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Evaluate these two options and recommend which option might be preferred by Morrison’s shareholders - Edexcel - A-Level Business - Question 1 - 2017 - Paper 2
Question 1
Evaluate these two options and recommend which option might be preferred by Morrison’s shareholders. Morrisons’ revenue and share price have increased for the first... show full transcript
Worked Solution & Example Answer:Evaluate these two options and recommend which option might be preferred by Morrison’s shareholders - Edexcel - A-Level Business - Question 1 - 2017 - Paper 2
Step 1
Transformational Leadership
Answer
David Potts' transformational leadership is characterized by his ability to implement a vision through radical changes. He has replaced several directors, which may introduce fresh ideas and strategies, including the 'I’m cheaper' campaign. This drastic shift aims to enhance company performance by aligning it more closely with consumer expectations.
Step 2
Possible Counterbalance
Answer
While Potts’ leadership is pivotal, the recent increase in performance may also be attributed to external factors such as increased consumer confidence. For instance, consumers may have increased their spending at Morrisons due to a 0.6% rise in revenue, influenced by broader economic improvements and lower interest rates.
Step 3
Potential Judgment
Answer
It’s essential to consider that David Potts is new in his role, making it challenging to assess the long-term impact of his leadership on Morrisons. While transformation is underway, attributing improved performance solely to his actions may overlook significant external influences, like disposable income changes and market trends.