Managing strategic change Flashcards
What changes could impact a business?
Internal - 4 functional areas
External
Rapid and unexpected - sudden bad weather e.g. Australia bush fires
Long term - shift in economic power towards economies in India and China
Incremental - step by step change overtime
Disruptive - impact of digital cameras on camera makers, the impact of Tesla on electric car makers.
The internet - how your heating can be turned on via an app
What is Lewin’s force field analysis?
Argued that successful businesses tend to be constantly adapting and changing according to their environment, rather than being inflexible.
Shows the balance between forces driving change in a business and the forces resisting change.
What are the benefits and uses of Lewin’s model?
It examines the whole situation
Analysis is clear to understand
Shows the risk of any change
Everyone can be involved in determining strengths and weaknesses
helps with decision-making
What are the limitations and problems with Lewin’s model?
Not detailed enough - too simple
Steps within each phase can be interpreted in different ways
Too rigid and doesn’t reflect modern times
What needs to happen in order for change to occur?
The driving force must exceed the restraining force
What are examples of forces driving change?
Internal forces:
Need for higher profits
Expansion
Management
Poor efficiency
Lack of innovation
Need to change culture
Change of leadership
External forces:
Customer demand
Competition
Legislation and taxes
Political environment
Ethics and social values
What are the reasons for resistance?
Self interest - more concerned about the impact it has on the individual , prefer the present situation.
Prefer the present situation - sense of job security.
Different assessment - disagreement over the need for change.
Misunderstanding - disagreement over + and - , inadequate information, communication problems.
How can resistance to change be overcome (Kotter and Schlesinger)?
Education and communication - management explaining changes.
Participation and involvement - staff are encouraged to input into the change.
Facilitation and support - managers support staff with the change.
Manipulation and co-option - identify key people who are likely to resist change and get them onboard.
Negotiation and bargaining - management doing a deal with staff e.g. rewards.
Exploit and implant concerns - management forcing the change through coercion = threats of redundancies and pay cuts.
What are the benefits of change for a business?
Sustain a competitive advantage
Align its business strategy with changing customer needs and wants
Take advantage of developing technologies
Gain from improved productivity and a better work environment
Develop a more appropriate and effective organisational structure = better communication and decision-making.
Build a reputation for embracing change rather than fearing it.
What is a flexible organisation?
One that is able to adapt and respond relatively quickly to changes in it’s external environment in order to gain advantage and sustain its competitive position.
What do flexible organisations include?
Restructuring through delayering - removing layers of management.
taller - moves to a flatter structure
improved communication
more delegation needed
fast decision-making
Employment contracts - more use of zero hour contracts, part time contracts, job sharing, temporary contracts.
quickly to adjust staff levels and change as required
therefore, utilise capacity - leads to lean efficiency as your recruitment costs are reduced - if demand goes up and you need more staff - they may already be there - business can adjust contracts.
What are organic structures?
Decentralised structures
Informal
Flexible and fluid (easy to change)
Prefer verbal communication
Associated with decentralised decision-making and empowerment
Find change easier to handle
What are mechanistic structures?
Centralised
Formal
Find it hard to change
Formal communication methods
Associated with centralised decision-making and supervision
Favours standardised policies and procedures
Little perceive need to change
What are characteristics of a flexible organisation?
Use flexible working
Flat hierarchies
Culture embraces change
Quick decision-making
What is knowledge and information management?
Data is easy to access and to use for decision-making e.g. oil functional areas data is available to all managers.
Leads to more collaboration - more efficient
easy to access
informed and faster decision
What is organisational culture?
The unwritten code that affects the attitudes and behaviour of staff, approaches to decision making and the leadership style of management, the shared values of an organisation, including the beliefs and norms that affect every aspect of work life.
What is Handy’s four classes of culture?
Power - control radiates from the centre
- concentrates power among a few
- few rules and little control (bureaucracy)
-swift decisions are possible
-autocratic
Role - people have clearly delegated authorities within a highly defined structure.
- hierarchical bureaucracy
-power derives from a person’s position
-little scope exists for expert power
-paternalistic/democratic
Task culture - teams are formed to solve particular problems.
-power derives from expertise as long as a team requires expertise
-no single power source
-matrix organisation
-team may develop own objectives ( a risk)
-democratic/ paternalistic
Person culture - people believe themselves to be superior to the business.
-business full of people with similar training, background and expertise.
-common in firms of professional e.g. accountants and lawyers.
-power lies in each group of individuals
