The Nature of Change (AQA A Level Business): Flashcards
Exam code: 7132
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Define business change.
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Define business change.
Business change is any significant shift in how a business operates, is organised, or competes, moving away from an existing way of working towards a new one.
What is the difference between planned change and reactive change?
Planned change is deliberately decided in advance as part of a business's strategy. Reactive change is forced quickly in response to an unexpected event or pressure.
Define incremental change.
Incremental change is a series of small, gradual improvements to processes, products or structures rather than a single large overhaul.
True or False?
Incremental change usually causes more staff resistance than a single large overhaul.
False.
Gradual change gives employees time to adapt, so there is likely to be less resistance.
Define disruptive change.
Disruptive change is a radical shift that transforms an industry or market by introducing a new business model, technology or way of operating.
Disruptive change can give a business a _________ advantage, securing market leadership and strong brand recognition.
Disruptive change can give a business a first-mover advantage, securing market leadership and strong brand recognition.
What are the four internal reasons for change?
The four internal reasons for change are leadership change, technology upgrades, poor performance and employee-driven improvement.
How can competitive pressure cause a business to change?
Actions by rival firms can force a business to change its product range or operations to stay competitive.
How can economic fluctuations cause a business to change?
A recession may require a business to cut costs, while a boom may require it to increase capacity.
True or False?
A change that benefits one stakeholder group can disadvantage another.
True.
Stakeholders are affected in different ways, so managing change well requires considering its impact across all stakeholder groups.
What problems can change cause for employees?
Change can cause job insecurity due to the risk of redundancy, an increased workload during the transition and stress from having to learn new skills or processes.
Why might change reduce shareholders' returns in the short term?
The short-term costs of change, such as restructuring or redundancy payments, can reduce short-term profit and unsettle investor confidence.
How can a change in strategy threaten a business's suppliers?
Suppliers' revenue can fall if orders are reduced, contracts are renegotiated or the business switches to a different supplier.
Negative change, such as site closures, can damage local employment and sometimes prompts ________ intervention.
Negative change, such as site closures, can damage local employment and sometimes prompts government intervention.
Define resistance to change.
Resistance to change is the reluctance or refusal of employees, managers or other stakeholders to accept, support or engage with a change a business is trying to introduce.
What is the difference between active and passive resistance?
Active resistance involves openly opposing or obstructing a change, such as taking industrial action. Passive resistance involves reduced effort, disengagement or quietly continuing to work in the old way.
True or False?
Resistance can occur even when a change would genuinely benefit the people affected by it.
True.
Resistance is a natural human response to uncertainty, so it can arise even when a change would genuinely benefit the business and its people.
What are Kotter and Schlesinger's four reasons for resistance to change?
The four reasons are self-interest, fear and misunderstanding, different assessments and preferring things as they are.
How does resistance caused by different assessments differ from resistance caused by self-interest?
Different assessments reflect genuine debate over what is best for the business, such as disagreement about the problem or how to fix it. It is not about people protecting what they value.
Providing training, resources and coaching to help anxious employees accept a change is known as __________ and support.
Providing training, resources and coaching to help anxious employees accept a change is known as facilitation and support.
When is education and communication most useful for overcoming resistance to change?
It is most useful when people lack facts or hold incorrect views about the change.
True or False?
Coercion should be the first method managers use to overcome resistance to change.
False.
Explicit and implicit coercion is a last resort, where change is enforced through formal orders or implied threats.
How does manipulation and co-option help to overcome resistance to change?
Offering perks or roles to influential individuals encourages them to champion the change.
What are the benefits of managing change effectively?
Effectively managed change achieves its intended benefits faster and more fully, maintains staff morale and protects the business's reputation. It also builds a more resilient, adaptable culture.
How can poorly managed change lead to wasted resources?
Money, time and management effort invested in a change can be lost if implementation fails, stalls or has to be reversed.
Define force field analysis.
Force field analysis involves managers identifying the driving and restraining forces that surround a strategic change decision, to determine whether the decision should go ahead.
In a force field analysis, the driving forces are weighted 4, 4 and 2 and the restraining forces 5, 3 and 1. What does this suggest about the decision?
The driving forces total 10 and the restraining forces total 9. As the driving forces outweigh the restraining forces, there is a good chance the decision would be successful.
True or False?
Force field analysis tells managers which strategy to use to bring about a change.
False.
Force field analysis is a diagnostic tool, not a prescriptive one. Managers still need to develop appropriate strategies themselves.
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