Chapter 7 - The Management of Change Sac Study

Question 1

What are the internal environment sources of change? (4)

Answer 1

• management
• employees
• corporate culture
• policies

Question 2

How can management be a source of change? (internal environment)

Answer 2

have the responsibility of running a successful organisation which requires anticipating and adjusting to change

Question 3

how can employees be a source of change? (internal environment)

Answer 3

employees working in an innovative/open environment are likely to recommend changes

Question 4

how can corporate culture be a source of change? (internal environment)

Answer 4

if corporate culture is having negative effects on the success of the business it must be changed

Question 5

how can policies be a source of change? (internal environment)

Answer 5

internal change comes as new policies are developed and implemented

Question 6

What are the operating environment sources of change? (4)

Answer 6

customers
competitors
suppliers
interest groups

Question 7

how can customers be a source of change? (operating environment) plus eg relating to McDonalds

Answer 7

organisation needs to be responsive to changes in customer tastes and preferences so it can satisfy customer needs
e.g healthy choice menu

Question 8

how can competitors be a source of change? (operating environment) plus eg relating to McDonalds

Answer 8

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

Question 9

how can suppliers be a source of change? (operating environment)

Answer 9

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

Question 10

how can interest groups be a source of change? (operating environment) Plus e.g. relating to McDonalds

Answer 10

some groups want to directly influence the organisation. e.g. Obesity foundations and diabetes groups

Question 11

what are the macro environment sources of change? plus example of social force relating to maccas (4)

Answer 11

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

Question 12

how can driving and restraining forces impact change? (3)

Answer 12

• 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

Question 13

what are 3 examples of driving forces?

Answer 13

• a clear vision
• participative management style
• group decision making

Question 14

what are the 7 restraining forces?

Answer 14

• managers
• employees
• time
• competitors
• low productivity
• legislation
• costs

Question 15

how can managers impede change? (2)

Answer 15

• by making hasty decisions that are poorly timed and unclear
• managers may put off making a decision, creating uncertainty

Question 16

how can employees impede change?

Answer 16

employees may resist change because they’re worries they cannot adapt to the new procedures, this is made worse with lack of training

Question 17

how can time impede change?

Answer 17

organisations may invest millions in change, only to find the external environment has changed so much that the plan is no longer applicable

Question 18

how can competitors impede change?

Answer 18

a competitor may dominate the marketplace, making other organisations reluctant to major changes as they could be a waste of time and resources

Question 19

how can low productivity impede change?

Answer 19

fear of reduction in productivity is why some organisations are hesitant to embrace change

Question 20

how can legislation and cost impede change? (2)

Answer 20

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

Question 21

what are the 8 key principles of the kottor theory of change management?

Answer 21

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

Question 22

what is the step “create urgency” in kotters theory? (3)

Answer 22

• 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

Question 23

what is the step “form a powerful coalition” in kotters theory? Plus example relating to McDonalds (3)

Answer 23

• 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

Question 24

what is the step “create a vision for change” in kotters theory? Plus example relating to McDonalds (3)

Answer 24

• 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

Question 25

what is the step “communicate the vision” in kottors theory? Plus example relating to McDonalds (2)

Answer 25

• 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

Question 26

what is the step “remove obstacles” in kottors theory? Plus example relating to McDonalds (2)

Answer 26

• 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

Question 27

what is the step “create short-term wins” in kottors theory? Plus example relating to McDonalds (3)

Answer 27

• 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

Question 28

what is the step “build on the change” of kottors theory? Plus example relating to McDonalds (4)

Answer 28

• 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

Question 29

what is the step “anchor the change in corporate culture” of kottors theory? Plus example relating to McDonalds (3)

Answer 29

• 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

Question 30

what are 3 examples of low risk strategies to manage change effectively?

Answer 30

• 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

Question 31

what are 3 high risk factors for managing change effectively?

Answer 31

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

Question 32

What characteristics will organisations who are undergoing transformational change have? 3

Answer 32

• flatter organisational structure
• greater use of technology
• altered corporate culture

Question 33

what are the main structural changes? (3)

Answer 33

outsourcing - reduce costs, more efficient
flatter organisational structures - greater communication
work teams - fosters creativity

Question 34

what is the impact of change on corporate culture?

Answer 34

if organisational culture fits the external environment, managers and employees have the attitude they need to compete successfully

Question 35

what are 2 types of human resource changes?

Answer 35

• intorduce flexible working arrangements will be needed

- if employees are made redundant, appropriate termination procedures must be put in place

Question 36

what are 2 types of operations management changes?

Answer 36

• adopting new technology

- emphasis on quality assurance, including quality control and TQM

Question 37

what is kotters proposed model of effective change management based on? (3)

Answer 37

• thorough preparation and planning
• clear communication
• cooperative participation with all stakeholders

Question 38

what are 3 things a successful leader will need to do?

Answer 38

• 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