Unit 10 Flashcards
Lewin’s force field analysis not on paper 2
balance between forces driving change in a business and forces resisting change
equilibrium = no change
change to occur = force must exceed the straining force
forces driving change: poor efficiency, lack of innovation, customer demand, legislation
factors resisting change: poor communication, self interest (potential job loss)
Kotter + Schlesiers resistance to change not on paper 2
- self interest -> perceived threat, concerned with how that will effect employees jobs + finance
- low tolerance of change -> inertia, “why change?”. previous changes
- misunderstanding -> misinformed + inadequate info
- different assessments of the situation -> differing opinions on the reason for change
Kotter + Schlesiers overcoming resistance to change not on paper 2
- education + communication -> why is there need for change
- participation + involvement -> getting involved in process
- facilitation + support -> training, counselling
- negotiation -> incentive to change
- manipulation -> selective use of info to encourage
- power/coercion -> being told what implications will be
Handy’s model of culture
power culture: few key people at the centre (make major decisions), few rules + bureaucracy, quick decision making
role culture: functional organisational structure, power derives from position, hierarchical bureaucracy
task culture: identify with task they are working on, teams formed, matrix organisation, no single power source
person culture: given their own parts of business to make decisions on + control, people believe themselves to be superior to the business, power lies in each group of individual
corporate governance
a system by which companies are directed + controlled
responsibly of board of directors
who are companies controlled by?
board of directors
who are companies owned by?
shareholders
key responsibilities of board of directors?
- setting companies objectives
- determining strategy
- providing leadership for organisation
- supervising the management
- reporting to shareholders on how they’re doing
what is the shareholders role in corporate governance?
to appoint the directors
what is the divorce between ownership + control?
happens when the owners of a business do not control day to day decisions made in the business
what are non executive directors?
business people with no financial or personal ties to the executives and are there to give an impartial view
what are activist shareholders?
put pressure on existing on management or force through changes to management boards, some insist on businesses using profits to buy back shares to increase returns to existing shareholders
internal factors of causing change? not on paper 2
- change in leadership -> organisational culture or structure
- better than expected performance -> expand
- poor financial performance -> retrenchment
- type of business eg innovative likely to come up with better methods
external factors of causing change? not on paper 2
- availability of new tech -> production faster + cheaper
- consumer tastes change -> altering product range eg electrical cars
- changes in ethical views may effect suppliers
not on paper 2 incremental change
- gradually, usually the result of a strategic plan + often attempts to minimise disruption
- mangers decide a time scale for changes
disruptive change not on paper 2
- sudden forces firms to do things different
- may have to close or sell subsidy companies, spend heavily on promotions to raise consumer confidence etc
value of change not on paper 2
- need to grow + stay comp. -> can allow to take adv of new effective ideas
- people within a business naturally resist change but adv normally outweighs disruption
- without change a company may fall behind its competitors -> insolvency
restructuring not on paper 2
changing the organisational structure
- businesses that can do this efficiently can adapt to keep up w changes in external environment
- can max the efficiency of decision making, communication + division of task
- can reduce costs, make the business more comp.
- might decentralise in fast changing environments to give more power + flexibility to departments
delayering not on paper 2
removing parts of an organisations hierarchy
- businesses w flexible structures can to delayer to reduce costs, improve communication + give more responsibility
mechanistic structure not on paper 2
- rigid, works well for stable environments
- centralised, decision making by managers
- tall structure, long time to travel
- slow to make changes
organic structure not on paper 2
- decentralised, employees get a say
- flat structure - fast communication
- suited to changing environment, quick action
- work in teams
flexible employment contracts (not on it)
employees flexible, business effective at managing change eg zero hour contacts easily cope w changes in demand
-> achieve by employing a mixture of core + peripheral workers
-> can also outsource workers
-> can hold on to valuable employees + open up more job opportunities for skilled applicants
but could lead to poor communication + teamwork between staff who work at different times
value of leadership
a good leader can take action to make sure change is smooth
- > should take overall responsibility + also delegate
- > create a clear inspiring vision
- > motivate everyone to engage w the process
type of leader upon change
authoritarian = employees fearful of change
laissez faire = employees not confident that changes will work out
most suitable is democratic or paternalistic
value of good communication
can clearly pass on info + ideas to motivate people
- senior managers need to communicate function objectives to department managers + strategy to staff
- any employee affected needs to be told
types of organisational structure
functional => organised into departments, each department may have own culture so hard to co-ordinate
product based => each product has its own division, ideal for strategies to grow market share of one product but could be unnecessary duplication of roles
regional => based on locations - suits market development strategy
matrix => organises staff by two different criteria, ensures working towards objectives
network analysis
identifies the most efficient + cost effective way of completing a complex project
- > used when implementing a strategy or launch of new product etc
- > allows companies to work out when they’ll need resources
- > helps with decision making knowing the LFT can make it easier to know when to launch
float time
spare time available
total float
LFT - duration - EST
the length of time you delay an activity without delaying the whole project
network analysis adv + disadvantage
+ identifies the critical activities, helps firm forecast their cash flow, finds the shortest possible time, can give CA
- relies on estimates, constructing + amending the network will require planning + time, quality could suffer due to strict deadlines
contingency planning
outline what to do if something unexpected happens
- > can help a business respond to lots of different crises
- > businesses can’t plan for every unforeseen event
- > very expensive, managers have to decide how likely the event is going to happen
crisis management
when an unexpected situation occurs + a business has to respond
-> managers need to act quickly + decisively - autocratic leadership
strategic planning
gives clear direction, communicate exactly what the business is trying to achieve, work towards same goals
- > helps managers to think about SWOT but can restrict business’s flexibility
- > more useful in stable markets
evaluating strategy
- > see whether targets met, check departments sticking to time scale + budgeted resources
- > actual performance should be measured against objectives
- > comp. environment monitored so external factors are spotting, avoiding strategic drift
monitoring strategy
market analysis - shows if assumptions about market are correct
management info systems - collect + process routine departmental data to give current state of business
reasons for strategic drift to happen?
- overambition
- failing to adapt to external environment
- what worked before doesn’t work anymore
- senior managers may deny there is a problem -> complacency
strategic drift
when strategy becomes less suited to the businesses environment -> doesn’t adapt to changes eg new tech, consumer tastes etc
- > a business should respond to these changes esp if competitors are benefitting
- > small changes might work in ST but as external change increase, strategic drift increase + managers will have to introduce transformational change for business to survive
risks involved with strategic decision making
- unknowns you can’t account for, need to consider risk
- managers need to have info about resource, skills + time available
- external environment is continually changing
- stakeholders want different things eg Richard Bransons. had to buy back company
what difficulties might a business need to overcome?
- a lack of resources, heavy investment = less working capital
- miscommunication
- if managers don’t provide strong leadership
- inaccuracies in forecasting
organisational culture
The shared values of a business + The beliefs and norms that affect every aspect of work life
what does organisational culture affect?
planning, objective setting + strategy
how is organisational culture reinforced?
with company rules, recruitment policies, training workshops
what is a strong culture?
Staff understand and respond to culture, little need for policies and procedures, consistent behaviour, culture is embedded, staff = loyal, turnover = low
what is a weak culture?
Little alignment with business values, Inconsistent behaviour, A need for extensive bureaucracy & procedures
how does organisational culture affect stakeholders?
staff - affects motivation, power or role culture affects creative staff
customers - decentralised know needs + wants better
shareholders - low risk culture may have low returns
reasons for changing organisational culture?
- new manager may want to make it similar where they worked before
- to be more competitive eg power culture slow to spot ways to more comp
influences on organisational culture?
- business grows, new employees, new ambitions + exceptions
- multinational may be influenced by culture of country
problems for changing organisational culture?
- employees usually resist change esp if they’ve worked there a long time (prefer the status quo)
- more complicated as have to change attitudes + behaviour
- expensive, changing office layout, extra training etc
- HR may need to change recruitment + induction processes, payment + reward systems
hofstedes international cultures?
individualism = focus on personal achievement vs collectivism = team, supporting each other
power distance - Low PD = flatter structures, more autonomy, High PD = encourages bureaucracy + rank
masc = competitive, aggressive vs fem = decisioning making consultative
uncertainty avoidance - low = open to change, high = resistant
LT orientation - low = short termism, high = encourage LT thinking, future
indulgence = allows ppl to satisfy desires vs restraint = regulating desires
what is hofstede for?
used to plan for communication problems when trading with international suppliers etc
multinationals deciding how best to reward management + employees in different countries
