Topic 10 - Managing Strategic Change

Question 1

Why should managers and leaders of all businesses constantly monitor their internal and external environment ?

Answer 1

To help discover pressures for change

Question 2

When managing change what must managers consider from employees ?

Answer 2

employee resistance to change, known as forces resisting change.

Question 3

What does lewin’s force field support ?

Answer 3

Lewin’s force field analysis supports managers and leaders in comparing:

pressures or forces for change against the forces resisting this change

Question 4

What does the lewins force field analysis state ?

Answer 4

The success of implementing change

Lewin’s force field analysis states that if pressures and forces for change are greater than the forces resisting change, then such change is likely to be successful.

Lewin’s force field analysis states that if pressures and forces for change are less than the forces resisting change, then such change is likely to be unsuccessful.

Question 5

What factors contribute for change ?

Answer 5

Responding to poor financial performance may require a business to make changes, therefore acting as a pressure for change.

Poor customer satisfaction may require a business to make changes, therefore acting as a pressure for change.

Question 6

What factors contribute to resisting change ?

Answer 6

A lack of resources, including finance and labour, may provide resistance to change if a business is unable to provide the resources needed for change.

Employee concerns may provide resistance to change if employees are worried about the impact of the change on their job security or working conditions.

Question 7

Who proposed six strategies which managers and leaders can use to overcome resistance to change ?

Answer 7

Kotter and Schlesinger

Question 8

What are the six strategies which managers and leaders can use to overcome resistance to change that kotter and Schlesinger proposed ?

Answer 8

Educating and communicating with staff
Facilitation
Participation
Coercion
Negotiation
Manipulation

Question 9

How can managers and leaders use educating and communicating with staff to overcome resistance?

Answer 9

Educating and communicating with staff can help employees overcome their resistance as discussions can be used to inform staff of the reason behind why the change is required for the business’ ongoing success

Question 10

How can managers and leaders use facilitation to overcome resistance?

Answer 10

Facilitation can help employees overcome their resistance through supporting and providing resources so that employees have the tools needed to address and adapt to change.

Question 11

How can managers and leaders use participation to overcome resistance?

Answer 11

Participation can help employees overcome their resistance by giving them a sense of involvement and ownership so that they feel involved with the process of change.

Question 12

How can managers and leaders use coercion to overcome resistance?

Answer 12

Coercion can force employees to overcome their resistance by offering employees the decision to either co-operate or accept redundancy.

Question 13

How can managers and leaders use negotiation to overcome resistance?

Answer 13

Negotiation can help employees overcome their resistance through offering rewards to employees who agree to co-operate with and support change.

Question 14

How can managers and leaders use manipulation to overcome resistance?

Answer 14

Manipulation can help employees overcome their resistance through targeting employees likely to offer the most resistance and offering opportunities for these employees to become involved in the change process.

Question 15

What are reasons for resistance to change ?

Answer 15

Employee self-interest
Employee misunderstanding
Employees may prefer the current situation (known as the status quo)
Employees may have made a different assessment to that of the managers and leaders

Question 16

How can employee self-interest provide resistance to change ?

Answer 16

Employee self-interest may provide resistance to change as employees value their own values and beliefs above those of the business.

Question 17

How can employee misunderstanding be a reason for resistance to change ?

Answer 17

Employee misunderstanding may provide resistance to change as employees simply do not understand the change or do not understand how it will affect them

Question 18

How can employee current situation be a reason for resistance to change ?

Answer 18

Employees may prefer the current situation (known as the status quo) and therefore see no reason to change, and therefore resist any change proposed.

Question 19

How can employee opinions/assessments be a reason for resistance to change ?

Answer 19

Employees may have made a different assessment to that of the managers and leaders, and may agree that some change is needed, but may disagree about the type of change needed, which can provide resistance.

Question 20

What does organisational culture refers to in the business ?

Answer 20

the ethos, values and beliefs of a business and its employees

Question 21

When attempting to study the business culture, managers and leaders can use what model of culture ?

Answer 21

Handy’s model of culture

Question 22

What are the 4 cultures in handys model ?

Answer 22

Power culture
Role culture
Task culture
Person culture

Question 23

In handys model what does power culture refer to ?

Answer 23

Power culture refers to a business that places importance on the authority and decision-making power of a small number of key employees.

Investment banks like Morgan Stanley have a few powerful individuals who make all important decisions

Question 24

In handys model what does role culture refer to ?

Answer 24

Role culture refers to a business which places importance on employees having clear roles within the organisation.

Question 25

In handys model what does task culture refer too ?

Answer 25

Task culture refers to a business which places importance on employees being associated with tasks and projects within the organisation.

For example, in project-based businesses, such as Yell (Yellow Pages), employees will often use their skills on one specialist task before then moving to another task or project, which is an example of a task culture.

Question 26

In handys model what does person culture refer to ?

Answer 26

Person culture refers to a business that places importance on employees being valued and operating autonomously within the business.

Amazon splits its business up according to the category, for example, gardening and homeware each have their own category. The gardening manager has the freedom to run their own area and make their own decisions, which is an example of a person culture, with lots of people operating with autonomy.

Question 27

For a small business what’s an example of role culture ?

Answer 27

small business which is growing may decide to appoint a human resources director and a finance director and these directors have a clear role within the business, which is an example of a role culture.

Question 28

Who’s model of national culture states that businesses operating internationally will be affected by the cultural influences of the different countries in which they operate ?

Answer 28

Hofstede’s

Question 29

How are the influences in hofstedes model categorised ?

Answer 29

Individualism and collectivism
Power distance
Long term orientation
Uncertainty avoidance
Masculinity and femininity

Question 30

What is individualism and collectivism in hofsetedes model ?

Answer 30

Individualism and collectivism state that different countries will influence branches of a business in different ways as some countries have societies which value individuals whereas other countries have societies which value team members

Question 31

What is power distance in hofstedes model ?

Answer 31

Power distance states that different countries will influence branches of a business in different ways as some countries have societies which value individuals based on age and experience whereas other countries have societies which value individuals based on their skill and ability

Question 32

What is long-term orientation in hofstedes model ?

Answer 32

Long-term orientation states that different countries will influence branches of a business in different ways as some countries have societies and governments which value short-term approaches whereas other countries have societies and governments which value long-term approaches.

Question 33

What is uncertainty avoidance in hofstedes model ?

Answer 33

Uncertainty avoidance states that different countries will influence branches of a business in different ways as some countries have high adversity to uncertainty whereas other countries have much lower adversity to uncertainty.

Question 34

What is masculinity and femininity in hofstedes model ?

Answer 34

Masculinity and femininity state that decision-making approaches may differ between cultures and that masculinity focusses on rewards and discipline whereas femininity focusses instead on relationships and being caring.

Question 35

As businesses grow, organisational structures can be used, what are the types of organisational structures?

Answer 35

Functional structure
Product structure
Matrix structure
Regional structure

Question 36

What is a functional structure ?

Answer 36

A functional structure exists when a business structures itself by the four main business functions of human resources, finance, marketing, and operations.

Question 37

What is a product structure ?

Answer 37

A product structure exists when a business structures itself around the products or services it produces, so there will be staff from each function working in a team assigned to each business product.

Question 38

What is a matrix structure?

Answer 38

A matrix structure exists when a business structures itself around a matrix where each employee may report to two or more supervisors, for example where one supervisor has knowledge of a product or project and another supervisor has knowledge of a business function.

Question 39

What is a regional structure ?

Answer 39

A regional structure exists when a business structures itself around a region, so there will be staff from each function working in a team assigned to each region.

Question 40

When choosing the most appropriate organisational structure, what must businesses consider ?

Answer 40

A range of different influences including the industry, the actions of competitors and the market conditions in which the business operates.

For example, a fashion brand may have functional directors working in their accessories team and functional directors working in their outdoor clothing team which is an example of a product structure.

Question 41

When implementing a new strategy, managers and leaders can use what to manage and plan the different stages and elements of a project

Answer 41

Network analysis

Question 42

What is network analysis?

Answer 42

Network analysis is the use of a network analysis diagram to visually display the different elements of a project to identify the quickest way of completing all activities.

Question 43

In a network analysis diagram, what are nodes seen as ?

Answer 43

Circles

Question 44

In a network analysis diagram do nodes show ?

Answer 44

They are used to show the start and end of an individual activity.

Question 45

In a network analysis diagram, nodes have three numbers what does each number mean ?

Answer 45

The left number is the node reference, used for information.
In a node, the upper-right number is the earliest start time (EST) the next activity can begin based on the previous activity finishing.
In a node, the lower-right number is the latest finish time (LFT) of the previous activity to not delay the overall project.

Question 46

In a network analysis diagram, straight arrows are used to show what ?

Answer 46

Each individual activity within the overall project

Question 47

How do network analysis diagrams help with understanding times ?

Answer 47

Using network analysis allows managers and leaders to identify activities which can overrun without impacting the finish date of the whole project. This extra time is known as float time and is the difference between the latest finish time of the previous activity and the earliest start time of the next activity with the activity duration deducted.

Question 48

What are the advantages of network analysis diagrams ?

Answer 48

Network analysis allows businesses to calculate float time and identify activities which can be delayed or overrun without affecting the overall project, which allows managers and leaders to move resources if they need to.

Network analysis allows businesses to calculate the critical path which is the list of activities which have no float time and cannot be delayed without delaying the overall project, which allows managers to prioritise.

Network analysis allows managers and leaders to identify whether different tasks can be done at the same time to minimise the overall duration of project implementation.

Question 49

What are the disadvantages of network analysis ?

Answer 49

Network analysis uses forecasted activity durations and these forecasts may be inaccurate.

Network analysis does not guarantee successful strategy implementation as the business still needs adequate resources and managerial experience to implement the strategy successfully.

Question 50

What factors influence strategies ?

Answer 50

Internal and external environment
The leadership

Question 51

What are the impacts of implementing new strategies?

Answer 51

Implementing a new strategy can mean that the business experiences large cultural changes.
Leaders are needed to guide the business through this period of change and ensure that employees are supporting the change and the business’ direction.

Question 52

What are the importance of leaders for implementing new strategies ?

Answer 52

Leaders often understand the process of change and their guidance and expertise can help make sure that any change is successful.
Leaders often take responsibility for monitoring and reviewing any strategic changes and ensuring that appropriate actions are taken to address any concerns. Leaders may also delegate these decisions to others within the organisation.
Leaders motivate and empower staff and ensure that employees are not resistant.

Question 53

What is the importance of communication for implementing a new strategy ?

Answer 53

Communication involves employees and ensures that key stakeholders understand why change is happening. This can reduce employee resistance and support strategic change.

Communication between functional areas is vital to ensure that all functions have the resources available to support the strategic change.

Communication is vital to enable employees to report on and review the success of the change and relay this information to managers and leaders.

Question 54

What are the types of strategy implementation ?

Answer 54

Planned strategies are strategies which are planned by managers and leaders and are purposefully implemented.
Emergent strategies are strategies which develop overtime but were not planned or implemented purposefully

Question 55

What is strategic drift ?

Answer 55

Strategic drift occurs when a business fails to respond to changes in the external environment, including customer demands, and therefore no longer offers the products and services demanded by customers.

Question 56

How do businesses overcome strategic drift ?

Answer 56

In some cases, managers and leaders may not respond to changes in the market as they believe that changes will eventually reverse, but often this is not the case and many businesses have battled survival because of strategic drift. Businesses will need to make a transformational change or their failure to respond to market changes may otherwise become fatal.

Question 57

Why do strategic problems occur ?

Answer 57

Strategic problems occur when ownership and management is separated

Question 58

When businesses operate with sole trader status, the owner and manager is often what ?

Answer 58

Is often the same individual

Question 59

In limited companies, the owners and managers are often what ?

Answer 59

They can be separate groups of individuals as owners, or shareholders, appoint a board of directors to manage the company on their behalf, especially in Public Limited Companies (PLC) like Morrisons and Tesco.

Question 60

What are the disadvantages of divorce of ownership and control ?

Answer 60

Owners, or shareholders, may be focussed on shareholder return and the maximisation of dividends whereas managers and directors may wish to invest profit in the long-term growth of the business; this creates conflict.

Question 61

What is corporate governance ?

Answer 61

The process of monitoring the decisions made by managers to ensure shareholder interests are considered.

For example, Tesco has non-executive directors who advise executive directors on issues related to corporate governance to challenge decisions and audit processes used by business managers.

Question 62

What is contingency planning ?

Answer 62

The the process of managers and leaders planning for events which, if happened, would have a potentially serious impact on the business’ success.

For example, many businesses with head-quarters in the United Kingdom have created contingency plans because they are unsure of the impact Brexit will have on their business and may need to relocate offices, employees or headquarters in the event of an unfavourable Brexit outcome.

Question 63

What are the advantages of contingency planning ?

Answer 63

Contingency plans can prepare a business for unlikely but potentially serious events

Question 64

What are the disadvantages of contingency planning?

Answer 64

Contingency plans can waste resources as plans may never be needed but have still been produced.

Question 65

How can a business mitigate the effect of the divorce between ownership and control?

Answer 65

Explain the divorce between ownership and control
The divorce between ownership and control occurs in limited companies means that most shareholders are not involved in the day-to-day running of the business. Instead, the business is managed by a Board of Directors. If the Board makes decisions that benefit themselves instead of the shareholders (or owners), then this is poor corporate governance.

The role of Non-Executive Directors
Each Board should have a number of Non-executive Directors who are there to represent the views of the wider shareholders. It is their role to question decisions made by the Board and to provide constructive criticism on the strategy of the business. These individuals should be impartial and have no personal or financial ties to anyone else on the Board; this ensures that different views are considered before making a decision.

Aligned incentives
Another way to make sure that the Board works in the best interests of the shareholders is to provide incentives that are aligned to both stakeholder groups. Shareholders seek to gain the biggest return in terms of dividends and the value of their shares. Therefore, targets and incentives for the Board should relate to the financial performance, profitability and potentially the share price, which is directly tied to the value created for external shareholders.