change Flashcards
(39 cards)
causes of rapid change
- introduction to new technology
- change in competition
- change in consumer taste
- new legislation
- labour markets change
- change in economic conditions
- change in ownership
what markets are likely to change often
- tech markets due to innovation
- fashion due to change in consumer taste
what are internal causes of change
- change in management styles
- change in business ownership
- change in business size
- introduction of new technology
What are external causes of change
- introduction of new technology
- labour markets
- change in economic conditions
- competition
- change in consumer taste
- new legislation
What are change in business size
internal causes of change
- if a business grows organically they may expand their product range
- developing new distribution channels
- rapid organic growth can happen which can put pressure on liquidity, can also put pressure on staff as they may need to learn new skills
rationalisation may occur - reduction in staff responsibilities
labour market
external causes of change
- minimum wage, living wage, employment protection, increases maternity pay will all push up costs
- recessions will increases supply of labour and push down costs
- immigration policies and expansion of EU membership will increases supply of immigrant workers
planned change
- creates internally and is structured and timetabled
- clear objectives for the changes are established
unplanned changes
- this occurs as a response to a shock to the business and are often unstructured and under resourced
- usually a response to external changes
what are the effects of change
- shorter product life cycle
- demised brand loyalty
- new product needs to be developed
- production methods will need to be changed
- retaining in the workforce
- flexible workforce
- the need to comply with constantly changing legislation
effects of change
why would products needs shorter product lifecycle
- bring threats and opportunities of retailers and manufactures
- products must pay a return immediately
- little incentive for long term investment
- returns can be improved by seeking new markets for products
- market development
effects of change
diminished brand loyalty
- new entrants find it easier to grab market share and existing businesses have to fight to maintain sales
- marketing costs are increases to maintain brands and introduce new products
effects of change
why would production methods will need to be changed
- to match changing consumer demands
- new products needs continually, spending required on new ideas and improving existing products
- capital good are likely to be out of date faster and this increase pressure on returns from large scale capital investments. this encourages businesses to contract out manufacturing
effects of change
why would you need to retraining the workforce
- skills mismatch the problems
- need to adapt to new technologies
- training and recruitment costs increased
what are strategies for effective change management
- employee preparation
- increases R&D expenditure
- additional capital investments
effective change management
employee preparation
- This may involve reskilling to enable employees to carry out new tasks effectively
- training will make a workforce more flexible and adaptable, enabling them to meet the demands of change.
effective change management
Increased research and development expenditure
- Increased expenditure on R & D is used both in preparation for change, and as a reaction to change
effective change management
additional capital investments
- Change can create the need for investment in new technology and new equipment.
- change is an expensive undertaking
Storey’s Four Methods of Implementing Change
- negotiated Total Package
- Negotiated Piecemeal Initiatives
- Imposed Piecemeal Initiatives
- Imposed Total Package
Negotiated Total Package
- change implemented will be based on agreement between management and workers
- Trade unions will be involved
- more likely to result in a coordinated process of change which is understood, and accepted, by all stakeholders
- requires a good deal of preparation
and expenditure, may not always be possible in a highly competitive and difficult business environment
Negotiated Piecemeal Initiatives
- changes will happen gradually
- agreed on change through negotiation and consultation with the workforce
Imposed Piecemeal Initiatives
- This saves time and the structure
of change is in the hands of management who understand the overall objectives - imposition of change can be met with resistance from workers who may resent the lack of consultation
- Each piecemeal change may also be aimed at a different objective, whereas a total package is more likely to be working towards one overall objective
Imposed Total Package
- Senior management plan and introduce a major change all at once without consultation with workers
- This sort of change might occur when negotiated change has failed or because of rapidly changing external factors that need responding to quickly
- resisted by middle managers and workers and its success depends on the skills of the senior managers in being able to establish new systems whilst minimising disruption.
supplier change
- manufacturers who change to a Just in Time (JIT) system may find that some of their suppliers resist having to supply components ‘as and when’ the manufacturer requires. This may well result in an increase in costs as deliveries need to increase in frequency
- Unfortunately smaller suppliers may have no choice but to accept the situation or lose a valuable customer
- Manufacturers should involve their suppliers from the outset
Owner resistance
- Owners may fear that change will increase risk
- implementing change may be costly and may involve investment
- Management will need to explain their plans to the shareholders carefully to convince them that sacrifice now will lead to better profit in the future