Practice Exam 4
VCE Business Management Units 3 & 4 | 15 minutes reading time, 2 hours writing time
✎ Complete ALL questions on paper before opening the Model Answers lesson. No notes permitted. This paper has two sections: Section A (short-answer and extended-answer questions, 40 marks) and Section B (short-answer and extended-answer questions based on a case study, 35 marks). Total marks: 75. Aim for approximately 1 minute per mark.
SECTION A — 40 MARKS
Question 1 (4 marks)
Explain the purpose of reviewing performance in a business and outline two reasons why businesses use Key Performance Indicators (KPIs).
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KPIs (a)
Question 2 (3 marks)
Explain two financial KPIs a business could use to review its performance.
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KPIs (b)
Question 3 (3 marks)
Explain two non-financial KPIs a business could use to review its performance, and why these are important.
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Question 4 (4 marks)
Distinguish between a proactive and a reactive approach to change, providing an example of each.
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Question 5 (4 marks)
Explain the difference between internal and external pressures for change, providing one example of each.
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Force Field Analysis (a)
Question 6 (3 marks)
Explain the purpose of Lewin’s Force Field Analysis when planning organisational change.
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Force Field Analysis (b)
Question 7 (3 marks)
Explain two driving forces and two restraining forces a business might identify when using Force Field Analysis in response to declining KPI results.
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Question 8 (4 marks)
Explain the difference between a low-risk and a high-risk change management strategy, providing an example of each.
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Question 9 (4 marks)
Explain two reasons why employees may resist organisational change.
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Question 10 (4 marks)
Explain Porter’s cost leadership and differentiation strategies, and explain how declining KPI results might indicate a business needs to reposition using one of these strategies.
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Question 11 (4 marks)
Explain how effective use of the management skill of decision-making can help a business respond to poor KPI results.
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SECTION B — CASE STUDY — 35 MARKS
Case Study — Harbourline Fashion
Industry: Retail (fashion apparel)
Harbourline Fashion is an Australian mid-market clothing retailer operating 45 stores in shopping centres across NSW, Victoria and Queensland, employing 620 staff. Once a strong performer, Harbourline’s KPI reports over the past three years show concerning trends: net profit has fallen from $9.2 million to $2.1 million, market share has dropped from 12% to 6% as online-only retailers such as international fast-fashion apps capture younger customers, and staff turnover has risen from 22% to 41% per year. Customer satisfaction surveys show declining scores, with shoppers citing outdated in-store technology, limited stock availability, and a lack of online-in-store integration. Newly appointed CEO Jordan Whitfield has proposed a turnaround plan: closing 12 underperforming stores, investing $6 million in an omnichannel e-commerce platform allowing online ordering with in-store pickup and returns, retraining remaining store staff in personalised styling services, and repositioning Harbourline as a premium personal-styling destination rather than competing on price. The plan requires significant organisational change within twelve months. Several long-serving store managers, worried about job losses from store closures and unfamiliar with new technology, have been vocal in their opposition at recent staff meetings, while head office and younger staff have generally welcomed the direction of the plan.
Reviewing Performance (a)
Question 12 (3 marks)
Referring to the case study, identify and explain two KPIs that indicate Harbourline Fashion’s declining performance.
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Reviewing Performance (b)
Question 13 (3 marks)
Referring to the case study, explain whether the pressures for change facing Harbourline are primarily internal or external, justifying your answer with evidence from the case study.
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Force Field Analysis (a)
Question 14 (3 marks)
Referring to the case study, identify and explain two driving forces for Harbourline’s turnaround plan.
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Force Field Analysis (b)
Question 15 (3 marks)
Referring to the case study, identify and explain two restraining forces or sources of resistance to the turnaround plan.
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Question 16 (6 marks)
Recommend and justify whether Harbourline should adopt a low-risk or a high-risk change management approach to implement the turnaround plan, referring to specific details in the case study.
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Question 17 (6 marks)
Explain how Harbourline could use Porter’s differentiation strategy to reposition itself against online fast-fashion competitors, referring to specific details from the case study.
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Question 18 (5 marks)
Referring to the case study, explain how management could use one motivation theory (Maslow’s Hierarchy of Needs or Locke’s Goal Setting Theory) to address staff concerns about the turnaround plan.
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Question 19 (6 marks)
Evaluate the likely effectiveness of Harbourline’s turnaround plan in improving its KPI performance over the next two years. In your response, refer to specific details from the case study and identify one risk to the plan’s success.
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✓ Finished? Open the next lesson – Model Answers – to mark your work.
