16
The Rationale for Planning
Back in Business · Strand 3: Managing
9 Learning
Outcomes
Outcomes
Click a learning outcome to open it, then tap cards to explore the detail
16.1
Outline the internal and external changes that organisations encounter through their lifetime
Outline
▼
OUTLINEGive the main points. Give a brief explanation of each type of change and an example.
Internal: Change in leadership
New leaders or managers bring different priorities, communication styles or strategies. This can change the direction of the whole organisation and affect how staff work day-to-day.
+Internal: Adoption of new technology
Businesses adopt new digital tools or systems to improve efficiency. This requires staff training and can change workflows or job roles significantly.
+Internal: Restructuring or reorganisation
New departments or roles may be created as a business grows. This can change reporting lines, teamwork structures and workplace culture. It may also involve job losses.
+External: Technological advancements
Rapid changes in automation, AI and digital tools can force businesses to update systems, retrain staff or change how they sell. E.g. the rise of e-commerce forced traditional retailers to build online stores.
+External: Economic conditions
Inflation, interest rates and changes in consumer confidence affect business costs and customer spending. During a downturn, a business might cut costs or delay expansion. E.g. rising energy costs forcing manufacturers to reduce output.
+External: Government policy / legal changes
New laws, taxes or employment legislation can change how a business operates. E.g. GDPR changed how businesses collect and store customer data. Carbon taxes are pushing businesses towards greener practices.
+External: Competitors' innovations
A rival entering the market with lower prices or better technology can force a business to adapt. E.g. when Aldi and Lidl entered Ireland, Tesco and Dunnes responded with lower prices, loyalty schemes and Irish supplier messaging.
+16.2
Analyse the reasons for resistance to change in an organisation
Analyse
▼
ANALYSEExamine in detail. State the reason, explain why it causes resistance, and link to management responsibility. 6 marks per reason.
Fear of job loss
When automation, restructuring or cost-cutting is introduced, employees may worry their role will become unnecessary. This fear leads to anxiety and low morale. If management does not address it clearly, small worries can grow into strong resistance that blocks the change.
+Fear of failure
Some employees do not feel confident that they can learn new skills or adapt to new systems. They fear making mistakes or being judged for not keeping up. Without proper training and support from management, this fear can reduce productivity and create resistance.
+No clear benefit communicated
Staff are more willing to accept change when they understand how it benefits them personally, such as better pay, improved job security or new opportunities. If management fails to explain the benefits, employees may see the change as unnecessary or threatening, making it harder to get buy-in.
+Inertia (comfort with routine)
Many employees are comfortable with familiar routines and working methods. Change disrupts what they know, and even improvements can feel threatening. Strong leadership is needed to create a clear vision and inspire staff to move beyond their comfort zone.
+16.3
Identify the practices that promote innovation and entrepreneurial/intrapreneurial thinking
Identify
▼
IDENTIFYName and briefly state each practice. Intrapreneurs are employees who think and act like entrepreneurs within an existing organisation.
Leadership culture that encourages risk-taking
Leaders who reward creative thinking and treat failed ideas as learning experiences encourage staff to take initiative. When mistakes are not punished, employees are more likely to suggest new ideas and try new approaches.
+Training and resources for staff
Giving employees time, tools and training to explore new ideas creates the conditions for innovation. Access to resources shows the organisation values new thinking and is willing to invest in it.
+Teamwork and collaboration
Working together across teams or departments brings in different perspectives and skills. Collaboration often produces better ideas than individual thinking alone, especially when people from different backgrounds contribute.
+Recognition and rewards for innovation
Publicly recognising and rewarding employees who generate useful ideas motivates others to do the same. Rewards can be financial (bonuses) or non-financial (public praise, extra responsibility, career development).
+16.4
Outline a range of approaches which may help to overcome resistance to change
Outline
▼
OUTLINEGive the main points. For each approach, state what it involves and why it helps reduce resistance.
Open communication and consultation
Management clearly explains why the change is happening, what it involves and how it benefits staff. Inviting employees to ask questions and share concerns reduces fear and rumours. People are more likely to support decisions they understand and have had input into.
+Training and resource support
Providing workshops, mentoring and practical support gives staff the skills and confidence to adapt. When employees feel capable and prepared, anxiety about the change decreases. This is especially important when new technology or systems are being introduced.
+Lead by example
Managers who visibly support the change, adopt new systems themselves and remain positive set the tone for the whole organisation. When leaders are consistent and enthusiastic, staff are more willing to follow their lead.
+Employee empowerment
Giving employees a role in planning or implementing the change makes them feel valued and reduces the feeling that change is being imposed on them. People are less likely to resist something they have helped to shape.
+Rewarding staff
Recognising and rewarding employees who engage positively with change helps build momentum. Financial bonuses, public praise or additional responsibilities can motivate the wider team to follow suit.
+16.5
Outline what is meant by strategic planning and appreciate the importance of strategic planning as an ongoing process
Outline / Appreciate
▼
OUTLINEState the definition clearly, then explain why it must be an ongoing process rather than a one-off task.
Strategic planning: The ongoing process of defining an organisation's long-term goals and determining the best way to achieve them.
Why it must be an ongoing process
The business environment keeps changing. Competitors launch new products, technology evolves, consumer habits shift and new laws come into effect. A strategic plan that is not regularly reviewed quickly becomes outdated. The business must evaluate and adjust its plan based on new information, new risks and new opportunities.
Example: Netflix originally planned around DVD rental. It continuously revised its strategic plan as streaming emerged, and later again as original content became the competitive battleground.
+Example: Netflix originally planned around DVD rental. It continuously revised its strategic plan as streaming emerged, and later again as original content became the competitive battleground.
16.6
Describe the benefit of strategic planning for an organisation
Describe
▼
DESCRIBEGive a detailed account. State the benefit, explain what it means in practice, and link to how the organisation uses it.
Clarity and direction
A strategic plan acts as a roadmap for the organisation. It sets out long-term goals and the steps needed to reach them, reducing confusion in management decision-making. Everyone in the organisation knows what they are working towards and why.
+Ability to manage change
Strategic planning helps a business respond to unexpected challenges quickly because it has already thought through different scenarios. It gives structure to change and reduces the likelihood of panic or poor decisions under pressure.
+Resource efficiency
A strategic plan guides how the organisation allocates its resources: staff, capital, equipment and time. Spending is directed towards activities that support the long-term goals, reducing waste and improving overall efficiency.
+Competitive advantage
Regularly scanning the environment as part of strategic planning encourages innovation and helps the business spot opportunities before competitors do. Staying ahead of trends allows the business to lead rather than react.
+16.7
Explain the importance of planning for change and discuss how a force-field analysis could support strategically planning for change
Explain / Discuss
▼
DISCUSSOffer a considered, balanced review. Cover why planning for change matters, then explain the force-field analysis tool and its four steps.
Why planning for change is important
1. Reduces uncertainty and risk
Planning prepares the business for the unexpected, such as supply chain failures or disruptions. Contingency plans are built during this process so the business can keep operating when things go wrong.
+2. Improves decision-making
A strategic plan gives leaders clear priorities and structure when facing change. This allows better allocation of resources and clearer communication during difficult periods.
+3. Increases chances of success
Change is more likely to succeed when broken into manageable steps. Tactical plans translate big strategies into short-term actions for teams so everyone knows what they need to do.
+4. Supports employee engagement
Staff accept change more readily when they understand the reason behind it. Linking change to the business mission statement helps employees see how the change fits the bigger picture and builds motivation.
+Force-Field Analysis — definition
A Force-Field Analysis is an approach used to identify and analyse forces that drive and inhibit change. Think of it as a tug-of-war: driving forces pull towards the change, restraining forces hold it back. Both can be internal (staff attitudes, budgets) or external (customer expectations, laws).
Tap any force below to learn what it means, then see the four steps below.
Tap any force below to learn what it means, then see the four steps below.
Tap any force to see what it means
▶▶ Driving Forces
Growing customer demand for online sales
Lower running costs without physical stores
Access to data and customer insights online
→
Strategic Decision
←
Restraining Forces ◀◀
Loss of loyal in-store customers
Reduced visibility in local communities
Need to hire extra staff for logistics
The four steps of a Force-Field Analysis
1
Define the change clearly. State the proposed change precisely — e.g. moving all operations online, launching a new product, returning to full office-based work.
2
Identify driving and restraining forces. List all forces for the change on one side and all forces against it on the other. These can be internal (staff attitudes, budgets) or external (customer expectations, laws).
3
Assign a score to each force. Give each force a score from 1 (weak) to 5 (strong). This helps compare the overall strength of driving and restraining forces objectively.
4
Analyse and decide. If driving forces outweigh restraining forces, move forward. If not, try to strengthen driving forces, reduce restraining forces, or revise the strategy. The analysis should end with a finding or conclusion.
16.8
Explain what is meant by contingency planning in terms of crisis management in an organisation
Explain
▼
EXPLAINGive a detailed account. Define contingency planning, explain what crisis management involves, and say what a good contingency plan helps the business to do.
Contingency planning: A back-up plan an organisation prepares in advance to deal with disruption from unexpected events or emergencies.
What it involves
A contingency plan identifies possible risks, outlines backup procedures and assigns responsibilities for dealing with a crisis. It is prepared before an emergency happens so the business can act quickly and calmly rather than reacting in panic.
+Why it matters for crisis management
When a crisis hits, such as Storm Eowyn cutting off power, a cyberattack or a supply chain breakdown, a business with a contingency plan can keep operating. It protects the business's assets, maintains service for customers, minimises financial loss and protects reputation.
+Examples of crises it covers
Storm damage to premises, IT system failures or data breaches, supply chain disruptions, fire or flood, sudden loss of key staff, a product safety issue requiring recall. Each type of crisis needs its own specific response plan.
+16.9
Discuss the factors that should be considered when developing a contingency plan
Discuss
▼
DISCUSSOffer a considered, balanced review. For each factor: state what it is, explain why it matters, and give an example. The spec names cost, time and risk as the key factors. Communication is also in the textbook.
Cost
Developing a contingency plan involves spending money on things like staff training, backup equipment, insurance and securing alternative suppliers. The business must weigh the cost of preparing in advance against the potential losses if a crisis happens with no plan in place.
Example: Installing a backup generator in a restaurant may cost thousands, but it could prevent a full loss of revenue on a busy Friday night if the power goes out.
+Example: Installing a backup generator in a restaurant may cost thousands, but it could prevent a full loss of revenue on a busy Friday night if the power goes out.
Timing
The more sudden or time-sensitive a risk is, the more detailed the plan needs to be. If a crisis can unfold in seconds, such as a cyberattack locking staff out of their systems, the response procedures must be ready in advance with no time for decision-making during the event.
Example: A cyberattack on an online retailer's ordering system could happen instantly. Emergency access procedures and a backup system must already be in place.
+Example: A cyberattack on an online retailer's ordering system could happen instantly. Emergency access procedures and a backup system must already be in place.
Risk
Not all risks are equally likely or damaging. The business should prioritise risks that are both high probability and high impact. Planning for a very unlikely but low-damage event is less urgent than planning for a likely, high-damage one.
Example: An online retailer should prioritise a backup for its ordering system during the Christmas peak season, when a failure would cause maximum disruption and financial loss.
+Example: An online retailer should prioritise a backup for its ordering system during the Christmas peak season, when a failure would cause maximum disruption and financial loss.
Communication
In a crisis, fast and clear communication is essential. A good contingency plan sets out who to contact, how to notify staff and customers, and how updates will be shared publicly. Confusion about who is responsible for communication can make a crisis significantly worse.
Example: A business could have social media response templates ready for a service disruption so it can communicate with customers immediately without drafting messages under pressure.
+Example: A business could have social media response templates ready for a service disruption so it can communicate with customers immediately without drafting messages under pressure.
Click an LO group to see its mind map.
📌 16.1 + 16.2 Change & Resistance
Change
Internal
Leadership change | New technology | Restructuring / reorganisation
External
Technological advances | Economic conditions | Government policy | Competitor innovations
Resistance (16.2)
Fear of job loss | Fear of failure | No clear benefit communicated | Inertia (comfort with routine)
📌 16.3 + 16.4 Innovation & Overcoming Resistance
Overcome
Promote Innovation (16.3)
Leadership culture encouraging risk-taking | Training and resources
Teamwork and collaboration | Recognition and rewards
Overcome Resistance (16.4)
Open communication and consultation | Training and support
Lead by example | Employee empowerment | Rewarding staff
📌 16.5 + 16.6 Strategic Planning
Strategic
Planning
Planning
Definition
Ongoing process of defining long-term goals and how to achieve them. Must be reviewed as the environment changes.
4 Benefits (16.6)
Clarity and direction | Ability to manage change
Resource efficiency | Competitive advantage
📌 16.7 Force-Field Analysis
FFA
Driving forces
Internal or external forces that push the change forward
Restraining forces
Internal or external forces that hold the change back
4 Steps
1. Define the change | 2. List driving and restraining forces | 3. Score each force (1-5) | 4. Analyse and decide (finding/conclusion required)
Why it helps
Reduces uncertainty and risk | Improves decision-making | Increases chances of success | Supports employee engagement
📌 16.8 + 16.9 Contingency Planning
Contingency
Plan
Plan
Definition
A back-up plan prepared in advance to deal with unexpected events or crises. Helps the business respond quickly, protect assets, maintain operations and minimise damage.
4 Factors (16.9)
Cost: weigh preparation costs vs potential losses
Timing: more sudden risk = more detailed plan needed
Risk: prioritise high probability AND high impact risks
Communication: who to contact, how to notify, public messaging
Filter by LO then tap any card to study it.
Filter by LO then tap Start. Answers shuffle every time.
16.2Analyse four reasons for resistance to change in an organisation.HL Paper 1 · Q5(d)▼
AnalyseExamine in detail. State the reason, explain what it causes, and link to what management can do about it. 6 marks each.
Model solution
1. Fear of job lossWhen a business introduces new technology or restructures, employees may worry their role will become unnecessary. This fear leads to anxiety and low morale. If management does not address it clearly, small worries can grow into strong resistance that slows or blocks the change.
2. Fear of failureSome employees do not feel confident they can learn new skills or use new systems. They are afraid of making mistakes or falling behind. Without proper training and support, this fear reduces productivity and turns into resistance before the change even begins.
3. No clear benefit communicatedStaff are more willing to accept change when they can see what is in it for them, such as better job security, new opportunities or improved working conditions. If management does not clearly explain the benefits, employees see the change as unnecessary or threatening, making it much harder to get buy-in.
4. InertiaMany employees are comfortable with familiar routines. Even when a change is an improvement, it disrupts what they know. Without strong leadership that creates a clear vision and inspires confidence, employees stay tied to old habits and slow down the whole process.
16.4Outline two ways companies can overcome resistance to change.HL Paper 2 · Q3(b)▼
OutlineGive the main points. For each approach: say what it involves and why it helps.
Model solution (three options given)
1. Open communication and consultationManagement explains clearly why the change is happening, what it involves and what the benefits are for staff. Employees are given the chance to ask questions and raise concerns. This reduces fear and rumours. People are far more likely to support a decision they understand and have had a say in.
2. Training and resource supportThe business provides workshops, one-to-one coaching or online training so staff have the skills to adapt. When employees feel prepared and capable, anxiety about the change drops. This is especially important when new technology or software is being introduced.
3. Lead by exampleManagers who visibly embrace the change, adopt new systems themselves and stay positive set the tone for the whole organisation. When leaders are consistent and enthusiastic, staff take their cue from them and are more willing to get on board.
16.7Use a Force Field Analysis to examine the potential effects of closing two restaurants and returning to one original location.HL Paper 2 · Q1(d)▼
DiscussUse the force-field framework. Identify driving forces (reasons to close), restraining forces (reasons against), score each, and reach a finding or conclusion.
Model solution
| Driving Forces (for closing) | Restraining Forces (against closing) |
|---|---|
| Lower costs (5/5) — Running one restaurant cuts rent, wages and utility bills dramatically, reducing financial pressure on the business. | Loss of revenue (4/5) — Closing two restaurants removes income streams the business already has. Even if costs fall, overall profit may not improve. |
| Simpler operations (4/5) — Managing one site makes it much easier to maintain quality, train staff consistently and monitor performance. | Staff redundancies (4/5) — Letting staff go is costly, both financially and in terms of reputation. It can also damage morale among remaining employees. |
| Refocus on quality (3/5) — Returning to the original location allows the owners to concentrate on what made the first restaurant successful and restore the brand identity. | Loss of loyal customers (3/5) — Customers at the other two locations may not travel to the original site. The business risks losing a significant part of its customer base. |
16.7Using examples from the text, identify two driving forces and two restraining forces relating to the expansion of EverGlow Organics Ltd.OL Paper 1 · Q1(c)▼
IdentifyName and briefly explain each force. Driving forces support the change; restraining forces work against it. Use detail from the stimulus.
Model solution
Driving Force 1: Growing demand for organic productsThere is growing demand for organic products in Europe and Asia. This gives EverGlow a clear market opportunity to expand into and increases the chance the business will be successful in new markets.
Driving Force 2: Potential to save money through economies of scaleProducing at a larger scale reduces the cost per unit. As EverGlow expands, it can negotiate better deals with suppliers and spread fixed costs over more sales, improving its profit margins.
Restraining Force 1: Financial risk from currency and funding challengesEverGlow is concerned about changing exchange rates and the difficulty of securing sufficient funding. These financial uncertainties make the expansion riskier and could affect the business if the investment does not deliver the expected returns quickly enough.
Restraining Force 2: Established competitors in new marketsThere are already well-established businesses operating in the markets EverGlow wants to enter. Breaking into these markets and convincing customers to switch from existing brands is a significant challenge.
16.7Indicate whether each statement is a driving force or a restraining force when moving to a hybrid working model.OL Paper 2 · Q2(e)▼
IdentifyDriving forces support the move to hybrid working. Restraining forces argue against it.
Answers
May result in employees feeling isolatedRestraining force. Employees working from home two days a week may feel cut off from the team. This could reduce morale and team cohesion, which is an argument against the change.
May bring about a higher likelihood of confidentiality breachesRestraining force. Employees working from home may use less secure networks or have less oversight, increasing the risk that sensitive business information is accessed or shared inappropriately.
May lead to difficulty in monitoring employee productivityRestraining force. Managers cannot easily observe staff working from home. This makes it harder to measure output and ensure employees are staying on task.
Would fulfil an element of the Corporate Wellness ProgrammeDriving force. Giving employees flexibility to work from home supports their work-life balance and wellbeing. This aligns with the business's stated commitment to employee health and satisfaction.
16.8Explain the term contingency planning.OL Paper 2 · Q4(e)▼
ExplainGive a detailed account. State what it is, say what it involves, and explain what it helps the business do.
Model solution
What contingency planning isContingency planning means preparing back-up plans or procedures in advance so a business can deal with unexpected events or crises.
What it involvesThe business identifies possible risks, decides what procedures to follow if those risks happen, and assigns responsibility to specific people so everyone knows their role in a crisis.
What it helps the business doA good contingency plan means the business can respond quickly, protect its assets, keep serving customers and minimise financial damage. For example, many businesses that had no contingency plan in place suffered serious losses when Storm Eowyn hit Ireland in January 2025.
16.9Discuss one factor that should be considered when developing a contingency plan.OL Paper 2 · Q4(f)▼
DiscussOffer a considered review. State the factor, explain why it matters, and give a practical example. Three options are given below.
Three acceptable options
Option 1: CostPreparing a contingency plan costs money. The business needs to pay for things like staff training, backup equipment, insurance and securing alternative suppliers. Management must weigh up the cost of being prepared against the potential loss if a crisis happens and there is no plan in place. For example, a restaurant might spend money installing a backup generator. It is expensive, but it could prevent a full shutdown on a busy evening if the power goes out.
Option 2: TimingThe more suddenly a risk can happen, the more detailed and ready the plan needs to be. If there is no time to think during a crisis, the response must already be agreed and practised. For example, a cyberattack can lock a business out of its own systems in seconds. Emergency access procedures and a backup system must be set up in advance so the business can keep working without delay.
Option 3: RiskNot all risks are equally likely or equally damaging. The business should focus most of its planning on risks that are both highly likely to happen and would cause the most damage if they did. It is not possible to plan for every scenario, so prioritising is essential. For example, an online retailer should prioritise a backup ordering system in the run-up to Christmas, when a technical failure would be most costly.
