3.10 MANAGING STRATEGIC CHANGE Flashcards
When does change occur in a business?
- When a business changes its structure, size or strategy to respond to internal or external influences
- May be necessary to help a business meet aims / objectives
- Can either cause opportunities or threats
- Must be managed carefully to ensure an increase in competitiveness
What is ‘critical path analysis’ and what does it show?
Technique to be efficient
- Sets out all individual activities that make up a larger project
- Shows order in which activities should be done in
- Shows which activities can only take place once other activities are done
- Shows which activities can be undertaken simultaneously, reducing overall time taken to complete whole project
- Shows when certain resources will be needed
What is ‘critical path’ ?
Route through the CPA, which has no ‘float’ (spare time)
Layout of every node (‘critical path analysis’)
- Circle in 3 sections
- Left: Node No.
- Top right: EST (Earliest Start Times)
- Bottom right: LFT (Latest Finish Times)
What does the ‘Earliest Start Time’ (‘Critical Path Analysis’) show and what is its aim?
Shows earliest start time an activity can start because it is dependent upon the previous activity being completed
Aims to identify when resources will be needed, allowing orders to be processed and arrive in time for the start of the project.
How to work out the ‘Earliest Start Time’ (EST)
Take EST for previous task (top right of node) and add on duration (on line) of the previous task
Always pick highest number if between 2 tasks!
What happens when a task is dependent on two tasks take place simultaneously? (Critical Path Analysis)
EST will be the time of longest task, because the project cannot proceed until all dependent tasks have been completed
What does the ‘Latest Finish Time’ (‘Critical Path Analysis’) show and what is its aim?
Latest possible time for a task to finish, avoiding delays in the project. Any delay in tasks will hold up the project and the completion date will be delayed.
How to work out the ‘Latest Finish Time’ (LFT)
Worked out backwards, from end of the network
If there are simultaneous activities always choose the longest duration!
What do the arrows mean in ‘Critical Path Analysis’ ?
Tells you which task you are undertaking
Duration of the task before it
Advantages of ‘Critical Path Analysis’
- Helps keep a business organised
- Shortens the overall time of a project
- Improves focus on project
- Greater productive efficiency
- Allows for just-in-time: will know when need
Disadvantages of ‘Critical Path Analysis’
- Is only a starting point for a successful project - does not ensure success
- Relies on estimations
- Does not take into account external influences
- Large projects can be too complex for CPA
- Time-consuming
What is a ‘FLOAT’ (‘Critical Path Analysis’)
Delay
‘FLOAT’ Calculation (‘Critical Path Analysis’)
And preference…
LFT (Node after task) - Duration - EST (Node before task)
Less float / delay , the better
How can you judge where the critical path is? (‘Critical Path Analysis’)
0 Float = the critical path
Meaning there is no delay
What does the line with cross through it mean? (‘Critical Path Analysis’)
The critical route through the project
Method to remember ‘path crossers’ (‘Critical Path Analysis’)
Lowest on way back
Highest on way there
What is ‘Critical Path Analysis’ dependent on?
- The availability of labour and other resources
- Lead times for delivery of materials and other services
- Seasonal factors (e.g. dry weather required in a building project)
What can a business do if a project is delayed?
- CPA is helpful because it shows likely impact on whole project if no actions are taken
- May be possible to switch staff from another activity to help catch up on delayed activity
- As a rule, most projects can be brought back on track by using extra labour, outsourcing or overtime. This will be an extra cost.
Define ‘culture’
The way we do things around here
Affects the way in which a business operates
Contextual example of a business culture
- Unique HQ in Zurich with slides and pets
THIS IS A UNIQUE CULTURE
What aspects of a business does culture affect?
- Decision making
- Organisational structure
- Communication
- Leadership styles
- Attitudes towards work
Aspects of ‘Handy’s Cultural Model’
- Task
- Role
- Power
- Person
Explain ‘Task’ in ‘Handy’s Cultural Model’
Emphasis on achieving set outcomes through cooperation and team work
Explain ‘Role’ in ‘Handy’s Cultural Model’
- Clear rules and procedures result in a clear hierarchy where the organisation functions based on each individual’s role within a clearly defined structure
‘I am not gonna do that because its not part of my job’
Explain ‘Role’ in ‘Handy’s Cultural Model’
- Clear rules and procedures result in a clear hierarchy where the organisation functions based on each individual’s role within a clearly defined structure
‘I am not gonna do that because its not part of my job’
Explain ‘Power’ in ‘Handy’s Cultural Model’
- A few people central to the organisation have control
Explain ‘Person’ in ‘Handy’s Cultural Model’
A high degree of autonomy is given to individuals who are often highly skilled. Risk taking and innovation are actively encouraged and rewarded, whilst failure is not criticised.
All features of ‘Hoftede’s Culture Model’
- Individualism and collectivism
- Masculinity and Femininity
- High power and low power distance index
- Avoiding and embracing uncertainty
How is the ‘Hoftede’s Culture Model’ used to assess?
Scores out of 100 for each country, for each feature.
Average worked out at bottom of grid
Define ‘Individualism and collectivism’ (‘Hoftede’s Culture Model’)
An individual 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
Define ‘Masculinity and femininity’ (‘Hoftede’s Culture Model’)
The dominant values in a masculine culture are money and power based on assertive behavior.
Within a feminine culture, there is greater concern for others and relationships are valued.
Masculine: hard edge decision making (quick)
Define ‘Higher power and low power distance index’ (‘Hoftede’s Culture Model’)
Attitude towards equality and the degree of formality within an organisational structure
Define ‘Avoiding and embracing uncertainty’ (‘Hoftede’s Culture Model’)
The extent to which rules and regulations are instrumental to the smooth running of a business and the confidence of the employees.
Influences on organiastional structure
- Mission statement and corporate objectives
- Personal attitudes / priorities of the leaders
- Norms within society
- Ownership and size of organisation
- Geographical scope
- Competitive environment
Reasons for changing an organisational culture
- Change in owners and leaders
- Change in corporate objectives
- Change in size (mergers and takeovers)
- Responding to market conditions (e.g. new competition)
All types of change
- Internal change: within a business
- External change: PESTLE
- Incremental change: small improvements overtime
- Disruptive change: rapid and unexpected
Define ‘incremental change’
Small improvements overtime
Define ‘disruptive change’
Rapid + unexpected
All at once
Internal techniques of managing change
- Identifying a project champion
- Establishing project groups
Describe the layout of ‘Lewin’s Force Field Model’
Driving forces vs. resisting forces
Task attempted to be completed in middle
What does the ‘Lewin’s Force Field Model’ help to find out?
Where does the most resistance come from?
Value of change
- Engage customers
- Take advantage of opportunities
- Respond to changes in competitive environment
- React to changing needs and tastes of society to meet customer’s expectations
Define a ‘flexible organisation’
More able to respond to change quickly
-
Actions to improve the flexibility of an organisation
- Restructuring: changing organisation of workforce
- Delayering: removing levels from within the hierarchy
- Flexible employment contracts
Define ‘delayering’
Removing levels from within a hierarchy
Define ‘restructuring’
Changing organisation of workforce
What model did ‘Kotter and Schlesinger’ develop?
Kotter and Schlesinger’s Reasons for Resistance to Change
State the 4 reasons for resistance? (‘Kotter and Schlesinger’s Reasons for Resistance to Change’)
- Prefer the status quo
- Parochial self-interest
- Different assessment
- Misunderstanding and fear
Define ‘prefers the status quo’ (‘Kotter and Schlesinger’s Reasons for Resistance to Change’)
Stakeholders are happy with the way things are and therefore just want to keep it how it is
Define ‘parochial self interest’ (‘Kotter and Schlesinger’s Reasons for Resistance to Change’)
Stakeholders fear that change will result in them being personally worse off and therefore want to protect themselves against this
Define ‘different assessment’ (‘Kotter and Schlesinger’s Reasons for Resistance to Change’)
Stakeholders believe that the proposed change is not the correct course of action and that they could suggest a better solution
State the 6 methods to OVERCOME resistance to change (‘Kotter and Schlesinger’s Model for Overcoming Resistance to Change’)
- Education and communication
- Negotiation and agreement
- Facilitation and support
- Participation and involvement
- Manipulation and co-option
- Explicit and implied coercion
Define ‘education and communication’ (‘Kotter and Schlesinger’s Model for Overcoming Resistance to Change’)
Providing stakeholders with all of the necessary information to help them to understand the reason for change, how it will be implemented and the proposed outcome
Define ‘negotiation and agreement’ (‘Kotter and Schlesinger’s Model for Overcoming Resistance to Change’)
Increase two-way communication by bargaining with stakeholders and if necessary making compromises to change process
Define ‘facilitation and support’ (‘Kotter and Schlesinger’s Model for Overcoming Resistance to Change’)
Providing the necessary skills and resources to help stakeholders feel more confident with the changed process
Define ‘participation and involvement’ (‘Kotter and Schlesinger’s Model for Overcoming Resistance to Change’)
Providing a sense of ownership to stakeholders so they feel part of the whole change process
Define ‘manipulation and co-option’ (‘Kotter and Schlesinger’s Model for Overcoming Resistance to Change’)
Use of project champions who may receive incentives and are tasked with winning around others
Define ‘explicit and implied coercion’ (‘Kotter and Schlesinger’s Model for Overcoming Resistance to Change’)
Pushing change through, despite resistance
This may be last resort
Define ‘brand dilution’
Brand has less strength within market.
When you take over so many brands, you don’t focus on core brand - leads to core brand becoming less successful as NO FOCUS ANYMORE
Contextual example of problematic strategy
MYSPACE
- Heavy competition from Facebook.
- Lack of monetisation
- Didn’t develop technology
THIS LEAD TO THEIR DOWNFALL
Advantages of ‘planned strategy’
- Introduced with foresight
- Provides a clear sense of direction
- Easily communicated
- Implemented by managers, reliable
Disadvantages of ‘planned strategy’
May lack flexibility
Define ‘emergent strategy’
- Developed overtime
- Responds to change in internal and external environment
Advantage of ‘emergent strategy’
Greater flexibility
Disadvantage of ‘emergent strategy’
May create a feeling of mistrust amongst stakeholders, due to frequent revisions, leading to a lack of confidence
Define ‘strategic drift’
Occurs when a strategy fails to adapt to changes in the internal and/or external environment, making it no longer fit for purpose
Reasons for ‘strategic drift’
- Failing to keep up with changes in external environment
- Failing to respond to changes in internal environment
Define ‘divorce of ownership and control’
Situation that arises when one group of people own a business, but a different group makes the day-to-day decisions
What can ‘divorce of ownership and control’ cause?
Conflict of interest
One wants one thing, one wants another
Define ‘corporate governance’
Formal policies and procedures that are instrumental in the running of a business
e.g. disclosure transparency (public aware of reports)
Advantage of developing a contingency plan
Reduces chance of crisis occuring
Disadvantage of developing a contingency plan
How are you meant to plan for something you don’t know will actually happen?
