3.6 - Managing Change Flashcards
Change management
The process that ensures a business responds to the environment in which it operates
Step change
Dramatic change in one fell swoop. Often required when a business has suffered from strategic drift
Incremental change
Many small changes which take place as a business develops and responds to subtle changes in the external environment
Examples of internal causes of change
- New leadership
- New ownership
- Adjusting the organisational structure
Main reasons why change is resisted
- Self interest
- Different assessment of the situation
- Low tolerance for change and inertia
- Misinformation and misunderstanding
Examples of external causes of change
- Significant competitor actions
- Political and legal changes
- Technological change
Ways to overcome resistance to change
- Communication
- Support
- Negotiation
- Involvement
Risk management
Process of identifying, assessing, and prioritising risks followed by coordinated efforts to minimise, monitor, and control the likelihood or impact of unfortunate events
Scenario planning
Strategic planning method used by businesses and organizations to create long-term plans based on different possible future scenarios. Instead of relying on predictions, it involves exploring a range of possible futures and preparing responses to various uncertainties and challenges
Crisis management
Process by which an organisation handles a disruptive event or situation that has the potential to damage its reputation, finances, operations, or overall stability
Succession planning
Process of identifying and developing internal talent to fill key leadership roles within an organisation. It ensures that the business can maintain continuity and stability when current leaders retire, leave, or are unable to perform their duties
Risk mitigation
Process of identifying, assessing, and taking steps to reduce or manage the potential impact of risks on a business or project. The goal is to prevent or minimise the negative consequences that could arise from uncertain events or situations, thereby protecting the organisation’s assets, reputation, and long-term success
Risk acceptance
Strategy in risk management where an organisation acknowledges the presence of a risk but decides not to take action to mitigate or avoid it. Instead, the organization accepts the potential consequences if the risk materializes. This approach is often used when the cost of mitigating the risk is too high, or the risk is perceived to have a low likelihood or impact
Risk avoidance
Strategy in risk management where an organisation takes steps to completely eliminate a potential risk by either not engaging in certain activities or changing their processes to avoid exposure to the risk. This approach aims to eliminate the possibility of a risk occurring altogether
Risk limitation
Strategy in risk management aimed at reducing the severity or impact of risks that cannot be entirely avoided. Instead of completely eliminating a risk, businesses focus on minimising its potential negative effects through mitigation strategies, such as preventive measures or setting limits on the scale of exposure
Risk transference
A risk management strategy where a business shifts the responsibility for a particular risk to a third party. This typically involves passing the financial or operational burden of a risk to another entity, such as an insurer, contractor, or supplier. The goal is to reduce the impact of the risk on the business by having another party assume responsibility for it
Business continuity
The ability of an organisation to maintain essential functions during and after a disaster or disruption. This involves planning and preparation to ensure that a company can continue delivering products or services to customers even in the face of unexpected events, such as natural disasters, cyberattacks, or other crises
