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COMPAK | BUSINESS MANAGEMENT UNIT 4

BUSINESS MANAGEMENT UNIT 4

Unit 4, Outcome 2 assessment task: implementing change in a business

JULIE CAIN | MOUNT WAVERLEY SECONDARY COLLEGE

This assessment task for Outcome 2 in VCE Business Management Unit 4 (Transforming a Business) focuses on the management of change in a business, including the need to review and evaluate business performance, the forces for change, and strategies used to manage change efficiently and effectively. This task covers all of the key knowledge and key skills in the area of study and suggested answers are provided. Refer to the Teacher notes section for information about a supplementary teacher resource that accompanies this task.

ASSESSMENT TASK DETAILSName of taskStructured questions and case study

Unit/area of studyUnit 4: Transforming a Business

Area of Study 2: ‘Implementing change’

Outcome 2 ‘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.’

Source: VCE Business Management Study Design (2017–2021), VCAA, page 23, © VCAA, reproduced by permission

Key knowledge and key skillsThis task addresses all of the key knowledge and key skills outlined in Area of Study 2 in Unit 4.

vcta.asn.au | published August 2019 | © VCTA and Julie Cain


INSTRUCTIONS AND CONDITIONS

Answer all questions in this answer book. The marks for each question are indicated after each question. Additional space is available following the questions if you need extra paper to complete an answer. If you use this additional space, clearly label all answers with the appropriate question number.

Conditions: Closed book

Time allowed: 90 minutes (plus 10 minutes reading time)

Marks allocated: 50 marks

SECTION A (16 MARKS)Question 1 (6 marks)

a. Outline three principles of Senge’s Learning Organisation. 3 marks



b. Explain how one of the principles outlined in part a. might be used by a business.3 marks

Question 2 (6 marks)

a. Outline the key principles of the Three Step Change Model (Lewin). 3 marks



b. Explain how a business could use the Three Step Change Model to implement change. 3 marks


Explain why it is important for a business to consider its corporate social responsibilities (CSR) when implementing change.




‘The announcement is the easy part—it makes the manager look bold and decisive. Implementation is more difficult …’.

Source: You can’t delegate change management, Harvard Business Review, 30 May 2014, https://hbr.org/2014/05/you-cant-delegate-change-management

Describe the role of leadership when managing change in a business. In your response, refer to an example from a contemporary business case study.


https://hbr.org/2014/05/you-cant-delegate-change-management


SECTION B (34 MARKS)Question 5 (6 marks)

Explain how two management strategies can be used to develop new business opportunities domestically. Support your response with an example of each strategy.




Discuss the importance of reviewing key performance indicators (KPIs) when determining the effectiveness of business transformation.




Read the following information about Coles supermarkets, including Table 1 and Table 2, and answer the questions that follow.

RECENT SUPERMARKET ACHIEVEMENTS Number of workplace accidents (recordable injury frequency rates) at Coles decreased by

13.6% between 2016 and 2017.

Between 2009 and 2016, greenhouse gas emissions were reduced by 35%.

In 2019, customer satisfaction was at 87.8%.

In 2019, the ‘food-to-go’ sector grew by 11.6%.

Coles removed single-use plastic bags from Victorian stores in July 2018.

Coles continued to assist small to medium-sized businesses through the $50 million Coles Nurture Fund, which was established in April 2015. Since its launch, Coles has provided close to $9 million in grants and interest-free loans to 19 producers.

TABLE 1: KEY PERFORMANCE INDICATORS FOR COLES (2016–2018)

KPI 2016 2017 2018 2019(Jan. – Jun)

Revenue—number of sales

$39 242m $39 217m $39 338m $20 235m

Net profit

Sales growth— Coles Increased by 2% Increased by 2.1%

Sales growth— Coles Express

Decreased by 8.12% Decreased by 6.1%

TABLE 2: AUSTRALIAN SUPPLIERS OF FOOD PRODUCTS

Food products Australian suppliers%

Fresh produce 96

Fresh lamb, beef, pork, chicken, milk and eggs 100

Seafood (responsibly sourced) 100



a. Propose and justify two management strategies Coles could introduce to respond to, and improve two or more of the KPIs listed in Table 1 and/or any results listed in Table 2 and ‘Recent supermarket achievements’. 6 marks



b. Evaluate the effectiveness of one of the management strategies proposed in part a. in improving the performance of a KPI or another Coles’ result from the information provided. 3 marks

c. Read the following information and answer the questions that follow.

Coles’ strategic plan includes:

continuing to open new supermarkets and renew existing stores.

developing flexible store blueprints that allow it to fill network gaps with smaller formats in inner city locations.

continuing its innovative practices, particularly in the fresh food space.

focusing on reducing costs by improving employee rostering and better inventory management systems, using technology and the supply chain model.

developing a new leadership framework to create a positive corporate culture and enhance the capabilities of team members.

nurturing talent through its Retail Leaders Program and the Graduate Program.

continuing to engage with customers and communities through partnerships, community events and sponsorships.

expanding Coles Express network and work with another business—an alliance partner.

developing further the ‘click and collect’ service for online shopping.



i. Identify one low-risk strategy and one high-risk strategy that Coles might use when implementing some changes outlined in its strategic plan. 2 marks

ii. Select one of the strategies identified in part i. and evaluate its effectiveness in implementing a change outlined in Coles’ strategic plan. 3 marks




Read the following information and answer the questions that follow.

CORPORATE SOCIAL RESPONSIBILITY (CSR)Coles has worked on enhancing and developing its corporate social responsibility (CSR) measures including:

reducing its greenhouse gas emissions by 30% by 2020. Coles met this target four years earlier in 2016.

achieving its sustainability aims by supporting farmers, suppliers, the community and team members; offering customers great products, and reducing environmental impacts.

implementing an Australian-first sourcing policy to provide Australian-grown food as a first priority.

supporting small businesses to innovate and grow through the $50 million Coles Nurture Fund and supporting small to medium-sized businesses in the food and grocery sector with the development of new market-leading products, technologies and processes.

partnering with SecondBite to donate unsold edible food from its supermarkets and distribution centres to 1300 community groups, supporting disadvantaged Australians.

partnering with the national cancer charity Redkite to provide support to children and young people with cancer and their families.

reducing its impact on the environment.

removing single-use plastic shopping bags across all its businesses from 1 July 2018.

a. Coles has introduced a number of CSR programs and initiatives.

Explain the possible impact of two CSRs outlined above, on the change process at Coles. 4 marks



b. Explain how suppliers and employees could be affected by the implementation of Coles’ CSR. 4 marks



Extra space for responsesClearly number all responses in this space.



Suggested answersNote: The answers below are suggestions only. For some questions, more than one answer is possible.

Marking adviceWhen making judgements about the quality of student answers to questions, teachers could be guided by some or all of the following factors (depending on the question): accuracy, relevance, completeness, breadth/depth of treatment, logic of connections, clarity, substantiation of claims, level of coherence. These factors are particularly useful to consider when marking questions that require a global marking approach. These types of questions are multifaceted as they involve the application of a marking range that considers different aspects of a question. The factors listed above will provide useful reference points for discrimination within a marking range.


a. Outline three principles of Senge’s Learning Organisation. 3 marks

Note: The following answer is one of a number of possible answers to this question. Other accepted principles are mental models and team learning.

There are five principles of Senge’s Learning Organisation, three of which are systems thinking, personal mastery and building a shared vision. The principles are designed to enhance the capacity of people who work in a business and they take a long-term view of the organisation.

Systems thinking, according to Senge, focuses on looking at management as a whole and the interrelationship between the parts. Senge recommends that a business takes a long-term approach to see what has happened, gain feedback and look at how all parts of the organisation connect. This is Senge’s overarching principle.

A second principle is personal mastery, which is based on the premise that businesses learn through individuals learning. Personal mastery incorporates a continued focus on learning and being aware of what to learn.

A third principle is building a shared vision. Senge believes that this is important because it allows everyone in the organisation to come together and encourage and inspire each other.

Marking guide:

1 mark for indicating in general terms the features of a principle (x three = 3 marks)

b. Explain how one of the principles outlined in part a. might be used by a business.3 marks

The share vision principle can assist a business when it is trying to make internal changes and when it is trying to gain a commitment from others, such as customers and suppliers. A shared vision, which is developed by many people in the business rather than being imposed, creates energy and a focus, meaning that everyone understands why changes are proposed and are happy to commit to them. This in turn increases the likelihood of the business getting ‘buy-in’ and the change it wishes to implement over time.

Marking guide:

1–3 marks for linking one principle to changes in business practice, taking into account relevance, logic of connections and depth of treatment




a. Outline the key principles of the Three Step Change Model (Lewin). 3 marks

Kurt Lewin was a social scientist who developed ideas about how an organisation could introduce change. Lewin developed a Three Step Change Model, and the three steps are:

unfreezing the status quo, which involves unlearning current practices and developing confidence to accommodate change

moving from the current to the new situation, which involves learning new procedures and skills and testing if they are suitable

refreezing at the new situation, which involves consolidating and embedding new practices so success is experienced and people feel confident.

Marking guide:

1 mark for providing the general features of a step in the model (x three = 3 marks)

b. Explain how a business could use the Three Step Change Model to implement change. 3 marks

Initially a business needs to recognise that a change is required and this is done by assisting people to ‘unlearn’ (or unfreeze) their current behaviour, habits and ways of thinking. Changing behaviour is difficult as people are creatures of habit and will often revert to the attitudes and behaviours that make them feel comfortable and confident. However, people have to feel comfortable and confident before they will change.

The second step is to ‘move’. If current behaviour is ‘unfrozen’ then it does not necessarily mean that behaviour will automatically change. People might need to see if the change works and will need a chance to learn new procedures and tasks, hence build their confidence. If this is not done then it is unlikely that people will move.

The third step in the change model is to ‘refreeze’ in the new situation or desired state. This means that the new behaviours have to be frozen or set in place. If the employees accept the change and change their behaviours and processes, and policies also change to support these, then it is more likely that the change will be embedded and successful.

Marking guide:

1 mark for linking a step in the model with an outcome that supports the implementation of change, taking into account the logic of the connections and accuracy (x three = 3 marks)


Explain why it is important for a business to consider its corporate social responsibilities (CSR) when implementing change.

The concept of CSR means that a business should not only be concerned about its economic outcomes, but it should also consider the social and environmental implications of its activities. When a business is implementing change, it is important that it takes into account its CSR as part of the change process. This will contribute to the stakeholders being satisfied with the changes or transformations that are being implemented.

The majority of stakeholders, including customers, employees and shareholders wish to invest in, buy from or work for a business that exercises social responsibility and has a positive impact on society. This is an advantage for businesses in terms of reputation and business performance.



Social responsibilities in the change process might include the types of packaging used in the business, its sources of inputs, how employees are treated (beyond the minimum legal requirements) and how the business contributes to the community in a way that goes beyond its core business. If social responsibility is considered a part of the change process then it is likely to improve the reputation and performance of the business.

Marking guide:

1 mark for defining the term CSR

1–2 marks for showing why CSRs are important when a business is implementing change, taking into account the logic of the connections


Describe two roles that leaders should play when managing change in a business. In your response, refer to an example from a contemporary business case study. Leaders play a vital and important role in the transformation of a business. Leadership is important when managing a business through the change process. Leaders need to determine the nature of a change, its purposes, and develop a vision shared between the business and its stakeholders on how the change will be implemented. By carrying out the role of clearly understanding the nature of the change, it is more likely that the proposed changes will be implemented successfully. Leaders not only have to understand the details of the change but also explain and communicate them so that everyone is clear on why the change is occurring and its possible effects. This supports a shared vision of everyone working together to achieve a change.

A good example of leadership is at Coles where it is investing in the development of team member capabilities to improve customer service as it implements its new ‘anytime, anywhere’ customer offer. This investment shows team members that leaders acknowledge the importance of their contribution to the success of a change.

Marking guide:

1 mark for providing the key characteristics of a leader

1 mark for showing the connection between leadership and change

1 mark for providing an appropriate example


Explain how two management strategies can be used to develop new business opportunities domestically. Support your response with an example of each strategy. Note: Other business opportunities could include the expansion of outlets, and research and development to generate new ideas for products, services or processes.

There are a range of strategies that a business can use to create and maximise opportunities in the domestic market, including innovation and developing a niche market.

One strategy Coles has used to develop domestic business opportunities is through the innovative use of new technology. Coles has developed a way to increase the flexibility for customers to shop and collect their products. Its ‘click and collect’ approach and its improved service for pick-up products should allow Coles to expand its customer base, diversify the way it supplies customers and increase its customer base.

Coles has used the strategy of developing a niche market by forming a partnership with Laurent’s bakery to expand its range of fresh bakery products. It has also signed up a partnership with Uber to provide ready-to-eat meals for customers, which will be delivered to their homes.



Both of these strategies will provide customers with greater choice and should further develop Coles’ customer base and increase its market share.

Marking guide:

1 mark for providing a relevant example of a strategy (x two = 2 marks)

2 marks for explaining the relationship between a strategy and the enhancement of a business opportunity, taking into account the logic of the relationship and relevance (x two = 4 marks)


Discuss the importance of reviewing key performance indicators (KPIs) when determining the effectiveness of business transformation.

It is important for all businesses to review its key performance indicators (KPIs) when determining the effectiveness of business transformation. KPIs provide information for a business to measure or make a judgement about how it has met its goals or objectives. If a business can make judgements about its performance and review and make changes when necessary to work towards its objectives, then it will ensure it stays on track. Using KPIs and other data and information can also ensure the business monitors its performance.

It is important for businesses to review the quality of the data used to calculate their KPIs because making transformation decisions based on invalid data could lead to poor outcomes. Continuous reviewing also gives businesses the opportunity to identify trends rather than maybe reacting to a ‘hiccup’ in a KPI and to readjust its KPIs if there have been changed economic, social and environmental circumstances or changed business objectives. If a business does not use the KPIs to monitor and make judgements then it will not be able to respond to changes or track its performance properly. If this is not done, it might be too late for a business to implement an effective transformation.

Therefore, it is crucial that all businesses measure and monitor their performance using a range of data, and make decisions to ensure that the objectives of the business are met.

Marking guide (global):

1–4 marks for providing some benefits of reviewing KPI,s and the consequences of not reviewing KPIs, when measuring effectiveness, taking into account the depth of understanding and relevance


a. Propose and justify two management strategies Coles could introduce to respond to, and improve two or more of the KPIs listed in Table 1 and/or any results listed in Table 2 and ‘Recent supermarket achievements’. 6 marks

Note: There are other strategies that could be used including lean management production techniques, cost cutting, improving quality in production, increased investment in technology, management styles and management skills, staff motivation and staff training and development.



There are a number of different management strategies Coles could introduce to respond to the KPIs and other data. One management strategy is staff training and development. This is important for Coles as the business needs to ensure that the employees have the skills and abilities to accept and implement change. The increase in customer satisfaction and the reduction in number of workplace accidents can all be improved further by increased staff training and the development of their capacity as these enhance the ability to fulfil their roles in the business.

A second management strategy Coles could implement to respond to some of the KPIs is the redeployment of resources. Reallocating its personnel resources (staff) to different positions or locations, as well as changing and closing some physical resources (stores), will assist in costs being reduced compared to profit levels. This will mean revenue (number of sales) and profit will also improve. Reducing costs will also mean that Coles will become more efficient in its resource use.

Marking guide:

1 mark for proposing a management strategy (x two = 2 marks)

2 marks for providing evidence that supports a strategy, taking into account its suitability to the data and the level of substantiation (x two = 4 marks)

b. Evaluate the effectiveness of one of the management strategies proposed in part a. in improving the performance of a KPI or another Coles’ result from the information provided 3 marks

Effectiveness is a measure of how well a solution, decision or practice is working, and staff training and development is one strategy that can improve the quality of the performance of a number of KPIs. Knowledgeable and productive employees will be able to complete their jobs effectively, which may mean improvements in customer service, and tasks being done to a higher standard because staff in the stores and warehouses will understand their roles better and have higher levels of skills and knowledge.

While there is a range of benefits associated with staff training and development, it can be costly for a business such as Coles. It needs to ensure that its training programs are developed and delivered at a high standard, and it needs to retain these upskilled employees, rather than them seeking employment elsewhere. This training and development strategy can be time-consuming and costly.

A number of KPIs, such as sales, customer complaints, the number of workplace accidents and staff absenteeism, should all improve if a management strategy of staff training and development is implemented and followed. Focusing on employees will provide a range of benefits to Coles.

Marking guide:

1 mark for providing an advantage of the selected management strategy that is linked to effectiveness

1 mark for providing a disadvantage of the selected management strategy that is linked to effectiveness

1 mark for drawing a conclusion about the value of the management strategy



c. Read the following information and answer the questions that follow.

i. Identify one low-risk strategy and one high-risk strategy that Coles might use when implementing some changes outlined in its strategic plan. 2 marks

One low-risk strategy Coles could use to nurture new talent and support employees is to empower them to make decisions and come up with their own ideas and solutions.

One high-risk strategy Coles could use is to threaten employees with job losses if they do not agree to changes, such as the new employee rostering system.

Marking guide:

1 mark for identifying a low-risk strategy that is relevant to Coles

1 mark for identifying a high-risk strategy that is relevant to Coles

ii. Select one of the strategies identified in part i. and evaluate its effectiveness in implementing a change outlined in Coles’ strategic plan. 3 marks

A high-risk strategy is usually associated with an autocratic approach to management, is often considered as being ‘heavy-handed’ and is sometimes used to achieve quick results. A high-risk strategy is one that involves threats and manipulation, and often lacks an understanding of the role that employees play in implementing change. If Coles wants to focus on quickly reducing costs through better employee rostering and stock control it could use a high-risk strategy, such as making the changes and not providing employees with information about how their rosters might change, or threatening employees with job losses if they do not agree to the changes. However, the consequences of such a strategy are high and are more likely to lead to employee resistance. Coles would be advised to use a low-risk strategy (low-touch) even though it might take longer to implement, as it involves gaining employee support. However, low-risk strategies usually bring long-term benefits for the business and this would be a more appropriate for Coles.

Marking guide:

1 mark for providing an advantage of the selected management strategy

1 mark for providing a disadvantage of the selected management strategy

1 mark for drawing a valid conclusion about the value of the management strategy


a. Coles has introduced a number of CSR programs and initiatives.

Explain the possible impact of two CSRs outlined above, on the change process at Coles. 4 marks

Corporate social responsibility (CSR) can be defined as a commitment by organisations and businesses to conduct their business in an ethical manner. A business will provide support or resources to the community beyond their core activities.

It is important for a business, such as Coles, to ensure that any change or transformation it plans takes into consideration the likely impact it might have on the community. This could mean maximising the benefits to the community of any change, and reducing the impact of any negative effects, where appropriate, as Coles wants to ensure its reputation is maintained and exercise its social responsibilities.



Coles has introduced a number of changes that link to its CSR. One such change was to source food and products from Australia as a way to support the local community and to ensure that local jobs and farmers are supported. The impact of this change on Coles was that it strengthened its relationships with local suppliers and ensured that there was a guaranteed supply of the products required by Coles.

Another change that Coles introduced was its partnership with SecondBite, which provides disadvantaged members of the community with food. This can have a positive impact on Coles and its shareholders, including employees, as they feel that they are contributing to the community and supporting others rather than throwing out food which is still edible.

Marking guide:

1 mark for outlining features of a CSR of Coles (x two = 2 marks)

1 mark for showing a link between a CSR of Coles and the change process (x two = 2 marks)

b. Explain how suppliers and the employees could be affected by the implementation of Coles’ CSR. 4 marks

A stakeholder is a group or individual who has a vested interest in the business. Two stakeholders of Coles are suppliers and employees. Stakeholders can be affected by the changes that are introduced by a business, which can be positive or negative.

Employees might be affected by the changes introduced by Coles. Employees will have their jobs changed due to changes in the sourcing of products and the types of products being sold. It might mean that tasks are changed and, in some instances, employees are redeployed to other parts of the business. This might create new opportunities for some employees, whereas for others it might have a negative effect on their wellbeing. To ensure Coles is operating in a socially responsible way the business needs to offer transition and other services to support employees beyond the legal requirements. By providing services, such as financial planning, career advice, job interviews and other employment advice, might assist those employees who find that they do not have a job.

Another stakeholder affected by the implementation of Coles’ CSRs is suppliers. Suppliers have been able to build up relationships with farmers and other businesses to ensure that they are able to achieve a reliable supply of products and services. If Coles is focused on ensuring its suppliers are supported to move to more sustainable practices, which minimise the impact on the environment, then it is supporting corporate social responsibility and rewarding those suppliers who follow these practices and Coles’ codes of conduct.

Marking guide:

2 marks for connecting a CSR with an effect on a stakeholder, taking into account the logic of the connection (x two = 4 marks)



Teacher notesThis task addresses all of the key knowledge and key skills outlined in Area of Study 2 in Unit 4.

It should be noted that on the advice of the Victorian Curriculum and Assessment Authority (VCAA), tasks available in the public domain should be sufficiently modified to minimise authentication concerns. For example, teachers could change the stimulus material relating to Questions 7 and 8 to reflect a contemporary business case study discussed in class. This would warrant some subsequent modifications to these questions. Similarly, teachers could change the number of requirements in a question, such as Question 5, change the command verb in a question and change statistics, such as in Questions 7 and 8. It should be noted that if the command verbs are changed, teachers should consider the impact on the mark allocation for those questions and the effect they might have on the spread of question demands (low, middle and high). See ‘Authentication advice’ on page 23.

Note: A supplementary teacher resource accompanies this article providing a wide selection of information related to this area of study. Teachers can use this material to assist in making modifications to the task, as suggested above.

Tips for developing a SAC Only ask questions that are within the boundaries of the key knowledge and key skills for

a specific area of study.

Think about the task words and the number of marks allocated to a question—the marks should be commensurate with the different degrees of difficulty and reflect the relative importance of the key knowledge.

Restrict the number of 1-mark questions as they pose difficulties in discriminating performance (only two marking options available). These questions are best suited to answers that only have one answer—it is right or wrong, for example, identifying the type of redeployment of resources in a case study.

Provide students with opportunities to demonstrate at all levels of thinking (low, middle and high). This increases the likelihood of accurately ranking the students as well as indicating the ‘distance’ between each ranked position. Consider having 20–25% of questions at the low level; 50–60% of questions at the middle level and 20–25% at the high level.



Authentication advice

'Where commercially produced tasks are being used for School-based Assessment, the school should ensure the tasks meet the requirements of the study design and that they have been sufficiently modified to enable student work to be authenticated.’

—VCE and VCAL Administrative Handbook 2019, VCAA, 2019, page 74

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Disclaimer: This resource has been written by the author (Julie Cain) for use with students of VCE Business Management. This does not imply that it has been endorsed by the Victorian Curriculum and Assessment Authority (VCAA). The current VCE Business Management Study Design (2017–2021) can be accessed directly via the VCAA website. VCE is a registered trademark of VCAA. While every care is taken, VCTA accepts no responsibility for the accuracy of information or advice contained in Compak. Teachers are advised to preview and evaluate all Compak classroom resources before using them or distributing them to students.


http://www.vcaa.vic.edu.au/Pages/vce/studies/busmngmnt/businesstindex.aspx

https://www.vcaa.vic.edu.au/Documents/handbook/2019/adhb19.pdf