Wellington Secondary College

Business Management Unit 4

SAC 2b
Area of Study 2
OUTCOME 2B

On completion of this unit the student should be able to evaluate the effectiveness of a variety of strategies
used by managers to implement change and discuss the effect of change on the stakeholders of a business.

Key Knowledge:
•Low-risk strategies to overcome employee resistance, including communication, empowerment, support and
incentives
• high-risk strategies to overcome employee resistance, including manipulation and threat
• key principles of the Three Step Change Model (Lewin)
• the effect of change on stakeholders, including managers, employees, customers, suppliers and the general
community
• corporate social responsibility considerations when implementing change
• the importance of reviewing key performance indicators to evaluate the effectiveness of business
transformation.

Key skills
• define, describe and apply relevant business management concepts and terms
• research and analyse case studies and contemporary examples of business management applicable to
managing change in a business
• interpret business information and ideas
• apply business management knowledge to practical and/or simulated business situations
• evaluate the advantages and disadvantages of various strategies in implementing change in a business
• propose and justify strategies in response to key performance indicators and to assist in implementing
change in a business.

SAC 2B
‘Evaluate the effectiveness of a variety of strategies used by managers to implement and discuss the effect of
change on the stakeholders of a business’

Tuesday 18th September 2018 Reading Time: 10 minutes, Writing Time: 40 Minutes.

Instructions
This booklet contains 5 questions. Answer all parts of the question in the spaces provided.
Electronic translators and dictionaries are NOT to be used.

Name : __________________________ Teacher : MAYT, COTK, RAVM

Read the following fictional case study and Table 1, and answer the questions that follow.

Finesse

Mark Etting is the Chief Executive Officer (CEO) of Finesse, a medium-sized marketing and communications
agency located in Melbourne. The business employs 80 people, including creative and administrative staff,
accounts managers and a sales and marketing team.
Finesse was established in 1990 and offers clients a range of services including conducting research,
marketing, advertising and graphic design. Its clients include organisations from both the public and private
sectors. The business assists clients with strategic marketing, brand building, website design, product and
service advertising across most sectors of the mainstream media, including the internet, newspapers and
magazines, signage, television and radio.
Over the past financial year Finesse has experienced a decline in revenue and net profit due to competition
from a number of new boutique marketing firms that are undercutting Finesse’s prices. A number of these rival
companies have even managed to secure some of Finesse’s larger clients.
In response to this financial situation, Mark and the business’s Human Resource Manager, Kim Tran, decided
that urgent changes were required if Finesse was to survive and remain competitive. In June 2017, they
implemented the following changes:
 Bonuses were increased by 50% to sales staff who attracted new clients.
 Two of the 10 administrative staff and two of the 5 account managers were retrenched to reduce operating
costs. Tasks previously done by the retrenched staff have been distributed among the remaining staff
members.
 All remaining staff were required to undertake professional development training in their respective area,
paid for by Finesse, to enhance their skills and to improve the competitiveness of Finesse.
Refer to Table 1 for some details of Finesse’s performance for the period June 2016 to June 2018.

TABLE 1: EXTRACT FROM FINESSE’S 2018 ANNUAL REPORT

Item June 2016 June 2017 June 2018 Change over

past year (%)
Net profit $6 000 300 $2 300 000 $1 900 400 –17%
Revenue $10 000 500 $6 000 300 $3 000 000 –49%
Percentage of 3% 2.8% 1.9% –0.9%
market share
Staff absenteeism 2% 2.3% 5% +2.7%
Level of staff 2% 2.2% 4.3% +2.1%
turnover
Average annual $4 000 000 $3 700 000 $1 100 000 –30%
operating costs

2
Question 1 (3 marks)

a. Define the term ‘Corporate Social Responsibility’. 1 mark

b. Explain the importance of using KPIs to evaluate the effectiveness of business transformation. 2 marks

3
Question 2

a. Identify two stakeholders and explain how they would be affected by the change in Finesse’s
management strategies.
4 marks

4
Question 3 (10 marks)

a. Distinguish between low-risk strategies and high-risk strategies. 2 marks

b. Describe one low-risk strategy and one high-risk strategy that Mark and his Human Resource Manager,
Kim Tran, could use to overcome any employee resistance to the changes they implemented.

4 marks

5
c. Evaluate one of the strategies from part b that Kim and Mark should use. 4 marks

6
Question 4

Explain how Mark could have applied Lewin’s Three Step Change Model when implementing the changes at
Finesse. 6 marks

7
8
Question 5

Describe one corporate social responsibility consideration that Mark needed to address when implementing
the changes at Finesse. 2 marks

9
Extra space for responses

Clearly number all responses in this space.

10
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