Strategy, Risk and Managing Change | OCR A-Level Business H436 (H436)

Strategy, Risk and Managing Change

440 questions
31 subtopics
Component 03: Strategy, risk and managing change
Component 03

Strategy, Risk and Managing Change is examined in Component 03, Strategy, risk and managing change.

It covers business planning and the reduction of risk, the uses and limitations of a business plan, business strategy and the interdependence of business decisions, SWOT analysis, PEST analysis, the Ansoff matrix, Porter's five forces, opportunity cost, risk and uncertainty in decision making, the stages of making a business decision, corporate planning from objectives to evaluation, Handy's four organisational cultures, the payback period, average rate of return, net present value and discounted cash flow, judging an investment decision, contingency planning and disaster recovery, crisis management and the response to a crisis, insurance and the protection it gives a business, internal and external causes of change, the effects of change on a business, barriers to change and resistance, Lewin's force field analysis, critical path analysis and the critical path, total float, free float and the use of a network, monitoring change with quantitative and qualitative data, ethical treatment of workers and suppliers, ethical marketing and community engagement, consumer and employee protection law, pollution, waste and the environmental audit, sustainability, net zero and the circular economy and ESG reporting.

Sample questions from Strategy, Risk and Managing Change

Answer each one closed book first, then open the answer.

Business planning and the reduction of risk

State what is meant by risk in the context of business planning.

Show the answer
Risk is the chance that actual results differ from those expected, leaving the business with a loss it had not allowed for.
SWOT analysis

Why does a SWOT analysis date quickly?

Show the answer
It is a snapshot: opportunities are taken by rivals and new threats appear, so it must be repeated as conditions change rather than treated as permanent.
Opportunity cost, risk and uncertainty in decision making

Give an example of a risk that a business can quantify.

Show the answer
The chance of a machine breaking down, which can be estimated from maintenance records and is therefore something an insurer will price.
Handy's four organisational cultures

Give one drawback of a role culture.

Show the answer
It responds slowly to change, because procedures have to be rewritten first and nobody is expected to act outside their own job description.
Judging an investment decision

Which technique gives a percentage that can be compared directly with the cost of borrowing?

Show the answer
The average rate of return does, because it expresses average annual profit as a percentage of the sum invested.
Insurance and the protection it gives a business

A window cleaning firm works on busy high street shopfronts. Which type of cover matters most, and why?

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Public liability matters most, because dropped equipment or water damage could injure passers-by or ruin stock, and such a claim would exceed the firm's assets.
Lewin's force field analysis

Give two typical restraining forces against adopting new production technology.

Show the answer
The capital cost of the equipment, and employees' fear of redundancy or of being unable to operate it.
Monitoring change with quantitative and qualitative data

Explain one weakness of relying only on quantitative data to monitor change.

Show the answer
Numbers show what has happened but not why, so a fall in output could be a temporary learning effect or a permanent fault in the new process.

The 31 subtopics

One subtopic is one session. Work down the list.

Subtopic	What it covers	Questions
Business planning and the reduction of risk	Recall questions on what business planning is, how it reduces risk, why it matters most to a start-up, and what risk means in this context.	13
The uses and limitations of a business plan	Recall questions on what a business plan is and why lenders and investors ask for one, the resources and financial forecasts it sets out, scenario planning, how plans support objectives and recruitment, and why a plan never guarantees success.	13
Business strategy and the interdependence of business decisions	Recall questions on business strategy and the difference between a strategy and a tactic, strategic and operational decisions, and how decisions in marketing, operations, finance and people depend on one another.	15
SWOT analysis	Recall questions on what SWOT stands for, which elements are internal and which external, examples of each, and why the distinction is useful.	14
PEST analysis	Recall questions on what PEST stands for, political, economic, social and technological influences on a business, how a PEST analysis feeds into strategy, and its limitations for multinational and short-term decisions.	13
The Ansoff matrix	Recall questions on the axes and four growth strategies of the Ansoff matrix, market penetration, product development, market development and diversification, the risk in each quadrant, and the matrix's uses and limitations.	15
Porter's five forces	Recall questions on Porter's five forces, the threat of substitution and of new entry, buyer and supplier power, competitive rivalry, how a business uses the model to improve its position, and its limitations.	15
Opportunity cost, risk and uncertainty in decision making	Recall questions on opportunity cost in business decisions, the difference between risk and uncertainty, the relationship between risk and reward, reducing risk in a decision, and how owners' attitudes shape the choice.	14
The stages of making a business decision	Recall questions on the four stages of a structured decision-making process, defining the problem, researching the context, analysing and evaluating solutions, qualitative factors, and the benefits and drawbacks of a formal process.	13
Corporate planning from objectives to evaluation	Recall questions on corporate planning and its six stages from gathering information and setting objectives to implementation, monitoring and evaluation, and the benefits and criticisms of corporate planning.	13
Handy's four organisational cultures	Recall questions on organisational culture and Charles Handy's power, role, task and person cultures, which culture suits different businesses, the drawbacks of each, and why culture is hard to change.	14
The payback period	Recall questions on the payback period and its formula, calculating payback with constant and uneven cash inflows, why cash-short and fast-changing businesses favour it, and its main weaknesses as an appraisal technique.	14
Average rate of return	Recall questions on the average rate of return and its formula, calculating average annual profit and ARR, comparing ARR with a criterion rate or interest on deposit, and its advantages and weaknesses compared with payback.	14
Net present value and discounted cash flow	Recall questions on net present value and the time value of money, discount factors and present values, calculating NPV and interpreting positive and negative results, choosing a discount rate, and the advantages and limitations of NPV.	15
Judging an investment decision	Recall questions on investment decisions, comparing payback, average rate of return and net present value, qualitative factors, forecast quality and sensitivity, opportunity cost, and why a business may accept a project with a poor appraisal.	13
Contingency planning and disaster recovery	Recall questions on business continuity, contingency plans and disaster recovery plans and the difference between them, risk assessment, testing a continuity plan, and the costs, benefits and limitations of contingency planning.	14
Crisis management and the response to a crisis	Recall questions on crises in business and the management, communication and operational responses to them, speed and honesty in communication, product contamination and recalls, and the long-term impact of handling a crisis well or badly.	14
Insurance and the protection it gives a business	Recall questions on the purposes of insurance, premiums and excesses, premises, vehicle, employers' liability and public liability insurance, which cover suits different businesses, and why not every risk can be insured.	16
Internal and external causes of change	Recall questions on internal causes of change such as growth, poor performance, new owners and new leaders, external causes such as competition, government policy and ethical expectations, and temporary shocks versus permanent shifts.	16
The effects of change on a business	Recall questions on how significant change affects decision making, competitiveness, employees, the marketing and operations functions, cash flow, shareholders and customers, and why its effects are felt unevenly.	13
Barriers to change and resistance	Recall questions on the common barriers to change, why employees resist it, weak leadership support, unclear vision, insufficient resources and culture as barriers, and how communication and training reduce resistance.	14
Lewin's force field analysis	Recall questions on Lewin's force field analysis, driving and restraining forces for change, how forces are scored and presented, why weakening restraining forces is preferred, and the benefits and limitations of the analysis.	13
Critical path analysis and the critical path	Recall questions on critical path analysis and networks, calculating earliest start and latest finish times, identifying the critical path and minimum project duration, the effect of overruns, and the benefits and limitations of the method.	16
Total float, free float and the use of a network	Recall questions on total float and free float, how each is calculated and how they differ, float on the critical path, the effect of delays on completion, and using a network to manage resources and project cash flow.	14
Monitoring change with quantitative and qualitative data	Recall questions on why change is monitored after implementation, the quantitative and qualitative measures used, and calculating productivity before and after.	13
Ethical treatment of workers and suppliers	Recall questions on business ethics, pay gaps, working conditions, diversity, equity and inclusion, legal and ethical obligations to employees, transparent procurement, payment terms for small suppliers and ethical sourcing.	15
Ethical marketing and community engagement	Recall questions on unethical pricing, misleading promotions and hidden fees, targeting vulnerable customers, transparent pricing, community engagement, employee volunteer programmes, local sponsorship and criticisms of corporate charitable giving.	13
Consumer and employee protection law	Recall questions on the standards goods and services sold to consumers must meet, the costs and benefits of consumer protection law, the national minimum wage, working time rules, employment contracts, health and safety duties and fair and unfair dismissal.	17
Pollution, waste and the environmental audit	Recall questions on air, water and noise pollution, climate change and environmental destruction caused by business, the problems and costs of waste, environmental audits, and how reducing environmental impact can lower costs.	15
Sustainability, net zero and the circular economy	Recall questions on sustainability and its three pillars, supply chain transparency and traceability, net zero and carbon offsetting, the circular economy and the three Rs of waste, nature positive approaches, green technology and misleading eco-claims.	17
ESG reporting	Recall questions on what ESG stands for, the governance element, ESG reporting and the environmental measures and responsible sourcing it discloses, its use by investors, its benefits, costs and criticisms, and greenwashing.	12

Strategy, Risk and Managing Change is 440 of the 2,383 questions in the guide.Get the guide, £8

How the guide is worked

Answering a question from memory stores it far better than reading the answer again. The guide runs that as a fixed procedure on one subtopic at a time, about twenty minutes a session.

Step 1 · Closed book
Cover the answers. Work through one subtopic and write down what you can. Leave blanks where you have nothing.
Step 2 · Open book
Go back to the top. Read each printed answer and write it out in full, including the ones you had right.
Step 3 · Closed book again
Same questions, same order, from memory. The gap between pass one and pass three is the session result.

Read the full method, the return schedule and the research behind it.