BUSMAN U4 AOS2 KEY KNOWLEDGE NOTES

22 Sep 2025

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VCE > Units 3&4 > Business Management

This area of study focuses on the role of leadership and strategies in managing change within a business. Leadership is essential in change management, as effective leaders motivate and support employees, making them more likely to accept change. Leaders use informational, interpersonal, and decision-making skills to successfully guide transformation. Businesses also apply various management strategies to respond to key performance indicators (KPIs) or pursue new opportunities, such as staff training, motivating employees, adapting management styles, investing in technology, redeploying resources, innovation, global sourcing, overseas manufacture, and outsourcing. Corporate culture is another key factor, with strategies such as establishing rituals, changing management styles, training staff, using role models, communicating values, hiring for cultural fit, and rewarding appropriate behaviour used to develop a positive culture. Peter Senge’s theory of the learning organisation highlights five key principles—systems thinking, personal mastery, mental models, shared vision, and team learning—which foster a positive culture of continuous learning, collaboration, and adaptability. When implementing change, managers can use low-risk strategies such as communication, empowerment, support, and incentives, which build long-term trust and acceptance, or high-risk strategies such as manipulation and threat, which may achieve short-term results but risk damaging corporate culture and relationships. Lewin’s three-step change model (unfreeze, change, refreeze) provides a structured approach to implementing change and embedding it into business operations. The impact of change on stakeholders—including owners, managers, employees, customers, suppliers, and the general community—can be both positive and negative, depending on how the change is managed. Corporate Social Responsibility (CSR) considerations are also important during change, ensuring that the business acts ethically towards the environment, employees, customers, suppliers, and the community. Finally, businesses must review KPIs after change to evaluate whether the transformation has been successful and to identify any areas requiring further improvement.