3.6 Flashcards
What is change management?
Involves the process that ensures a business responds to the environment in which it operates
What is step change?
Significant and occurs rapidly
- dramatic or radical change
- required when a business has suffered from strategic drift
- gets it over with quickly/ decisively
What is incremental change?
Many small and frequent change
- many small changes which take place as a business develops and responds to subtle changes in external environment
What is disruptive change?
From of step change that arises from changes in the external environment which impact the market as a whole
- impacts the market as a whole, challenging the established “business model”
- rapid improvements in technology are the main driver of disruptive change- new ways of delivering goods and services as well as reducing barriers to entry
Internal change vs external change
Internal- within the control of business
External- outside of the control of the business but which still need to be addressed
Internal causes of change examples
- new leadership
- change in strategic direction and corporate objectives
- significant investment decisions
- changes to scope of business activities
- adjusting the organisational structure
External causes of change examples
- significant competitor actions (e.g new products, takeovers)
- political and legal changes
- significant changes in economic environment
- changes in society
- technological change
Benefits of effective change
- may help sustain competitive advantage (respond to competitor changes)
- aligns business strategy with evolving nature of customer needs and wants
- change in organisational structure improves communication and decision making
- stakeholders gain from improved productivity and work environment
Why organisational change needs to change:
Help improve business performance
- declining profits and sales
- inadequate returns on investment
- low quality customer service
Make the business more responsive to external change
- market changes
- change of ownership
Symptoms that an organisational structure needs to change
- internal fighting
- high levels of staff turnover
- absenteeism rising
- innovation is no longer valued
- declining customer service and
4 reasons why change is resisted
Self interest
Different assessment of the situation
Low tolerance for change and inertia
Misinformation of misunderstanding
Resisting change: self interest
- powerful motivator
- arises from a perceived threat to job security, status and financial position
Resisting change: misinformation and misunderstanding
- people don’t understand why change is needed- misinformed about real strategic position
- perception may be widespread that there is no compelling reason for chance
Resisting change: different assessment of the situation
- disagreement about the need for change or what that change needs to be
- some people may disagree with the change proposed
Resisting change: low tolerance and inertia
- many people suffer from inertia or reluctance to change, preferring things to stay “they way they are”
- many people need security, predictability and stability in their work
Approaches to overcoming change
Education and communication Participation and involvement Facilitating and support Manipulation and co option Negotiating and bargaining Explicit and implicit coercion
Overcoming change: education and communication
- communicate effectively the reasons why change is needed
- honest communication about the issues ( see logic of change)
- education- address misconceptions about the change
Overcoming change: participation and involvement
- effective way of bringing “on board” people who would otherwise resist
- participation leads to commitment
Overcoming change: facilitation and support
- need support to help cope with change
- includes additional training, counselling and mentoring
Overcoming change: co option and manipulation
- C: involves bringing specific individuals into roles that are part of change management
- M: involves the selective use of info to encourage people to behave in a particular way
Overcoming change: negotiation and bargaining
- idea here is to give people who resist an incentive to change
- involve offering better financial rewards for those who accept the requirements of the change programme
Overcoming change: explicit and implicit coercion
- E: involves people been told exactly what the implications of resisting change will be
- I: involves suggesting the likely negative consequences for the business of failing to change, without making explicit threats
What is scenario planning?
Process of preparing for predictable and quantifiable problems and preparing for unexpected and unwelcome events
What is succession planning?
Planning for the orderly replacement of key management and employees
