AQA A-Level Business: Managing strategic change (7132) – Revision Notes

These notes condense section 3.10 Managing strategic change (A-level only) of the AQA AS and A-level Business specification (7132), for first teaching from September 2023. For full explanations and the worked Lowerby Candles examples read the study guide. Test yourself with the practice questions, check coverage on the printable checklist, see the course hub, and use the free diagnostics to find weak areas.

Topic map

Part	Headings
3.10.1 Managing change	Causes and pressures; four types; Lewin; value of change; flexible organisation; information and knowledge; Kotter and Schlesinger
3.10.2 Culture	Importance; Handy; Hofstede; influences; reasons for and problems of changing
3.10.3 Implementation	Effective implementation; leadership; communications; structures; network analysis
3.10.4 Problems	Difficulties; planned v emergent; strategic drift; ownership and control; evaluating performance; strategic and contingency planning

3.10.1 Managing change

Key definitions

Term	Meaning
Internal change	Starts inside the business (restructure, new system, new leader)
External change	Starts in the environment (rival, law, technology, tastes)
Incremental change	Small, steady steps; lower risk; may be too slow
Disruptive change	Sudden and large; forces a fast response
Driving force	Pushes for the change
Restraining force	Holds the change back
Delayering	Removing layers from the hierarchy
Mechanistic structure	Rigid hierarchy, narrow tasks, formal rules
Organic structure	Flat, flexible, wide roles, shared decisions

Force field analysis in steps

1. State the change clearly.
2. List the driving forces and the restraining forces.
3. Score each (for example 1 to 5).
4. Total each side and find the net score.
5. Plan: reduce the strongest restrainers, or strengthen drivers.
6. Judge: the scores are subjective, so say what the result suggests and what could change it.

Reminder: drivers 12 and restrainers 9 give a net of +3. The change is more likely to work, but a single strong restrainer (such as a key group refusing to cooperate) can still stop it.

The flexible organisation (specification list)

Feature	Benefit	Cost or risk
Restructuring	Fits structure to new strategy	Disruption; uncertainty for staff
Delayering	Faster communication, lower pay costs, wider spans	Overloaded managers, fewer promotion routes
Flexible contracts	Staffing matches demand; lower fixed costs	Lower loyalty, higher turnover
Organic structure	Quick response, ideas shared	Less control; roles unclear
Mechanistic structure	Clear control; suits stable markets	Slow, rigid in a changing market
Knowledge and information management	Better decisions, less duplication, know-how kept	System cost, overload, security risk

Kotter and Schlesinger

Four reasons for resistance	Six ways of overcoming it
Parochial self-interest	Education and communication
Misunderstanding	Participation and involvement
Low tolerance of change	Facilitation and support
Different assessments of the situation	Negotiation and agreement
	Manipulation and co-optation
	Explicit and implicit coercion

Matching guide: misunderstanding goes with education and communication; self-interest with negotiation or participation; low tolerance with facilitation and support; different assessments with participation. Coercion is fast but damages trust.

3.10.2 Organisational culture

Culture is the shared values and ways of behaving in a business. It affects motivation, decisions, service and how change is received.

Handy	One-line description	Typical fit
Power	One person or small group controls; fast, leader-dependent	Small owner-led business
Role	Rules, procedures and defined jobs	Large, stable organisation
Task	Teams built around projects and expertise	Project or consultancy work
Person	Individuals matter most	Small professional partnership

Hofstede’s national cultures: compare countries on dimensions including power distance, individualism versus collectivism, masculinity versus femininity and uncertainty avoidance (later work adds long-term orientation and indulgence). Use it to explain why a management style may not transfer across borders.

Influences on culture: founder and leaders, history, size, structure, industry, staff, national background, reward systems, past success.

Changing culture

• Reasons: new strategy, merger, poor performance, new technology, mismatch with the market.
• Problems: slow and deep; resistance from long-serving staff; mixed messages; falling morale; staff leave.

3.10.3 Strategic implementation

• Effective implementation: clear objectives, resources, responsibilities, deadlines, monitoring, fit with structure and culture.
• Leadership: sets direction, builds commitment, backs the change visibly. Style should suit urgency and staff.
• Communications: clear, consistent, two-way, timely. Reduces misunderstanding and rumour.

Structure	Grouped by	Plus	Minus
Functional	Activity	Expertise	Departmental silos
Product based	Product line	Product focus	Duplication
Regional	Area	Local knowledge	Inconsistency
Matrix	Function and project	Shared skills	Two bosses

Network analysis in steps

1. Draw activities and their order; note durations.
2. Forward pass: earliest start (ES) is the largest earliest finish of the activities that must come before. Earliest finish (EF) is ES plus duration.
3. Project duration is the largest EF at the end.
4. Backward pass: latest finish (LF) of an activity is the smallest latest start of the activities that follow. Latest start (LS) is LF minus duration.
5. Total float = LS − ES (equivalently LF − EF). Zero float means critical.
6. The critical path is the longest route; it joins the zero-float activities.
7. Amend: change a duration or add or remove an activity, then redo steps 2 to 6. A longer non-critical activity may use up its float, or become critical.

Small reminder. A (4 weeks, first), B (3, first), C (5, after A), D (2, after B), E (3, after C and D). Forward pass: C finishes at week 9, D at week 5, E starts week 9 and ends week 12. Duration 12 weeks, critical path A, C, E (4 + 5 + 3). B and D each have 4 weeks of float. If D took 6 weeks it would end at week 9, so D would have no float and there would be two critical paths. The project would still take 12 weeks.

Uses: focus control on critical tasks, move resources from tasks with float, estimate the earliest finish. Limit: durations are estimates.

3.10.4 Problems with strategy

• Difficulties: uncertain information, unpredictable environment, conflicting stakeholder aims, limited resources, bias, long time lags.
• Planned (deliberate) strategy: set in advance by analysis; gives direction and control; may be rigid.
• Emergent strategy: grows from day-to-day decisions and responses; flexible, uses front-line knowledge; may lack direction.
• Strategic drift: strategy slowly moves out of line with the environment, often after success. Causes: complacency, strong culture, slow monitoring.
• Ownership and control: in a large company owners (shareholders) and managers differ. Managers may chase their own aims. Corporate governance (board structure, independent non-executive directors, committees, transparency, shareholder votes) tries to reduce the gap.
• Evaluating strategic performance: compare results with objectives, past results and rivals; use financial and non-financial measures; find the cause of any gap.
• Strategic planning: direction, alignment, resource guide. Costs time; can be rigid; depends on forecasts.
• Contingency planning: ready responses to possible shocks. Faster reaction, less panic; costs time and cannot cover everything.

Must-know distinctions

• Internal v external change (where it starts) and incremental v disruptive (speed and size).
• Organic v mechanistic.
• Planned v emergent strategy.
• Ownership v control.
• Float v critical path: float is spare time, the critical path has none.
• Strategic planning (the main plan) v contingency planning (plan B for shocks).

Quick self-test

1. Name the four types of change in the specification.
2. In a force field analysis, drivers score 4, 3 and 2 and restrainers score 5 and 3. What is the net score?
3. State Kotter and Schlesinger’s four reasons for resistance.
4. Which method of overcoming resistance suits staff who simply lack information?
5. Name Handy’s four cultures.
6. Which Handy culture fits a firm where one founder makes nearly every decision?
7. Define delayering.
8. A project has activities X (3 weeks, first), Y (6 weeks, first) and Z (2 weeks, after X and Y). Find the duration, the critical path and the float on X.
9. What is strategic drift?
10. What is the aim of corporate governance?

Answers

1. Internal, external, incremental and disruptive.
2. Drivers 9, restrainers 8, net +1.
3. Parochial self-interest, misunderstanding, low tolerance of change, different assessments of the situation.
4. Education and communication.
5. Power, role, task and person.
6. Power culture.
7. Removing one or more layers from the hierarchy.
8. Z starts when Y ends at week 6 and finishes week 8. Duration 8 weeks, critical path Y then Z, float on X is 3 weeks (6 − 3).
9. A gradual shift of strategy away from what the changing environment needs.
10. To direct and check a company so managers act in the owners’ interests, reducing the divorce between ownership and control.

Where marks are usually lost

• Naming Lewin or Kotter and Schlesinger without applying them to the case.
• Scoring forces but never comparing the totals or commenting on how subjective they are.
• Recommending a method of overcoming resistance that does not match the reason for resistance shown.
• Describing delayering as only a cost saving and ignoring the workload on remaining managers.
• Treating Handy’s cultures as good or bad rather than as a fit or mismatch with the strategy.
• Mixing up float and duration, or giving a critical path as a single activity.
• Forgetting to rework the network after an amendment.
• Writing about strategy generally when asked about planned versus emergent, or ownership versus control.
• Making a one-sided case when asked to evaluate, with no judgement at the end.

Frequently asked questions

What are Kotter and Schlesinger’s four reasons for resistance to change? Parochial self-interest, misunderstanding, low tolerance of change, and different assessments of the situation.

What are Handy’s four organisational cultures? Power, role, task and person cultures. They should be judged as a fit or mismatch with the strategy, not as good or bad in themselves.

What are the four types of change in AQA 7132? Internal, external, incremental and disruptive change. Internal and external describe where the change starts, while incremental and disruptive describe its speed and size.

What is the difference between strategic planning and contingency planning? Strategic planning is the main plan, giving direction and aligning departments. Contingency planning prepares ready responses to possible shocks, allowing faster reaction, but it costs time and cannot cover everything.

Official syllabus

AQA AS and A-level Business (7131 and 7132) specification, published by AQA: section 3.10 Managing strategic change (A-level only).