Evaluate the importance of developing a change culture to the successful implementation of option 2.

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2021). The mark or mark type is shown in brackets.

1. [Level 3 Knowledge 3 marks] 3 marks Good understand-ing shown
2. [Level 3 Application 3 marks] 3 marks Good application to the case
3. [Level 3 Analysis 4 marks] 3-4 marks Good use of theory and/or reasoned argument
4. [Level 3 Evaluation 10 marks] 7-10 marks Good judgement shown throughout with well supported conclusion/recommendation, focused on the business in the case
5. [Knowledge] Culture means the values and beliefs of an organisation – especially senior management. Culture of change means encouraging and facilitating strategic change in an organisation.
6. [Knowledge] Nature of strategic management and implementation, such as long term, irreversible change.
7. [Knowledge] Implementation means putting into effect strategic change.
8. [Knowledge] These changes will affect employees – opportunities but also potential threats.
9. [Knowledge] Business planning as part of implementation, including mission, objectives and functional business plan sections.
10. [Application] Option 2 is diversification or product development as new product of fitness centres. AC has some knowledge of the market as already sells to gyms.
11. [Application] Current problems at AC that need to be avoided/solved when diversifying: Labour turnover of 15%
12. [Application] Current problems at AC that need to be avoided/solved when diversifying: Employees do not feel valued or trusted.
13. [Application] Current problems at AC that need to be avoided/solved when diversifying: AC's current organisational structure is centralised.
14. [Application] Current problems at AC that need to be avoided/solved when diversifying: Expertise in running fitness centres is necessary to develop.
15. [Application] Current problems at AC that need to be avoided/solved when diversifying: Need to recruit new staff for the gyms and integrating into the culture of the business.
16. [Analysis] Benefits of developing a change culture: Employees could actually add something to the decision and its implementation.
17. [Analysis] Benefits of developing a change culture: Less resistance to change makes responding to a dynamic environment more effective.
18. [Analysis] Benefits of developing a change culture: Decisions can be made more quickly resulting in first mover advantage in a competitive market.
19. [Analysis] Benefits of developing a change culture: Important in a globalised market to be flexible and responsive.
20. [Analysis] Change can be promoted through: Clear mission statement and sense of direction
21. [Analysis] Change can be promoted through: Effective communication
22. [Analysis] Change can be promoted through: Strong leadership and management
23. [Analysis] Change can be promoted through: Employee involvement
24. [Analysis] Change can be promoted through: Team working/project champions.
25. [Evaluation] Without a culture of change, strategic implementation can become very difficult and less successful – putting at risk a large investment.
26. [Evaluation] Employee fear of change and resistance to change will be much greater without an effective culture of change.
27. [Evaluation] It is vital to the success of the implementation of either of these options that employees are involved, consulted and communicated with.
28. [Evaluation] A culture of change may not be very important because existing employees will not be affected and may see the diversification as increasing job security and prospects.
29. [Evaluation] It may only be at a more senior management level and at head office that a culture of change is important as factory workers will not be directly affected.
30. [Evaluation] AC's mission and objectives might need to change.
31. [Evaluation] ARA