Cost cutting in one area may allow the business to invest money into other areas, helping seek new business opportunities

Question 11

Explain initiating lean production.

Answer 11

Lean production: A holistic approach to enhance operational efficiency by reducing waste.

Businesses can look to reduce wastage throughout all areas of their production

KPIs: level of wastage, net profit market share, sales.

Business opportunities: Lean techniques can lead to more streamlined processes and better responsiveness. E.g. Offer new products quickly or have resources to enter new markets.

Question 12

Explain the redeployment of resources.

Answer 12

Redeployment: is the transfer of resources from one place in the business to another.
- Allows a business to make better use of their resources

There are 3 types of resources that can be redeployed:
- Natural Resources: Land, water, raw materials.
- Labour Resources: Human effort in production.
- Capital Resources: Machinery, technology, finance, facilities.

KPIs: Level of wastage, rate of productivity growth, staff turnover.

Business opportunities: Cost savings, tapping into high-growth areas, exploring new domains of business activities.

Question 13

Explain innovation.

Answer 13

Innovation is the process of creating and implementing a new idea, method, or product.

• Encompasses the introduction of new products or services as well as enhancement of existing processes, business models, or methods to achieve better results or meet evolving needs.
• More than just products: Systems, methods, marketing, production techniques.

KPIs: Sales, net profit, productivity growth, wastage, customer complaints. staff turnover, workplace accidents.

Business opportunities: Entering new markets, distinguishing from competitors, leading industry trends.

Question 14

Explain global sourcing of inputs.

Answer 14

Global sourcing of inputs: is where a business receives resources from overseas suppliers.

Provides access to top-quality materials and/or cost effective materials and skills worldwide.

KPIs: Net profit, sales, customer complaints, wastage, percentage of market share.

Business opportunities: Exploring new markets, fostering international partnerships.

Question 15

Explain overseas manufacture.

Answer 15

Overseas manufacture refers to the production of goods in a country different from the business’s home base

Allows business to lower labor costs, reduced production expenses, or provide strategic geographic positioning for distribution.

KPIs: Net profit, sales, market share, customer complaints, productivity growth.

Business opportunities: Access to new markets, increased brand recognition, cater for local market demands.

Question 16

Explain global outsourcing.

Answer 16

Global outsourcing is where a function of a business is conducted by an external person or business in another country.

• Allows the business to leverage specialised skills, or cheaper expertise from across the globe.
• Can reduce costs and/or improve quality

KPIs: Net profit, sales, market share, customer complaints, productivity growth.

Business opportunities: Gaining operational efficiencies, accessing best-in-class expertise.

Question 17

Explain corporate culture.

Answer 17

Corporate culture: is the shared values and beliefs of the people in the business.

• A business where the employees share the same values can create a positive environment where people are working towards the same thing.
• Having the desired culture rarely happens by chance.
• Managers can implement strategies to develop the corporate culture within the business.

Question 18

Explain corporate culture and change.

Answer 18

• Proposed changes should take into account the existing corporate culture and if it can support the changes.
• Corporate culture has the potential to create resistance to changes if it not open and positive.
• Change is more likely to be sustained over the long term if there is a culture that supports adaptability and continuous improvement.

Question 19

List the strategies a business can implement to develop its desired corporate culture.

Answer 19

Businesses can implement strategies to develop their desired corporate culture. These can include:
- Developing and communicating core values
- Changing the overriding management style
- Providing training that is in line with the desired values
- Leaders acting as role models
- Recruiting employees that fit with the values of the business
- Rewarding those that display the desired values
- Implement policies that align with the values
- Structure the work environment to allow the values to shine

Question 20

Explain the learning organisation and list the principles.

Answer 20

• Peter Senge developed the concept of the learning organisation.
• The learning organisation is a business that is flexible, adaptive and productive. It aims to have a culture where people work together at their best and continually learn to work together at their best.
• He found that businesses that are more flexible, adaptive and productive will excel during times of rapid change.

There are 5 key principles to the learning organisation:
- Systems thinking
- Personal Mastery
- Mental Models
- Shared Vision
- Team Learning

Question 21

Explain systems thinking.

Answer 21

Systems thinking: the ability to see the big picture rather than see things in isolation.

• For a business to be deemed a learning organisation they need to implement all of the other 4 principles as one does not work without the others.

Question 22

Explain personal mastery.

Answer 22

Personal Mastery: is where the people within the business undertake continual learning.

• Employees continuously work towards a vision of themselves.
• Businesses need to provide an environment that allows individuals to learn and follow their passions.
• If individuals learn, the business will learn.

Question 23

Identify Peter Senge’s quote.

Answer 23

“Well intentioned, compulsory personal growth training programs, are probably the most sure-fire way to impede the genuine spread of commitment to personal mastery in an organisation.”
- Peter Senge

So what does a business do?
Organisations need to foster a climate where challenging the status quo is expected and where employees are encouraged to create and pursue their own visions.

Question 24

Explain mental models.

Answer 24

Mental Models: are the deeply ingrained assumptions, generalisations and images of how people understand the world.
- These beliefs and values direct how we behave.
- During transformation, the business and its people need to look at themselves and scrutinise what they do.

Question 25

Explain shared vision.

Answer 25

Shared vision: is being able to develop a vision that the people within the business believe in.
- Develops commitment rather than compliance.
- Having all people on the same page can develop long-term drive towards transformation.

Question 26

Explain team learning.

Answer 26

Team learning: the process of aligning and developing the capacities of a team to create the results its members truly desire.
- Individuals that learn together, will grow more rapidly.

Question 27

Explain leading a learning organisation.

Answer 27

• Senge states that a learning organisation requires a more contemporary form of leadership.

Leaders in the learning organisation are:
- Designers: being able to design purpose, vision and core values.
- Stewards: Leaders look after and protect the vision rather than own it.
- Teachers: being able to foster an environment where learning is for
everyone.

Question 28

Explain strategies to overcome employee resistance.

Answer 28

• Change can cause resistance from many stakeholders, especially employees.
• Employees often resist change because they feel isolated, fear, frustration and uncertainty.

Managing change effectively is crucial to overcome this resistance and ensure the change is successful. Possible strategies for overcoming this resistance fall into two categories:
- Low Risk
- High Risk

Question 29

Explain and list the low-risk strategies.

Answer 29

• Communication
• Empowerment
• Support
• Incentives

Low risk strategies allow the employees and the manager to maintain strong relationships throughout the change.

Question 30

Explain the low-risk strategy communication.

Answer 30

Communication: Being open and honest about the change so that employees fully understand the direction of the business and its impact.

• Allowing employees to voice their concerns and have their questions answered.
• This helps build trust and gains support as employees have a better understanding of the change.

Question 31

Explain the low-risk strategy empowerment.

Answer 31

Empowerment: Involving employees in the change process can help get them on board with the change.

• Empowerment show a level of trust in employees which can help gain support for the change.
• Employees are also less likely to resist decisions they have been involved in making.

Question 32

Explain the low-risk strategy support.

Answer 32

Support: Those that are affected by the change need to be supported through the process.

• If employees lose employment due to the change they can be supported in finding new employment.
• Others may find the changes difficult and can be supported by training, counseling and consultation.

Question 33

Explain the low-risk strategy incentives.

Answer 33

Incentives: providing something that encourages employees to embrace the change.

• This can come in many forms including promotions or bonuses.
• This can help employees accept the change and work towards the new state.

Question 34

Explain and list the high-risk strategies.

Answer 34

High-risk strategies are another way businesses can overcome resistance to change.

• These strategies can allow a manager to overcome resistance quickly.
• However they are deemed high-risk, because there is a greater risk they will result in negative consequences compared with the low-risk strategies.

High-risk strategies:
- Manipulation
- Threats

Question 35

Explain the high-risk strategy manipulation.

Answer 35

Manipulation: Gaining support from employees by the selective use of facts or deception.

• This can reduce resistance because employees are likely to be told the benefits of the change without knowing the negatives.
• This can harm the morale and culture if employee find out.

Question 36

Explain the high-risk strategy threat.

Answer 36

Threat: Forcing employees to embrace the change or receive retribution.

• Possible threats include, retrenchment, loss of promotion, demotion or loss of working conditions.
• This can get employees to embrace the change quickly.
• However, this can cause resentment and harm relationships.

Question 37

Explain Lewin’s 3-step change model.

Answer 37

Kurt Lewin developed a change model that business could use to implement effective change.

There are 3 steps in this model:
1) Unfreeze
↓
2) Change
↓
3) Refreeze

Question 38

Explain unfreeze.

Answer 38

1)

• Businesses can often find change difficult.
• The unfreezing stage may be the most difficult.

Unfreezing is about preparing the business for change and includes:
- Identifying what needs to change
- Creating urgency by demonstrating a need for change
- Challenge current beliefs that may resist change

Question 39

Explain the change stage.

Answer 39

2)

• With the business unfrozen and prepared for change, they can begin moving to the new desired state.
• It is important that open communication and support is used in this stage to help those that are finding the change difficult.
• People are empowered to take action and the necessary resources are provided towards the implementation of the change.

Question 40

Explain refreeze.

Answer 40

3)

• Refreezing is about reinforcing the change and anchoring it into the culture so that it can remain for the long term.
• Without refreezing, there is potential that change be implemented and then gradually the business moves back to its old ways.
• Continuous support and training is provided to help reinforce.
• Adjustments are made where necessary.

Question 41

Simplify Lewin’s change model.

Answer 41

1) Unfreeze
- Prepare the business for change
- Create a need for change
- Reduce resistance
↓
2) Change
- Implement change
- Ensure people are trained and supported
- Open communication
↓
3) Refreeze
- Reinforce the change
- Embed into the culture
- Evaluate results and make adjustments

Question 42

Explain the effect of change on stakeholders.

Answer 42

• When businesses implement change, it can have a significant effect on stakeholders.
• Stakeholders are those with a vested interest in the business.
• The effect the change will have will greatly depend on the type of change that occurs.
• The effect on the stakeholder could be a positive one or a negative one.

Question 43

Explain the effect of change on managers.

Answer 43

• Managers are those that make decisions on the direction of the business and the strategies used to achieve those objectives.

Changes can impact managers in a number of ways including:
- Change of management style
- Change of processes that managers need to carry out
- Increase/decrease of roles
- Loss of employment

Question 44

Explain the effect of change on employees.

Answer 44

• Employees are those that work in the business and are often the ones effected the most by change.
• Some effects that change can have on employees include:
• Loss of employment through downsizing
• Changes such as new technology can:
  → Alter an employee’s job
  → Improve safety
  → Improve productivity

Question 45

Explain the effect of change on customers.

Answer 45

• Customers are those that purchase goods or services from the business.
• Changes in a business that impact the good or service will have an effect on customers.
• This effect can be positive e.g. improved quality or lowered price.
• It could also be negative e.g. stop producing a product, change the product (e.g. recipe), or how the product is accessed.

Question 46

Explain the effect of change on suppliers.

Answer 46

• Suppliers are businesses that provide resources to a business.
• When business change their operations, it can have an effect on the suppliers.

For example:
- A business may decide to operate in a more socially responsible manner, impacting the types of suppliers they deal with.
- A business may decide to move their operations overseas, and use a different supplier.

Question 47

Explain the effect of change on the general community.

Answer 47

• Businesses have a significant effect on the general community.
• Businesses may decide to take part of their business offshore to reduce costs, which could result in increased unemployment in the local community.
• Businesses can also have a positive impact if they expand into a new location, and stimulate the local economy in the community.

Question 48

List the stakeholders affected by change,

Answer 48

• Managers
• Employees
• Customers
• Suppliers
• General community

Question 49

Explain CSR considerations in change.

Answer 49

• When implementing change, businesses need to consider their commitment to corporate social responsibility.
• Businesses need to consider their impact on the environment, on the community, employees and other key stakeholders.…not only profit!
• CSR can be a driving force for businesses to implement change OR the business needs to consider SR when implementing changes.
• Businesses should consider their commitment to corporate social responsibility when implementing change.
• There are many considerations that arise during this time. These will vary depending on the change.
• Important to consider the impact change has on employees, the community and the environment.

Question 50

Explain restructuring/downsizing in relation to CSR and change.

Answer 50

• When a business looks to restructure it should consider the impact on the employees and the community.
• Considering reducing the amount of job losses.
• Implement strategies to find new employment.

Question 51

Explain suppliers in relation to CSR and change.

Answer 51

Some CSR considerations when dealing with suppliers includes:
- Purchasing supplies from local suppliers.
- They should consider the working conditions of employees in overseas suppliers.
- They should look to support their suppliers to ensure their ongoing success.

Question 52

Explain technology in relation to CSR and change.

Answer 52

• Impact of technology on the environment should be considered

Businesses can consider the impact technology will have on employees:
- Support and training should be considered to ensure employees feel confident using the technology.
- Considering employment levels.

Question 53

Explain the environment in relation to CSR and change.

Answer 53

• Businesses should consider the environment when implementing changes.
• Changes that could increase pollution or can harm wildlife habitats should be considered.
• Businesses should implement changes that improve the impact on environment.

Question 54

Explain the importance of reviewing KPIs.

Answer 54

• Businesses use key performance indicators to evaluate their performance.
• This can drive the business to implement changes.
• A business needs to assess if the changes have been successful.
• To do this they can review their KPI data to see the impact the changes have had.
• This allows the business to continue on the same path or make adjustments/corrections.

Question 55

Explain an example of the importance of reviewing KPIs.

Answer 55

• Due to reduction in number of sales and poor results around market share and net profit, Foxtel implemented a number of changes.
• These changes were implemented to improve the poor results they had achieved.
• To measure the success of the changes, Foxtel would be looking at the impact the changes had on their sales, market share and net profit.

Question 56

List the benefits of adopting Lewin’s Three-step Change Model.

Answer 56

• Provides a structured approach to change.
• Provides clear steps for change progression.
• Forms a checklist for progress.
• Minimizes resistance to change.
• Enables stakeholders to monitor change unfolding.
• Helps them understand their role in the change process and business post-change.

Question 57

List the positive and negative effects of change on owners.

Answer 57

POSITIVE:
* Improved performance leads to increased or steady investment.
* Owners directly involved in operations learn new skills.

NEGATIVE:
* Owners may sell business shares due to discomfort.
* Owners involved in daily operations may move out of comfort zone.
* Change may lead to business loss or shareholder value loss.

Question 58

List the positive and negative effects of change on managers.

Answer 58

POSITIVE:
* Improves morale and motivation.
* Provides performance-related rewards for successful change.
* Offers career advancement opportunities with increased responsibility in restructuring.

NEGATIVE:
* Uncomfortable with new management style or skills.
* Potential job loss during restructuring or downsizing.
* Reduced roles or less responsibility due to restructuring or downsizing.

Question 59

List the positive and negative effects of change on employees.

Answer 59

POSITIVE:
* Employees may view redeployment as opportunities.
* New skill learning could lead to long-term job satisfaction.
* Changes may result in improved employment conditions.

NEGATIVE:
* Potential job loss due to restructuring, downsizing, or new technology introduction.
* Stress or concern about redeployment into other areas.
* Retraining required for new technology skills.
* Increased work hours or increased responsibility.
* Dissatisfaction due to changes, end of teams, or introduction of new teams.

Question 60

List the positive and negative effects of change on suppliers.

Answer 60

POSITIVE:
* Increased business resources may boost sales.
* Contract or specification changes may necessitate adjustments in production processes.

NEGATIVE:
* Decrease in business resources may lead to reduced sales.
* Business switch to different supplier may result in sales drop.
* Contract or specification changes may necessitate supplier adjustments, potentially unaffordable or difficult to implement.

Question 61

List the positive and negative effects of change on the general community.

Answer 61

POSITIVE:
* Potential job creation for improved employment and social wellbeing.
* Increased customer traffic and sales from relocation or expansion.
* Potential use of renewable resources or pollution reduction.
* Greater contribution to social needs through successful change.

NEGATIVE:
* Potential job loss, increasing unemployment and negatively impacting social wellbeing.
* Business relocation or reduction can decrease customer traffic and sales, especially in smaller towns with one major employer.
* Reduced employment and less spending can harm communities.
* Changes may lead to non-renewable resource use or increased pollution.
* Unsuccessful changes may reduce business’s contribution to social needs.