Forces for Change 11 Flashcards
Business change
Business change- any alteration to a business and/or its work environment. Process of altering and establishing a modified form.
Planned change is usually more successful (proactive; initiate innovate embrace change), unplanned change (reactive) is done in haste, not managed well
proactive- in anticipation
reactive- in response to businesses that have already changed
Lewin’s Force Field Theory
looks at the driving forces and restraining forces to explain why the business is ‘the way it is’
If DF outweigh RF change is likely to be implemented, if they are equal it is unlikely the change will be implemented, if RF outweigh DF the change will unlikely be introduced
Driving force
those forces that push the business and support/encourage proposed change
Restraining force
personal or organisational resistance to change that counteracts driving forces
Managers as a driving force
Influence the business (provide strategic direction)
Initiate and ensure changes are implemented
Critical to the success of change
Example: business proposes to increase market share by differentiation
Employees as a driving force
If they are happy to implement and support the change, the business is likely to find the whole change process a success
Main reason for the success or failure of a change
Example: business implements new technology
Competitors as a driving force
Stay informed on what competitors are doing and how they are performing so your business can respond to those changes to maintain customers and market share
Constant pressure to stay ahead of competitors to gain a competitive edge, respond to pressures in the industry/market first
Example: competition between supermarkets
Legislation as a driving force
Government changes legislation which can impact the business
These forces cannot be ignored and have to be followed (could mean aspects of operations have to change)
Affects taxation, budget on small businesses, permits/licenses/regulations
Could make it easier to drive change (higher budget on small businesses, lower taxation, reduce GST)
Pursuit of profit as a driving force
All businesses will implement changes in a hope to improve products and increase sales and market share. Profit is an incentive for businesses to drive change because profit is needed for the business to grow.
Improving quality or a strategy to cut back on costs/expenses (reducing employees)
Example: Denimsmith durable jeans that are hand-made and physically checked for quality
Reduction in costs as a driving force
Cost-cutting leads to higher net profit
outsourcing, reviewing contracts/insurance/loans for cheaper options, negotiating with suppliers (bulk buying)
Cost reduction strategy can lead to being able to offer products at lower prices, therefore attracting customers
Example: Woolworths increased operational efficiencies to increase profit
Globalisation as a driving force
Globalisation is the breakdown of barriers to trade among countries/nations/consumers, the free movement of goods, capital and people Globalisation can drive change as it increases access to other markets (can get supplies from overseas for cheaper and, maybe, at a superior quality) or outsource (reduces costs) and greater potential for growth (larger market).
Example: 2XU originated in Australia but is now nearly internationally known (America)
Technology as a driving force
Technological advancements have allowed for desired changes such as increasing productivity. Newer/more efficient machinery can now automate dangerous or difficult tasks and mass produce at a faster rate with fewer faults. Increased technology (computers, applications, software) in the workplace has driven businesses to train employees.
Example: Amazon using robots to automate tasks
Innovation as a driving force
Innovation is the creation of effective procedures/products/processes to increase quality/attributes of products or increase efficiency
Catalyst for growth and success
Can give the business a competitive edge
Example: Henry Ford’s production line to deliver cars at a lower price
Societal attitude as a driving force
Societal attitudes refer to the changes in opinion, values, and lifestyle of the community.
Businesses want to appeal to future employees and customers as an organisation that values opinions and values. Businesses need to adapt or else, their reputation is risked.
Example: gender pay gap, equal opportunity in the workplace
Managers as a restraining force
Big influence, can stop change from occurring (refuse to implement, fail to actively support it)
Scared of change, may threaten position/power/role
Example: VW, managers don’t want to implement change
