3.6 Flashcards
Causes of change
-changes in organisational size
-poor business performance
-new ownership
-transformational leadership
-the market and other external factors (PESTLE)
Possible effects of change
Change can have significant effects in the business on the following:
-competitiveness
-productivity
-financial performance
-stakeholders
Effects of change on competitiveness
Changes can either increase or decrease a business’s competitiveness.
Positive effects: New products, improved technology, or better efficiency can improve a firm’s position in the market.
Negative effects: Poor implementation of changes or failure to adapt to the market can make a business less competitive, losing market share to more adaptable competitors.
Effects of change on productivity
Positive changes like new technology, streamlined processes, or better employee training can increase productivity.
Negative changes, such as poor management or low employee morale, can reduce productivity.
Effects of change on financial performance
Positive effects: Improved processes, successful marketing campaigns, or new product launches can boost revenue.
Negative effects: Restructuring costs, poor strategic decisions, or inefficiency can lead to declining profits.
Effects of change on stakeholders
Employees may experience changes in their roles, pay, or job security.
Customers may see improved or deteriorated product offerings or service quality.
Suppliers might be affected by a change in order volumes, pricing, or contracts.
Shareholders may experience increased profits or losses depending on the outcome of the changes.
What is organisational culture
Organisational culture refers to the shared values, beliefs, norms, and behaviours within a business that shape how employees interact and work together.
Key factors in change
-Organisational culture
>Strong cultures may resist change because employees are comfortable with existing norms and practices.
>Flexible cultures are more adaptable and open to new ideas, making change easier to implement.
-Size of organisation
> Larger organisations may face more resistance to change due to complex layers of management and a larger workforce.
Decision-making can be slower, and communication can be more challenging, making change difficult.
Smaller organisations can be more agile and may be able to implement changes more quickly.
With fewer layers of management small businesses can adapt rapidly to new opportunities or threats.
-Time/speed of change
>Fast change may cause disruptions, create resistance, and risk mistakes if not carefully managed.
>Slow change may allow for more careful planning and better stakeholder buy-in, but it can result in missed opportunities.
-Managing resistance to change
What is resistance to change
Resistance to change occurs when employees or stakeholders are unwilling or hesitant to accept new methods, ideas, or directions.
Common Reasons for Resistance:
Fear of the unknown: Employees are often uncomfortable with changes they don’t understand.
Disruption of routine: Change might challenge employees’ well-established ways of working.
Lack of trust in management: If employees don’t believe in the leadership’s ability to guide change effectively, they may resist.
Fear of job loss: Structural changes, such as downsizing, may cause job insecurity.
Ways to Manage Resistance to Change:
Clear communication: Explain why the change is necessary and how it benefits the business and employees.
Involve employees: Let employees contribute to the change process, increasing their sense of ownership and reducing resistance.
Training and support: Provide training programs and resources to help employees adjust to new systems or processes.
Create a positive culture: Foster a culture of change, where employees view it as an opportunity rather than a threat.
Leadership support: Strong and visible leadership can inspire confidence in the change process.
What is risk assessment
Risk assessment involves identifying potential threats that could negatively impact a business
Types of risk
-Natural Disasters such as earthquakes, floods, hurricanes, and wildfires can disrupt business operations by damaging physical assets, disrupting supply chains, and even causing loss of life or employee injuries.
-IT Systems Failure can include cyberattacks, data breaches, or problems like software malfunctions and hardware crashes.
>In today’s digital world, businesses depend heavily on IT systems for daily operations. A failure can result in data loss, security breaches, or a halt in business processes, leading to lost revenue and customer trust.
-Loss of Key Staff- Losing key personnel, such as top executives, critical managers, or employees with unique skills, can lead to major disruptions in operations and decision-making.
Planning for Risk Mitigation 2 factors
-Business continuity
-Succession Planning
Everything on business continuity
Business continuity planning ensures that a company can continue to operate even in the event of a significant disruption (e.g., natural disaster, IT failure).
The focus is on creating strategies that allow businesses to continue delivering essential products or services during and after a crisis.
Key Components of Business Continuity Plans:
-Backup systems: Ensuring that data and key IT infrastructure are backed up and accessible in case of failure.
-Emergency protocols: Detailed plans for handling emergencies, including who to contact and what steps to take immediately following a crisis.
-Communication plans: How the business will communicate with customers, employees, and stakeholders during a crisis to keep them informed.
-Recovery strategies: Plans to restore normal operations as quickly as possible after a disruption (e.g., relocating operations, scaling down production).
Everything on succession planning
Succession planning is the process of identifying and developing internal talent to fill key roles in the future, particularly leadership positions.
Key Aspects of Succession Planning:
-Identifying future leaders: Assessing potential candidates within the organisation who can step into key positions in the future.
-Training and development: Providing leadership training and mentoring for high-potential employees to prepare them for senior roles.
-Planning for sudden departures: Ensuring that the business can continue operating effectively even if a leader leaves unexpectedly (e.g., due to retirement, resignation, or illness).
What is scenario planning
Scenario planning is a strategic planning method used by businesses to prepare for possible future scenarios.
