3.10 Managing Change

Question 1

What is managing change?

Answer 1

Managing change is the combination of activities involved in planning for, implementing, coordinating and monitoring the process of change.

Question 2

When does change occur?

Answer 2

When a business alters it’s structure, size or strategy to respond to internal or external influences.

Question 3

What is change used for?

Answer 3

Change is necessary to help a business meet its aims and objectives. Change creates opportunities and threats.

Question 4

Pressures for change?

Answer 4

-To meet objectives
-Gain market share
-Increase shareholders’ worth
-Respond to external forces
-Technological advancements
-Political and legal changes
-Consumer Demand
-Respond to internal forces
-Employee pressures
-Owners’ power
-Experience curve
-Gain competitive advantage
-Economies of scale and scope
-Market development

Question 5

Types of change

Answer 5

Internal change

External change

Incremental change

Disruptive change

Question 6

What is internal change?

Answer 6

Change that happens from within the business e.g change of leadership or strategy or realignment of values

Question 7

What is external change?

Answer 7

Change that happens from outside of the business e.g PESTEL environment or the competitive environment

Question 8

What is incremental change?

Answer 8

Change that is implemented over time with a number of small change being made on a regular basis to achieve ongoing improvements

Question 9

What is disruptive change

Answer 9

Change that is rapid and unexpected having a dramatic effect on the way in which an industry or business operate

Question 10

Techniques for managing change.

Answer 10

-Identifying a project champion
-The person responsible for driving
a project and gaining commitment
-Establishing project group
-A group of specialists from
different backgrounds who are
tasked with achieving the desired
change
-Gaining commitment from employees

Question 11

Theories related to Managing change?

Answer 11

Lewin’s force field analysis

Kotter and Schlesinger’s model

Question 12

What is Lewin’a force field analysis?

Answer 12

-There are two opposing forces when change is being implemented
-Driving forces who are in favour of
change and pushing for it to
happen as they welcome change.
-Resisting forces who are against
change and fighting against it
happening as they prefer the
status quo.
-Lewin’s model of change attempts to identify:
-The balance of power between the two forces
-The key decision makers
-Those People for the change and
those against it

Question 13

What is the value of change?

Answer 13

-Embrace change in the external environment e.g respond to technological advancements
-Engage employees as a result of responding to their changing needs e.g greater flexibility to match work life needs.
-Take advantage of opportunities e.g new market or new product development
-Respond to changes in the competitive environment e.g a new competitor entering the market
-React to changing needs and tastes of society to meet customers’ expectations.

Question 14

Actions to improve flexibility of organisation.

Answer 14

-Restructuring
-Changing the way in which the
workforce is organised e.g the span
of control, hierarchy or from a
functional structure to a matrix
structure.
-Delayering
-Removing levels from within the hierarchy e.g taking out a level of junior management.
-Flexible employment contracts
-Employees contracts allow for a degree of flexibility in terms of hours to be worked, number of hours guaranteed, place of work and tasks to be carried out.

Question 15

Organic structured organisation

Answer 15

Has a built in degree of flexibility making it more able to respond to change. Focused on individuals and teams and their ability to complete tasks.

Question 16

Mechanistic structured organisations

Answer 16

A formal structure that is based around clearly defined policies and procedures. The hierarchy is very important and tends to have a lot of levels.

Question 17

How to manage knowledge and information?

Answer 17

-Information systems will help keep managers informed allowing for more scientific decision making.
-Monitoring of internal and external trends allowing a business to respond more quickly
-Better able to meet customer needs maintaining a competitive advantage
-Keep stakeholders informed making it easier to implement a change as and when it is needed.

Question 18

4 reasons for resistance to change shown by Kotter and Schlesinger’s model?

Answer 18

-Parochial self interest
-Stakeholders fear that change will
result in them being personally
worse off and therefore want to
protect themselves against this.
-Prefer the status quo
-Stakeholders are happy with the way
things are and therefore just want
to keep it as it is
-Different assessment
-Stakeholders believe that the
proposed change is not the correct
course of action and that they could
suggest a better solution.
-Misunderstanding and fear
-Stakeholders believe that the
motives for change are wrong and
they therefore mistrust the decision
makers.

Question 19

6 ways to overcome resistance to change according to Kotter and Schlesinger?

Answer 19

-Education and communication
-Providing stakeholders with all of the
necessary information to help them
understand the reason for change,
how it will be implemented and the
proposed outcome.
-Participation and involvement
-Providing a sense of ownership to
stakeholders so they feel part of the
whole change process
-Facilitation and support
-Providing the necessary skills and
resources to help stakeholders feel
more confident with the change process
-Negotiation and agreement
-Increase two way communication by
bargaining with stakeholders and if
necessary making compromises to
the change process
-Manipulation and co-option
-Use of project champions who may
receive incentives and are tasked
with winning around others
-Explicit and Implicit coercion
-Pushing change through despite
resistance. (Last resort)

Question 20

What is Organisational Culture

Answer 20

The values and standards shared by people and groups within an organisation.

These impact the way that people within the organisation interact with each other and with other stakeholders.

The culture of a business effects the way in which a business operates. This includes:
-Decision making
-Organisational Structure
-Communication
-Leadership Styles
-Attitude towards work
-Workforce performance

Question 21

What is the importance of organisational culture?

Answer 21

-Impact of staff motivation
-Communication
-Retention
-Workforce performance indicators
-Effects decision making
-Speed
-Level of involvement
-Scientific v intuition
-Competitiveness of the business
-Innovation
-Adaptability
-Brand image
-Consumer perception
-Stakeholder opinion

Question 22

What are the cultural models?

Answer 22

Handy’s task culture model

Hofstede’s national cultures model

Question 23

Cultural dimensions that effect organisational culture based on Hofstede’s national cultures

Answer 23

-Individualism and collectivism
-An individualist culture is one where
each person will look to maximise
their personal self-interest. A
collectivist culture is one where
individuals will work as a team to
achieve mutually beneficial
outcomes.
-Masculinity and femininity
-The dominant values in a masculine
culture are money and power based
on assertive behaviour. Within a
feminine culture there is greater
concern for others and relationship.
-Long-term and Short-term orientation
-Whether a business is focused on
short-term goals or takes a longer-
term outlook on decision making.
-High power and low power distance index
-Attitude towards equality and the
degree of formality within an
organisational structure.
-Avoiding and Embracing uncertainty
-The extent to which rules and
regulations are instrumental to the
smooth running of a business and
the confidence of employees.

Question 24

Influences on organisational culture:

Answer 24

-Mission statement and corporate objectives
-Personal attitudes, beliefs and priorities of the leaders
-Norms within society
-Ownership and size of the organisation
-Geographical scope i.e local, national or global
-Competitive environment

Question 25

Reasons for changing organisational culture?

Answer 25

-Change in owners or leaders
-Change in corporate objectives
-Change in size
-Mergers and takeovers can often
mean businesses with different
cultures joining together
-Responding to market conditions
-New competition
-Economic climate

Question 26

Problems of changing organisational culture?

Answer 26

-Resistance to change
-Lack of trust
-Period of adjustment
-Alienation of:
-Suppliers
-Customers
-Other Stakeholders

Question 27

How to implement strategy Effectively?

Answer 27

-Allocation of responsibilities
-Who,what, where and when by
-Allocation of resources
-Set clear standards
-Manage and coordinate resources
-Predetermine monitoring points and success criteria at each point.
-Adapt as necessary

Question 28

What are leaders responsible for during Strategic Implementation?

Answer 28

-Clearly defining the strategic direction
-Setting and sharing clear policies and procedures
-Communicating the strategy to everyone to provide a clear vision
-Overcoming resistance to change
-Allocating resources
-Monitoring progress against pre set targets
-Taking corrective action if necessary

Question 29

Why is communication important during Strategic Implementation?

Answer 29

-Strategy needs to be shared with all stakeholders
-Reduce resistance to change
-Gain support from external organisations e.g investors
-Keep trade unions informed
-Help everyone to understand their role during the implementation stage
-Coordination of all key parties e.g suppliers and employees.

Question 30

What factors of organisational structure will affect the ability to successfully implement new strategy?

Answer 30

-Span of Control
-The ease with which managers can
communicate with and coordinate
subordinates
-Chain of command
-The time it takes to communicate
strategy and tasks to the workforce
-Decentralised or centralised decision making
-Allocation of roles during implementation.
-Power distance index

Question 31

4 Types of Organisational structures with definitions:

Answer 31

-Functional Structure
-A business structure based on the
function of each position within the
business and the knowledge and
skills of the team members that
perform each role.

-Product based structure (divisional structure)
-Employees are assigned into self
contained divisions according to:
the particular line of products or
services they produce, The
customers they deal with, or the
geographical area they serve.

-Regional Structure
-The organisation or arrangement of
a large geographical territory or a
designated division of a country or
state that may be formulated
according to some administrative,
biological, political, economic or
demographic criteria.

-Matrix structure
-The combination of two or more
types of organisational structures. It
is a way of arranging your business
so that you set up reporting
relationships as a grid, or a matrix,
rather than in a traditional
hierarchy.

Question 32

What is Newtork Analysis?

Answer 32

Network analysis is a technique used to identify the order in which all activities need to be completed when planning a complex project.

Network diagrams(critical path diagrams) organise the activities in an order to show which activities can be done simultaneously and which are dependent upon earlier activities.

This allows for the identification of the shortest time in which a project can be completed.

The critical path is the set of activities that will lengthen the duration of the project if delayed.

Question 33

A network diagram is made up of nodes. Each node is split into 3 parts. What are those parts known as?

Answer 33

-The node number (left half)
-Based on the order in which it is
drawn.
-The earliest start time(EST)(top right)
-Earliest the following activity can
possibly start (Left to right)
-The latest finish time (LFT)(bottom right)
-The latest an activity can finish
without delaying the whole project.
(Right to left)

Question 34

Advantages of Network Analysis

Answer 34

-Identifies the critical activities
-Shortens the overall time of a project
-Improves focus on project
-Greater productive efficiency
-Allows for just in time

Question 35

Disadvantages of Network Analysis

Answer 35

-Is only a starting point for a successful
-Relies on estimations
-Does not take into account external influences
-Large projects can be too complex for CPA

Question 36

What is the process of making decisions?

Answer 36

-Set Objetives
-Gather data
-Analyse data
-Implement
-Review

Question 37

Reasons why strategic decisions go wrong?

Answer 37

-Wrong objectives set
-Data may not be easily available
-Data may be badly analysed
-Implementation carried out incorrectly
-Progress of plan is misread

Question 38

What is a planned strategy?

Answer 38

The strategy the managers intended to implement.

Question 39

What is an Emergent strategy?

Answer 39

The strategy that develops over time.

Question 40

What is strategic drift?

Answer 40

When the strategy differs from the original plan.

Question 41

Phases 1 and 2 of strategic drift

Answer 41

-Phase 1 Incremental change
-Little significant change in the
external environment.
-A series of small, incremental
changes to strategy enable the
business to remain in touch with
the external environment.
-Phase 2 Strategic Drift
-Plan starting to drift apart
-The rate of change in the external
environment is accelerating and
small, incremental changes in
strategy are not enough on their
own remain in touch.
-Business losing its competitive
advantage

Question 42

Phases 3 and 4 of strategic drift?

Answer 42

-Phase 3 Flux
-Management indecision
-Significant gap between plan and
emergent strategy
-Management may have begun to
alter strategy, however there is no
decisive improvement.
-Disagreements about how to
address strategic drift
-Phase 4 Transformational change or demise.
-Either management recognise the
need for a transformational change
in strategic direction, or the
business fails.
-Often takes new, external
leadership.
-For some business, this place
comes too late.

Question 43

What is corporate Governance?

Answer 43

This refers to the systems and processes in place to monitor and control how a business is run.

Question 44

Why is strategic planning important?

Answer 44

-Decisions based on data therefore thorough planning should be done.
-Provides guidance for employees(should aid motivation)
-However:
-Environment changes very fast e.g
technology
-Strategy will change over time
-Levels of details in plan need to be
considered to see if worth it

Question 45

What is contingency planning?

Answer 45

-Businesses operate in uncertain and risky environments
-Contingency planning is when a firm prepares for unlikely events such as fire, bankruptcy of major customer, closure of important supplier, virus attack, illness epidemic.
-Contingency plans may include:
-Using various suppliers to safeguard
against closures
-Use computer storage elsewhere to
protect data
-Training employees in various tasks
to cover illness
-Ensure new products in development
to replace problems with existing
products.

Question 46

How to manage impacts of a crisis?

Answer 46

-Identify facts as soon as possible
-Scale of problem, how will people
be affected
-Establish good communication systems
-Ensure everyone knows what to do
and management in control
-Have authority and resources to make quick decisions.

Question 47

What is scenario planning?

Answer 47

-Involves planning for a few specific scenarios that may occur in future.
-Examples may include:
-Political unrest in the country a
business trades in.
-Changes in taxes
-etc