Unit 4 outcome 1a

Question 1

Definition of business change

Answer 1

• when a business is altered to a new or modified form
• involve moving a business from one point to a new one
• occurs as a result of pressure from both the internal and external environment
• two approaches: proactive and reactive

Question 2

Business change: proactive approach

Answer 2

• planned change

- foreseeing pressures in a dynamic environment and implementing change to take advantage

Question 3

Business change: reactive approach

Answer 3

• is effected by pressures of the business environment

- the business then responds as a result of the pressures

Question 4

Definition of key performance indicators (KPI’s)

Answer 4

• tools used to measure how well a business is achieving or has achieved its goals
• sources of data management use to measure business performance against business objectives
• analyse the success of the business
• specific set of criteria that measure efficiency and effectiveness

Question 5

Definition of efficiency

Answer 5

• how well a business uses its resources to achieve its objectives

Question 6

Definition of effectiveness

Answer 6

• degree to which a business achieves objectives

Question 7

Definition KPI: percentage of market share

Answer 7

• a business share of the total sales in an industry for a particular good or service earned over a specific period of time
• express as a percentage

Question 8

Definition KPI: net profit figure

Answer 8

• amount of money left over after expenses have been deducted from revenue earned
• calculated over a yearly period

Question 9

Definition KPI: number of sales

Answer 9

• amount of goods or services sold in a specific period of time by a business

Question 10

Definition KPI: rate of productivity growth

Answer 10

• the amount of outputs produced compared to the amount of inputs used
• the rate in which it increases over time
• measures the efficiency and productivity of a company’s production process

Question 11

Definition KPI: rates of staff absenteeism

Answer 11

• number of days in which employees take off work when expected to be there over a given period of time
• if staff absenteeism is high it might be an indicator of low staff morale

Question 12

Definition of KPI: level of staff turnover

Answer 12

• the rate in which employees leave an organisation and need to be replaced over a given period of time
• staff turnover means that staff will need to be replaced resulting in recruiting and raining costs and and the loss of productivity and knowledge

Question 13

Definition KPI: level of wastage

Answer 13

• amount of avoidable loss of something valuable through under utilisation, decay, erosion or destruction
• relates to waste of any resources including labour, time and money
• good efficiency measure
• by reducing the level of wastage it can reduce the cost of producing a product/service, may also mean that fewer resources are used which is better for the environment

Question 14

Definition KPI: number of customer complaints

Answer 14

• amount of customers or those who visit, buy from or use a business that contact the organisation to express their dissatisfaction
• customer complaints may indicate that there is a need to further train staff, redesign products or change production methods
• unhappy customers can have a detrimental impact on future sales of the business, affecting profits

Question 15

Definition KPI: number of workplace accidents

Answer 15

• amount of employees who are hurt or injured through incidents at the workplace during work hours
• measure how safe the workplace is
• staff members who feel unsafe may not be motivated to work harder and accidents may stop production
• workplace accidents may result in civil action

Question 16

Definition of driving forces

Answer 16

• forces that initiate or support change

- they push the business towards a desired state

Question 17

Driving forces: managers

Answer 17

• managers wish to see continuous improvement in the business performance
• they are the ones that set objectives
• they are the driving forces for change to be introduced into an organisation

Question 18

Driving forces: employees

Answer 18

• may drive the change as they believe it will be better for the organisation and their long term employment
• may also see it to be advantageous to their employment
• if employees support change then the change process is likely to be successful

Question 19

Driving forces: competitors

Answer 19

• organisations may have to change to compete in their market place to maintain marketshare
• if competitors are out performing the business, changes will need to be made to correct the situation

Question 20

Driving forces: legislation

Answer 20

• organisations must comply with new laws from the commonwealth, state and local governments as well as other statutory authorities
• there for a change in law may initiate a change to an aspect of a business operation

Question 21

Driving forces: pursuit of profit

Answer 21

• if profits are not at the desired levels mangers and/or shareholders demand, a business will need to consider how to generate more revenue or decrease their costs to achieve their objectives
• profits need to be sustained overtime to ensure a business can continue to grow

Question 22

Driving forces: reduction of costs

Answer 22

• if a businesses expenses are too high, management will need to look at changes that can be made to cut costs

Question 23

Driving forces: globalisation

Answer 23

• the process of growing and expanding to exist throughout the world
• changes in technology have meant a business may be competing with international businesses
• this may mean businesses have to make better use of ecommerce and the potential to faster business growth

Question 24

Driving forces: technology

Answer 24

• helps organisations achieve greater efficiencies, cutting costs and improving productivity
• if a business fails to take advantage of technology they will likely loose their competitive edge
• may also force businesses to change their policies to ensure acceptable use of technology

Question 25

Definition of restraining force

Answer 25

• forces that work against a proposed change

- they make it difficult for the business to implement change successfully

Question 26

Restraining force: managers

Answer 26

• restrain change if they do not implement change in a timely and efficient manner with employee involvement and support
• managers may not have the skills and experience to deal with the change process
• may refuse to implement or fail to actively support the change

Question 27

Restraining force: employees

Answer 27

• if change means loss of jobs or decreased job security employees may resist the change
• this could also occur if they do not understand the change which leads to fear of unknown

Question 28

Restraining force: time

Answer 28

• if change occurs too quickly employees may be overwhelmed
• if change occurs too slow, momentum may be lost
• industry change can happen quickly an if a business lags behind its competitors implementing change then time becomes a restraining force

Question 29

Restraining force: organisational interia

Answer 29

• it is when a business remains still or is content with how the business is without moving towards change
• the business may be running nicely and management don’t want to step out of their comfort zone
• management don’t see the need for continual change and are happy with the entrenched ways the business operates

Question 30

Restraining force: legislation

Answer 30

• legislation may be rigid and not allow a business to implement all the changes it wishes to
• there may be costs involved in the change (e.g. permit)
• laws can be complex which may be difficult for businesses to understand and implement

Question 31

Restraining force: financial considerations

Answer 31

• change can be expensive
• costs may include redundancies, new equipment, retraining
• businesses may find it hard to borrow money from banks and even when they can, they will have interest repayments to consider