Theme 3 Topic 16
Managing Change
Causes of Change
Organisational Size
The size of an organisation naturally changes at it grows
Requires restructuring and adopting policies and procedures to manage expansion
Can grow through organic or inorganic (merger/takeover) growth
Poor Business Performance
Can be measured by indicators such as:
Poor sales figures
Lower profits
Increased costs
Slower expansion than planned
Businesses go through a period of change, as a result, as they implement new strategies to improve
performance
New Ownership
May result as the business grows
E.g. a business changing from a private limited company (ltd) to a public limited (plc) will raise finance
by selling shares on the stock exchange
- The business may then be owned by institutional investors e.g. pension funds and banks
If a business goes through a process of merger or takeover it will have new owners
Transformational Leadership
Occurs when a new Chief Executive is appointed
The new leader is often appointed as a result of poor business performance
They are expected to transform the performance of the business by implementing a new vision or
strategic decision for the business
PESTLE
Political, Economic, Social, Technological, Legal and Environmental factors are constant external causes of
change that businesses have to anticipate and respond to
Effects of Change
Competitiveness
Businesses that are slower to respond to change than their rivals become less competitive
If a business is first to innovate or adopt a new technology, responds fastest to changing consumer
needs or implements policies that adhere to new legislation, it might be able to gain a competitive
advantage
Managing Change
Causes of Change
Organisational Size
The size of an organisation naturally changes at it grows
Requires restructuring and adopting policies and procedures to manage expansion
Can grow through organic or inorganic (merger/takeover) growth
Poor Business Performance
Can be measured by indicators such as:
Poor sales figures
Lower profits
Increased costs
Slower expansion than planned
Businesses go through a period of change, as a result, as they implement new strategies to improve
performance
New Ownership
May result as the business grows
E.g. a business changing from a private limited company (ltd) to a public limited (plc) will raise finance
by selling shares on the stock exchange
- The business may then be owned by institutional investors e.g. pension funds and banks
If a business goes through a process of merger or takeover it will have new owners
Transformational Leadership
Occurs when a new Chief Executive is appointed
The new leader is often appointed as a result of poor business performance
They are expected to transform the performance of the business by implementing a new vision or
strategic decision for the business
PESTLE
Political, Economic, Social, Technological, Legal and Environmental factors are constant external causes of
change that businesses have to anticipate and respond to
Effects of Change
Competitiveness
Businesses that are slower to respond to change than their rivals become less competitive
If a business is first to innovate or adopt a new technology, responds fastest to changing consumer
needs or implements policies that adhere to new legislation, it might be able to gain a competitive
advantage
