change Flashcards
what is change ?
business change occurs when an organisation improves, restructures, or transforms a major part of its operations disrupting systems, people and processes
what is crucial to the success of any organisation ?
managing change effectively, change is usually met with a level of resistance
why do businesses need to adapt and change ?
the business environment is dynamic and ever-changing, need to adapt and change to stay relevant to consumer wants/needs
what is restructuring ? - internal change
where a business changes its internal organisational design which can result in additional layers being created with new management positions, can involve delayering - levels of management are removed
why does delayering cause high levels of resistance ?
employees may be worried about losing their job, workload can increase, can have more responsibility, can be harder to get promoted
what is new product development ? - internal change
can be when a business invests high amounts of capital into a new product, can result in new methods of working for the employees
why has new product development resulted in employees needing to work in a different way ?
car companies - the more advanced the car, the more skilled the employees need to be
what is major innovation developments ? - internal change
this can be where a business has to create new methods of working or operating which are in line with innovation, e.g. food delivery apps or 3D food printing
what are research & development activities ? - internal change
many businesses are now using AI to improve the capability of their products, including the automotive industry
why are individuals wary of AI and the changes it brings ?
missing information, people will have a lack of innovation
what is relocation of business (operations) ? - internal change
many businesses will move to different countries to reduce expenditure in areas such as manufacturing, assembly or call centre operations, e.g. apple moving production to india
challenges faced by companies by moving production from one location to another ?
the cost and time of training new staff, production may be more costly
what is a change in strategic direction of the business ? - internal change
e.g. netflix - change from DVD’s to streaming and creating their own content
what is change in ownership ? - internal change
e.g. the kraft cadbury hostile takeover in 2010, unwelcome change for many stakeholders
what is retrenchment ? - internal change
a strategy used when a business decides to scale-back its activities, e.g. pizza express
why may it be difficult to recruit new employees after scaling-back its business ?
potential employees may not trust them to have their job long-term
what is a merger/acquisition ? - internal change
companies join together on a friendly joint agreement, one company buys another - can be hostile, e.g. jd sports purchased footasylum in 2019 for £90m - later forced to sell at a loss
how the change in ownership following the re-sale could have a negative impact on stakeholders ?
fear of redundancy, fear of job security - affects work performance, fear of asset-strip - companies buy companies then sell
what is rebranding of the business ? - internal change
this occurs when the image of a business is changed to create a different identity for the brand to differentiate it from competitors, e.g. Greggs re-branding from low quality cheap food
what is growth in size of the business ? - internal change
organic growth - when a business achieves growth from existing activities rather than through acquisitions or mergers, e.g. poundland
what are leadership and management changes ? - internal changes
e.g. apple changes in leadership from steve jobs to tim cook
are changes driven by internal factors easier to manage ?
it depends; can be easier to control and manage, less conflict because the workers are familiar with each other, may be less resistance with effective communication
how can a business attempt to prepare for potential challenges ?
by understanding the market/industry that it operates in, can conduct SWOT analysis to assess key opportunities and threats
how to resolve poor financial performance ? e.g. lower profit margins
change to cheaper suppliers, delayering, decrease variable costs, increase prices - rebranding
how to resolve employees attitudes towards the business ? e.g. demotivated workforce
enrichment, feedback, appraisals, financial and non-financial motivators
how to resolve increases in labour turnover ? - resulting in loss of key employees
improve communication, more appraisals, improve recruitment processes, better working environment
how to resolve product recalls ? - due to faulty products being released and sold to customers
improve technology, quality control, quality assurance, better quality checks, purchase better quality materials
what is the external environment ?
all of the factors that are outside the direct influence and control of a business, but which impact upon their operations
why may businesses be reluctant to change their operations ?
high initial costs, arrogance/complatency - dont believe its going to affect them, overstake customer loyalty, dont see it coming
how can businesses reduce the impact of change and associated problems ?
by planning the implementation carefully, can help to minimise disruption
what is the ability to manage change dependent on ?
the pace of the change, differs according to industries and the business situation
what is rapid/unplanned change ? ‘the pace of change’
rapid change, occurs in response to a shock and is therefore often unstructured and under-resourced
e.g. covid 19
e.g. a volcanic eruption restricting access to supplies
firms should have contingency plans in place to help manage such events
what is incremental/planned change ? ‘the pace of change’
internally managed and is structured and timetables, managers generate clear objectives for the change, create timescales and allocate resources to ensure changes are achieved
enables managers to anticipate the impact of changes and to minimise the adverse effects through consultation with employees, trade unions, suppliers and other stakeholders
what are disruptive changes ? ‘the pace of change’
occurs when an industry undergoes radical change that modifies how all firms operate
e.g. impact of uber on taxi drivers
what are the three factors that should be considered to help change to be effective ?
employee preparation
increased research & development (R&D) expenditure
additional capital investment
why is employee preparation essential ? - dealing with and managing change
to gain the support of the workforce before any changes begin
ways of employee preparation
company meetings, employee training, reassure/comfort them
why is increased research & development (R&D) expenditure essential ? - dealing with and managing change
this will be important to introduce new products and processes when implementing change
why is additional capital investment essential ? - dealing with and managing change
a business will struggle with change if they have outdated technology and equipment, this could be affected by the level of borrowing (gearing) that a business has
what does implementing change relate to ?
the process of bringing about change and the strategies that a business can use to maximise the chances of success
what model did john storey create ?
4-stage model, that leaders can use when implementing change
according to storey, what can change be ?
imposed or negotiated
what are the four approaches of storey ?
negotiated total package (NTP)
negotiated piecemeal initiatives (NPI)
imposed piecemeal initiatives (IPI)
imposed total package (ITP)
what is negotiated total package (NTP) ? - john storey
managers and workers negotiate on how a major change will be implemented
based on an agreement, trade unions often involved
e.g. uniform change
benefits of negotiated total package (NTP) ?
potentially the most effective method of implementing a process of change, can help to largely reduce resistance to change
negatives of negotiated total package (NTP) ?
can lead to some conflict, affects all workers, very time consuming, can lead to employee resistance - due to comprimises
what is negotiated piecemeal initiatives (NPI) ?
managers and workers consult and agree on changes as they become necessary
e.g. working hours
benefits of negotiated piecemeal initiatives (NPI) ?
can be easier to implement than a total package of change
negatives of negotiated piecemeal initiatives (NPI) ?
time consuming, quite disruptive - can slow down production
