U4 AOS2: Implementing change Flashcards
Change management
The process of implementing strategies that prepare business to undergo transformation
Leadership
The ability to influence or motivate people to work towards the achievement of business objectives
- Effective leader will reduce resistance to change
Leadership in change
The process of positively influencing and encouraging individuals to set and achieve objectives as the business undergoes a transformation
What are the individual qualities for leading through change?
- Motivating
- Inspiring
- Responding to feedback
- Guiding and training staff
- Supporting, mentoring, coaching
- Decisiveness
- Acts as a role model
- Communicates business intentions, visions and objectives
Management strategies to respond to KPIs
- Staff training
- Staff motivation
- Change in management styles or management skills
- Increased investment in technology
- Improving quality in production
- Cost cutting
- Initiating lean production techniques
- Redeployment of resources (natural, labour and capital)
- Innovation
- Global sourcing of inputs, overseas manufacture, global outsourcing
Staff training
Aimed at improving employee’s skills, knowledge, attitude and behaviour.
- Number of workplace accidents
- Number of sales
- Level of staff turnover
- Rate of productivity growth
- Number of customer complaints
Staff motivation
Use of performance related pay, career advancement, investment in training, support and sanction strategies to motivate staff
- Career advancement, make staff feel valued and recognised and rewarded with higher > reduce level of staff turnover
- Performance related pay, reward staff for increased sales > level of productivity growth, percentage of market share, net profit figures
- Support and sanction to punish reckless staff and help make the workplace safer > reduce number of accidents
Change in management styles or management skills
Autocratic, persuasive, consultative, participative, laissez-faire
Communication, delegation, planning, leadership, decision-making and interpersonal
- Communication, delegation and interpersonal skills may be used to improve morale and motivation, thus improving rates of staff absenteeism
Increased investment in technology
- APL allows economies of scale with high levels of output, lower cost per unit > increases net profit
- CAD allows different designs for customers before manufacturing > reduce number of complaints
- CAM reduces human errors > reduces wastage
- Online services process orders faster than staff > increase rate of productivity growth
Improving quality in production
Quality Control, Quality Assurance and TQM
- Number of customer complaints
- Number of sales
- Percentage of market share
- Rate of productivity growth and level of wastage (reducing defects reduces wastes and makes sure inputs are being used more efficiently)
Cost cutting
Business looking for ways to reduce expenditures.
This can involve…
Inputs
- Sourcing cheaper inputs from different suppliers
- Sourcing different inputs (e.g. switching oil for butter)
Processes
- Reducing labour
- Using inputs more efficiently (maybe by introducing new machinery)
- Moving manufacturing overseas
Outputs
- Discontinuing low turnover products
- Cheaper packaging for outputs
Ultimately improves net profit figures, percentage of market share and number of sales.
Initiating lean production techniques
Intent to eliminate waste and improve quality > pull, one piece flow, takt, zero defects
- Level of wastage
- Rate of productivity growth
- Net profit figures (less waste means lower costs, means high profits)
Redeployment of resources (natural, labour and capital)
Redeployment of resources means moving resources from one area of to another area in a business.
- Rate of productivity growth
- Level of waste
- Level of staff turnover (redeploy labour)
Innovation
Innovation can mean a business creates a new good or service, a new way of producing an existing good or service, or a new way or structure of marketing.
- Percentage of market share (new products, new processes)
Global sourcing of inputs, overseas manufacture and global outsourcing
Can all result in…
- Improvement in quality = have a positive effect on percentage of market share, number of sales, number of customer complaints
- Reduced costs = positive effect on net profit
Corporate culture
The shared values and beliefs that characterise a business
- Some of the values and beliefs will be guided by the policies and formal rules of the business (Official)
- Others will be influenced by the unwritten or informal rules that guide how people in the business behave. (Real)
Corporate culture and change management
Transformation will require a +ve corporate culture to support it and gain full potential.
- Strong culture = more successful as workplace is perceived by employees to be +ve and personalised
Strategies for developing corporate culture
- Publish/update vision/mission statement
- Policies and procedures
- Develop training
- Hiring staff who fit in with values of business
- Rewarding staff who exemplify appropriate values
Learning organisation (Senge)
Senge argues that all businesses should try and become learning organisations.
This means that they are able to…
- Adapt to new situations quickly
- Find how they can do things better
- Embrace change with a +ve mindset and use thinking and behaviours to open new ideas and possibilities
What are the 5 principles of the learning organisation?
- Systems thinking
- Mental models
- Building a shared vision
- Personal mastery
- Team learning
Systems thinking
Consider the interrelationship between parts of a whole system
- See business as a whole and understand all the connections between parts of business
- See the big picture and think about the long-term whenever they think about the impact of changes
Mental models
Existing assumptions and need to be challenged
- Identify assumptions
- Challenge assumptions to test if true
- Ask what business has been doing wrong the whole time
Building a shared vision
Creates a common goal for learning
- Employees understand business intentions
- Know where to direct their work
- Feel involved in change and committed
Personal mastery
Personal growth; self-improvement through training and development
- Analyse strengths and weaknesses
- Build their skills and knowledge in required areas to change
Team learning
Individuals learn from each other
- Individuals work together to achieve shared vision
- Individuals learn from each other and as a whole group
- Individuals communicate honestly and openly to think collectively
Low-risk strategies
Actions taken that are likely to generate positive outcomes in the short term and longer term
Purpose of low-risk strategies
- Reduce stress and anxiety
- Allow employees to feel valued
- Maintain +ve corporate culture
What are the actions of staff that resist change?
- Refuse to contribute ideas
- Act with -ve mindset, complain
- Work against change
Types of low-risk strategies
- Communication
- Empowerment
- Support
- Incentives
Incentives
- Offering promotions as part of change
- Offering bonuses/gifts/prizes to employees who embrace change
How can incentives help overcome employee resistance?
- Personally benefit from change
- Performance objectives linked with business objectives
Communication
- Clearly explain reasons for change
- Allow employee questions, suggestions and feedback
- Hearing employee concerns
How can communication help overcome employee resistance?
- Understand reasons and outcomes for change
- Managers have listened to their concerns
- Managers have used some of their ideas
Empowerment
- Allow employees to have input on decisions
- Delegating responsibility for parts of change to employees
How can empowerment help overcome employee resistance?
- Feeling of input to change
- Ownership over change, pride
Support
- Allow employees to share worries and anxieties about change
- Reassure employees
- Coping strategies
How can support help overcome employee resistance?
- Reduce fear of change
- Reassured by help when change becomes difficult
Advantages of low-risk strategies
- Long-term trust and motivation from employees
- Change likely to be successful in long-term
- Employees understand and are committed to change
Disadvantages of low-risk strategies
- Slower change process
- May be costly (bonuses, counselling)
High-risk strategies
Actions taken that may succeed in the short term but run the risk of generating negative outcomes in the longer term
Types of high-risk strategies
- Manipulation
- Threats
Threats
Telling an employee they will suffer a negative consequence unless they do a certain task or accept a certain change.
- Threaten job security
- Threaten pay
What are the negative consequences of threats?
- Resist change
- Employees threaten to go on strike
Manipulation
Using tricks/lies to persuade someone to do something not in their interests.
- Hiding info/truth about change
- Forcing employees into a decision
- Giving diff employees diff info
What are the negative consequences of manipulation?
- Employees may find the truth and resist change
- Employees lose trust and motivation
Advantages of high-risk strategies
- Change occurs faster
- Lower costs
Disadvantages of high-risk strategies
- High staff turnover
- Loss of long-term motivation and productivity
- Strikes
Three-step change model (Lewin)
Framework business’ use to help successfully implement change.
- Unfreeze
- Change
- Refreeze
Unfreeze
Business must be ready for change
- Identify aspects that require change
- Communicate the necessity for change and its’ vision
- Challenge existing beliefs, values and practices
Change
Make necessary changes
- Communicate about change, listen to feedback
- Provide support (counselling/training) so employees accept change
- Empower employees to make decisions and be part of change
Refreeze
Return to stability, ensure change isn’t undone
- Celebrate successes
- Recognise employees who have changed successful
- Re-write policies, processes and job descriptions
- Integrate change into corporate culture
Stakeholders
Groups and individuals who interact with the business and have a vested interest in its activities
Owners
Invest in business with expectation of receiving ROI over time
What are the positive impacts of change on owners?
- Generate more profit
- Involve new interesting work
- Opportunity to learn new skills
What are the negative impacts of change on owners?
- Large costs may decrease profits
- Must move outside of comfort zone to change, can be stressful
Managers
Individuals with the responsibility to implement change. Make decisions and accept accountability for outcomes.
What are the positive impacts of change on managers?
- Publicly acknowledged for successful leadership, potential financial incentive
- Involve new, interesting work
- Opportunity to learn new skills and promotion
What are the negative impacts of change on managers?
- Increased workload, increases stress
- Employees resent manager for change
- Change may lead to redundancy
Employees
Usually most impacted by change, need to adjust to different methods and sometimes struggle to understand the necessity for change
What are the positive impacts of change on employees?
- Increase skills through training
- Increase in profits will increase job security
- Can gain financial reward for successes
What are the negative impacts of change on employees?
- Change may lead to redundancy
- Need to learn new skills and change of area of work can be stressful
Customers
Meeting customer expectations is often reason for change, however can lead to inconvenience as they adjust to new products/operations
What are the positive impacts of change on customers?
- Receive higher quality products
- Receive lower prices due to cost reductions from change
What are the negative impacts of change on customers?
- Resent changes if new products don’t meet needs
- Potentially harder to access products
Suppliers
Organisations who provide businesses with inputs. Changes to production methods will impact suppliers in terms of input requirements, quantities and delivery locations/timeframes
What are the positive impacts of change on suppliers?
- Increased sales will lead to profitability by providing more inputs
- Gain competitive advantage by selling same high quality inputs to other businesses
What are the negative impacts of change on suppliers?
- Business may find new supplier
- May be more expensive to deliver inputs if JIT is implemented, more orders less inputs
General community
Residents, towns and suburbs that provide employees for business and live near business.
Changes can impact the local community if factories and stores are closed or relocated.
What are the positive impacts of change on the general community?
- Business may donate to local community to promote change
- If business expands operations, it creates job opportunities for local residents
What are the negative impacts of change on the general community?
- If business closes site, then local businesses suffer as less money spent
- Increased traffic, pollution, noise if business expands
Corporate social responsibility (CSR)
The obligations a business has over and above its legal responsibilities to the wellbeing of employees and customers, shareholders and the community, as well as the environment.
Considering CSR in change
- Inputs (ethically responsible suppliers, ethical treatment of animals)
- Process (energy efficient machinery, waste management)
- Outputs (environmentally friendly packaging, healthy products)
Reviewing KPIs to evaluate transformation
Once change has occurred, business must review its KPI’s to evaluate effectiveness of change
If KPIs show success, what should business do?
- Maintain current actions
- Continue to implement strategies
- Implement the strategies more widely (e.g. other products, sites, factories)
- Use success as driving force to undergo further change (change often happens in stages)
If KPIs are unsuccessful, what should business do?
- Gather more data to be certain of impact of strategies (change can take time to influence KPIs)
- Review strategies to identify reasons for failure
- Implement alternative strategies
