Managing change Flashcards
Internal factors causing change
Change in leadership
Poor financial performance- retrenchment
Business growth - expanding into markets must adapt its product range
External factors causing change
Availability of new technology
Consumer tastes
Economic factors
Laws
Competition
Incremental change
is gradual and usually is the result of a strategic plan and minimizes disruption
Disruptive change
sudden and forces firms to suddenly do things in a different way to usual. They may have to close of sell of subsidiary companies, spend heavily on promotions to raise consumer confidence.
Lewin force field analysis
Forces for change
- eg improve speed of production , reduced costs
Forces against change
- e.g. expensive to purchase machinery , need to retrain staff
Organic structures
uses a decentralised structure, meaning employees get more say in decision making.
Flat structure - fast communication
Best suited to an uncertain, changing environment
Mechanistic structure
centralised, traditional structure
Tall structure - long chains of command
Employees are very specialised in certain tasks and tend to work separately on them
e.g. a marketing employee may focus on a specific market rather than the whole one
Advantages of flexible employment contracts
able to outsource some of it’s workers in order to manage change
- easier for business to keep hold of valuable employees
- more job opportunities for skilled applicants
- cope with changes in demand
Cons of flexible employment contracts
Could result in poor communication and teamwork between staff who work at different times
Barriers to change
Tall organisational structure means it can be difficult to communicate the change to lower layers
Poor management- lack of trust
Trade unions
Kotter and Schlesinger’s resistance to change
Self interest
Misunderstanding
Status Quo - low tolerance to change
Different assessments of the situation
Kotter and Schlesinger’s six ways of overcoming resistance to change
1) education and communication
- discussions , reports and presentations
2) Participation and involvement
- in design of change- more engaged
3) Facilitation and support
- regular meetings listening to workers
- training for new skills
4) Negotiation and agreement
-Financial or non-finance incentives
5) Manipulation and co-option
- by giving an employee a desirable role
- lie about financial situation- risky
6) Explicit and implicit coercion
- threatened to comply or risk redundancy, losing promotional opportunities
Organisational culture
the way people are expected to do things in a business
- affects staff behaviour
- objectives
Strong organisational culture
when employees agree with the corporate values
- employees need less supervision
- staff are more lower so staff turnover is lower
- increases motivation
Handy’s four types of culture
Role, Power, person and task
Power culture
centralised structure
may struggle if the business grows
employees are likely to be more resistant to change
Role culture
where employees are given specific roles and responsibilities e.g. in bureaucratic firms where authority is defined by job title
- poor communication between departments and respond slowly to change- losing out to competitors when strategies need to be developed quickly
Risk adverse
Person culture
where employees work independently e.g. accountants and lawyers
Decisions are made jointly
However, decisions on change can be difficult to make as individuals will think about personal ambitions
Task culture
emphasis on task and projects
Staff working in task culture are less likely to be resistant to change as they believe it is normal
Entrepreneurial culture
employees are encouraged to think innovatively
change is a big part of this culture
Other examples of organisational culture
Customer-focused
Clan
market culture -focussed on competitors
How the culture affects shareholders
Level of risk depends on organisational culture as shareholders want a high ROI - may come from entrepreneurial culture
How the culture affects staff
A power or role culture will demotivate employees and make them resistant to change
How the culture affects customers
Affects customer loyalty e.g. customer focussed culture
