3.6 – Managing Change
3.6.1 – Causes and Efeecs of Change
Transformational The ability to implement a vision through radical policies and
leadership strategies to bring about a positive change
PESTLE The factors within the external environment that infuence
business behaviours, decision making and performance
Stakeholders Anyone with an interest in the actions of a business
Financial performance The quantiiable outcomes of a business as reported in the
inancial statements and analysed through ratios
Retrenchment Getng smaller as part of a cost minimisation exercise
Productivity The measure of the output, in a production process, per unit
of input
Managing Change
Managing change is the combination of activities involved in planning for, implementing,
coordinating and monitoring the process of change*
Change creates opportunities and threats* It should not be seen as a bad thing but must be
managed carefully to ensure a positive efect, e*g* increased competitiveness*
Causes of Internal Change
New leadership, e*g* CEO
New ownership, e*g* following a takeover
Change in strategic direction and corporate objectives
Signiicant investment decisions
Changes to scope of business activities, e*g* business unit closures
Adjusting the organisational structure, e*g* delayering
Causes of External Change
Signiicant competitor actions, e*g* new products, takeover
Political and legal changes, e*g* deregulation or new taxes
Signiicant changes in the economic environment, e*g* post-nBrexit for K irms
Longer-nterm changes in society, e*g* lifestyles, demographics
Technological changes, e*g* rapid growth or mobile device usage and market related
disruption
Efects of Change
Competitiveness – e*g* sales, price, market share, KSP, unit cost
Productivity – e*g* output per worker/machine, input vs* output
Financial performance – e*g* revenue, cost, proit, proit margins, liquidity
Stakeholders – e*g* employees, customers, suppliers
1* Organisational Change
Businesses can grow and contract depending on business objectives*
Growth may involve: new product development, diversiication, mergers or
takeovers
Retrenchment may involve: delayering, closing down unproitable elements, selling
of elements of the business
3.6.1 – Causes and Efeecs of Change
Transformational The ability to implement a vision through radical policies and
leadership strategies to bring about a positive change
PESTLE The factors within the external environment that infuence
business behaviours, decision making and performance
Stakeholders Anyone with an interest in the actions of a business
Financial performance The quantiiable outcomes of a business as reported in the
inancial statements and analysed through ratios
Retrenchment Getng smaller as part of a cost minimisation exercise
Productivity The measure of the output, in a production process, per unit
of input
Managing Change
Managing change is the combination of activities involved in planning for, implementing,
coordinating and monitoring the process of change*
Change creates opportunities and threats* It should not be seen as a bad thing but must be
managed carefully to ensure a positive efect, e*g* increased competitiveness*
Causes of Internal Change
New leadership, e*g* CEO
New ownership, e*g* following a takeover
Change in strategic direction and corporate objectives
Signiicant investment decisions
Changes to scope of business activities, e*g* business unit closures
Adjusting the organisational structure, e*g* delayering
Causes of External Change
Signiicant competitor actions, e*g* new products, takeover
Political and legal changes, e*g* deregulation or new taxes
Signiicant changes in the economic environment, e*g* post-nBrexit for K irms
Longer-nterm changes in society, e*g* lifestyles, demographics
Technological changes, e*g* rapid growth or mobile device usage and market related
disruption
Efects of Change
Competitiveness – e*g* sales, price, market share, KSP, unit cost
Productivity – e*g* output per worker/machine, input vs* output
Financial performance – e*g* revenue, cost, proit, proit margins, liquidity
Stakeholders – e*g* employees, customers, suppliers
1* Organisational Change
Businesses can grow and contract depending on business objectives*
Growth may involve: new product development, diversiication, mergers or
takeovers
Retrenchment may involve: delayering, closing down unproitable elements, selling
of elements of the business
