OxfordAQA A-Level Business: Change, risk and uncertainty (9725) – Revision Notes

These notes condense section 3.4.6 Change, risk and uncertainty from the OxfordAQA International AS and A-level Business (9725) specification, Version 1.1, for International AS exams May/June 2027 onwards and International A-level exams May/June 2028 onwards. Everything below is International A-level only content for Unit 4: Business strategy. If your course is the older 9625 specification, use revision material matched to it. New to the topic? Start with the study guide for the explanations and worked examples.

Then test yourself with the practice set. Other topics are on the Business (9725) course hub, the printable checklist tracks what you have covered, and the free diagnostics show where to start.

Key definitions

• Change: any alteration to what a business does or how it does it: its structure, products, markets, processes or people.
• Driving forces: pressures pushing a business towards a change.
• Restraining forces: pressures holding a change back.
• Risk: the possibility that results differ from the plan, where outcomes can be identified and roughly estimated.
• Uncertainty: a situation where future outcomes cannot be predicted or measured with confidence.
• Contingency plan: a prepared response to a specific possible event.
• Crisis management: how a business responds while an unexpected, damaging event is unfolding.
• Agile business: one that senses change early and responds quickly.

Reasons for change

Internal	External
New leader or owner	New technology
New objectives or strategy	Competitors’ actions
Poor performance (profit, costs, labour turnover)	Economic change: wages, interest or exchange rates
Growth beyond current structure or systems	New laws or regulations
Decision to adopt new methods	Shifts in customer tastes

Change and stakeholders

Stakeholder	Can gain	Can lose
Employees	New skills, more varied work, a more secure employer	Jobs, overtime, familiar routines and teams
Managers	Chance to lead and show results	Workload, blame if it fails
Shareholders	Higher long-term profit	Short-term dividends while costs are paid
Customers	Better products, prices or service	Disruption during the switch
Suppliers	Larger orders if the firm grows	Contracts if the firm switches or in-sources
Community	Investment, skilled jobs	Redundancies, site closures

For each group in a case, give one gain and one loss, then say whose interest is likely to win and why.

Barriers to change

General barriers: cost, skills gaps, culture, management time.

Kotter and Schlesinger’s four reasons for resistance

Reason	Signal in a case study
Self-interest	Staff stand to lose pay, status, overtime or jobs
Misunderstanding and lack of trust	Rumours, poor communication, past broken promises
Inertia	“We’ve always done it this way”; staff keep old habits
Different assessments of the situation	Staff genuinely think the change is a mistake

Managing change

Method in steps: force field analysis

1. List the driving forces and the restraining forces.
2. Score each force (e.g. 1 = weak to 5 = strong).
3. Total each side and compare.
4. Plan to weaken the strongest restraining forces (and, where possible, strengthen driving forces).
5. Judge: the scores are subjective, so treat a narrow margin with caution.

Mini example. Larkspire Travel wants to close its high-street branches and sell only online. Driving: falling branch visits 2, lower costs online 5 → total 7. Restraining: older customers’ loyalty 3, staff opposition 3, lease penalties 2 → total 8. Restraining forces lead by 1, so the change is unlikely to succeed until something shifts the balance.

Kotter and Schlesinger’s six ways to overcome resistance

Method	Use when	Main drawback
Education	Staff misunderstand	Slow
Participation	Staff have knowledge or power to block	Slow; may water down the change
Facilitation	Fear or a skills gap	Costly
Negotiation	A powerful group clearly loses	Costly; sets a precedent
Manipulation	Time and money are short	Trust collapses if exposed
Coercion	Speed matters and managers hold power	Resentment, demotivation, staff leave

The methods run roughly from slow and consensual to fast and forceful. Match each method to the reason for resistance.

Method in steps: a “how should managers overcome resistance” answer

1. Identify the reason for resistance from the case evidence (which of the four?).
2. Choose the method that fits that reason, e.g. misunderstanding → education; skills fear → facilitation.
3. Weigh its drawback against the case constraints: time, cost, managers’ power.
4. Judge: often a combination works, with forceful methods held back as a last resort.

Risk

Why assess and plan: protects cash and profit, keeps output flowing, avoids fines, reassures lenders and customers, speeds the response. But excessive caution means missed opportunities.

Type of risk	Examples
Financial	Heavy borrowing, falling profit, liquidity shortages
Strategic	Entering new markets, launching new products
Operational	Production breakdowns, supply-chain disruption
Compliance	Breaking laws or regulations
Reputational	Negative publicity, dissatisfied customers
Cybersecurity	Hacking, ransomware, data theft

Methods of managing risk

Method	For	Against
Market research	Tests demand first	Cost, time, possible bias
Contingency/crisis plans	Faster, calmer response	May not fit the actual event
Insurance	Transfers insurable losses	Premiums; not all risks insurable
Diversifying products, markets, suppliers	Spreads exposure	Lost economies of scale; less focus
Training	Fewer errors and breaches	Cost; trained staff may leave
Forecasting	Early warning	Unreliable when conditions shift
Cybersecurity measures	Fewer, smaller attacks	Ongoing cost; never complete

Method in steps: recommending a way to manage a risk

1. Name the type of risk and the event causing it.
2. Ask how likely it is and how damaging it would be.
3. Pick a method that reduces either the likelihood or the impact.
4. Weigh the method’s cost against the damage avoided, then judge.

Mini reminder. Larkspire’s online-only plan raises strategic risk (will customers book online?) and cybersecurity risk (card data on its site). Market research tests the first; firewalls, backups and staff training reduce the second.

Uncertainty

Approach	For	Against
Scenario planning	Prepares responses to several futures	Time-consuming; reality may match no scenario
Agile business	Adapts to any change; seizes opportunities	Constant change can unsettle staff; less tightly efficient

Four ways to develop agility: flat organisational structure (faster decisions), empowerment (decisions made close to the problem), transformational leadership (a vision that makes staff welcome change), cross-functional teams (ideas tested by every function at once).

Selbrooke Foods shows the chain: a flat structure and empowered store managers let it switch to a new local supplier within days when a drought hit its main supplier’s region.

Must-know distinctions

• Risk vs uncertainty: risk can be estimated; uncertainty cannot. Market research and forecasting suit risk; scenario planning and agility suit uncertainty.
• Contingency plan vs crisis management: the plan is written in advance; crisis management is the live response.
• Reasons for resistance vs ways to overcome it: four reasons, six methods. Do not mix the lists.
• Driving vs restraining forces: driving forces push towards the change; restraining forces hold it back.
• Strategic vs operational risk: strategic risk comes from big choices; operational risk comes from day-to-day disruption.

Evaluation hooks

Judgements on this topic usually turn on a few case facts. Use them to say “it depends on…”:

• Time available: a tight deadline favours faster methods (negotiation, coercion); more time allows education and participation.
• Size and finances: a small firm may not afford insurance for every risk, full scenario planning or a dedicated cybersecurity team.
• Likelihood and impact: spend most on risks that are both likely and damaging.
• Culture and leadership: an agile structure fails without leaders who trust staff to decide.
• Speed of change in the market: the faster the market moves, the more valuable agility is compared with detailed plans.

Quick self-test

1. Give one internal and one external reason for change.
2. Name Kotter and Schlesinger’s four reasons for resistance.
3. Which method suits resistance caused by misunderstanding?
4. Driving forces score 3 and 4; restraining forces score 2, 2 and 2. Which side is stronger, and by how much?
5. Name the type of risk: a firm fails a hygiene inspection.
6. Name the type of risk: a bank cuts a firm’s overdraft limit.
7. Why can’t a firm insure against a failed product launch?
8. State one disadvantage of diversifying suppliers.
9. What is scenario planning?
10. Explain how empowerment makes a business more agile.
11. Which of Kotter and Schlesinger’s methods involves offering incentives such as early-retirement terms?
12. State one advantage of a contingency plan.

Answers

1. Internal: e.g. a new chief executive. External: e.g. a competitor cuts prices.
2. Self-interest; misunderstanding and lack of trust; inertia; different assessments of the situation.
3. Education.
4. Driving 3 + 4 = 7; restraining 2 + 2 + 2 = 6. Driving forces are stronger by 1.
5. Compliance risk.
6. Financial risk (liquidity).
7. Its outcome depends on the firm’s own decisions and the probability cannot be calculated, so insurers will not cover it.
8. Smaller orders with each supplier can lose bulk discounts (or quality becomes harder to control).
9. Describing several plausible futures and planning a response to each.
10. Staff can act without waiting for approval, so the response to change is faster.
11. Negotiation.
12. A response is ready in advance, so damage is limited and recovery is faster.

Where marks are usually lost

• Swapping the four reasons for resistance with the six methods.
• Recommending coercion without weighing resentment and staff loss.
• Totalling force field scores but not saying what management should do next.
• Calling an unpredictable event a “risk” and suggesting insurance for it.
• Naming the type of risk without linking it to the case business.
• Listing methods of risk management without advantages and disadvantages.
• Describing agility in general terms without one of the four named ways.
• Giving stakeholder effects for “employees” only and ignoring other groups.

Official syllabus

OxfordAQA International AS and A-level Business (9725) specification, Version 1.1, for International AS exams May/June 2027 onwards and International A-level exams May/June 2028 onwards. Published by OxfordAQA.