Chapter 5 revision Flashcards
Leadership in change management definition
Refers to the ability to positively adhere and motivate employees towards achieving business objectives during transformation.
What is the important of leadership in change management?
Leadership is important as change is likely to be successful when there is a strong leader.
How does a person demonstrate strong leadership?
Building a share vision
Provide ongoing communication
Provide ongoing support
What is change management?
Change management is the process of implementing approaches that prepare an organisation undergoing a transformation.
Change management vs change leadership
Change management is proactive, change leadership is reactive.
Change management occurs in groups/teams, change leadership has one lead figure
Change management focuses on smaller changes, while change leadership focuses on large changes.
9 management strategies to respond to KPIs
Staff training Staff motivation Change in management styles Change in management skills Investment in technology Quality in production Cost cutting Lean production Redeployment of resources
What is staff training?
Staff training refers to a business equipping employees with the knowledge and skills required to perform work tasks. It can increase quality productivity and safety of a business.
Staff training examples
Provide training to improve current skills and career development opportunities
Undertake regular performance reviews
Staff training effect on KPIs
Staff training improves the quality of products, leading to increased customer satisfaction, decreasing number of customer complaints
Staff training improves employees handling of equipment, promoting safer work practices, reducing number of workplace accidents.
Staff training improves employee ability to communicate value of product to customers, increasing number of sales.
Staff training increases efficiency and effectiveness of production, increasing rate of productivity.
What is staff motivation?
Staff motivation refers to managers implementing strategies that seek to drive employees to work toward the achievement of business objectives. It can increase productivity of employees and levels of communication and management within a business.
Staff motivation strategies
Employee recognition and rewards
Performance appraisals to set meaningful, achievable goals
Staff motivation effect on KPIs
Provides staff with sense of commitment when fulfilling tasks, decreasing level of staff turnover.
Improves employee willingness to show up to work and complete tasks, decreasing rates of staff absenteeism.
Increases employee willingness to improve quality of product to satisfy customers, decreasing number of customer complaints.
Improves employee willingness to improve effectiveness and efficiency of operations, increasing rate of productivity.
What is change in management styles/skills?
Refers to an alteration in the way manager’s direct and interact with staff. It can improve employee morale and efficiency of tasks.
Change in management styles/skills effect on KPIs
Less restrictive management styles promotes employee involvement in decision making, creating greater sense of belonging and value in a business, decreasing level of staff turnover.
Less restrictive management styles increase employee confidence in completing tasks, decreasing rates of staff absenteeism.
More restrictive management styles keep employees on task, increasing rate of productivity growth.
What is increased investment in technology?
Refers to the implementation of automated and computerised processes for production and operations. It can improve business productivity and profitability.
Technology strategies include
Improving websites
Using online resources
Investing in automation/more efficient technology
Investment in technology effect on KPIs
Implementing technology such as CAD and CAM can improve quality of products and services, increasing number of sales.
CAD can improve customer willingness to purchase goods due to involvement in process, increasing percentage market share.
CAM can improve business efficiency and effectiveness in production, increasing rate of productivity growth.
What is improving quality in production?
Refers to the implementation of processes that increase the perceived value of a product or service. It allows for a better ability to meet customer needs, remain competitive and improve efficiency.
Quality in production effect on KPIs
Higher quality goods increase customer satisfaction, decreasing number of customer complaints.
High quality products increase likelihood of purchases, increasing number of sales.
Increased customer satisfaction from high quality products increases sales, promoting a competitive advantage, increase percentage of market share.
What is cost cutting?
Cost cutting refers to processes that aim to reduce business expenses.
Cost cutting strategies
Merge staff roles to reduce number of requires staff
Shut down ineffective business locations
Use cheaper suppliers
Cost cutting effect on KPIs
Merging staff roles gives staff more to do, increasing job satisfaction, decreasing rates of staff absenteeism.
Using cheaper suppliers reduces total costs, improving net profit figures.
What is lean production?
Refers to adopting approaches that reduce waste in production, while increasing value of the good to customers. It can improve effectiveness and efficiency of operations.
Lean management strategies
Just in time
Kaizen
Automation
Lean production effect on KPIs
Less idle stock from JIT decreases levels of wastage.
Lean production aims to continuously maximise product quality and meet customer needs, increasing percentage of market share.
Lean production reduces costs by lowering waste, increasing net profit figures
What is redeployment of resources?
Refers to the reallocation of natural, labour and capital materials to different areas of the business to improve their effectiveness and productivity.
Redeployment of resources effect on KPIs
Redeploying resources reduces inefficiencies in the product process, leading to a more productive use of materials, increasing rate of productivity growth.
Redeploying resources for more productive uses reduces time, labour and goods wasted during production, decreasing levels of waste.
Staff training advantages
Staff are highly skilled and able to complete any new roles or tasks
Motivation may rise as staff feel apart of the change process
Staff training disadvantages
Training can be a large cost to a business
Some staff may leave after upskilling
Staff motivation advantages
Increasing motivation levels can increase productivity
Staff motivation disadvantages
Change can be stressful and may demotivated staff who feel threatened by it
Change in management styles advantages
Less restrictive styles increase staff involvement
More restrictive styles promote greater efficiency.
Change in management styles disadvantages
Less restrictive styles can be more time consuming to reach a decision
Change in management skills advantages
Effective use of skills can lead to greater achievement of business objectives
Change in management skills disadvantages
Some managers may need time to develop skills
Investment in technology advantages
Provides business with most efficient to change processes and products
Technology can provide a competitive advantage
Investment in technology disadvantages
Expensive to implement and maintain
Quality in production advantages
Reduced waste
Higher quality products increase customer satisfaction
Quality in production disadvantages
Increasing quality of products could increase costs also
Cost cutting advantages
Increases profit margins
Increases competitiveness of business
Cost cutting disadvantages
Product quality could decline
Lean production advantages
Increased quality
Reduced defects and faults
Lean production disadvantages
Time consuming
Why may businesses decide to expand their business?
Responding to competitors Improve profit margins Attract new customers Capitalise on existing success Take advantage of new market opportunities
New business opportunities
New locations
Online sales
Differentiation
Exporting
What are new locations?
New locations refers to a business opening new storefronts in new locations, such as in a new suburb, city or country.
Advantages of new locations
Creates a physical presence in new geographical locations which can improve business reputation
Further employees can be hired
Could increase sales and profit from new markets
Disadvantages of new locations
Can be difficult to understand and cater to new market
Products may need to be modified to suit overseas audience
Delivery may be more time consuming depending on location
Increased costs (wages, rent etc.)
What are online sales?
Online sales refers to a business aiming to increase their sales by selling products online, making it easier for customers who do not live near a shopfront to purchase goods.
Advantages of online sales
Access to global market without need for expansion
Improved job opportunities for employees
Allows for greater reach to larger customer base in a short period of time
Overall increases market share, sales and profit
Disadvantages of online sales
Reduces face to face contact with customers
Product may be lost or damaged in delivery
Delivery times could be long depending on its destination.
What is differentiation?
Differentiation refers to a business garnering new opportunities by making their products/services unique and different to competitors to serve a competitive advantage.
How can differentiation be achieved?
Introducing tech improvements
Implement innovations
Advertise a brand image
Niche marketing
Advantages of differentiation
Customers are often more loyal to business with differentiation
Employees feel increased sense of pride working for a differentiated business
Business can charge premium prices and customers will still buy their products
Disadvantages of differentiation
Can be difficult to prevent competitors from replicating point of difference
Higher selling prices can deter customers
Additional training may be required for employees
What is exporting?
Exporting refers to sending goods and services overseas for sale.
Advantages of exporting
Creates brand presence in new geographical locations
Increases access to larger market, which can improve sales, profit etc.
Avoids the time and costs needed to set up new stores
Disadvantages of exporting
Products may need to be modified to be sold overseas
There may be hidden costs in exporting like tariffs
Increase in delivery costs
What is Senge’s Learning Organisation?
Senge’s Learning Organisation is a strategy for managing change in an organisation.
What is a learning organisation?
A learning organisation is a business that facilitates the growth of its member and continuously transforms itself to adapt to changing environments
5 principles of a learning organisation
Shared vision Team learning Personal mastery Systems thinking Mental models
What is systems thinking?
Systems thinking refers to the ability to understand the interrelationships between different areas of a business. It allows a business to consider all implications of a change beyond the simple short-term cause and effect.
What is mental models?
Mental models refers to challenging the pre-existing assumptions about a business and its practices.
What is shared vision?
Shared vision refers to the aspirational description of what a business and its members would like to achieve. It involves the participation of many people, not just leaders, to develop a vision.
What is personal mastery?
Personal mastery refers to encouraging individual development and learning through business activities.
What is team learning?
Team learning refers to encouraging individuals to combine their strengths and abilities to grow together.
What is the role of a leader in a learning organisation?
A leader in a L.O should act as a designer, steward and teacher. They are responsible for creating an organisation that is responsive to change and where individuals are able to learn.
What is employee resistance and when does it occur?
Employee resistance refers to the staff in a business restraining against change. It occurs when employees are concerned with their own further and job security and if they feel that is threatened, they will resist change from being implemented.
Low-risk strategies definition
Low risk strategies are the gradual management approaches that encourage employees to accept and participate in change. The strategies seek to create a supportive environment for employees during the change process and aim to assist employees in understanding and accepting a proposed change.
Low-risk strategies examples
Communication
Empowerment
Support
Incentives
What is communication as a low-risk strategy?
Refers to managers initiating open and honest two-way discussion with employees so they are fully aware of the reasons, impacts and their roles in an upcoming change. It involves managers clearly outlining the reasons, benefits and other important information regarding change to employees, as well as employees approaching managers with any concerns or feedback they have.
What is empowerment as a low-risk strategy?
Refers to managers providing employees with increased responsibility and authority during times of change. It provides employees with the power to contribute to change, making them feel directly involved in the process.
What is support as a low-risk strategy?
Refers to providing employees with assistance as they move from current to new practices.
What is incentives as a low-risk strategy?
Incentives as a low-risk strategy refers to managers providing financial or non-financial rewards to encourage employees to support change. These rewards include bonuses or new responsibilities at the work site.
Advantages of low-risk strategies
Communication, empowerment and support increase trust and cohesion between employees and managers
Support and communication can reduce levels of fear of change in employees
Incentives and empowerment provide opportunities for career advancement
All strategies make employees feel valued
Disadvantages of low-risk strategies
Empowerment may result in tasks being carried out incorrectly
Incentives could be seen as bribes
Incentives can be costly
What are high risk strategies?
Refers to the autocratic management approaches used to influence employees to quickly accept and follow a business change.
High risk strategy examples
Manipulation
Threats
What is manipulation as a high-risk strategy?
Refers to influencing employees to follow a proposed change by providing incomplete and deceptive information about the proposed change. It involves providing selective information to distort the employees understanding of the upcoming change.
What is threat as a high risk strategy?
Threat as a high risk strategy refers to managers forcing employees to follow a proposed change by stating that they will cause harm to them if they fail to do so. Threats include threatened dismissal, reduction in hours and abuse.
Advantages of high risk strategies
Business change is implemented to the managers desire
High-risk strategies are effective in crisis situations where change must occur rapidly.
High risk strategies involve little financial cost
Disadvantages of high risk strategies
Could create a negative corporate culture
Relationship between employees and managers is compromised
Employees will have low morale if threatened
Only effective in short-term
What is Lewin’s 3 step change model?
Lewin’s 3 step change model is a process which can be used by a business to implement successful change.
3 stages of Lewin’s change model
Unfreeze
Change
Refreeze
What is the unfreeze stage?
The unfreeze step moves a business to a state where stakeholders are prepared to undergo change. It involves challenging the beliefs, behaviours and value that currently define the business.
What is the change step?
The change step moves the business towards the desired state. It transforms the business practices to meet the new objectives of the business.
What is the refreeze step?
The refreeze step ensures that change is sustained within the business long-term. It stops a business from reverting to previous ways of operating by embedding change into everyday operations.
Business stakeholders who are affected by change
Managers Employees Customers Suppliers General community Shareholders
Positive effects of change on managers
Opportunities to develop new skills or advance careers
Financial or non-financial rewards are provided if the business change is successful
Increased authority and responsibility can improve a managers skills
Negative effects of change on managers
Increased workload can lead to stress
Could lose job/financial security if change is unsuccessful
Reduced roles/responsibility may lead to less authority and control
Positive effects of change on employees
New opportunities and responsibilities can improve employee job satisfaction
Change could build long term job security
Change can provide better work conditions or rewards
Negative effects of change on employees
Employees may need to develop new complex skills and knowledge to keep their job which can increase stress levels
Change could negatively impact job security and financial security
Positive effects of change on customers
Better product quality can increase customer satisfaction
Reduction in price of product can increase customer satisfaction
Practice of CSR may increase customer satisfaction
Negative effects of change on customers
Lowering quality to reduce costs may reduce customer satisfaction
Increasing prices of products may reduce customer satisfaction
Discontinuing a product may reduce customer satisfaction
Positive effects of change on suppliers
May increase amount of resources demanded by a business, increasing sales for supplier
Negative effects of change on suppliers
May decrease sales for supplier if business decides to switch to new suppliers or lower volume of orders
Positive effects of change on general community
Creation of more jobs
Increase customer traffic and sales of surrounding businesses if change involves expanding into new areas
Greater ability to make charitable donations if change is successful
Negative effects of change on general community
Loss of jobs
Decreased customer traffic if change involves shutting down a storefront.
3 things to consider with CSR during change
Employees
General community
Environment
CSR considerations for employees during change
Offer outplacement services to help employees find alternative employment
Offer counselling to help reduce stress and anxiety
Provide extra training and support
Engage in 2-way communication to reduce misunderstanding
CSR considerations for the general community during change
Choosing local suppliers to create employment opportunities and improve the local economy
Redeploying employees to minimise unemployment rates
Sourcing materials from businesses that provide employees with fair pay and working conditions
CSR considerations for the environment during change
Purchasing accurate tech to minimise waste caused by errors
Choosing a local supplier to reduce transport carbon emissions.
Advantages of CSR considerations
Develops good brand reputation
May attract highly skilled employees who value ethical conduct and are committed to meeting business objectives
Customers are willing to pay more for ethically produced goods and services
Disadvantages of CSR considerations
Constant focus on CSR can decrease productivity
Time consuming process
CSR practices can be expensive to implement.
Why is it important for a business to review KPIs following a change?
Because it allows them to identify whether the change has achieved its desired objectives or if further changes are required.
KPIs definition
Refers to the criteria that measure how efficient and effective a business is at achieving objectives
Changes to Australia Post
Redeployed workers to its StarTrack services
Increased freighter flights
Retrained motorbike posties
Management strategies used at Aldi
Investment in technology with self-serve checkouts
Redeployment of resources with employees being reallocated to new areas of the business if they are no longer required in their current one
New business opportunities used at Aldi
Online sales with online store
