Unit 10 - Managing Change Flashcards
Change management
Involves the process that ensures a business responds to the environment in which it operates (about survival)
Internal causes of change
Arise from factors within the control of the business e.g. decisions taken by business management (strengths and weaknesses - SWOT)
External causes of change
Arise from factors outside the control of the business e.g. PESTELE
Examples of internal change
- new leadership
- change in strategic directions
- significant investment decisions
- adjusting organisational structure
Examples of external change
- significant competitor actions
- political and legal changes
- long term changes in society
- technology
Step change
Change that is significant and occurs rapidly
(May required some coercion to overcome resistance)
Incremental change
Change occurs of a period of time in incremental and small changes
(Responding to subtle changes in environment and arises as strategy develops)
Benefits of embracing change
- sustain competitive advantage
- aligns business strategy with evolving nature of customer needs
- take advantage of developing technologies
- stakeholder gain
- improve effectiveness of communication and decision making
- leading change rather than following it may bring about market benefits
Disruptive change
- Form of step change that arises from changes in external environment
- impacts the market as a whole
- challenges the established business model
- improvements of tech = main driver of this change
Why might incremental change be better than step change
- less resistance
- more time to plan change
Lewins force field analysis
An overview of the balance between forces driving change in a business and the forces resisting change
Examples of internal forces driving change
- need for higher profits
- poor efficiency
- lack of innovation
- need to change culture
- chance of leadership
Examples of external forces driving change
- customer demand
- competition
- legislation and tax
- ethics and social values
- technological change
Kotter and Schlesinger - 4 reasons to resist change
- parochial (limited/ narrow outlook) self interest
- different assessment of the situation (disagreement)
- low tolerance for change and inertia (like to do things the way we do them)
- misinformation and misunderstanding
How can we overcome resistance to change?
- educate and communicate
- participation and involvement
- facilitation and support
- manipulation and co-option
- negotiation and bargaining
- explicit and implicit coercion
Charles Handy (1990) - the flexible firm
1) core workforce
2) flexible workers (part time)
3) freelance contractors
Financial flexibility
- pay can quickly represent the demand Ian’s supply of labour in the external economy
- differences between pay of different type of employees (skilled/unskilled)
- performance related pay
Numerical flexibility
- headcount if employees can be changed quickly and efficiently
- fire and hire policies can be implemented quickly
- looser contracts
Functional flexibility
- redeploy staff quickly and efficiently between tasks and activities
- movement of staff between direct and indirect production tasks
- complete change in career /skills
How has flexibility changed since the pandemic?
- more working from home
- sabbaticals
- zero hour working
- remote working
- job sharing
- shift swapping
How many times a year can you request flexible working
Twice a year
Flexibility in flat structures
- informal
- fluid to change
- favours verbal comms
- decentralised decisions so empowerment
- change easier to handle
Flexibility in a hierarchal (mechanic) structure
- formal and bureaucratic
- centralised and supervised
- formal comms
- standard policies and procedures
- little perceived need to change
Flexible labour markets
- involve a minimum of government regulators
- wastes and conditions should be decided by marker forces, not government
- more effective and competitive
- globalisation to remain competitive
Benefits of flexible labour
- increased trade
- greater choice of jobs
- increased labour market participation rates
- may encourage inward foreign direct investment (FDI)
- lower rates of unemployment
- stabilises economic cycle
Arguments against flexible labour
- lack of training (low skilled people never get training as they never get job stability)
- low productivity
- job insecurity and stress
- risking inequality (big gap between ppl with secure jobs vs others on contracts)
- high search costs for workers needing to find new jobs
Social cost of flexibility
- easier to hire and fire workers
- limited regulations (high job insecurity, low costs)
- downward pressure on wages
- greater variety of job contracts
- poor productivity growth
Barriers to implementing flexible working
- operational restrictions
- potential for lower customer service
- attitudes towards flexible work
- senior management may suffer from inertia
- monitoring and controlling performance can be harder
- firm may not like the culture change
- HR workload may be too much
Organisational culture
The way we do things
Importance on organisational culture
- fosters collaboration
- drives innovation
- builds trust
- influencing employee engagement
- influences customer perception
- express creativity
- preserving community
Organisational culture impact on employees
- sets expectations
- shapes attitude and cakes m
- define acceptable norms
- shapes how employees interact with each other
- shapes their perception of their role
Organisational culture impact on customers
- good culture with emphasis on customer satisfaction so good loyalty and retention
- consistency in service and products
- brand perception
- better culture so more innovative ideas so better products that meet customers needs
- culture focused on problem solving can solve customer issues quickly and effectively
Organisational culture impact on business
- positive culture = increased motivation = increased productivity
- increased innovation = firm stays competitive
- supportive culture = employees feel valued to increased labour retention, low turnover
- collaborative or top down culture influences decision making which impacts business strategy
- flexible culture = business adapts to changes in market
- strong culture = improves financial performance
What makes a good organisational culture and how can this be built
- clear vision and goals and values
- open communication
- respect and inclusion
- collaboration
- employee empowerment
- recognition and appreciation
- work life balance
- continuous learning
What can create a toxic organisational culture
- lack of communication
- authoritarian leadership can lessen morale
- lack of recognition
- discrimination
- lack of support
- resistance to change
- inconsistent values
- toxic competition within organisation
Handy model of culture - power culture (Zeus)
- autocratic leadership
- decisions made quickly
- managers are judged on results
- hierarchal structure
- motivation usually focusses on financial rewards
Handys model of culture - role culture (Apollo)
- clearly defined job titles and role
- bureaucratic organisations (government)
- structure of the organisation is clearly defined and clear delegated authority
- power comes from a persons position
- decision making can be slow
- risk taking are frowned upon
- tall hierarchal organisation structure
Handy model of culture - task culture (Athena)
- groups are formed to solve problems
- communication may follow a matrix structure
- decentralised
- creative and problem solving spirit
- very motivating environment that meets workers instinct needs
- paternalistic / democratic leadership
Handys model of culture - person culture (Dionysus)
- the most creative type of culture
- no emphasis on teamwork
- people who thrive may find it difficult to work in a structured environment
- democratic leadership
Handys model of culture - entrepreneurial culture (new later edition)
- encourages management and workers to take risks and encourages new ideas and business ventures
- success is rewarded but failure isn’t automatically criticised
- motivation can be high among people who like challenge and risk taking
Examples of successful culture changes
- Netflix = shifted from hierarchal to one more agile and innovative by giving employees more responsibility and freedom
- Microsoft = competitive to collaborative and customer focused culture
Examples of failed culture changes
- uber = controversies due to toxic and aggressive culture so attempted to reform with a new CEO but struggled to overcome deep rooted cultural problems
- Sears = tried to change culture from traditional and centralised to more entrepreneurial but faced conflict, dysfunction, distrust and neglected its core competencies
Why might a business see a change in culture?
- change in leadership
- change in organisational structure
- retrenchment
- need for greater innovation
- legal impacts
- competitive markets
Barriers to cultural change - tradition and set ways
- loyalty to existing relationships
- failure to accept the need for change
- insecurity
- preference for existing arrangement
- different person ambition
Barriers to cultural change - fear of…
- loss of power
- loss of skill
- loss of income
- the unknown
- inability to perform as well as currently
Lewins model of organisational change
If we want to change the culture, we need to get over the resisting forces to change
- unfreeze = get employees willing to change, challenge values and nature of exiting culture
- move = organisation implants new changes - there will be employee resistance so change management techniques and leadership styles
- refreeze = as employees begging to accept the change and but into it, resistance will deplete and equilibrium will set in
Sergio Marchionne - Chrysler
- made it from hierarchal to more flat
- made office next to car manufacturers
- 26 managers would report directly to him
- improved image with collaboration with Eminem
Armin Trost
- theory A = create and communicate new values to employees instead of telling them to change
- theory B = if you want to change the culture, change the structure
Advantages of critical path
- calculate which activities are critical to the the success of the project based on time management
- quantitative data = quicker and definite
- calculate how long a project is going to take
- helps manage risks
- allocate resources to tasks that are critical
Disadvantages of critical paths
- ignores external factors and risks
- based on an estimate so could be wrong
- doesn’t guarantee project success
Strategic implementation
The process of turning plans into action to reach a desired outcome. The art of getting stuff done
