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Business > Unit 10 > Flashcards

Unit 10 Flashcards

1
Q

what is incremental change?

A

involves introducing many small changes

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2
Q

what is disruptive change?

A

involves radical change, often requiring rethinking and redesigning in the business.
= high risk
= may be a impact to entire market or industry.

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3
Q

what are the external factors for change?

A
  1. competitor actions
  2. economic changes
  3. long term social changes (lifestyle/ demographics)
  4. political and legal changes (regulations and tax changes)
  5. technological change (eg. ecom)
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4
Q

what are the internal factors for change?

A
  1. new leadership
  2. significant investment decisions
  3. changes in corporate objectives(eg. growth/ retrenchment)
  4. change in strategic position (eg. to pursue market development)
  5. adjusting the organisational structure (delayering)
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5
Q

What does lewin’s force field analysis model depict?

A

It provides an overview of the balance between forces driving change in a business and the forces resisting change

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6
Q

what are examples of driving forces for change?

A
  • increased competition
  • poor financial performance
  • poor HR performance
  • dissatisfied customers
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7
Q

what are examples of resisting forces to change?

A
  • shareholders response
  • employee resistance
  • lack of finance
  • existing power and organisational structure
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8
Q

What does Kotter and Schlesinger explain?

A

why is change resisted and how to overcome resistance to change.

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9
Q
  1. Parochial self-interest- Kotter and Schlesinger
A

only care about the impact change has on their personal circumstance.
= narrow outlook

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10
Q
  1. misunderstanding or trust issues- Kotter and Schlesinger
A

unable to believe the managers assessment or lack of communication given by managers.

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11
Q
  1. different assessments of the situation- Kotter and Schlesinger
A

do not agree with the managers assessment of the situation and has better idea of what to change.

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12
Q
  1. low tolerance of change- Kotter and Schlesinger
A

workers fear they do not have the skills to cope with the change and are unwilling to retrain.

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13
Q
  1. solution- education and understanding- Kotter and Schlesinger
A

giving out more information on the change and explaining why it is necessary

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14
Q
  1. solution - participation and evolvement- Kotter and Schlesinger
A

get people involved giving
them a sense of ownership

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15
Q
  1. solution- facilitation and support- Kotter and Schlesinger
A

help them through the change and train them to cope with the new situations
- expensive

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16
Q
  1. solution - negotiation and agreement- Kotter and Schlesinger
A

barging with the employees until they are happy with the change

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17
Q
  1. solution - manipulation and co-option- Kotter and Schlesinger
A

offer rewards to win over people

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18
Q
  1. solutions - coercion- Kotter and Schlesinger
A

no solution- employees are almost forced to comply

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19
Q

what is a flexible organisation?

A

one that is able to adapt and respond relatively quickly to change in its external environment in order to gain advantage and sustain its competitive position.

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20
Q

what is restructuring

A

changing the organisational structure of a business

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21
Q

what is the main reason for restructuring a business?

A

in order to maximise the efficient of decision-making, communication and division of tasks in a business’ current situation.

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22
Q

what is a centralised organisation?

A

when control and therefore decision making is made by the highest layers of the organisation.
- typically tall structure

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23
Q

tall structure characteristics and examples of industry

A
  • authoritarian management
  • less skilled labour
  • compliance and obedience
    = fast food companies that rely of consistency
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24
Q

what is a decentralised organisation?

A

when control and therefor decision-making is delegated by highest layers to management
- typically flat structure

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25
Q

flat structure characteristics and industry examples

A
  • democratic management
  • more skilled workforce
  • innovative
    = new tech start ups
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26
Q

what is delayering?

A
  • removing parts of a business’ hierarchy, usually a layer of middle managers.
  • more agile business
  • remove costs- but wider span of control
  • quicker decision making
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27
Q

what are flexible employment contracts?

A

covers part time, temporary, zero-hours and flexible hour contracts. it covers self rostering, flexible working locations and special leave availability.

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28
Q

what is a mechanistic structure?

A

more formal and rigid structure
- centralised decision making
- tall structure
- staff are more specialised in certain areas and autonomously

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29
Q

what businesses is mechanistic structure more appropriate for?

A
  • older businesses or businesses operating in stable markets = with fewer changes to their environment
  • businesses that are expecting steady growth, that are financially stable and need to meet shareholder expectations
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30
Q

what is an organic structure?

A

flexible structures that are more able to adapt to change
- decentralised decision making
- flat structure allowing fast communication
- staff more multi-skilled and work in teams

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31
Q

what businesses is an organic structure most appropriate for?

A
  • businesses operating in fast changing or volatile markets = tech
  • businesses that need to be agile to grow, hat require constant innovation to stay at forefront
    -businesses that are lead by strong individualistic leaders with low regard for other stakeholders views
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32
Q

what is knowledge and information management?

A

the collection, organisation, distribution and application of knowledge and information within a business

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33
Q

what is knowledge managemnet?

A

focus on understanding and wisdom/experience to make effective decisions and take effective actions.

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34
Q

what is information management?

A

focus on retrieving, organising and analysing data to identify and anticipate the need for future changes.

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35
Q

what is organisational culture?

A

the way that people do things in a company and the way they expect things to be done. its an important way to shape the expectations and attitudes of staff and managers.

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36
Q

what are ways the culture of a company can be reflected?

A
  • how employees are recruited
  • treatment of guests
  • organisation of work space
  • degree of delegation
  • labour turnover
  • customer experience
  • speed of communication
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37
Q

what is the effect of a good culture within a business

A

can inspire, engage and motivate employees whereas a poor culture can demotivate and lead to employees loosing passion= effect on productivity and quality of work

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38
Q

what is a strong culture?

A

when employees agree with the corporate values of the business.
- staff wont need as much supervision= they work with values in mind
-staff loyalty
- increased motivation

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39
Q

what does Charles Handy Model of culture show?

A

how the organisational culture has an impact on how businesses handle change and whether staff are open to change or resistant to it.

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40
Q

1) Power culture - Charles Handy Model of culture

A
  • Power remains with few dominant people
  • often centralised decision making
  • often autocratic leadership
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41
Q

what are the advantages of power culture?

A
  • quick decision making
  • clearer direction for employees to follow
  • quick to adaptation = less bureaucratic hurdles
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42
Q

what are the disadvantages of power culture?

A
  • dependency = over reliance on leadership = vulnerability
  • limited diversification in innovation or creativity
  • employees may be resistant to change
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43
Q

2) Role culture- Charles Handy Model of culture

A
  • clear rules and procedures
    -clear hierarchy
  • often hierarchical structure
    -bureaucratic leadership
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44
Q

what are the advantages of role culture?

A
  • better stability with clear roles
  • better efficiency working collaboratively in teams = enhance problem solving
  • more compliance and work within rules
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45
Q

what are the disadvantages of role culture?

A
  • innovation limited
  • slow decision making due to hierarchical structure
  • disengagement of employees = may feel disregarded in decision making process
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46
Q

3) Task culture- Charles Handy Model of culture

A
  • key focus on outcome of specific task
  • teams brought together from all functional areas
  • often matrix organisational structures
  • high delegation
  • innovation encouraged
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47
Q

what are the advantages of task culture?

A
  • increase efficiency being task orientated
  • emphasis on collaboration enhances staffs problem solving and relationships at work
  • allows for specialisation and expertise within a team
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48
Q

what are the disadvantages of task culture?

A
  • risk of potential conflict in opinions in the teams
  • may limit adaptability since small scope only focusing on task
  • overreliance on teamwork may result in underutilised individuals
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49
Q

4) Person culture- Charles Handy Model of culture

A
  • high degree of autonomy
  • highly skilled employees
  • decentralised decision making
  • democratic or laissez faire leadership
  • professional
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50
Q

what are the advantages of person culture?

A
  • encourages innovation, valuing individual contributions
  • employee morale high = job satisfaction and passionate projects
  • able to adapt to change due to focus on individua skills and interest
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51
Q

what are the disadvantages of person culture?

A
  • coordination challenges = lack of centralised control
  • risk of fragmentation = loss of company goals in individual pursuits
  • potential inequality = some may feel less valued in recognition for projects
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52
Q

what is the importance of organisational culture?

A

it affects stakeholders such as staff, customers and shareholders

53
Q

what are the main reasons for changing a culture?

A
  • when a new leader joins a business = may have a different attitude and personality with their own ideas of doing things
  • when a business is underperforming or falling
54
Q

what are the problems of changing a culture?

A
  • resistance from staff in changing traditional culture
  • the scale of change may need high funding and large number of people in different locations
55
Q

what are the influences on organisational culture?

A
  • influence of management
  • size and structure of business
  • leadership and risk taking
  • market
  • working environment
  • external environment
56
Q

what does Hofstede’s model of national culture look at?

A

the key differences in organisational culture based upon national societal cultures. shows the effects of society’s culture on the values of people in the workplace and how these values affect behaviours and organisational culture in different countries.

57
Q

how can businesses use Hofstede’s model?

A
  • plan communication problems when trading with international suppliers
  • when expanding into other countries= direct foreign investment, during mergers, takeovers and joint ventures
  • help businesses foresee problems when entering international markets
58
Q

how is Hofstede’s model useful for multinationals?

A

allows to assess how proposed changes will be perceived by employees in different countries. they can adjust changes and the way they are communicated to match cultures.

59
Q

1) power distance- Hofstede’s model of national culture

A

type of relationship with authority and degree of acceptance of authority and hierarchy within workplace

60
Q

2) uncertainty avoidance- Hofstede’s model of national culture

A

how much risk is accepted at work and how much risk they are allowed to take by authority.

61
Q

3) individualism / collectivism- Hofstede’s model of national culture

A

which needs are more important = working in a team or on your own

62
Q

4) masculinity / femininity- Hofstede’s model of national culture

A

attitude and behaviour in workplace
- aggressive and competitive= masculine
- concerned by welfare of colleagues and work life balance = feminine

63
Q

5) long / short term orientated- Hofstede’s model of national culture

A

focus on long or short term plans and importance of sustainability

64
Q

what is strategic implementation?

A

the activities used within a business to manage the execution of a strategy. which will help work towards achieving corporate goals.
PLAN—IMPLEMENT—EVALUATE

65
Q

how to implement strategy effectively

A
  • may have to make disruptive change
  • depends on how business manages change
  • need to plan and organise resources needed
  • leadership, communication and organisational structure
66
Q

what are the key factors required for a successful strategy implementation?

A

-clear understanding of the circumstances = SWOT analysis
- commitment = allocate required resources
- the willingness to change within whole organisation
- ability to monitor and measure progress = PESTEL with continued monitoring

67
Q

what is the value of leadership in strategic implementation?

A

strong and effective leadership is required to make sure the changes go smoothly. communicating a clear vision to motivate employees.

68
Q

what is the value of communication in strategic implementation?

A

effective communication will ensure all employees understand what they should be doing and why. if they all share the same vision and understand their part in the change there’s more chance of success.

69
Q

what are the impacts of insufficient communication?

A
  • less efficient employees
  • lack of information
  • unable to finish
  • demotivating long term

=flat structure

70
Q

what are the impacts of excessive communication?

A
  • less efficient employees
  • too much information
  • confusion on priority of info
  • demotivating long term

= tall structures

71
Q

what are the impacts of effective communication?

A
  • more efficient
  • better work quality
  • higher morale and motivation
  • lower absenteeism
  • higher employee retention
72
Q

what does organisational structure determine?

A

how roles, power and responsibilities are assigned, controlled and coordinated ad how information flows between different levels of management.

73
Q

what is a functional structure?

A

groups employees based upon business functions = marketing, finance, operations and HR.

74
Q

what are the advantages of a functional structure?

A
  • brings employees with similar skills together allowing development of skills
  • less duplication of resources
75
Q

what are the disadvantages of a functional structure?

A
  • can lead to slow decision making and poor communication
  • can become unresponsive to external changes in market
76
Q

what is a product base structure?

A

where employees are organised according to the businesses divisions or product lines.

77
Q

what are the advantages of a product based structure?

A
  • encourages customer loyalty
  • easier to identify products that are poorly performing
  • department can respond quickly to change their specialised areas
78
Q

what are the disadvantages of a product based structure?

A
  • duplications of resources and effort
  • departments may start competing
  • difficult to share expertise and resources across departments
79
Q

what is a regional structure?

A

where employees are organised based on geographical location.

80
Q

what are the advantages of a regional structure?

A
  • each department can meet needs of local markets
  • react quick to external changes
  • better communication
  • easy identification of failing departments
81
Q

what are the disadvantages of a regional structure?

A
  • high cost due to duplication of resources and efforts
  • competition between departments
  • new departments need creating if wanting trade in new area
82
Q

what is a matrix structure?

A

where project teams are formed from across different functional areas and different levels of the hierarchy on project by project basis. relying on a skilled workforce.

83
Q

what are the advantages of a matrix structure?

A
  • good way of having different viewpoints and skills involved in a project
  • opportunity for staff to gain new skills`
84
Q

what are the disadvantages of a matrix structure?

A
  • very expensive
  • team members maybe have priority issues having to report to more than one authority figure.
85
Q

what are the factors to consider when designing an organisational structure to implement strategy?

A
  • appropriate span of control
  • appropriate levels of management
  • what specialist roles are needed?
  • centralised decision making?
  • what mix of skills and teams would be required?
86
Q

what is a Network analysis?

A

using a network diagram to manage the various tasks required to complete a project. the use of network analysis can help a manager to complete a project in the shortest space of time possible and identify the critical activities.

87
Q

how do you calculate the EST (earliest start time) ?

A

fill the EST from the first (0) task to the last ( left to right of the diagram)
= by adding the duration of one task to the EST of the previous task.

88
Q

how do you calculate the LFT(latest finish time) ?

A

fill the LFT from the last task to the first (right to left of the diagram)
= by subtracting the duration of one task to the LFT of the following task

89
Q

how do you calculate the the float (spare time)?

A

LFT-duration- EST
- when comparing original float to new float it can determine the difference in the overall critical path time

90
Q

what are the benefits of using the network/ critical path analysis?

A
  • considers the shortest duration of each task
  • considers simultaneous task (can be done at the same time)
  • part of management theory and lean production = save money and time
  • identifies priority task = critical path
  • identify rate of monitoring needed
91
Q

what are the drawbacks of using network/ critical path analysis?

A
  • timings are estimates
  • unforeseeable events may disrupt
  • too complicated for large projects
  • one change to a critical task affects overall
92
Q

what are the challenges with strategies?

A

implementation failure rates are between 60-90%. due to external factors such as economic conditions or sufficient plans in place

93
Q

what are the internal causes of failure?

A
  • liquidity problems
  • lack of planning
  • insufficient start up capital
  • poor leadership
94
Q

what are the external causes of failure?

A
  • economic conditions
  • competitive forces
  • trends and fashion
  • technology
95
Q

what are the financial causes of failure?

A
  • cash flow management
  • bankruptcy
96
Q

what are the non financial causes of failure?

A
  • poor planning
  • lack of skills
97
Q

what is a planned strategy?

A

one that is formulated and then carried out over a period of time.

98
Q

characteristics of a planned strategy

A
  • rigid strategy based on corp objectives
    -formal planning process
  • supported by data = SWOT, PESTLE, porters 5 forces
99
Q

what are the advantages of a planned strategy?

A
  • clear purpose set out for employees to follow
  • easier to measure success against
100
Q

what is an emergent strategy?

A

one that develops as the strategic plan is implemented. often a business will adapt the strategy because it has to respond to external forces or the managers realise that the initial plan was not appropriate.
- ability to adapt is a key factor in its long term success

101
Q

characteristics of an emergent strategy

A
  • flexible strategy that responds to events as they arise
  • uses strategic and tactical changes
102
Q

what are the advantages of emergent strategy?

A
  • allows business to adapt to it’s environment
  • encourages to learn from their mistakes
103
Q

what are the disadvantages of emergent strategy?

A
  • may lack clarity
  • could lead to confusion
  • difficult for large businesses because different parts of the business need coordination.
104
Q

what is strategic drift?

A

occurs when a business’ strategy no longer matches the environment in which it operates. this can be for any of the PESTLE+C factor. eventually the business will need to adjust strategy or fail.

105
Q

phase 1 of strategic drift - Incremental change

A

the business remains competitive due to incremental changes (small changes) in the strategy are made in line with external environment

106
Q

phase 2 of strategic drift - Strategic drift

A

begins to appear as the incremental changes fail to keep up with the fasetr rate of change in external environment

107
Q

phase 3 of strategic drift - Flux

A

State of flux in the strategy and management recognises the existence of drift due to poorer performance and tries to make changes.
- no clear direction and disagreements may occur
- the gap between the business’ strategy and the line of change in the external environment widens

108
Q

phase 4 of strategic drift - Transformational change or demise

A

final phase when the business either fails or undertakes transformational change to realign itself with the external environment.

109
Q

what is divorce of ownership and control?

A

the separation of ownership (shareholders) and control (elected board of directors) in a public limited company.

110
Q

what would a divorce of ownership mean for a business?

A

different groups of individuals: the original owners, new shareholders, new CEO, board of directors and managers that may have different views on objectives and strategy.

111
Q

what conflict of interest could a divorce of ownership cause?

A

the owners may wish to see a policy of profit maximisation but the directors want a strategy of long term growth.

112
Q

what can be put in place to ensure decisions of CEOs, directors or managers aligns with interest of the shareholders and other stakeholders?

A

Corporate governence

113
Q

what is corporate governence?

A

a set of systems, processes and principles that ensures a business is managed in the best interest of all its stakeholders.

114
Q

what does key element, accountability mean in corporate governance?

A

ensure management is accountable to the board of directors and then BOD accountable to shareholders. the BOD should have clear strategy and objectives and contingency plan to manage risk.

115
Q

what does key element, responsibility mean in corporate governance?

A

to ensure that all matters related to finance, performance, ownership and corporate governance is communicated both accurately and on time

116
Q

what does key element, fairness mean in corporate governance?

A

protect all stakeholders rights to ensure all are treated equitably including employees and customers.
- Including Corporate social responsibility (CSR) policies

117
Q

what does key element, transparency mean in corporate governance?

A

ensure the business complies with relevant laws and regulations.

118
Q

why must a business evaluate strategic performance?

A

ensures the objectives are being achieved and also alerts management to problems. an emergent strategy might not be what the business originally intended to achieve but doesn’t mean it wasn’t successful

119
Q

how might a business evaluate strategy?

A
  • comparing expected results with actual results: conducting a variance analysis
  • check performance against key performance indicators such as: new products launched, labour turnover, ROCE ratio, customer satisfaction
  • KPIs can feature on a business’ balanced scorecard
120
Q

why is strategic planning important?

A

helps managers understand their business and the environment in which it operates (SWOT). it also identifies the steps needed and targets by which to measure success

121
Q

what are the imitations of strategic planning?

A
  • business environment is changing always meaning plans have to change fast
  • doesn’t guarantee success (strategic drift)
  • may depend on accuracy of data = market research, sales forecast, costs and return predictions
122
Q

what is contingency planning?

A

planning for the unexpected such as natural disasters or loss of data

123
Q

what events of natural disasters would they plan for?

A
  • flood
  • earthquake
  • storms
    etc.
124
Q

what event of loss of data would they plan for?

A
  • through system malfunction
  • sabotage
  • hacking
125
Q

what event of loss of key personnel would they plan for?

A
  • due to death
  • resignation
126
Q

what event of product issue would they plan for?

A
  • product fault or contamination
  • unexpected large order or cancellation of order
  • loss of a key client
127
Q

what does the process of contingency planning involve?

A
  • identifying what/how things might go wrong
  • understand potential effects or impacts
  • devise plans to cope with threats
  • putting strategies in place to deal with the risk before they happen
128
Q

what are the advantages of contingency planning?

A
  • speeds up recovery process
  • saves money
  • shows ethical concerns (CRS)
129
Q

what are the drawbacks of contingency plans?

A
  • costly and timely
  • opportunity cost
  • could be a waste of money if never happens
  • better to take risk?

Business (11 decks)

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