Cost-Benefit Analysis Instructions Essay Example

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Cost-Benefit Analysis Instructions

Cost-Benefit Analysis Instructions  1



Advanced Diploma of Leadership and Management

Organisation Management

Assessment method

Part A – Cost-benefit Analysis

Part B – Risk Analysis

Part C – Case Study

Session 5


Units of Competency


Lead and Manage Organisational Change


Contribute to Organisation Development


  1. Assessments should be completed as per your trainer’s instructions.

  2. Assessments must be submitted by the due date to avoid a late submission penalty.

  3. Plagiarism is copying someone else’s work and submitting it as your own. You must write your answers in your own words or appropriately reference your sources. A mark of zero will be given for any assessment or part of an assessment that has been plagiarised.

  4. A list of references must be included.

  5. You may discuss your assessments with other students, but submitting identical answers to other students will result in a failing grade. Your answers must be yours alone.

  6. Your trainer will advise whether the assessment should be digitally uploaded or submitted in hard copy. Assessments that are digitally uploaded should be saved in pdf format.

  7. You must pass both assessments in the subject to pass the subject.

Assessment 1 Part A – Cost-Benefit Analysis


Analysis for a change project that is being considered reveals that it will cost $70,000 to establish (in year 0), and that the recurring costs for the next 3 years will be $25,000 (in years 1, 2 & 3). There will be no benefits in year 0, but there will be $96,000 worth of benefits each year in years 1 through to 3. Using the formula above, calculate the payback period and the ROI. What is your recommendation?





The payback period is ___________1 and half_______________________ years

The Return on Investment (ROI) is __92________________________%.

Would you recommend it as a good investment? Justify your answer.

Total part A: 10 marks

Cost-Benefit Analysis Instructions  2I recommend the investors to choose the project.Payback period is very short.This is the

Cost-Benefit Analysis Instructions  3Taken for a project to recover the cost of investment. Investors are interested in the concept of

Cost-Benefit Analysis Instructions  4Value of money, project that brings benefits as early as possible than just bringing benefits in

Cost-Benefit Analysis Instructions  5Long period. The return on investment is also high.This is a measure of profitability index.Investors

Cost-Benefit Analysis Instructions  6Are interested in those projects that have high profitability index.

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Cost-Benefit Analysis Instructions  8

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Cost-Benefit Analysis Instructions  12

Assessment 1 Part B – Risk Analysis

You are the HR director at a large Australian bank with a bureaucratic authoritarian culture and a highly unionized workforce. In response to competitive pressures, the bank aims to become the fastest growing, most profitable bank in Australia.

They are also looking at expanding their operations in Asia as part of their growth strategy. You realized that to bring the company to reach new heights, the bank needs to make changes to their organizational culture.

  1. How are you going to introduce cultural change in the entire organization?

(5 marks)

Cultural change is defined as the values, norms, internal functions and unique features of an organization. These features portray the image of the organization to the external environment. Cultural change can be enhanced by;

  • Through sharing attitude, beliefs, and customs by following the rules that the management has put in place.

  • Management may also demonstrate to the staff on how it wants the operations to be done.It acts as a good example as employees get skills in handling with the customers.

  • Management should show commitment to enhancing the change.Should make sure that the change is strictly monitored.

  1. What are the risks of introducing a cultural change in a bureaucratic authoritarian culture and a highly unionized workforce? For example, if the change will require retrenchment, what are the risks involved? What are the

barriers to change? (5 marks)

  • Low morale.When staffs know that they are going to be retrenched they loose morale in conducting business activities.They may also incite other staffs not to work.

  • Strikes. Staffs may involve themselves in a strike when they hear they are going to be retrenched.This can bring a bad image to the organization.

  • Sabotage.Staffs may start damaging the property and even stealing from the business when they know that they are going to be retrenched.

  • Some may start developing vested interests, especially with the firm’s customers.

  • Some staff may fear losing status in the society.

  1. Perform a risk assessment of all the risks you identify including your recommended mitigation strategies. Use risk analysis forms similar to the

one you used in Session 4. (10 marks)

Sources of risks


Organisational behaviour

Performance of people

Surrounding environment



Risk priority

Possible treatment

Preferred option

Risk rating after treatment

Personal responsibility










Total part B: 20 marks

Assessment 1 Part C – Case Study

Scenario Change at Asia/Pacific Manufacturing (APM)

The atmosphere in the boardroom was intense. Mon Ey, the financial director for APM just concluded his presentation on the current situation of the Australian manufacturing division of APM. The following conclusions were made based on the presentation:

  • APM Australian factories not competitive

  • Benchmarked against international best practice, production costs of the Australian manufacturing operations are the highest in the world

  • The Australian factories have low productivity and high labor costs

  • Must cut losses and expand elsewhere OR make the Australian operations more competitive

  • At risks of being taken over by another major competitor. If this materializes, all

Australian operations will be sold off and moved overseas

  • Share price dropped 20 percent from the past six months

Given the current problems of APM, they decided to hire the services of strategic, a strategic consultancy firm to make sense of the problem and possibly come up with a recommendation as to the best possible course of action.

The study conducted by STegic reveals the following issues:

  • If the Australian factories could achieve 90 percent of best practice figures for productivity and labor costs, the Australian operations would be among the most profitable in the company

  • Machines are ok; problem is people performance

  • Low production figures caused by lack of labor flexibility

  • Excessive penalty rates make it uneconomical to operate factories seven days a week

  • Workers are not motivated. Thus absenteeism is high

  • Constant fight with unions over demarcation, workers show more loyalty to unions than to the company

  • Safety record of the Australian operations are worst in the company

  • Pay and conditions of employment are among the best in the world

  • Labor turnover is low

  • No clearly articulated HR strategy that is linked to the strategic business objectives

  • The Industrial Union of Manufacturing Workers (IUMW) is strong and dictates a lot of terms, for example: promotes the “last on, first off” policy, rewards based on seniority not on merit, everyone gets an across-the-board salary irrespective on their performance and the company’s profitability

After reading the case study:

  1. Identify change requirements/opportunities at APM (5 marks)

Change management is required.

  • Business processes

  • Organizational culture

  • Job roles

  • Business systems need to change.

  • Change in human resources policies is required

  1. Develop strategic objectives in the areas of recruitment and selection, training and development, and remuneration and benefits (10 marks)

  • There needs to be a proper definition of training goal and the overall results.

  • Clear definition of objectives to be achieved in training.

  • Implementing training.

  • An evaluation needs to be done after the training.

  • Feedback must be got from the employees to see if the objectives were achieved.

  1. Identify the major stakeholder’s concern and potential problems that might hinder the implementation of your new change strategy. Suggest possible

ways to overcome these challenges (10 marks)

The main stakeholders are the management and the employees.Challenges that are likely to be faced includes;

  • Constraints on budgets.

  • Time is required to educate about the change that is to be effected.

  • Integration is required between staffs and the management.

  • Resistance from employees.

  • Strikes may occur as a result

  • Sabotage

  1. Develop a change management project plan for the implementation of your proposed change management strategy. Your plan should include the following elements:

Budget (5 marks)  Resources (people, equipment, and material needed) (5 marks)  methodology for change program (5 marks)  objectives/outcomes (5 marks)  Timetable (5 marks)

  • Determine the amount or cost to be incurred for the change.

  • The available amount of the funding needs to be established.

  • Review the budget

  • Carry out the change.

  • Evaluate whether the goals and objectives were achieved.

Methodology for the change:

  • Issue employees with questionnaires

  • Develop team building session

  • Determine whether the results are similar

  • Establish the change required

  • Evaluate whether objectives were achieved.


  • Compare the goals set and the results achieved

  • Look for any variations

  • Adjusting the change

  • Effecting the change

  • Review whether the change has produced good results


  • Determine the time required to effect the change

  • What are the time allocations

  • Carry out tasks

  • Review whether the change is achieved

  • Carry out the change that had not been effected

  1. Develop communication/education plan to promote the benefits of the change to the organization, to minimize loss and to enable people to accept

change positively, then prepare a report (10 marks)

Communication plan:

  • Prepare a personality information.

  • Prepare a team building session for interactions.

  • Use this information for allocation and support actions.

  • Map up to the overall goals of the project.

  • Start by asking each employee the relationship between management and the employees.How do the management often listen and respond to issues that one raise?

  • Interact with employees for a question and answer forum. The main aim is to enable employees to express themselves especially the ones who are not outspoken.

  • Compare this information with the results achieved in the organization.

  • Evaluate if the project has carried out the overall goals of the project.

Total part C: 60 marks

Assessment total: 90 marks

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