Managing Change (THEME THREE) Flashcards
What are some internal causes of change?
Changes in organisational size
Poor business performance
New ownership
Transformational leadership
What are the external causes of change?
Changes in PESTLE
What are the possible changes designed to boost competitiveness through cost leadership?
No idea mate maybe lower cost supplier or producer, waste minimisation or recycling.
What are the internal causes of change?
- Changes in organisational size: expansion can lead to adjusting budgets and adding extra supervisory layers to the structure. Contraction leads to redundancies and damaging impacts on staff morale.
- Poor business performances: change made by a senior decision-maker for underperformance.
- New ownership: change made for the vision of the new owners.
- Transformational leadership: radically change almost everything in the business to find a new mission or purpose.
What are the external causes of change?
Changes in PESTLE.
Possible changes designed to boost competitiveness through cost leadership.
- Finding new suppliers.
- Redesigning the product to reduce the cost of making it.
- Boosting capacity utilisation through branch closures.
Possible changes designed to boost competitiveness through differentiation.
- Redesigning the product .
- Re-branding the product or service.
- Adding extra features to the product or service.
What is automation?
Replacing people with machines, switching from a labour intensive to a capital intensive approach to a task.
Long-term financial improvement.
- Reducing labour costs.
- Lower unit costs.
- Improved revenue growth.
- Better profit margins through increased price.
Short-term financial improvement.
- Redundancy payments.
- Investment in new production robots.
- Increases advertising budget.
- Cost of redesigning product.
Reasons why change initiative fail.
- What motivates leaders does not motivate most of their staff.
- Leaders can believe that they themselves are the change.
- Money is the most expensive way to motivate people.
- The change process the outcome of the change must be fair.
What must managers ensure for successful change?
- All staff understand the need for change.
- All staff understand in advance, what the new changed world will be like.
- All staff understand the plan for moving from A to B.
How does organisational culture affect the success of change?
- Some organisations have cultures that welcome change as a chance to improve, to enhance the way the business strives to achieve its mission.
- Major change can require a change in culture within the organisation. Find ways to subtly adjust the culture.
Issues faced by managers of small-sized to medium-sized firms.
- Smaller firms may have fewer financial resources to help to move the change forward and ensure a smooth transition.
- Often dominated by one person or family.
- Range of skills may be limited, reducing the flexibility of the workforce.
Issues faced by large-sized firms.
- Senior managers may struggle to get a real feel for the views of many staff.
- Different parts of the business may need different approaches from the change programme.
- Explaining change to staff can be hard.
- Changing the way the organisation functions creates chances for co-ordination problems.
What is incremental change?
It occurs when change is slow and happens in small steps.
What is disruptive change?
It occurs suddenly, unpredictably, and has major effect on entire markets.
Approaches to managing the resistance to change .
- Education and communication: explaining to staff why change is needed.
- Participation and involvement: using colleagues own views on the changes to make them feel involved.
- Negotiation and agreement: resistors may need to be ‘bribed’ to accept changes.
What is risk assessment?
A process used to identify. quantify and decide on the likelihood of negative future events occurring.
The first stage to scenario planning is risk assessment. What does this involve?
- Identifying possible major risks or threats faced by the business.
- Quantifying the possible cost to the business if the event occurs.
- Attaching a probability to the chance of the risk occurring.
What is scenario planning?
Visualising possible future situations for a business and then devising plans for a business and then devising plans for how to exploit likely opportunities and minimise the effects of likely threats.
What are the common risks that many businesses identify?
- Natural disasters.
- IT system failure.
- Loss of key staff.
What is contingency planning?
It means preparing plans in advance that can be implemented if a company is hit by a major crisis.
What is risk mitigation?
Risk mitigation is defined as taking steps to reduce adverse effects.
Potential crisis’s and their risk mitigation.
- Natural disaster: have relationships in place with alternative suppliers. Organise potential outsourcing of production. Figure out alternative transport routes for major items within the supply chain.
- IT system failure: have a back-up system ready to switch on.
- Loss of key staff: succession planning.
What is succession planning?
Preparing replacements for key personnel in advance of their departure.
What is business continuity?
Getting a crisis-hit business back to functioning normality as quickly as possible after a major disruption.
What components rely on business continuity?
- A secure financial position that will enable a firm to spend the cash required to deal with an emergency without threatening its long-term financial stability.
- Clearly defined responsibility laid out of advance, confirming who will deal with what aspects of possible problems.
- Effective communication systems prepared. perhaps including special emergency numbers to call for stakeholders who want to contact the business.
