3.6.1 Causes and Effects of Change

• What does business change refer to?

  Alteration in company strategies
• Business change can arise from internal decisions or external market forces
• Match the category of change with a corresponding cause:

  Internal Factors ↔️ Changing business goals

  External Factors ↔️ Economic downturn
• What is an example of an internal factor causing business change in the strategy category?

  New market opportunities
• Technological advancements are an example of an internal factor causing change.
• Economic downturn is an example of an external factor related to market conditions
• What is a legal and regulatory factor that can cause business change?

  New laws affecting industry
• Improved efficiency and productivity are positive effects of change
• What is a negative effect of change on employees?

  Employee resistance and stress
• Higher costs during transition are a common negative effect of change.
• What are internal causes of change primarily related to?

  Company operations, strategy
• Strategic realignment involves adjusting business goals or market approaches
• Match the internal cause of change with its example:

  Technological Advancements ↔️ Implementing AI-powered chatbots

  HR Restructuring ↔️ Forming cross-functional teams

  Operational Streamlining ↔️ Upgrading supply chain software
• Adopting new technologies to improve efficiency is an example of technological advancements causing internal change.
• What is the purpose of operational streamlining as an internal cause of change?

  Reducing costs and enhancing productivity
• HR restructuring involves modifying staffing levels or team structures
• What formula is used to calculate the change in efficiency due to internal changes?

  $\Delta Efficiency =$$\frac{Output_{new}}{Output_{old}}$
• What are external causes of change primarily influenced by?

  Factors outside the company
• An economic recession leading to decreased demand is an example of a market condition causing external change.
• The launch of a rival product can lead to pricing adjustments due to competition
• What is an example of a legal and regulatory factor causing external change?

  Environmental regulations
• Match the external cause of change with its example:

  Market Conditions ↔️ Economic recession

  Competition ↔️ Launch of a rival product

  Social and Cultural Factors ↔️ Growing demand for sustainability
• What formula is used to calculate revenue change due to external factors?

  $Revenue Change =$$\frac{Revenue_{new}}{Revenue_{old}} - 1$
• Change can be triggered by both internal and external factors.
• Business change refers to any alteration in a company's strategies, processes, systems, or structures due to internal decisions or external market forces
• Common causes of business change can be categorized into internal and external factors.
• Match the category of change with its description:

  Internal Factors ↔️ New market opportunities

  External Factors ↔️ Economic downturn
• Internal factors that trigger business change include new market opportunities, changing business goals, and technological advancements
• Shifts in consumer preferences are an example of an external factor causing business change.
• What is one formula to calculate the change in efficiency due to business change?

  \Delta Efficiency = \frac{Output_{new}}{Output_{old}}</latex>
• Internal causes of change stem from within a company and impact its operations, strategy, or structure
• Match the internal cause of change with its example:

  Strategic Realignment ↔️ Shifting focus to new product lines

  Technological Advancements ↔️ Implementing AI-powered chatbots
• External causes of change stem from factors outside a company that impact its operations, strategy, or structure
• Adapting to external factors is crucial for the long-term success of a company.
• What is the formula to calculate profit margin?

  \text{Profit Margin} = \frac{\text{Net Profit}}{\text{Revenue}} \times 100</latex>
• How does change affect different business functions?

  Varies by function
• The training budget formula is Total Employees × Cost per Training
• What does the profit margin formula measure?

  Financial performance
• The market share formula is Company Sales ÷ Total Market Sales × 100
• Change always leads to improved employee morale in the HR department.

  False