3.6.2 and 3.6.3 Key factors in change and scenario planning Flashcards
What are the key factors in change?
- organisational culture
- size of organisation
- time and speed of change
What are the key factors in change? - organisational culture
- if a leader is implementing change in an organisation then they need to work with the culture
- if what they are trying to achieve is not consistent with the culture, they will likely fail as people will not support the change
- a new leader should communicate with key individuals within the organisation to understand the culture and get their buy in or support for the change for it to be successful
- listening and consultation are important
How do you manage resistance to change?
- explain the need for change - but this requires trust
- involvement of key players
- incentives to change
- incorporate views of staff views into the changes
- helps and lets the staff help set the time lines
- so they feel ownership of the changes
What are the key factors in change? - size of organisation
-large organisations
- understanding staff and their individual needs is harder due to their being many in lots of departments
- different departments or divisions may need to implement change differently leading to complex plan
- communication change and need for change is more difficult in tall organisational structures
- leaders and employees - relationship can be difficult
What are the key factors in change? - size of organisation
-small organisations
- staff may be personally invested in the business and more passionate about resisting change
- may be family members or friends involved which make things more personal
- small businesses may have less financial, human and physical resources with which to bring about change
What are the key factors in change? - time and speed of change
- depends on whether the change is incremental or step change
- incremental change is easier to implement then step change as the business has time to manage resistance to change
- disruptive change cannot be anticipated - so this is even harder as it involves step change that you didn’t know you needed to make
Risk
the possibility of loss or business damage
- a threat that may prevent or hinder the ability to achieve the business objectives
- the probability that a hoped for outcome will not occur
How can a business deal with risk?
- ignore it and wait and see
- reduce probability of risk
- share or deflect the risk - insurance
- make scenario plans - prepare for it
- treat risk as an opportunity - particularly if it also affects other competitors
risk management for marketing
- avoid over reliance on customers or product
- develop multiple distribution channels
- test marketing for new products
risk management for operations
- hold spare capacity
- quality assurance and control
risk management for finance
- insurance against bad debts or negative outcomes
- investment appraisal techniques
risk management for people
- key man insurance - protect against loss of key staff
- rigourous recruitment and selection procedures
Planning for risk mitigation
critical
predictable uncertain
low importance
Methods to reduce risk
- risk management - identifying and dealing with the risks threatening a business
- scenario planning contingency plans - planning for unforeseen event
- crisis management - handling potentially dangerous events for a business
Scenario planning
the process of anticipating possible changes in a business situation and devising ways to deal with them