What is change?
It is an ongoing process which businesses cannot avoid and have to deal with and its consequences. Change can be gradual with incremental changes made to the way they operate year after year. However, there are many factors which can cause rapid change. altering the way a business operates in a relatively short period of time.
What can the causes of change be categorised into?
. Internal causes of change
. External causes of change
List some of the internal causes of change.
. The introduction of new technology - this could involve the intro of EPOS, self service machines or even the introduction of robotics within manufacturing - improves efficiency and quality of products
. A change in management structure or leadership style - results in new ways of working
. Changes in size of the business through organic growth or external growth - could also include rationalisation
List some of the external causes of change.
. Developments in tech - businesses must react to advancements in order to remain competitive
. Market changes - such as competitors, new markets or globalisation - aggressive promotional activities, involving sales risk
. Changes in consumer taste - social factor - e.g. retail market, demanding new environmentally friendly products
. New legislation - impacts the way in which a business works
. Changes in the workforce - intro of flexible working
. Changes in the economy - changes in rates of inflation, interest rates and general employment levels within the economy
What is EPOS?
(Electronic point of sale) which is a computer based system used by businesses to process sales transactions; it can record payments, track stock levels and can help managers monitor performance and make decisions.
What is the difference between planned and unplanned change?
Planned change in created internally and is structured and timetabled. Clear objectives for the change are established, timetables created and resources applied to creating the change.
Unplanned change occurs in response to a shock to the business and is often unstructured and under-resourced. The shock could be both internal or external. Contingency planning can be used to help minimise the effect of unplanned changes
List and briefly explain some of the effects of change in a business.
. Shorter product life cycles - consumer tastes are ever changing. This trend brings both threats and opportunities to retailers and manufacturers. Products must be profitable immediately and there is little incentive for long-term investment.
. Diminished brand loyalty - New entrants into the market find it easier to grab market share. Marketing costs are increased to maintain brands and to introduce new products
. New product development - strategic planning is required by businesses to ensure that new products are developed in response to changing market conditions
. Changing production methods - these will have to be changed in response to changing market conditions - this will require spending on R&D and production tech
. Retraining the workforce - existing employees may not be able to adapt to new ways of working or new tech, so training and recruitment costs increase
What is change management?
It is a systematic approach a business uses to plan, implement and control change in order to minimise disruption and ensure employees and operations adapt effectively to new ways of working
List the pros and cons/evaluation of using change management.
Adv:
. Enables a business to assess and understand the need and impact of change
. Allocates resources, such as capital and staffing
. Helps manage and control the costs incurred with change
. Reduces the time needed to implement change
. Enables planning and implementing effective strategy to communicate change with stakeholders
. Maintains and improves performance of the business
Cons/Eval:
. Time-consuming - planning, consultation and training can slow down implementation
. Costly - requires spending on training, communication systems and management time
. Resistance can still occur - employees may oppose change despite structured management
. Disruption to productivity - performance may fall in the short term during transition
. No guarantee of success
What are some qualitative and quantitative indicators which can be used to assess change management?
. Delivery times
. Production defects
. Customer satisfaction surveys
. Market share
. Sales turnover
. Profitability
List and briefly explain some strategies which businesses can use to prepare for change.
. Employee preparation - full support of employees is crucial when it comes to change. Consultation and communication with employees is essential. Preparation may include reskilling and enabling employees to carry out new tasks effectively. This could also include recruitment
. Increased R&D expenditure - this is used both for preparation for change and in reaction to change. This type of preparation develops new products, new methods of production and new tech, providing a competitive advantage to businesses
. Additional capital investment - change can create the need for investment in capital
What is the difference between the impact of change and the implementation of change?
The impact of change refers to the positive or negative effects of change, while implementation is how the change is carried out
Why is implementation important in change management?
Because poor implementation can cause resistance and failure even if the change itself is beneficial
Who suggested methods for implementing change and what did he contribute to change management?
John Storey - he identified four different methods businesses can use to implement change
List and describe J Storey’s four different approaches/strategies that a business could use to manage change.
. A total impose package - this would be a whole package of changes and would be simply presented to employees. Senior management would workout the restructuring they feel is required and then impose it on the business. However, if the organisational culture does not match this approach then there may be resistance to change
. Imposed piecemeal initiatives - more gradual approach, giving employees more time to adapt and could potentially help alleviate resistance - there still needs to be changes in the organisational culture to encourage change. The firm may offer incentive payments and maybe other non-financial rewards for the successful implementation of the changes
. Negotiated total packages - the aim is to agree on the package of change through negotiation and consultation with the workforce. This may significantly reduce the level of resistance. This type of approach is growing more popular with trade unions keen to negotiate changes and ensure that their members benefit from change and are helped to cope with change
. Negotiated piecemeal packages - this is similar to the imposed piecemeal initiatives but also has similarities with the negotiated total package approach. The gradual implementation of change will be negotiated at each stage. The change may be linked to incentive payments.
State and briefly explain Kotter and Schlesinger’s reasons why change is resisted by stakeholders of a business.
. Self interest - arises from the threat to job security and maybe suppliers fearing for future order. Therefore stakeholders tend to put themselves before the needs of the business
. Misinformation and misunderstanding - stakeholders may not understand why change is needed because they have been misinformed about the strategy of the business.
. Different assessment of the situation - this is where there is disagreement about what change is needed
. Low tolerance and inertia - many people suffer from reluctance to change. Many people need security, predictability and stability in their work.
What could manager resistance be due to?
Manager resistance may be a result of a lack of experience or expertise e.g. fear of new markets and conditions due to a lack of experience or knowledge of that market or a lack of leadership skills to manage the change effectively.
What could worker resistance be due to?
Worker resistance may be a result of their wish to preserve the existing routines, to protect pay and employment and to avoid threat to security and status
What could supplier resistance be due to?
Supplier resistance may be a result of reluctance to changes made by their customers
What could shareholder/owner resistance be due to?
Shareholder/owner resistance may be due to the fear that changes to strategy may increase risk e.g. operating in a new market will be costly and damaging to dividends so shareholders will need some reassurance or persuading about the change
Explain how lack of finance could also lead to resistance to change.
Businesses may simply not have the capital required to fund the changes that are needed e.g. R&D, investing in capital equipment, investing in new product development etc.
Explain Lewin’s three step process and how does it help overcome resistance to change.
. Unfreeze - preparing employees for change by explaining through communication and involvement - this helps overcome resistance by reducing fear and uncertainty through communication and involvement
. Change - implementing the new processes, structures or behaviours - this helps overcome resistance by providing support, training and clear leadership during the transition
. Refreeze - embedding the change so it becomes the new normal (e.g. through rewards or policies) - this helps overcome resistance by preventing employees from reverting to old ways of working
What is the definition of corporate culture?
It is the shared values, beliefs, attitudes and behaviours that shape how employees behave within an organisation
List and briefly explain the 4 types of corporate culture (Charles Handy).
. Power culture - authority is centralised around one person or small group which results in fast decisions but risky if leaders make poor choices
. Role culture - based on rules, procedures and job roles (bureaucratic) - efficient and predictable but resistant to change
. Task culture - teams are formed to solve specific problems or projects - flexible and innovative but can be costly
. Person culture - individuals are more important than the organisation - hard to control
-
Unit 1 - Markets25
-
Unit 1 - Business Finance9
-
Unit 1 - Business Structure17
-
Unit 1 - Market Research14
-
Unit 1 - Revenue, Costs and Profit11
-
Unit 1 - Business Plans3
-
Unit 1 - Enterprise13
-
Unit 1 - Business Location2
-
Unit 2 - Operations Management68
-
Unit 2 - Marketing44
-
Unit 2 - HR96
-
Unit 2 - Finance40
-
Unit 3 - Analysing financial and non-financial measures or performance36
-
Unit 3 - Aims and Objectives9
-
Unit 3 - Strategy and Implementation66
-
Unit 3 - Decision-making models35
-
Unit 3 - Investment Appraisal11
-
Unit 3 - Market Analysis21
-
Unit 3 - Special Orders5
-
Unit 3 - Sales Forecasting21
-
Unit 3 - Data Analysis11
-
Unit 4 - Managing change42
-
Unit 4 - Risk management19
-
Unit 4 - PEST Analysis42
-
Unit 4 - International trade19
-
Unit 4 - Globalisation20
-
Unit 4 - Ethical, legal and environmental factors30
-
Unit 4 - The EU25
