Chapter 7 - The Management of Change Sac Study Flashcards
What are the internal environment sources of change? (4)
- management
- employees
- corporate culture
- policies
How can management be a source of change? (internal environment)
have the responsibility of running a successful organisation which requires anticipating and adjusting to change
how can employees be a source of change? (internal environment)
employees working in an innovative/open environment are likely to recommend changes
how can corporate culture be a source of change? (internal environment)
if corporate culture is having negative effects on the success of the business it must be changed
how can policies be a source of change? (internal environment)
internal change comes as new policies are developed and implemented
What are the operating environment sources of change? (4)
customers
competitors
suppliers
interest groups
how can customers be a source of change? (operating environment) plus eg relating to McDonalds
organisation needs to be responsive to changes in customer tastes and preferences so it can satisfy customer needs
e.g healthy choice menu
how can competitors be a source of change? (operating environment) plus eg relating to McDonalds
organisations need to monitor activities of their competition, knowledge of this allows organisation to modify existing business activities and plan new ones
e.g. Chipotle healthier, higher quality
how can suppliers be a source of change? (operating environment)
organisations should be on the lookout for new suppliers, even when needs are being met by their current ones. Makes them less vulnerable to supply difficulties
how can interest groups be a source of change? (operating environment) Plus e.g. relating to McDonalds
some groups want to directly influence the organisation. e.g. Obesity foundations and diabetes groups
what are the macro environment sources of change? plus example of social force relating to maccas (4)
economic forces - aus economy experiences ‘booms’ and busts’
political and legal forces - new legislation
technological forces - adopting new technology
social forces - societies changing values e.g. changing towards healthy eating and growing concerns for increase in childhood obesity and diabetes
how can driving and restraining forces impact change? (3)
- driving forces greater than restraining then the change will be successful
- restraining forces are greater than driving forces then the change will not be successful
- if driving and restraining forces equal change will not be successful
what are 3 examples of driving forces?
- a clear vision
- participative management style
- group decision making
what are the 7 restraining forces?
- managers
- employees
- time
- competitors
- low productivity
- legislation
- costs
how can managers impede change? (2)
- by making hasty decisions that are poorly timed and unclear
- managers may put off making a decision, creating uncertainty
how can employees impede change?
employees may resist change because they’re worries they cannot adapt to the new procedures, this is made worse with lack of training
how can time impede change?
organisations may invest millions in change, only to find the external environment has changed so much that the plan is no longer applicable
how can competitors impede change?
a competitor may dominate the marketplace, making other organisations reluctant to major changes as they could be a waste of time and resources
how can low productivity impede change?
fear of reduction in productivity is why some organisations are hesitant to embrace change
how can legislation and cost impede change? (2)
legislation - can act as restraining force when the legislation places restrictions on certain operational practices and procedures
cost - financial cost of implementation of change can be high e.g. purchasing new equipment
what are the 8 key principles of the kottor theory of change management?
CREATE - create urgency FORM - form a powerful coalition CREATE - create a vision for change COMMUNICATE - communicate the vision REMOVE - remove obstacles SHORT-TERM - create short-term wins BUILD - build on the change ANCHOR - anchor the change in corporate culture
what is the step “create urgency” in kotters theory? (3)
- for change to happen, helps if whole organisation really wants it
- sense of urgency around the need for change needs to be developed
e.g. In 2002 the CEO at Maccas started attending obesity forums and meetings
what is the step “form a powerful coalition” in kotters theory? Plus example relating to McDonalds (3)
- convince people change is necessary
- often takes strong leadership and support from key people within the organisation
eg. Store managers in McDonalds pushing for the change by encouraging workers to develop skills in line with the change
what is the step “create a vision for change” in kotters theory? Plus example relating to McDonalds (3)
- clear vision can help everyone understand why are are asking them to do something
- when people see for themselves what you’re trying to achieve, the directions they are given tend to make more sense
e.g. changes began to happen when salads plus menu was launched in 2003, creating a vision for what was to come
what is the step “communicate the vision” in kottors theory? Plus example relating to McDonalds (2)
- the change needs to be communicated frequently and powerfully and embedded within everything that is done in the organisation
e. g. use effective leadership and communication skills to internally share the vision to get all employees focused and motivated for change
what is the step “remove obstacles” in kottors theory? Plus example relating to McDonalds (2)
- hopefully staff want to start to achieve the benefits that have been prompted, so any obstacles that may impede progress need to be removed
e. g. Ongoing staff training
what is the step “create short-term wins” in kottors theory? Plus example relating to McDonalds (3)
- nothing motivates more than success
- needs to be results that staff can see in a short time frame, otherwise critics and negative thinkers may hurt progress
e.g. In 2007 McDonalds Australia was the first national restaurant chain to earn the heart foundation tick on a range of meals
what is the step “build on the change” of kottors theory? Plus example relating to McDonalds (4)
- victory cannot be declared too early
- quick wins are only the beginning of long-term change
- each success provides an opportunity to build on what went right and what can be improved
e.g. New products added to the healthier choice menu and became regularly available. Have also added to make your own burger range
what is the step “anchor the change in corporate culture” of kottors theory? Plus example relating to McDonalds (3)
- the change should become part of the core of the organsiation so it sticks
- corporate culture often determines what gets done, so values behind the vision must show in day-to-day work
e.g. Staff are continually being trained around knowlege that McDonalds has a greater focus on restaurant/cafe quality
what are 3 examples of low risk strategies to manage change effectively?
- participative approach, greater communication which increases level of trust
- participation and teamwork, gives everyone opportunity to participate and be apart of the process
- training to support the changes, which inspires confidence in staff that they will not be left behind during the change process
what are 3 high risk factors for managing change effectively?
manipulation: seen as unethical
cooperation: can backfire if the individual recognises what is being done and feels used
threat: can lead to possible compensation claims for stress and harassment
What characteristics will organisations who are undergoing transformational change have? 3
- flatter organisational structure
- greater use of technology
- altered corporate culture
what are the main structural changes? (3)
outsourcing - reduce costs, more efficient
flatter organisational structures - greater communication
work teams - fosters creativity
what is the impact of change on corporate culture?
if organisational culture fits the external environment, managers and employees have the attitude they need to compete successfully
what are 2 types of human resource changes?
- intorduce flexible working arrangements will be needed
- if employees are made redundant, appropriate termination procedures must be put in place
what are 2 types of operations management changes?
- adopting new technology
- emphasis on quality assurance, including quality control and TQM
what is kotters proposed model of effective change management based on? (3)
- thorough preparation and planning
- clear communication
- cooperative participation with all stakeholders
what are 3 things a successful leader will need to do?
- promote change in a manner that will achieve cooperation and acceptance
- build and communicate a clear vision
- keep an open mind, constantly seeking new ideas
