U4AOS2 Flashcards
Importance of Leadership in Change management
Leadership
- Process of positively influencing and encouraging individuals to set and achieve objectives
Change Management
- Process of implementing approaches that prepares an organisation undergoing a transformation
Build a shared vision
- Informing employees of the reasons and benefits of change, as well as the consequences of not changing
Provide ongoing communication
- Clear instructions to employees as they move from current to new practices
Provide ongoing support
- Including employee counselling, training, and consultation
Importance of Leadership in Change Management - Coles
Steve Cain is the current CEO of the Coles group
Cain established and communicated a clear vision to managers, employees and shareholders, specifically during the 2019 Investor Day, which focussed on inspiring customers, working together with employees, suppliers and communities and smarter selling through improving efficiencies.
Cain also recognises and supports staff through periods of change by providing programs which support mental wellbeing and analysing training needs so that they can continue to support staff through the changes to the online system.
Staff Training
Business equipping employees with the knowledge and skills required to perform work tasks
Impact on KPI’s
Decreases - Number of customer complaints
Improves the quality of a product or service leading to more satisfied customers
Decreases - Number of workplace accidents
Improves employees’ handling of equipment and promotes safe working practices.
Increases - Number of sales
Equips employees with the skills needed to communicate the value of products to customers and close sales
Increases - Rate of productivity growth
Equips employees with skills needed to increase efficiency and effectiveness in production
Staff Motivation
Managers implementing strategies that seek to drive employees to work towards the achievement of business objectives
Decrease - Level of Staff Turnover
- Staff feel sense of achievement and commitment in fulfilling tasks as their are considered meaningful by manager
Decreases - Rate of Staff Absenteeism
- Improves employees willingness to show up to work as they are given more support, specific goals and rewards
Change in management styles or skills
Managers altering their way of directing and interacting with staff
Impact on KPIs
Decrease - Rates of Staff Absenteeism
- Less restrictive styles increases employee confidence in completing tasks. Employees can gain feedback on their performance
Increase - Rates of Productivity growth
- More restrictive styles promotes employees staying on task which improve business productivity
Increased investment in technology
Implementation of automated and computerised processes for production and operations
Impacts on KPIs
Increased net profit
- CAM, WD, APL can reduced expenses from wastage and wages for employees
Rate of Productivity Growth
- APL and CAM improves business efficiency and effectiveness in production. WD allows business to anticipate customer demand
Improving quality in production
Implementation of processes that increase the perceived value of a product or service
Impact on KPIs
Number of Sales
- Higher quality goods or services satisfy customers needs and increase the likelihood of purchases
Number of Customer Complaints
- Higher quality goods or services increases customer satisfaction
Initiating lean production techniques
Adopting approaches that reduce waste in production while increasing the value of goods to the customer
Impact on KPIs
Level of Wastage
- No idle stock as goods are only produced when customer orders are received
Net Profit figures
- Reduces costs linked to excess inventory, Continually aims to improve product quality and reduces costs.
Cost-Cutting
Process of reducing business expenses
Impact on KPI’s
Rate of Productivity growth
- Reallocating resources such as labour and capital will lead to more productive uses of materials
Net Profit Figures
- Redeploying resources reduces inefficiencies in the production process, increasing the net profit margin
Redeployment of resources
Reallocation of natural, labour and capital materials to different areas of the business to improve their effectiveness and productivity
Impact on KPI’s
Rate of Productivity growth
- Reallocating resources such as labour and capital will lead to more productive uses of materials
Net Profit Figures
- Redeploying resources reduces inefficiencies in the production process, increasing the net profit margin
Management strategies to respond to KPIs - Coles
Management strategies to seek new business opportunities - Domestically
Diversifying products
Adv - Opens new market for business
Dis - Expensive due to start-up costs
Mergers and acquisitions
Adv - Take advantage of an existing business’s contacts and market share
Dis - Can be seen as negative by customers who may feel the ‘old’ business could lose their identity
Product Differentiation
Adv - Quality or uniqueness drives sales
Dis - Can be expensive to create the differentiation and so may need to charge a higher price
Franchising
Adv - Allows business to establish more branches for little cost to the business
Dis - Whole business can be negatively impacted by a poor reputation of one store
Principles of the Learning Organisation (Senge)
Systems thinking
- Ability to understand the interrelationships between different areas of a business
Mental models
- Challenging the pre-existing assumptions and beliefs that people have about a business and its practices.
Shared vision
- Aspirational description of what a business and its members would like to achieve
Personal mastery
- Encouraging individual development and learning through business activities
Team learning
- Encourages individuals to combine their strengths and abilities to continuously grow together
Low-risk strategies to overcome to employee resistance
Low-risk strategies
- Gradual management approaches that encourage employees to accept and participate in a business change
Communication
- Managers initiating open and honest two-way communication with employees so they are fully aware of the reasons, impacts and their roles in an upcoming change
Empowerment
- Managers providing employees with increased responsibility and authority during times of change
Support
- Providing employees with assistance as they move from current to new practices
Incentives
- Managers providing financial or non-financial rewards to encourage employees to support change
Adv
- All strategies can make employees feel valued by the business
- Employees embracing the change will likely result in an increase in revenue or decrease in costs.
Dis
- All strategies are not useful in crisis situations as they take time to be effective
- Incentives can involve financial expenses for the business
High-risk strategies to overcome employee resistance
High-risk strategies
- Autocratic management approaches used to influence employees to quickly accept and follow a business change.
Manipulation
- influencing employees to follow a proposed change by providing incomplete and deceptive information about the proposed change
Threat
- forcing employees to follow a proposed change by stating that they may or will cause harm to them if they fail to follow the change
Adv
- High-risk strategies involves little financial costs to initially implement
- High-risk strategies are useful in crisis situations where change must occur rapidly
Dis
- Employees have low morale in the workplace and are more likely to leave or be absent from work.
- Relationship between management and employees is compromised
Lewin’s three step change model
Lewin’s three step change model is a process which can be used by a business to implement successful change
Unfreeze step - moves a business to a state where stakeholders are prepared to undergo change.
Change step - moves business towards desired state
Refreeze step - ensures the change is sustained within the business for the long term
Effect of change on stakeholders, including managers, employees, customers, suppliers and the general community
Managers - In charge of the entire business or an area of management
Pos Effect
- Increased authority and responsibility can improve a manager’s skills
- Financial or non-financial rewards provided if business change is successful
Neg Effect
- Loss of job and financial security if business change is unsuccessful
- Increased workloads can lead to stress which may impact a managers wellbeing
Employees - Individuals who work for a business by completing allocated tasks
Pos Effect
- New opportunities and responsibilities can improve employee job satisfaction.
- May build long term job security and improve employee satisfaction if business change is successful.
Neg Effect
- May lose their job and financial security due to the change
- May need to develop new complex skills and knowledge to keep job which can increase stress levels
Customers - People who purchase goods or services from a business
Pos Effect
- Better product or service quality can increase customer satisfaction
- Reduction in the price of goods or services sold can increase customer satisfaction
Neg Effect
- Increasing the price of goods or services may frustrate customers and reduce satisfaction.
- Lowering quality to save on costs of production may frustrate customers and reduce satisfaction
Suppliers - Sell raw materials and resources to other businesses for their production
Pos Effect
- May increase the amount of resources demanded by businesses which can increase sales for a supplier
Neg Effect
- May decrease sales if businesses decide to switch to a different supplier or lower their volume of orders
- May require adjustments in processes and supplies offered to meet the requirements of a business change
General Community - Individuals and groups who do not directly interact with the business
Pos Effect
- Creation of more jobs can increase employment rates and improve society’s well being
- Greater ability to make donations to charity and contribute to social causes if business change successful
Neg Effect
- Loss of jobs may increase unemployment rates and decrease society’s well being
- Decreases customer traffic and sales of surrounding businesses if change involve shutdown or relocation
Corporate social responsibility considerations when implementing change
CSR - 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
Employees
- Businesses can improve the wellbeing of their employees
The general community
- Businesses can reduce social harm caused by a change and
make a positive impact on society
The environment
- Businesses can contribute to preserving the planet by conducting the change in an environmentally ethical manner
Evaluating changes
Reviewing key performance indicators can identify whether a business change has achieved its desired objectives or if further changes are required.
From a review of KPIs, a business may even discover that the change has achieved its objectives but unintentionally affected other areas negatively
