Lesson 3.10.1.1
3.10.1.1 Causes, types and value of change Quiz: AQA Business, Unit 10
20 questions
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Lesson 3.10.1.1, Causes, types and value of change: 20 multiple choice questions for the AQA Business (7132), Unit 10: Managing strategic change, written with Revision Ninja.
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The 20 questions
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What is the difference between internal and external change?
- Both internal and external change always originate from the same source, which is the board of directors
- Internal change originates in the environment, such as new laws, while external change originates within the business
- Internal change is always planned and external change is always accidental and unexpected in every case
- Internal change starts within the business, such as restructuring; external change starts outside it, such as new rivals or laws
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What is incremental change?
- A change that is imposed by a government regulator with immediate effect on every firm in the sector
- A sudden, radical change that replaces an entire business model in a short period of weeks or months
- Small, gradual changes that are introduced over time with limited disruption to the business
- A change that affects only the financial accounts of a business and not its products or processes
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What is disruptive change?
- A reduction in the number of staff by a fixed percentage each year as a matter of standard policy
- A gradual shift in the age profile of the workforce, which happens over many decades in a firm
- A sudden and radical change that alters the way a business operates or competes
- A small improvement made to a product to keep it in line with the expectations of its existing customers
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What does Lewin's force field analysis examine?
- The profit that a business earns from each of its products when they are sold in different markets
- The number of customers who buy a product at different prices in a range of markets over time
- Driving forces that push for change and restraining forces that resist it, to judge whether change will succeed
- The rate at which a firm's costs change as its output is increased over a period of several years
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In Lewin's force field analysis, driving forces total 60 and restraining forces total 45. What is the net position?
- 15 in favour of change
- 15 in favour of stability
- 105 in favour of change
- 45 in favour of change
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Which example is an external cause of change for a business?
- A new competitor entering the market with a lower-priced product
- A decision by the finance director to reduce the level of cash held in the bank for the year
- A decision by the managing director to restructure the sales team into regional units
- A change in the staff incentive scheme that is introduced by the human resources manager
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Which example is an internal cause of change?
- A new law on data protection passed by the government in the most recent parliamentary session
- A sharp rise in the price of a key raw material on world markets this quarter
- A restructuring of departments decided by new senior management
- A change in the tastes of customers that moves demand away from the firm's main product line
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Why is change valuable to a business?
- It helps the firm adapt to its environment and maintain its competitiveness over time
- It is valuable only for public sector organisations, which must adapt to changing government policy
- It removes the need for planning, because change always happens by chance and cannot be planned
- It guarantees higher profits in every year that change is introduced by any business in its market
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What is a pressure for change that comes from technology?
- A rise in the number of employees who take holidays during the summer months each year
- A decision by shareholders to keep the level of dividends unchanged for many years in succession
- New production or digital methods that make existing products or processes less competitive
- A fall in the population of the country that reduces the number of potential customers in the market
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Which change is most likely to be disruptive rather than incremental?
- A new technology that makes the firm's core product obsolete within a short period
- A gradual increase in the efficiency of a production line over several years through small changes
- A small improvement to the packaging of a product to make it more attractive to shoppers
- A minor change to the layout of a shop floor to improve the flow of customers around the store
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A business's market is changing quickly. Which is the most appropriate evaluation of the value of change?
- Change is always harmful, so businesses should avoid it whenever possible and keep all processes unchanged
- Change can protect competitiveness, but poorly managed change can damage morale and performance, so it should be planned
- Change is always beneficial, so businesses should introduce as much change as possible without any planning
- Change has no value in a fast-moving market, because the market will adjust without any action by the firm
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Which of the following is a driver of external change?
- A reorganisation of the finance team to reduce the number of reporting layers within the firm
- A shift in consumer preferences towards more sustainable products
- A decision to close a loss-making department within the business as part of its planning
- A change in the reward system for managers that the board introduced after its annual review
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Lewin's force field analysis suggests that change can be achieved by:
- Ignoring the restraining forces, because they never affect the success of a change programme in practice
- Increasing the driving forces or reducing the restraining forces to shift the balance
- Removing all driving forces so that the business is forced to accept the existing position in every case
- Doubling the restraining forces so that the existing position is strengthened against any new proposals
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A firm introduces a change only through top-down instruction, without involving staff. What is the main risk?
- The change will be implemented perfectly because managers always know the best way to make it
- The change will cost less, because staff involvement is always more expensive than top-down instruction
- Resistance from staff may increase, which can reduce the chance of successful implementation
- Staff will automatically support the change, so the firm faces no risk of resistance in any circumstances
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Evaluate the usefulness of force field analysis for managing change.
- It replaces the need for a change strategy, because identifying the forces is enough to bring about the change
- It helps managers identify the forces for and against change, but it does not by itself show how to strengthen the driving forces
- It provides an exact forecast of the result of any change, so managers can rely on it without further analysis
- It is only useful to managers in the public sector, and private firms cannot apply it to their own changes
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Which example best illustrates an incremental change in a business's products?
- A complete replacement of the product range with an entirely new set of goods in a single launch
- A sudden shift to a new business model in which the firm sells only through a single distributor
- A decision to exit the market for the firm's main product and enter an unrelated sector instead
- A regular update to software features that adds small improvements each release
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Which of these is a restraining force in Lewin's force field analysis?
- The board's agreed plan to reduce costs by a fixed percentage across all departments of the firm
- A new competitor's entry into the market with a product that is cheaper than the firm's current offer
- A government grant that is available to firms that invest in new equipment for their operations
- Employees' fear of losing their jobs or status under the proposed new arrangement
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A business's market share falls as consumers shift to online retailers. What type of change does this represent for the business?
- Structural change, because the firm must restructure its legal entity to respond to any loss of share
- Incremental change, because the market shift has been gradual and has caused only minor disruption so far
- External change, because the pressure originates in the market and outside the firm
- Internal change, because the decline in share is caused by decisions made by the firm's own managers
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What is the main difference in risk between incremental and disruptive change?
- Disruptive change carries lower risk than incremental change because it is planned in greater detail before launch
- Incremental and disruptive change carry exactly the same level of risk and disruption in every business
- Incremental change always damages the business more than disruptive change because it is harder to plan
- Incremental change carries lower risk and disruption, while disruptive change carries higher risk but may offer greater potential reward
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A board decides to merge two divisions to reduce costs. What type of change is this?
- Incremental change, because merging two divisions can never produce a significant effect on the firm
- Internal change, because the decision is made and implemented within the business
- External change, because the decision is driven by a new law set by the government in the market
- Disruptive change imposed by competitors, because the firm has no choice but to merge its divisions
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