3.10.1 Managing change Flashcards
Explain what organisational change is and how its affected by both internal and external environments
- For organisations, the last decade has been fraught with restructuring, process enhancements, mergers, acquisitions, and layoffs – all in hope of achieving revenue growth and increased profitability
- While the external environment will continue to play a role in an organisations ability to deliver goods and services, the internal environment within the organisation will increasingly inhibit it from delivering products required to meet the demands of the marketplace unless it is able to adapt quickly
What are the types of change?
- Internal
- External
- Incremental
- Step
- Disruptive
What does internal causes of change mean?
this is change caused by decisions taken by the business itself
What does internal causes of change include?
- Restructuring
- Delayering
- New leadership
Explain how new leadership acts as an internal cause of change
the arrival of new leadership is often followed by a change in business strategy and subsequent changes to the products and markets in which a business operates and how it competes.
What is the definition of external causes of change? Hint: think PESTLE
these are linked to changes in the external environment facing all businesses or businesses in specific markets and/or locations (link to the PESTLE analysis)
List the external causes of change
- Social trends/attitudes
- Economic conditions
- Laws/regulations
- Technological advances
Example of changes in social trends
for example the growing resistance by consumers to businesses using single-use plastic in products and packaging
Example of changes in economic conditions
for example the economic uncertainty created by Brexit
Example of changes in laws/regulations
for example changes to minimum pay requirements (National Living Wage), data protection (GDPR) and restrictions on advertising of HFSS in 2025
Example of changes in technological advances
the creation of new business models (e.g. streaming) to challenge existing, established business models (e.g cinemas and rental stores)
Explain what incremental change is and give an example
These are the many small changes that businesses make day-to-day as management respond to opportunities and threats
This refers to efficiency and sustainability improvements in a company’s processes, operations, and supply chains
They usually involve relatively little, if any, resistance to the changes made
These changes make day to day management more efficient
Example = small and continuous changes to the quality of a product and the quality process it undertakes (kaizen)
Explain what step change is
- These are the more dramatic or radical changes which management make
- They are often triggered through the arrival of new senior leadership and/or when it is recognised that the business is suffering from strategic drift
- As this type of change often involves significant alteration to the business’ activities, it requires a well-organised change management process to enable them to be made successfully
Explain what disruptive change is. Hint: form of step change
This is a form of step change that arises from changes in the external environment
Thus the business is changed and challenged fundamentally
It impacts the market as a whole, challenging the established “business model”
Rapid improvements in technology have been a leading driver of disruptive change since technological innovation provides new ways of delivering goods and services as well as reducing barriers to market entry
Explain what Lewin’s Force Field is and the general definition of change
- It provides an overview of the problems with change that need to be tackled by a business
- Change is the result of dissatisfaction with present strategies (performance, failure to meet objectives etc)
- Change doesn’t happen by itself – it is essential to develop a vision for a better alternative
- Management have to develop strategies to implement change
- There will be resistance to change – it is inevitable, but not impossible to overcome
- In Lewin’s model there are forces driving change and forces restraining it
- Where there is equilibrium between the two sets of forces there will be no change
In order for change to occur the driving force must exceed the restraining force
What does Lewin’s Force field look like?
List what Lewin’s analysis can be used for.
- Investigate the balance of power involved in an issue
- Identify the key stakeholders on the issue
- Identify opponents and allies
- Identify how to influence the target groups
List internal forces of change (from within the business)
- Desire to increase profitability and other performance measures
- The need to reorganise the organisational structure to increase efficiency and competitiveness
- Natural ageing and decline in a business (e.g. machinery, products)
What are external forces for change (outside the control of the business)?
- Increased demands for higher quality products
- Greater competition
- Ethics & social values
- Technological change
Why are there restraining forces that make change harder?
Despite the potential positive outcomes, change is nearly always resisted
A degree of resistance is normal since change is disruptive and stressful
List things that management will have to do in order to have change happen in the business
- Explain the need for change
- Provide information
- Consult, negotiate and offer support and training
- Build employee relations
List the reasons commonly associated with failed change programmes.
Employees do not understand the purpose or even the need for change
Employees lack the necessary skills and/or there is insufficient training and development offered
Lack of necessary resources
In adjusting a firm’s strategy, list what they may have to change
- The markets it will target
- The kind of products it will sell and how its sold
- The level of global activity
- It’s various partnerships and other joint business arrangements
What is a flexible organisation?
- This is one that is able to adapt and respond relatively quickly to changes in its external environment in order to gain competitive advantage and sustain its competitive position
- Firms need to be flexible in order to cope with internal and external pressures
What are the characterstics of flexible organisations?
- Encouragement and adoption of methods of flexible working
- Flatter rather than tall hierarchies in the organisational structure
- An organisational culture that embraces change – i.e. see change as an opportunity rather than something to be resisted
- Decision-making based on strong communication; likely to be decentralised, with widespread use of employment empowerment
What are methods of being a more flexible organisation?
Restructuring
Delayering
Flexible employment contracts
Organic structures
Knowledge and information management
What is restructuring?
this is the corporate management term for the act of reorganising the legal, ownership, operational, or other structures of a company for the purpose of making it more profitable or better organised for its present needs
What is delayering?
this involves the removal of one or more layers of hierarchy from the management structure of an organisation
What are the advantages of delayering?
- It offers opportunities for better delegation, empowerment, and motivation as the number of managers is reduced and more authority passed down the hierarchy
- It can improve communication within the business as messages have to pass through fewer levels of hierarchy
- It can remove departmental rivalry if department heads are removed and the workforce is organised more in teams
- It can reduce costs as fewer (expensive) managers are required
- Innovation can be encouraged further
- It brings managers into closer contact with the business’ customers – which should (in theory) result in better customer service
What are the disadvantages of delayering?
- Not all organisations are suited to flatter organisational structures – mass production industries with low skilled employees may not adapt easily
- It can have a negative impact on motivation due to job losses, especially if it’s just an excuse for redundancies
- A period of disruption may occur as people take on new responsibilities and fulfil new roles
- Those managers remaining will have a wider span of control which, if it is too wide, can damage communication within the business
- There is the danger of increasing the workload of the remaining managers beyond that which is reasonable
- It may also create skill shortages within the business – firms may lose managers and staff with valuable experience
What is a flexible employment contract?
these give employees the flexibility to only pay staff when they need to them (essentially a 0 hour contract)
What are organic and mechanistic structures?
Types of structure that a flexible organisation adopt
What is an example of an organic structure?
Google and Innocent Smoothes adopt an organic structure where the workforce is relaxed and informal – they also encourage employees to have fun in order to maintain their motivation and work ethic
What is an example of an mechanistic structure?
universities, schools, and the NHS adopt a mechanistic structure as they rarely have to change and have long, and strict procedures which all employees and students have to follow
What are characteristics of organic structures?
Informality
Flexible and fluid (easy to change)
Favours informal verbal communication
Associated with decentralised decision making and employee empowerment
Find change easer to handle
What are characteristics of mechanistic structures?
- More formal and bureaucratic
- Associated with centralised decision making and supervision
- Reliance on formal communication methods
- Favours standardised policies and procedures
- Little perceived need for change
- Greater resistance to change when implemented
What is Knowledge Management and give an example?
This is the process of creating, sharing, using, and managing the knowledge and information of an organisation
This refers to a multidisciplinary approach to achieving organisational objectives by making the best use of knowledge
It is an enabler of flexible organisations
Example = car manufacturers such as Ford apply knowledge and information management to product development processes and to maintain quality standards
Explain what barriers to change there may be?
What are the Four Reasons for Resistance to Change, according to Kotter and Schlesinger?
- Self interest
- Misunderstanding
- Low tolerance of change
- Different assessments of the situation
How is self interest a reason for resistance to change?
How is misunderstanding a reason for resistance to change?
How is low tolerance of change a reason for resistance to change?
How are different assessments of the situation a reason for resistance to change?
What are Kotter and Schlesinger’s Six Ways of Overcoming Resistance to Change?
- Education and communication
- Participation and involvement
- Facilitation and support
- Negotiation and agreement
- Manipulation and Co-option
- Explicit and implicit coercion
How is education and communication a way of overcoming resistance to change?
How is participation and involvement a way of overcoming resistance to change?
How is facilitation and support a way of overcoming resistance to change?
How is negotiation and agreement a way of overcoming resistance to change?
How is manipulation and co-option a way of overcoming resistance to change?
How is explicit and implicit coercion a way of overcoming resistance to change?
