Managing Change 3.10.1 Flashcards
what is internal change and what are some of the causes of it
This is change that happens inside the business. this is through things like a change in management, objectives, business decisions in fundamental areas.
what is external change and what are some of the causes of it
it is change that occurs outside the business that effects the business. It is through things like change in Consumers, competition, the economy, technology, political and social conditions, and resources are common external factors that influence the organization.
what is incremental change
A change that is predictable that happens over a long period of time, can be external or internal
what is disruptive change
this is change that happens within a time scale that makes it impossible to plan for, this change is mostly external, usually due to technology or legislation
what are the pressures of change
new technology competitors consumers demand for better service social trends shareholders pressures for growth
what is Lewin’s force field analysis
lewins for field analysis suggests the following management practise:
1) identity a problem or opportunity requiring change
2) Through consultation, identify all the main factors for change and the factors against it
3) Value each factor by using a scale such as 1-5, in line with its importance
4) add up both sides and see which case is the strongest
what is the value of change
Change is an important part of a business life; it allows a business to adapt to its environment and to improve its market position
what are the values of business being flexible to change
higher revenues:
stop money being held up in unsold stock, they can respond quickly to change in consumer tastes so can halt production of old items. Means they wont have to sell the unsold products at discounted price and therefore increasing revenue.
Able to provide new items needed due to changes in consumer tastes quickly and can then benefit from first mover advantage . by being first in the market a company is able to charge consumers higher prices until competitors arrive
lower costs:
lower labour costs as you only pay for labour when it is needed. Labour wont be wasted on unsold products
what can a business do to be more flexible
Reshoring:
this reduces transport costs and reduces delivery times meaning you can better get the first mover advantage, and reduce amount of unsold products as you don’t have to buy as much at a time so the quick changes in consumer tastes are less damaging
restructuring:
this will be through things like outsourcing so business resources are freed up to do other things and can be better used to respond to change
Another way to do this is delayering, this shortens the chain of command and makes communication faster and more efficient meaning implementing strategic measures is faster.
Flexible employment contracts:
zero hour contracts, these allow the business to rapidly change there workforce in response to demand
what is restructuring
Restructuring is an action taken by a company to significantly modify the financial and operational aspects of the company
what is delayering
This involves removing layers of management from a firms organisational chart
what is organic and mechanistic structures in business
Organic structures favour a decentralised decision making which increases the speed of decisions, they favour informal verbal communication making it a lot faster, there Is no attempt to standardise tasks so that the business is more flexible. This is considered to be a more flexible than mechanistic.
Mechanistic is the opposite, they have a centralised decision making, formal communication (meetings) and has a autocratic management. All operations are standardised so that all the procedure and policies laid down are met. This is usually used in markets where there is little change and used to make the business more efficient
what are Kotter and Schlesinger’s four reasons for resistance to change
self interest- if employees fear to lose from the change (being fired, losing power) then they may resist
Misunderstanding- lack of trust and misunderstanding can cause a barrier to change. Employees could misunderstand the change in a negative way.
Low Tolerance- don’t want change as it could effect their work life, (don’t want to have to learn new skills build new relationships) links to Maslow’s security needs.
Different assessment- they may feel the change is not needed as that part of the business is doing well
what are Kotter and Schlesinger’s six ways of overcoming resistance to change, what are the advantages and drawbacks of each one
Education and Communication:
useful when there is a misunderstanding or they lack information. Builds commitment to the change once staff understand what is needed and why, can be time consuming.
Participation and involvement:
useful when people managing change lack information which staff can provide. The best way of building commitment as staff will feel ownership of change they have had a hand in designing. Consultation is a time consuming process, danger of poor decision making of staff (lack of skills or information)
Facilitation and Support:
Useful when the major resistance of change is difficulty adjusting to new methods. Especially good at dealing with low tolerance change resistors. Can take time, be expensive and still fail
Negotiation and Agreement:
Useful when a powerful group will lose out from the change. Can be an effective way of gaining compliance of all who will be negatively affected. Can cost the business by not being able to take best route to change and/or could be expensive.
Manipulation and Co-optation:
Useful when other methods wont work or are too costly. Can work quickly and be done cheaply. May leave employees unmotivated and create bad relationship with employees
Explicit and implicit coercion:
When speed is vital and those driving change are powerful. Can be done quickly and overcome any type of resistance in the short term. Leads to only grudging acceptance of changes and creates ill will which is likely to persist in the future.
when can disruptive change benefit a business
Some long established markets see little change in yearly market shares making it difficult for newcomers, disruptive change gives new entrant a chance to break in
