Chapter 10+11

• Business change


  Businesses need to regularly evaluate their achievement of business objectives in order to maintain business competitiveness. If objectives are not being met, a business will need to make changes. It is the role of management to determine where change is needed, then implement it.
• Proactive change


  A manager predicts future events and makes a change before competitors, in preparation for them. Proactive change is to avoid a potential future threat or problem or to take advantage of a future opportunity.
• Reactive change


  A manager waits until events have occurred around them, then enacts change in response to them. Reactive change is often caused by external sources such as competitors or legislation.
• Key performance indicators (KPIs)


  A tool used to measure progress towards the achievement of objectives. To be effective, a KPI must be relevant, measurable, comparable and reliable.
• KPIs


  • Percentage of market share
  • Level of staff turnover
  • Net profit figures
  • Level of wastage
  • Rate of productivity growth
  • Number of customer complaints
  • Number of sales
  • Number of workplace accidents
  • Rate of staff absenteeism
  • Number of website hits
• Net profit figures


  Revenue - expenses = profit. All businesses want to increase profit. To increase profit, either have to increase revenue or decrease expenses.
• Percentage of market share

  The proportion or amount of the market held by a business. Businesses want to increase their market share. To increase market share, a business needs to attract customers away from their competitors.
• Rate of productivity growth

  How much a business has increased/decreased outputs from a given level of inputs, when compared to a previous time period. A business wants to increase its rate of productivity growth.
• Number of sales


  The total quantity of a particular product or service sold. A business usually wants to increase its number of sales. If number of sales increase, often this will lead to an increase in revenue and therefore net profit.
• Rate of staff absenteeism


  The number of days staff are not at work when they are supposed to be (measured as a %). A business wants the rate of staff absenteeism to decrease. If it is high, it could mean staff are unhappy at work.
• Level of staff turnover

  The number of employees permanently leaving a business who are then replaced. A business wants level of staff turnover to be low. If high, it can indicate that employees are not happy at work and so want to leave.
• Level of wastage


  The amount of inputs that are not being converted into outputs and are instead discarded. A business wants to reduce its level of wastage. Reducing waste levels will usually reduce the costs associated with producing the product.
• Number of customer complaints

  How many times a customer has deliberately and formally communicated their displeasure to the business. A business wants to decrease its number of customer complaints. They can also help a business learn where it can improve.
• Number of workplace accidents

  How many accidents, near misses or other harm befalls employees within a time period. A business wants to decrease number of workplace accidents. A high level could indicate a need for training or new equipment (OH&S).
• Lewin's Force Field Analysis theory

  Management theorist Kurt Lewin developed the concept of Force Field Analysis
• Force Field Analysis


  States that in any change situation, counterbalanced forces are at work - driving forces (pushing for change) or restraining forces (hindering the change process)
• When driving forces are more dominant in a business

  It is likely the change will be successful
• If the driving forces are met by restraining forces at a similar level

  It is likely that the change will not be successful
• If the restraining forces are more powerful than driving forces


  It is likely that the change will not be successful
• Implementing Lewin's theory


  1. Weighting - identify driving and restraining forces then number them according to importance

  2. Ranking - use the weightings to determine the most important considerations

  3. Implementing a response - make a decision on what action will be taken

  4. Evaluating a response - monitoring the situation to ensure the decision was the correct one
• Driving forces for change in a business

  • Owners
  • Managers
  • Employees
  • Competitors
  • Legislation
  • Pursuit of profit
  • Reduction in costs
  • Globalisation
  • Technology
  • Innovation
  • Societal attitudes
• Driving forces


  Factors that push for the change to occur
• Restraining forces for change in a business

  • Managers
  • Employees
  • Time
  • Organisational inertia
  • Legislation
  • Financial considerations
• Restraining forces


  Factors that inhibit or stop change from happening