U4 AOS1 T1 Flashcards
define change
Change is any alteration in the internal or external environments transitioning individual employees, working teams, functions or the whole business to a new state of operation.
businesses should before
Businesses should be making the necessary changes before they are forced upon you (proactive rather than reactive)
what do poorly managed changes result in
result in employee resistance, tension, anxiety, lost productivity and ultimately, unmet objectives.
business change can involve (6
Changing products to better suit customers needs
Moving production overseas to take account of cheaper labour rates
Changing the motivation strategies you use with your employees
A new manager coming in and changing the traditional management style
Changing an input supplier
Changing the dispute resolution process to take in employee suggestions
signals of change are (7
growth, innovation, redundancy, outsourcing, relocation, diversification competition
To be proactive
is to initiate change rather than simply to react to events.
To be reactive
is to wait for a change to occur and then respond to it.
management strategies required to help change (6
communication skills Delegation skills planning skills Leading skills Decision-making skills Interpersonal skills
how does communication skills contribute to change
Clear communication required in order progress change, as the changes will appear as clear for all staff to understand.
how does delegation skills contribute to change
Managers can oversee all aspects of the change, passing authority ensuring everyone is working toward goals
how does planning skills contribute to change
Plan is required to ensure that there are clear goals to achieve from the change
how does leading skills contribute to change
required to help influence staff to accept any change and thus work towards new objectives. the leadership determines how effectively the change is implemented and how quickly and successfully any resistance is overcome.
how does decision-making skills contribute to change
During the change process decisions will need to be made putting the business in the best position changing the organisation in the most efficient and effective way possible.
how does interpersonal skills contribute to change
change may have a negative impact for employees and managers need to relate and empathise with employees and any other stakeholder impacted by the change.
define key performance indicator
a type of measurement that helps you understand how your business is performing in a certain area, giving the business data, facts, figures etc. to analyse.
To be effective, a KPI must Be:
well-defined and quantifiable. Give you a clear insight into the area of the business you are concerned with Be calculated properly and consistently
benchmarking
occurs when a business measures its performance against that of other leading businesses known for their excellence.
effectiveness
is the degree to which a business has achieved its stated objectives.
efficiency
refers to how well a business uses resources to achieve objectives.
9 KPI’s
Percentage of market shares net profit figures Rate of productivity growth number of sales rate of staff absenteeism level of staff turnover level of wastage number of customer complaints number of workplace accidents
what is the KPI marketshare
represents the percentage of an industry or market’s total sales that is earned by a particular company over a specified time period.
how is marketshare calculated
Market share is calculated by taking the company’s sales over the period and dividing it by the total sales of the industry over the same period.
E.g. Company sales of 30,000 units out of a total sales in the industry of 100,000
30,000 x 100 = 30%
100,000
Reasons for lowering marketshare 3
Customers are not happy with the product
Competitors are gaining a competitive advantage
Our prices may be too high and we need to lower production costs
how can Customers are not happy with the product
be solved
Quality strategies could be implemented
• Staff training could be improved
how can Competitors are gaining a competitive advantage be solved
Reduce labour costs via global manufacture, lower labour entitlements
how can Our prices may be too high and we need to lower production costs be solved
• Or increase productivity rates via investment in technology strategies
what is the kpi net profit
is what the company has earned after all expenses are deducted, it is found on the last line of the income statement, which is why it’s often referred to as the bottom line.
how is net profit calculated
Net profit is calculated by subtracting a company’s total expenses from total revenue, thus showing what the company has earned (or lost) in a given period of time.
reasons for faults in net profit 2
Customers are not happy with the product
– decreasing sales and decreasing revenue.
Our costs and expenses are too high and we need to cut back.
ways to improve Customers are not happy with the product
– decreasing sales and decreasing revenue. 2
Quality strategies need to be looked at
Staff training, staff motivation
ways to improve Our costs and expenses are too high and we need to cut back. 4
Cost cutting measures •
Lean production techniques •
Reduce labour costs via global manufacture, lower labour entitlements •
Or increase productivity rates via investment in technology strategies
what is the kpi the rate of productivity growth
measures the efficiency of a company’s production process being the percentage increase in productivity over time.
how is the rate of productivity growth calculated
Productivity is calculated by dividing the outputs produced (sales, goods) by a company by the inputs (Labour, hours, capital, natural resources) used in its production process.
reasons for faults in the rate of productivity growth 3
Machinery is failing to produce as quickly. Aging machinery.
Staff are failing to produce as quickly.
There is a log jam in inputs arriving on time which is stopping production.
how to improve Machinery is failing to produce as quickly. Aging machinery. 2
Investment into technology •
Redeployment of resources (capital / labour)
how to improve Staff are failing to produce as quickly. 2
Increasing staff motivation •
Increased staff training (on the job or off the job)
how to improve There is a log jam in inputs arriving on time which is stopping production. 1
• Improvements in the international supply chain, JIT
what is the kpi number of sales
refers to the measure of the total customers that bought a good or service in a given reporting period.
what must be considered when measuring number of sales
You will need to bear in mind that the product or service may have seasonal variations e.g. chocolate up in winter, down in summer so changes in the data need to be considered.
how to calculate number of sales
By calculating the number of customers you’ve gained or lost compared to previous periods, you can understand whether or not you are meeting your customers’ needs.
how can number of sales be misleading
information regarding number of sales can also be misleading, as number of sales is an indicator of customer popularity, but may not have the same impact on other business objectives. For example sales may have gone up because you lowered the price, and although you increased sales, profits declined
reasons for lowering of the number of sales
The product is not meeting the customers needs.
The price of the product / service is too high.
Customers are not aware of the product
how to solve The product is not meeting the customers needs. 2
Improving quality in production •
Staff training
how to solve The price of the product / service is too high. 2
Lower the price •
Reduce costs to be able to lower the price
how to solve Customers are not aware of the product
• Improve marketing to customers
what is the kpi rate of staff absenteeism
This is the number of days employees are absent from work as a percentage of their total possible working time.
calculate rate of absenteeism
Calculated Number of days staff are absent as a percentage of the total number of days staff could normally be working
reasons for the rise in the rate of absenteeism 2
- job dissatisfaction
- ongoing personal issues and chronic medical problems.
ways to improve - job dissatisfaction
5
job dissatisfaction • Investment into worker motivation: e.g. performance related pay, investment in training • Staff support, counselling • Change in management styles • Redeployment of resources
ways to improve - ongoing personal issues and chronic medical problems. 3
Counselling •
Medical support, OH&S training •
Subsidising flu jabs, health and wellbeing programs
what is the kpi level of staff turnover
the amount of employees leaving the business in a period of time as a percentage of the total number of employees in that business.
how does staff turnover impact business
affects business through -> Recruitment + training costs and Productivity down
calculate rate of turnover
calculated number of employees who have departed the business in a period of time and divide it by the average number of employees working in the business in that period
what may be wrong if rate of staff turnover = high
resignation include job dissatisfaction, …
how can resignation include job dissatisfaction be improved 4
Investment into worker motivation: e.g. performance related pay, investment in training •
Staff support, counselling •
Change in management styles •
Redeployment of resources to allow promotional opportunities
what is the kpi level of wastage
The amount of stock either as a raw material or during processing which is discarded.
what does level of wastage tell about the business
efficiency use of their resources > low level of wastage, more efficient, lessen the production cost.
how is level of wastage calculate
- Calculated = number of units or total weight / volume of waste materials discarded from the production line.
what may have gone wrong if level of wastage = high? 2
storage is insufficient
production process = inefficient
how to improve storage is insufficient
production process = inefficient
quality management
lean management
investment in technology
what is the kpi number of customer complaints
The recorded number of individuals who report a defect, fault or issue in the good or service that they purchased in a given time period.
high level of customer complaints indicates
high level complaints = decreased sales + possibility profit
what may have gone wrong if level of customer complaints increase 2
Quality of products decreasing
Customer service = declining
strategies to improve Quality of products decreasing
Customer service = declining
Quality management strategies
staff training
staff motivation
what is the kpi number of workplace accidents
The recorded number of worker or customer related injuries that occur in a business in a given time period. As they say “accidents do happen” but all measures possibly should be taken to remove or diminish the numbers of these occurring at a business.
what may have went wrong if accidents increase 2
Unsafe workplace > less motivated staff > decrease productivity
accidents stop production all together
strategies to improve Unsafe workplace > less motivated staff > decrease productivity
accidents stop production all together
staff training on safety and procedures (OH&S)
investment in better technology
Maintenance on the machineries
define force field analysis
Force field analysis = outlines the process of determining which forces drive and which resist a proposed change.
driving force
the forces that support the change.
restraining force
Restraining forces =
eg of driving forces 4
increase market share
increase revenue
obtain customers in another market segment
generate economies of scale for production
eg of restraining forces 4
cost risks
divert sales from current
damage corporate image
upset business partners
what does the force field analysis assist with
model for understanding the change process. Known as Force Field Analysis, the model describes how you can determine which forces drive and which resist a proposed change.
why must managers implement FFA
Managers who are trying to implement a change must conduct a forcefield analysis to identify and balance the driving and restraining forces
three things to consider when making a FFA
consider the forces that are exerting pressure at this time.
people of influence, decision makers, systems and processes that are driving the project.
who and what are restraining the project eg stakeholders wanting same (common)
outline plan of the FFA 3
Driving forces are listed on the left side of the ‘T’ diagram and restraining forces are listed on the right.
Once the forces are listed they are allocated a numerical score for ranking.
forces = prioritised, so it can be decided which restraining forces to remove first and which driving forces to promote and encourage.
outline the process of the FFA 5
from a group of people driving the change
identify the change
Identify driving and restraining forces - then assign a score to represent the strength of the force
select 3-5 changes to focus on - reduce restraining, encourage driving (compare with SWOT analysis)
Identify actions to address these focus areas - how will it be implemented and who is responsible
6 benefits of the FFA
Driving vs restraining D>R, R>D - is it worth
It allows a timeline to be developed and additional resource requirements to be identified
Support D further, reduce R
Bus = weigh up for and against whether change is worth undertaking
allows stakeholders to identify the change as a positive or negative change from their perspective.
Force Field Analysis can identify if skills are restraining change and therefore
what training may be required.
The Force Field Analysis diagram is a visual aid that can support communication and reduce communication barriers.
types of performance related pay 5
Pay increase, bonuses, commissions, share plans, profit sharing
non financial motivtion strategies
career advancement
investment in training
support and sanction
on the job training
When employee needs to learn skill that usually occurs within working environment eg. Equipment, machinery + documents
off the job training
- Training away from workplace
- Individuals sent to specialised training institutes (TAFE/uni)
- To gain qualifications = to assist with performance
types of performance management strategies 5
employee observation performance appraisal management by objectives employee self evaluation performance feedback
operations management strategies that relate to change 5
Just in time lean management Total quality management Quality control waste minimisation
5 management structures in order
Autocratic Persuasive consultative participative Laissez Faire
