Unit 4 Flashcards
What is the definition of change?
act or process where some aspect of the business becomes different
Define ‘managing change’
the approach used to oversee a transitional stage within a business
the more planning and control a business has over change, the more likely it will be successful
Names of the 2 types of causes of change in a business
Internal and External
What is internal change?
Change that is caused by internal factors are those that take place WITHIN the business
What is external change?
Change that is caused by external factors are those that take place OUTSIDE the business
Give 5 examples of internal causes of change
- Changes in the size of the business
- Changes in the ownership
- Poor business performance
- Changes in the workforce
- Transformational leadership
Give 6 examples of external causes of change
- Changes in the market
- Political changes
- Economic changes
- Social changes
- Technological changes
6.Environmental changes
What are the possible changes due to a change in the size of the business?
An expansion may be due to growth resulting from greater spending on production capacity
A reduction may be due to a change in the organisational structure, eg downsizing
What are the issues to address caused by a change due to a change in the size of business?
Communication, performance management, motivation and labour costs
What are the possible changes caused by a change in ownership?
Can occur as a result of a merger or takeover by another business
The growth of a business into a limited company or plc
What are the issues to address for change caused by changes to ownership?
Role duplication, culture clash and communication
What is meant by poor business productivity in respect to change?
low productivity, poor sales figures or lower than expected figures
What are the issues to address when changing due to poor business productivity?
Resistance to change and changing the corporate strategy
Give an example of changes in the workplace
The need to make redundancies due to a lower demand for the product
Give an example of a transformational leadership change
Change in business ethos following the appointment of a new chief executive
What are the issues to address with transformational leadership change?
The resistance to change
What’s the definition of downsizing?
Reducing the size of a company by eliminating workers and/or functions within the company
What’s meant by transformational leadership?
Where a leader identifies a needed change, creates a plan for the change and executes the change with the commitment of the other members of the group
What can cause a change in the market?
This can be when new competitors take market share from the business
Give an example of a political cause of change
Possible effects of Brexit
What could be a economic change?
Rise in interest rates due to increasing inflationary pressures, eg rise in consumer debt
Give an example of a change caused by society (social cause)
Growing focus on healthy lifestyle and the adoption of social media
Examples of technological changes
The development of electric cars and on-demand viewing of videos via smart devices
Examples of environmental changes
The pressure on Western economies to move from fossil fuels to sustainable energy such as wind power
Changes can be ________ or ___________
Changes can be planned or unplanned
What are planned changes?
Changes that businesses has been able to consider carefully and create a strategy to reduce any risks and profit from any benefits.
Give an example of the planning needing with the introduction of new technology
The introduction of new technology would require planning in terms of staff numbers, staff training and the effects on the process of production
What is an unplanned change?
This is when a business has little or no time to plan, or has to make a conscious decision not to plan for
Give an example of a unplanned change regarding a political change
If the UK government decide to make a sudden change to the rules of diesel car emissions it means car manufacturers are left with a significant amount of stock that is now of much less value
Name 5 effects of change on a business
- Change production methods and equipment
- Develop new products
- Meet new legal requirements
- Retain the workforce
- Look for new markets
An example of change in production methods and equipment
Introduction of robots in car production reduces the number of staff but skilled staff is needed to program and maintain equipment
The production is then less labour intensive and is more capital intensive, with an increase of productivity
Example of developing new products
Bookshops have now cut down on physical shops and increased online presence by developing more sophisticated websites and apps as e-books are much more popular
Example of meeting new legal requirements
(The change of taxation rates, health and safety requirements or legal requirements)
The higher business rates paid by businesses on shops have meant smaller retailers have had to move premises to reduce costs in order to survive.
What does retain the workforce mean?
This is when products alter significantly, or the business has to adapt to new technology, staff will need to learn new skills
Why would businesses look for new markets?
Businesses look to grow through the expansion into new markets and this can include looking at overseas markets
What are business rates?
A tax on business properties, set by the government and collected by local councils
Why is it important for a business to adapt to and manage change?
Maintain competitiveness
Increasing productivity
Improving financial performance
Managing stakeholders
Importance for a business to manage change:
Maintaining competitiveness?
Business will need to ensure it’s still more effective in its markets or industry than other competitors.
Achieved by minimising costa and becoming highly differentiated from others in the market.
Importance for a business to manage change:
Increasing productivity?
changes in the production process or how workers are motivated can be a successful way of managing change
Importance for a business to manage change:
Improving financial performance?
a business may need to address financial issues in the short term in order to become more competitive and successful in the longer term
Importance for a business to manage change:
Managing stakeholders?
employees may need to be retained or made redundant
shareholders may have to be prepared to receive lower dividends in order for the business to finance any change
Who is John Storey?
Developed a more humane approach to managing change, which emphasised the commitment of staff rather than just compliance.
What are John Storeys 4 elements to his approach?
- Beliefs
- Strategic qualities
- Role of line managers
- Key levers
Explain the element ‘Belief’ in John Storeys approach to change
Staff should be encouraged to be committed to change by ensuring they have the right skills, capabilities and are treated as a valuable asset.
This would make change less risky and have more chance of success.
Explain the element of ‘strategic qualities’ in John Storeys approach to change
Managing human resources requires the attention of senior managers due to the dynamic nature of change.
Change is not always predictable and to manage it successfully needs a combination of planning and the ability to innovate quickly
Explain the element ‘Role of line managers’ in Jonn Storeys approach to change
There needs to be strong links between employees and their line managers on a day to day basis
Explain the element ‘Key levers’ in John Storeys approach to change
Culture is more important than procedures and systems because it reduces the risks of conflicts within the business.
Consensus on organisational beliefs and values between employees and managers is essential to ensuring to ensuring the business is sufficiently flexible and committed to the change.
What does John Storeys believes his approach does?
If followed by his elements a business would have the skills and qualities needed to minimise the impact of any negative aspects of change
They would be able to enhance the positive impacts to create a competitive advantage
