VICBusiness ManagementSyllabus dot point

Area of Study 1: How do managers identify the need for change?

Key performance indicators - percentage of market share, net profit figures, rate of productivity growth, number of sales, rates of staff absenteeism, level of staff turnover, level of wastage, number of customer complaints, number of workplace accidents - and their interpretation; Lewin's force field analysis of driving and restraining forces of change

A focused answer to the VCE Business Management Unit 4 AoS 1 dot point on KPIs and the need for change. The nine VCAA-named KPIs and their interpretation, Lewin's force field analysis of driving and restraining forces, with worked Australian examples from Telstra's T25 strategy and Coles's automated DC transformation.

Generated by Claude OpusReviewed by Better Tuition Academy9 min answerUpdated 2026-05-20

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What this dot point is asking

VCAA wants you to know the nine KPIs in the study design, how to interpret each, and how to apply Lewin's force field analysis to identify driving and restraining forces of change. Section A questions commonly test KPI interpretation; Section B case studies often require you to apply Lewin's analysis to a scenario business.

The answer

The nine KPIs in the study design

VCAA names nine KPIs that managers use to assess business performance and identify the need for change.

KPI	What it measures	What a negative trend signals
Percentage of market share	Share of category sales	Customer movement to competitors
Net profit figures	Bottom-line profitability	Margin compression or cost issues
Rate of productivity growth	Output per unit of input	Inefficiency, technology gap
Number of sales	Revenue or volume	Demand weakness, marketing issue
Rates of staff absenteeism	Days lost per employee	Wellbeing, engagement or workload issues
Level of staff turnover	Proportion of staff leaving	Culture, pay or management issues
Level of wastage	Materials, time or product waste	Process efficiency or quality issues
Number of customer complaints	Volume of negative feedback	Quality, service or experience issues
Number of workplace accidents	WHS incidents	Safety system or training failures

KPIs should be interpreted in context. A 3 percent decline in market share might be a serious red flag in a growing category or a strategic choice (the business is repositioning to a more profitable segment).

Trend analysis and benchmarking

A single-period KPI says little. Three analytical perspectives matter.

Trend. How the KPI has moved over the past three to five years.
Comparative. Against peer businesses or the business's own past performance.
Industry benchmark. Against industry-standard averages from ABS, IBISWorld or industry associations.

A current turnover rate of 18 percent looks high for most industries but is normal for retail-frontline workforces and low for some hospitality contexts.

KPI interpretation in practice

Telstra's experience through 2022-2024 illustrates how multiple KPIs combine to signal change need:

Net profit under pressure from legacy fixed-line decline.
Rate of productivity growth lagging digital-native competitors.
Customer complaint volumes elevated during the legacy-platform migration.
Staff turnover spikes through the 2021-2022 tech-talent war.

The combined signal triggered the T25 strategy reset under CEO Vicki Brady, including the InfraCo separation, product simplification and a digital-channel rebuild.

Lewin's force field analysis

Kurt Lewin (1947) proposed that any change situation is the result of two opposing sets of forces.

Driving forces. Push for change - market pressure, technology opportunity, regulatory change, financial necessity, leadership ambition.

Restraining forces. Resist change - employee fear, capital cost, technology risk, union opposition, customer disruption, cultural inertia.

Change occurs when driving forces outweigh restraining forces. To make change happen, managers can:

Strengthen driving forces. Build the case for change, share data on the cost of inaction, secure leadership commitment, articulate the vision.
Weaken restraining forces. Address the specific fears or barriers - consultation, communication, redeployment options, retraining, financial support, phased rollout.
Both simultaneously. The most effective strategy.

Force field diagram (illustrative)

DRIVING FORCES   <---->   RESTRAINING FORCES

Cost pressure       (3)    Capital cost           (4)
Available tech      (3)    Workforce resistance   (3)
Labour inflation    (2)    Union opposition       (3)
Investor pressure   (3)    Operational risk       (2)
Leadership vision   (2)
                   ----                          ----
                   13                            12

A force field diagram visualises the balance. Where driving > restraining, change is likely. Where they balance, change is stalled. Where restraining > driving, the status quo prevails.

Worked Australian example: Telstra T25

Telstra's T25 strategy (2022-2025) is an instructive force field analysis.

Driving forces.

Declining fixed-line revenue as customers moved to mobile and NBN.
5G technology opportunity in mobile (significant capex required).
Investor pressure for clearer growth narrative and capital efficiency.
New CEO (Vicki Brady, 2022) mandate to refocus the strategy.

Restraining forces.

Cost and complexity of legacy IT systems.
Workforce concerns about restructure (Telstra announced approximately 2,800 redundancies in 2024).
Union opposition (CEPU - Communications, Electrical and Plumbing Union).
Customer disruption risk during platform migrations.
Regulatory complexity (Telecommunications Act, ACMA rules).

Management response.

Strengthened driving forces through clear strategic messaging at investor days and all-hands events.
Weakened restraining forces through structured consultation, redundancy packages, retraining and phased platform rollouts.
The InfraCo separation (passive infrastructure assets separated from the customer-facing business) addressed both investor concerns and operational simplicity.

The T25 strategy is approximately on track midway through, though challenging customer-experience and platform-migration milestones remain.

Worked example

"Using Lewin's force field analysis, evaluate the proposed change at a hypothetical Australian retailer planning to introduce self-checkout across all 200 stores. (8 marks)"

Plan. Identify driving and restraining forces, then evaluate manageability and likely outcome.

Driving forces.

Labour cost reduction (self-checkout reduces required cashier hours by 50-60 percent at typical retail volumes).
Customer preference for fast checkout in many demographics (under-35s, urban customers).
Competitive pressure (Coles, Woolworths and Aldi all have self-checkout).
Technology maturity (Hitachi, Diebold Nixdorf systems well-proven in Australian retail).

Restraining forces.

Capital cost (roughly $50,000-$ 80,000 per checkout, $20-30 million for 200 stores).
Workforce resistance (cashier roles reduced, redundancies likely).
Union opposition (SDA, RAFFWU).
Customer adoption variability (older customers prefer staffed checkouts).
Theft risk (self-checkout shrinkage rates are typically 2-3x staffed-checkout rates).
Brand-image risk if execution is poor.

Force balance. The driving forces clearly outweigh the restraining forces on a financial basis - the labour saving payback period is around 2-3 years. The restraining forces are real but manageable.

Management response (recommendation).

Strengthen driving forces by securing board capex approval with the ROI case, communicating the strategic rationale to staff and customers.
Weaken restraining forces through consultation with SDA, redeployment of cashier staff into customer-service and stock-replenishment roles, retraining, voluntary-redundancy packages where roles cannot be redeployed, phased rollout (high-volume metro stores first, regional later), theft-prevention investment (AI-vision monitoring of self-checkouts), and customer-education staff stationed near the self-checkouts during the first 6 months.

Outcome assessment. With deliberate management of restraining forces, the change can be successfully implemented. The Australian supermarket sector has demonstrated this is achievable. Risk factors to monitor are theft rates and customer-experience scores during rollout.

Past exam questions, worked

Real questions from past VCAA papers on this dot point, with our answer explainer.

2024 VCAA6 marksExplain how three key performance indicators can be used to identify the need for change in a business. Use examples to support your answer.

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A 6-mark answer needs three distinct KPIs, their interpretation, and a worked example showing how each signals the need for change.

1. Percentage of market share. The business's share of total category sales in the market it competes in. A declining market share signals customer movement to competitors or to substitute products.

Example: Coles's market share in supermarkets fluctuates around 27 percent against Woolworths's around 33 percent and Aldi's around 10 percent. A persistent decline in Coles's share would signal the need for change - whether in price, range, fresh quality or customer experience. ABS retail data and IBISWorld track this.

2. Net profit figures. The bottom-line profitability after all costs and taxes. Declining net profit (even on stable revenue) signals cost pressure, margin compression or write-downs.

Example: Telstra's net profit was under pressure through the early 2020s as legacy fixed-line revenue declined faster than mobile and digital growth. The need-for-change signal triggered the T25 strategy reset under CEO Vicki Brady from 2022 - simplification of products, cost-out, and re-platforming of digital channels.

3. Level of staff turnover. The proportion of employees leaving the business in a period, usually annualised. High or rising turnover signals problems with management, culture, pay, or workload.

Example: Australian-tech-sector turnover spiked through the 2021-2022 "Great Resignation" period to over 20 percent annually in some businesses. Atlassian and Canva responded with strategy and benefit changes (sabbaticals, expanded learning budgets, remote-work options).

Markers reward (1) three distinct KPIs, (2) what a movement in each signals, (3) a worked Australian example for each.

2023 VCAA5 marksApply Lewin's force field analysis to a contemporary business change. Identify driving and restraining forces, and explain how managers can use the analysis.

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A 5-mark answer needs the analysis explained, the driving and restraining forces, and the practical use.

Lewin's force field analysis. Kurt Lewin (1947) proposed that any change is the result of forces operating in two directions - driving forces that push for change and restraining forces that resist it. Change occurs when driving forces outweigh restraining forces. To make change happen, managers should strengthen driving forces, weaken restraining forces, or both.

Worked example: Coles's automated distribution centre rollout (2023-2024).

Driving forces:

Cost pressure (cost-of-living-driven competition with Woolworths and Aldi).
Available technology (Ocado robotic-grid system commercially mature).
Long-run labour-cost inflation in NSW and VIC.
Investor pressure for ROCE improvement.

Restraining forces:

Capital cost (approximately $1 billion).
Existing workforce resistance (1,000+ manual DC jobs affected).
Union opposition (the United Workers Union and RAFFWU).
Operational risk during transition (a failed cutover could disrupt store supply).

Use of the analysis. Coles strengthened driving forces by securing capex approval from the board with a clear ROI case and by communicating the urgency of cost competition. It weakened restraining forces through extensive consultation with the unions, redeployment options for affected workers, retraining programs, redundancy packages, and a phased cutover with extensive testing.

The change went live in Kemps Creek (NSW) in 2024 and Truganina (VIC) shortly after. The successful execution reflects the deliberate management of driving and restraining forces.

Markers reward (1) accurate description of Lewin's analysis, (2) at least two driving and two restraining forces, (3) the practical use of the analysis by managers.

Related dot points

Senge's learning organisation - personal mastery, mental models, shared vision, team learning, systems thinking; low-risk and high-risk strategies for implementing change; leadership during change; the importance of leadership styles and management skills in implementing change
A focused answer to the VCE Business Management Unit 4 AoS 2 dot point on Senge's learning organisation and change strategies. The five disciplines, low-risk vs high-risk change strategies (Kotter-style consultation v aggressive restructure), and the role of leadership style in change, with worked examples from Atlassian, Qantas and ANZ.