Unit 4 AOS 1 Flashcards
Define business change
Business change is the alteration of behaviours, policies and practices of a business.
Define Key Performance indicators
Key performance indicators (KPIs) are criteria that measure how efficient and effective a business is at achieving different objectives.
Define percentage of market share
Percentage of market share measures a business’s proportion of total sales in a specific industry, over a specific period of time, expressed as a percentage.
Define net profit figures
Net profit figures are calculated by deducting total expenses incurred from total revenues earned over a period of time.
Define number of sales
Number of sales is the amount of goods and services sold by a business within a specific time period.
Define number of customer complaints
Number of customer complaints is the amount of customers who have notified the business of their dissatisfaction and had that dissatisfaction recorded, within a specific time period
Define rates of staff absenteeism
Rates of staff absenteeism is the average number of days employees are not present when scheduled to be at work, for a specific period of time.
Define level of staff turnover
Level of staff turnover is the percentage of employees that leave a business in a year and have to be replaced.
Number of workplace accidents
Number of workplace accidents measures the amount of injuries and unsafe incidents that occur at a work location over a period of time.
Level of wastage
Level of wastage is the amount of inputs and outputs that are discarded during the production process.
Rate of productivity growth
Rate of productivity growth is the change in outputs produced from a given level of inputs from one time period to another.
Difference between proactive and reactive change
•Proactive = planned → made in anticipation of a situation or event occurring (e.g. launching a new product or decision to upgrade technology platform)
Reactive = unplanned -→ response when it has become necessary = the result of a given situation
Define Force Field Analysis
Force field analysis theory is a model that determines if businesses should proceed with a proposed change. This model identifies and examines factors which promote or hinder the change from being successful.
Lewin’s force field analysis theory helps businesses identify factors which influence change. The model has two key principles: driving forces and restraining forces.
Define driving forces
Driving forces are factors within or outside the business’s environment which promote change by initiating, encouraging or supporting.
Define restraining forces
Restraining forces are factors within or outside the business’s environment which resist change and try and lead the business to remain in the status quo
What are the steps in applying Lewin’s Force Field Analysis?
Step 1: Identify need for change -
Step 2: Identify driving forces - Which internal and external factors promote the proposed change?
Step 3: Identify restraining forces - Which factors resist the proposed change?
Step 4: Assign scores - Determine the strength of each driving and restraining force by assigning numerical scores that are based on their level of influence on the proposed change.
Step 5: Analyse and apply
According to Lewin, what must be true for change to be successful?
Driving forces must outweigh restraining forces
If restraining forces match or exceed driving forces, strategies need to be implemented to overcome the restraining forces.
Advantages of force field analysis
Provides objective view of change before it is attempted
Analysis = process vs. meetings where ‘loudest’ voices can sway decision making = better informed decision making
Informs the implementation enables a plan around restraining forces
Saves time and money by only implementing changes that are predicted to be successful
Limitations of Force Field analysis
Weighting is subjective – so even if an organisation things that driving forces > restraining forces still need an action plan to reduce restraining (e.g. in the bean bag example could plan to redeploy employees or bring in outplacement services to assist redundant employees to overcome resistance)
Unknowns – some restraining forces may be unknown or unpredictable (how people will respond)
Time consuming to complete properly
What is the vested interest of managers as stakeholders?
Managers have a vested interest in the performance of a business. This is because business performance impacts their financial and job security, particularly, if the manager owns the business.
How can managers drive change?
- Initiate
- shape
- new management bring in new perspectives
- support change through effective management
Managers can act as a driving force if they are incentivised to push for change
What is the vested interest of employees as stakeholders?
Employees help achieve business objectives by completing work tasks to meet the needs of the business. In return for their contribution to the business, employees have their own expectations. These include competitive wages, supportive working conditions, and training.
When are employees likely to be a driving force?
any proposed change that can improve the working conditions of employees will see them become a driving force
could be:
- pay
- alignment of change to personal values
- increased status
- career advancement
- more flexible
How can employees drive change?
Can initiate = e.g. see need for improvement Total Quality Management
Can develop = feed in with new ideas or technologies that impact the change strategy
Can support = see benefit – e.g. improved working conditions OR keen for new challenge OR see/believe in need for change can influence other employees to also support
Pursuit of profit as a driving force
opportunities to improve financial performance will often encourage a business to change.
Additionally, this will make a business better able to fulfil its obligations, such as providing a return to shareholders.
Can change increase revenue or decrease costs?
Reduction of costs as a driving force
Opportunity to increase efficiency
e.g. changes that reduce waste, increase productivity, source materials from a cheaper supplier, reduce rent, reduce labour costs
Competitors as a driving force
impact of rivalry
either to keep up
or to stay ahead
e.g. technology, marketing campaigns, price differences, quality alteration to product, opening hours etc.
Technology as a driving force
can increase efficiency + productivity
constant updates create opportunities
Societal attitudes as a driving force
need to align operations to societal attitudes to
- attract best employees
- attract customers
- avoid tarnishing reputation
Legislation as a driving force
required to comply with laws and regulations to avoid fines, suspensions or even closure
Can lead to no choice
Innovation as a driving force
the process of altering and improving or creating new products or procedures.
enables business to stay ahead of competitors - look to maintain sales and market share
Globalisation as a driving force
Globalisation is increased trade between countries due to reduced trade barriers. Globalisation has increased due to advancements in technology, particularly in communication and transport.
Increased international competition means that businesses need to find more efficient ways to operate. If a business fails to recognise that they are competing in a global market they will likely not survive.
Globalisation also = opportunity - to expand market, access cheaper supplies, access expertise
Why might a manger act as a restraining force?
if they do not support the change or it threatens their position
How do managers act as a restraining force?
Lack of commitment to change i.e. don’t believe it will be successful or don’t believe change will be beneficial = undermine change
Managers that may lose personally due to change – e.g. status/importance/impact on role can undermine
Managers w/ poor communication skills can unintentionally act as a restraining force as they don’t alleviate fears OR miscommunication increases fears
Autocratic and persuasive style of management can work against change – don’t consult with employees to bring them along with them – increased fear amongst employees
Why might employees act as a restraining force
if the outcome is uncertain, it affects their job security or they fail to see a reason for the change.
How do employees act as a restraining force?
Fear and anxiety – change will impact they way they operate – can lead to resistance PARTICULARLY if fear is about job security or status
Fear due to lack of ability to perform new task/adapt to change
Lack of skills for what change requires
Spread rumours that impact other employees perception of change – fear of unknown
Passive resistance – do not vocalise opposition BUT move back to pervious work practices as soon as possible
Legislation as a restraining force
businesses need to comply with laws and regulations to avoid fines, suspensions or even closure. Therefore, a business must consider the types of legislation that apply to any proposed business change. To overcome a legislative restraining force, a business may have to apply for licenses, obtain permits or even change contracts and agreements. However, in some cases, legislative barriers cannot be overcome.
Time as a restraining force
Business changes often have to be completed before, after or within a certain time period.
The time restrictions may be due to other restraining forces such as legislation deadlines or financial pressures.
If time has been identified as a restraining force, a business may have to find ways to alter the time restriction. This can mean the change is progressively implemented in stages or another business is engaged to assist with implementing the change.
Financial considerations as a restraining force
Most change requires an outlay before it offers a return on investment - t/f need to take money from elsewhere or source funds (loans, investments)
Organisational inertia as a restraining force
A business may have been operating in a certain way for such a long time that it can become difficult for change to occur - ingrained culture
Staff become familiar and comfortable with these structures, attempts to make changes can be difficult.
To overcome organisational inertia, a business may have to change leadership, restructure the business or create work nvironments that promote new directions.
