unit 10 Flashcards
what is Lewis force field analysis
force field analysis provides an overview of the balance between forces driving change in a business and the forces resisting change
explaining force field analysis
- there are forces driving change and
forces restraining it - where there is an equilibrium
between the two sets if forces there
will be no change - in order for change to occur the
driving force must exceed the
restraining
examples of forces driving change
internal:
- need for higher profits
- poor productivity
- need to change culture
- change of lordship
external:
- customer demand
- competition
- legislation & taxes
- political environment
- economic conditions
- ethics & social values
- technological change
why change is resisted
- self interest
- misunderstanding
- low tolerance of change
- different assessment of the situation
resistance to change
- a degree of resistance is normal since
change is:- disruptive
- stressful
- a degree of scepticism can be healthy
especially where there are weakness
win the proposed changes - however resistance will also slow the
achievement objectives
example of Lewis model change a primark
forces to change:
- competition
- technology
- capacity
forces resisting change:
- employees
- culture
- low margins
reasons to change: self interest
- self-interest is a powerful motivator
- raises from a perceived threat to job
security, status and financial position - individuals often place their own
interest ahead of those of their
organisation, particularly if they don’t
feel a strong loyalty to it
resistance to change: different assessment of the situation
- here there is disagreement about the
need for change or what that change
needs to be - some people may simply disagree
with the change proposed, or they
may feel they have a better solution - this is different from “self-interest”-
the resistance here is based on
disagreement about what is best for
the business
resistance to change; low tolerance & inertia
- many people suffer from inertia or
reluctance to change, preferring
things to stay “that way they are” - many people need security,
predictability & stability in their work - if there is low tolerance of change
(perhaps arising from past experience)
then resistance to change may grow
resistance to change: misinformation & misunderstanding
- people don’t understand why change
is needed, perhaps because they are
misinformed about the real strategic
position of the business - perception may be widespread that
there is no compelling reason for
change - perhaps even an element of people
fooling themselves that things are
better than they really are
Mnemonic for resistance to change
- S elf intrest
- A assessment is issues
- L ow
- T tolerance
- M misunderstanding
- M isinformation
overcoming resistance to change,
6 ways of overcoming resistance to change
- education & communication
- participation & innovation
- facilitation & support
- manipulation & co-operation
- negotiation & bargaining
- explicit & implicit coercion
overcoming resistance to change: manipulation & co-operation
- co-operation involves bringing
specific individuals into roles and
positions that are part of change
management (perhaps managers who
are likely to be otherwise resistant to
change) - manipulation involves the selective
use of information to encourage
people to behave in a particular way - may be deemed to be unethical but
perhaps only option if other methods
of overcoming resistance to change
prove ineffective
overcoming resistance to change: negotiation & bargaining
- the idea here is to give people who
resist an incentive to change - or leave - the negation and bargaining might
involve offering better financial
rewards for those who accept the
requirements of the change
programme - alternatively, enhanced rewards for
leaving might also be offered - this approach is commonly used when
a business needs to restructure the
organisation
overcoming resistance ti change: explicit & implicit coercion
- this approach is very much the “last
resort” if other methods of
overcoming resistance to change fail - explicit coercion involves people been
told exactly what the implications of
resisting change will be ie. job losses - implicit coercion involves suggesting
the likely negative consequences for
the business of failing to change,
without making explicit threats - the big issue with using coercion is
that it almost inevitably damages trust
between people I a business and can
lead to damaged morale (in the sort-
term)
tall structure
- may levels of hierarchy
- clear line of authority
- slow decision making
- beneficial in large organisations
- specialised roles necessary
flat structure
- fewer levels
- faster communication and decision
making - enhance collaboration and
adaptability - struggles with roles
matrix structure
employees from different departments help speed up projects as well as add creativity, common in IT industries
delayering
- removing layers of management
- streamline processes
- increased efficiency
- requires carful handling to ensure
that communication remains effective
decentralised
- distributes decision-making power -
throughout organisation - empower employees and improve
responsiveness to local needs - may lead to inconsistencies in
decision-making
what is critical path
method for organising activities associated with a particular process in order to find the most efficient way of completing a task
save time
network diagram
node to show the start and end
EST
LFT
what is a strategy
- crucial aspect of running a business
- defined plan of action that outlines
the direction a business wants to take
and defines how the plan will cascade
through the organisation by the
allocation of resources - sets the direction for the entire
organisation and helps to align all
employees towards a common goal - ‘serves as a road map for a firm,
guiding its octopus and decisions to
achieve its goals and stay competitive
in the marketplace’
best business strategies, Tesla
- meant to create a ‘minimal viable
product’, Tesla didn’t - long term goal - biggest car brand
in the world - released first car being $200,000
- knew he wouldn’t make mass sales
or profit - aim ‘to create the most compelling
car company of the 21st century by
driving the worlds transition to electric
vehicles
how value was Tesla in 2022
- 76 billion
- leading competitor
what can we learn from Tesla
- supply chain strategy is one of the
most brilliant moves they’ve made - batteries can only supply to Tesla
- buys out battery company -
diversification
why strategies fail, McDonalds
- salads fail to sell, and they make you
fat - 2005, launched salad
- didn’t sell, 2% of overall sales revenue
what did mcdoanlds do
- added dressing, chicken
- went up to 3% of revenue
what ca we learn from McDonalds
- stick to core competencies
- need to embark why your doing
and what problems your going to
solve - started off s trying to mitigate
repetitional risk, then changed to
trying to drive extra revenue
difficult of strategic decision making
- making strategic decisions us difficult-
there are so many factors which
businesses have to consider, to least
the stakeholders who will be affected - strategic decisions should be
communicated effectively to the
stakeholder so that they are aware of
what the change will entail
mintzberg on emergent strategies
- ‘a pattern of action that develop over
time in an organisation in the absence
of a specific mission and goals, or
despite a mission and goals’ - strategy emerges over time as
intentions collide with accommodate a
changing reality
planned v emergent strategy
planned:
- intended strategy
- influenced by corporate objectives
- based around a formal strategy
planning process
- supported by traditional planning
tools and methods
- described in formal business plan
emergent:
- actually happens
- responds to event (environment)
- involves strategic and tactical changes
- not restricted by formal planning tools
what is strategic drift
happens when the business is no longer relevant to the external environment facing it
four stages of strategic drift
1- incremental change
2- strategic drift
3- flux
4- transformational change or death
why is contingency important
in business, always expect the unexpected
concept links to contingency planning
- external environment
- PESTLE
- risk management
- decision making
- crisis management
contingency planning is part of the way businesses manage risk
risk management
- identifying and dealing with the risks
threatening a business
contingency planning
- planning for foreseen events
crisis management
- handling potentially dangerous events
for a business
what is risk in business
- possibility of loss or business damage
- a threat that may prevent or hinder
the ability to achieve business
objectives - the chance that a hoped-for outcomes
will not occur (customers don’t
respond well to product launch)
different ways businesses deal with risk
- ignore it (wait and see)
- reduce probability of risk
- share or deflect the risk (insurance)
- make contingency plans - prepare for
it - treat risk as an opportunity -
particularly if it also affects other
competitors
examples of common approaches to day-to-day risk management
marketing:
- avoid over-reliance on customers or
products
- develop multiple distribution channels
- test marketing for new products
operations:
- hold spare capacity
- quality assurance & control
finance:
- insurance against bad debts
- investment appraisal techniques
people:
- key man insurance - protect against
loss of key staff
- rigorous recruitment & selection
procedures
contingency planning is part of risk management
- identifying what and how things can
and might go wrong - understanding the potential effects if
things go wrong - devising plans to cope with the
threats - putting in place strategies to deal with
the risks before they happen
what is contingency planning
involves:
- preparing for predictable and
quantifiable problems
- preparing for unexpected and
unwelcome events
aim:
- minimise the impact of a foreseeable
event and to plan for how the
business will resume normal
operations after the crisis
evaluating the need for contingency planning
risks vary in terms of their:
- significant to the business
- likelihood
contingency planning is not required for every eventuality
however, risks of strategic significance cannot be ignored
overview of strategic planning process
- set corporate objectives
- determine what should be done to
accomplish them - implement the plan
- monitor and evaluate the results
a reminder of how a business sets its strategic direction
vision:
- non-specific directional and
motivational guidance for the entire
business
- what will the business be like in five
years time
mission statement:
- an business’s reason for being
- it’s concern with the scope of the
business and what disguises it from
similar businesses
objectives:
- SMART objectives
goals:
- specific statements of anticipated
results
types of plan in business
strategic plan:
- sets out the overall direction for the
business in broad scope
business plan:
- actions that a business will take to
achieve corporate objectives
operational plan:
- details how each objectives is to be
achieved
- specifies what senior management
expects from specific departments or
functions
levels of business planning - strategic
level: business wide
focus: direction and strategy for whole
business
nature: broad and general
time horizon: long term 3+ years
levels of business planning - business
level: business unit
focus: direction and strategy for the
business unit
nature: more detail on goals and tasks
time horizon: 1-2 years
levels of business planning - operational
level: functional area
focus: resources and action for
functional area
nature: specific to the function
time horizon: up to one year
benefits of effective strategic planning
- clarify direction
- ensure efficient use of business
resources
