Photo AI
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' improved performance Morrisons' revenue and share p... 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
Reasons why transformational leadership is effective
Answer
Transformational leadership plays a crucial role in initiating and guiding positive changes within organizations. David Potts, as the new management, has implemented fresh ideas that cater to market demands. The new 'I'm cheaper' campaign signifies a strategic shift aimed at appealing to value-driven consumers, potentially enhancing customer loyalty and market competitiveness.
Step 2
Possible counterbalance to performance improvement
Answer
While the increase in revenue and share price may be attributed to Potts' leadership, there are external factors to consider. For instance, improvements in consumer confidence may have led to increased spending at Morrisons. Additionally, factors such as lower interest rates could have resulted in higher disposable incomes, thereby encouraging shopping at Morrisons.
Step 3
Potential judgement on David Potts' leadership impact
Answer
Although David Potts has been instrumental in introducing transformational leadership, it is essential to assess the long-term effects of his strategies. Being newly appointed means it might not be immediately clear how sustainable the changes will be. The observed performance improvement could be influenced heavily by external economic factors rather than internal changes alone.