Change Management Business Revision 4 — Questions and Answers
Question 1: A business undergoing revision implements a 'pilot program' before full rollout. The primary purpose is to:
- Avoid communicating the change to employees
- Test the change in a controlled environment to identify issues before scaling (Correct answer)
- Reduce the budget allocated to the initiative
- Comply with aviation industry regulations
Correct answer: Test the change in a controlled environment to identify issues before scaling
A pilot program tests changes on a small scale, allowing organizations to identify problems and refine the approach before full deployment.
Question 2: During a business revision, which stakeholder group typically has the highest formal authority to approve major structural changes?
- Middle management
- The board of directors (Correct answer)
- Front-line employees
- External consultants
Correct answer: The board of directors
The board of directors holds the highest formal governance authority in a corporation and must approve major structural or strategic changes.
Question 3: A company revising its supply chain strategy applies the 'make-or-buy' decision framework. This involves deciding whether to:
- Produce goods internally or outsource production to external suppliers (Correct answer)
- Market products domestically or internationally
- Hire permanent staff or use temporary contractors only
- Accept credit card payments or cash only
Correct answer: Produce goods internally or outsource production to external suppliers
The make-or-buy decision determines whether it is more efficient and cost-effective to produce something in-house or purchase it from a third party.
Question 4: In business revision, a 'gap analysis' is used to:
- Evaluate competitor weaknesses only
- Identify the difference between current performance and desired future performance (Correct answer)
- Calculate gaps in employee vacation schedules
- Measure physical distance between company locations
Correct answer: Identify the difference between current performance and desired future performance
Gap analysis compares current state to the target state to identify what needs to change to achieve organizational goals.
Question 5: A business revision team uses a RACI matrix. What does 'I' stand for?
- Initiator
- Informed (Correct answer)
- Inspector
- Integrator
Correct answer: Informed
In a RACI matrix, 'I' stands for Informed — those who are kept up to date on decisions and progress but are not directly involved.
Question 6: Which type of organizational change involves fundamental redesign of core business processes from scratch rather than incremental improvement?
- Continuous improvement (Kaizen)
- Business Process Reengineering (BPR) (Correct answer)
- Total Quality Management (TQM)
- Six Sigma DMAIC
Correct answer: Business Process Reengineering (BPR)
Business Process Reengineering involves radically redesigning business processes to achieve dramatic improvements in cost, quality, or speed.
Question 7: A business revision plan must address 'transition risk.' This refers to:
- The risk of stock price volatility during earnings season
- Risks arising from the period between old and new operating models (Correct answer)
- The danger of employee promotions during restructuring
- Legal risks from international tax transitions
Correct answer: Risks arising from the period between old and new operating models
Transition risk covers operational, financial, and people-related risks that occur during the changeover from the current to the future state.
Change Management Business Revision 4
A business undergoing revision implements a 'pilot program' before full rollout.
The primary purpose is to: