3.6.1 Causes and effects of change

Question 1

Change management

Answer 1

involves the process that ensures a business responds to the environment in which it operates

Question 2

Approaches to change

Answer 2

• step change

- incremental change

Question 3

Step change

Answer 3

significant and occurs rapidly

Question 4

Incremental change

Answer 4

change occurs over a period of time in incremental, small stages

Question 5

Internal causes of change

Answer 5

• arise from factors within the control of business

- e.g. the decisions taken by the business management

Question 6

External causes of change

Answer 6

• arise from factors outside the control of the business

- e.g. as a result of changes in the external environment

Question 7

What are internal causes of change?

Answer 7

• new leadership (eco) - cultural change
• new ownership following a takeover
• change in strategic direction and corporate objectives
• significant investment decisions
• change to scope of business activities
• adjusting the organisational structure

Question 8

Transformational change

Answer 8

the ability to implement a vision through radical policies and strategies to bring about a positive change

Question 9

What are external causes of change?

Answer 9

• external shocks
• political and legal changes
• significant changes in economic development
• longer term changes in societies
• technology change
• significant competitor changes

Question 10

Possible effects of change

Answer 10

• helps sustain a competitive advantage and more able to respond to competitor changes
• align business strategy with evolving nature of customer needs and wants
• businesses can take advantage of developing technologies
• stakeholders gain from improved productivity and work environment
• change in organisational structure may enable a business to improve the effectiveness of its communication and decision making
• being perceived as a business that leads to change rather than follows it may bring benefits - develop a reputation for innovation

Question 11

Factors that affect how successful change management is

Answer 11

• organisational structure
• size of organisation
• time/ speed of change
• managing resistance to change