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Business A level paper 3 AQA 2017 my answers - A grade student
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By: esmegallagher2006 • 7 months ago
By: vincematthewtorrevillas • 1 year ago
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A level Business Paper 3:1. One Barrier to change that KMH will face when implementing their new
strategy is self-interest. According to Kotter and Schlesingers work
sometimes people are more concerned about their own situation than the
success of the business and if they cant see how the change will directly
benefit them, they will resist it. For example employees in KMH may resist
the change in reducing the size of the workforce, by becoming
demotivated and not working as hard if they feel like they were going to
be laid off/ if some of their close coworkers have been laid off. Perhaps
they would become fearful that something similar would reoccur in the
future hence they may leave the company if they feel unsecure in their
jobs or request help from trade unions to help demand better employee
rights, they may even strike. This would be very detrimental to the
success of KMH as it is typically senior managers who are losing their jobs
(140 redundancies), who tend to hold a lot of power in the company,
future senior managers may end up feeling unsecure working at KMH and
may stop focusing on whats best for the company and start demanding
whats better for them to feel secure, e.g. higher wages.
Another barrier to change that KMH could face when implementing their new
strategy according to Kotter and Schlesingers work is that employees may not
understand the reasons for change and why the managers have implemented
these changes. This may cause employees at KMH to not trust the managers and
weak, employee-employer relationships could form. For example employees may
not understand why Sir Rodney has invested £50m in new production machinery
and why a new factory has been planned, if no mention of a reduction in
manufacturing costs and an increase in total capacity is apparent. Perhaps they
would resist this change as they wander how this is going to benefit the business
and where funding is coming from, with suspicions that cutting employee
numbers if not already done/mentioned is helping to fund this large investment.
2. Gearing ratio = non current liabilities / total equity + non current
liabilities x 100
For 2016 (when new strategy was introduced) = 4567.+4567.5
x100 = 64.55%
4567.5 ++4567.5 +50 x 100= 64.8% when £50m borrowed.
This means that borrowing this finance may not be the best choice as the
gearing ratio has increased, meaning the amount of finance of KMH that
comes from long term debt has increased, hence KMH is more highly
geared. However the ratio has only increased by 0.25% so there isn’t a
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