unit 4 AOS 2 Flashcards
Importance of leadership in change management
- It’s important for managers of a business to demonstrate leadership as it instils confidence, clarity, and feelings of value in employees
- strong leadership can lead to the successful implemention of change and help reduce resistance
what is leadership
Leadership is the ability to influence or motivate people to work towards the achievement of business objectives
Having effective leadership during times of change is vitally important because it:
· Inspires others to work toward the change
· Helps the team overcome challenges · Maintains momentum toward the change · Allows the business to overcome resistance · Reduces stress and anxiety · Ultimately, helps the business implement the change successfully
Strong leadership in change management can be demonstrated by:
Preparation and planning
communication
Support
Collaboration
Accountability
Key performance indicators
specific criteria used to measure the efficiency and/or effectiveness of a business’s performance
Management strategies used to evaluate KPIs
Staff training
Staff motivation
Change in management styles or skills
Increased investment in technology
Improving quality production
Cost cutting
Initiating lean production techniques
Redeployment of resources
Innovation
Global sourcing of inputs
Overseas manufacture
Global outsourcing
staff training
Training refers to the process of teaching staff how to do their job efficiently, improving their knowledge and skills - it can be on-the-job or off-the-job
favourable to: number of complaints & rate of productivity growth
Staff motivation
Motivation is the individual, internal process that directs, energises and sustains a persons behaviours - this is what drives employees to apply effort over a sustained period of time
favoruable to: level of staff turnover & rate of staff abseentism
what is Corporate culture
The shared values and beliefs of the people within a business
Official corporate culture: polices and procedures (written down). Official is what a business aims to have.
Real corporate culture: the values and beliefs that develop organically within a business (can be seen). Real is what a business actually has.
Corporate culture and change
- Implementing change may impact corporate culture - as such, its important for managers to acknowledge this and provide support through periods of uncertainty
- When implementing change, the corporate culture of a business will often be the first thing to be considered, to determine if the change will be possible
Businesses can implement strategies to develop their desired corporate culture. These can include:
→ developing and communicating core values
→ Changing the management style
Providing training that is in line with the desired values
Senge’s 5 principals of the learning organisation
· Systems thinking
· Personal mastery
· Mental models
· Building shared vision
Team learning
The five principles of Senge’s theory can all contribute positively to a business’ culture of learning and its willingness to pursue transformation.
Senge’s theory of the learning organisation
Senge’s theory of the learning organisation describes how a business can facilitate growth of its members to be better equipped to deal with change
Systems thinking
The ability to see the big picture rather than see things in isolation.
- This approach considers the interrelationship between the parts of a whole system - it underlines a business' ability to understand the interrelationships between different areas across its operations - Managers in a learning organisation understand how a change in one area may impact other areas
Personal mastery
The discipline of personal growth and learning. - people within a business undertake continual learning
- Senge argues that individuals with high levels of personal mastery are more likely to take initiative and have more responsibility for their work
Team learning
The collective learning that occurs when teams share their experience, insights, knowledge and skills to improve practices
- Open communication, shared meaning and shared understanding are more likely to contribute to a positive and supportive culture that leads to support for change
Mental models
Existing assumptions and generalisations and images of how people understand the world
These beliefs and values direct how we behave
- Businesses that aim to be learning organisations should try to continuously challenge their employees’ beliefs and break down existing mindsets – this encourages employees to more open to change and improve the business’ ability to implement change successfully
Building shared vision
A shared vision of what an organisation and its members would like to achieve
- A manger should develop and promote a goal that all employees can believe in - Having all people on the same page can develop long term drive towards transformation
Low risk strategies
Low risk strategies are measured management approaches that gradually encourages employees to accept and participate in a business change
- They are the actions taken that are likely to generate positive outcomes in the short and long term
Communication
Involves managers openly and honestly transferring information to employees, and listening to their feedback so that employees are fully aware of the reasons for and impacts of an upcoming change
- Employees are less likely to resist change when they are well informed and understand why change is necessary
what are some strategies of low risk
Communication
empowering
support
Incentives
empowering
Involves mangers providing employees with increased responsibility and authority during times of change
- Employees are less likely to resist change as they have sense of ownership towards the change and feel that mangers have trust and confidence in them.
support
Involves mangers providing employees with assistance as they move from current to new practices
- By providing support, management may reduce fear and anxiety and help employees feel more prepared for change
Incentives
Involves managers providing financial and non-financial rewards to encourage employees to support change
- Employees will be less resistant and more motivated to implement change if they can personally gain something from the change
advantages of low risk strategies
- Employee involvement and two-way communication provide opportunities for employees to put forward ideas
- Fears and anxieties are likely to be reduced as the situation is clearly explained so that there are no misunderstandings
Employer/employee relations are positive, there is a higher level of trust and cohesion, and there is reduced likelihood of industrial disputed. Employees are more likely to accept change, particularly in the long term
disadvantages of low risk stragies
- The change process can become very time consuming as it takes time to involve all employees
Low-risk strategies such as support and incentives can be expensive, especially in the cases of counselling’s, training and bonuses
High risk strategies
High risk strategies are autocratic management approaches used to influence employees to quickly accept and follow a business change
- They are actions taken that may succeed in the short term, but run the risk of generating negative outcomes in the longer term
what are some stragies of high risk
Manipulation
Threat
manipulation
Involves influencing employees to support proposed change by providing incomplete and deceptive information about the transformation
- It is relatively quick and inexpensive way to overcome resistance - employees may unknowingly agree with and support a change - This strategy can backfire if employees discover the truth
threat
Involves forcing employees to follow a proposed change by stating that they may or will cause harm to them if they fail to do so
- It is the suggestion that some sort of negative consequence will occur if employees fail to follow a requested change - The danger with this strategy is that people may be compliant, but become resentful
advantages of high risk strategies
- Enable immediate implementation of change/ensures that change will be implemented rapidly and successfully
- Appropriate for critical situations or a time of crisis, when speed is important or where change will be unpopular
Generally involve little financial cost
disadvantages of high risk stragies
- Likely to foster a negative corporate culture, which breeds mistrust in the longer-term
- A poor employee- employer relationship is very probable
- Can leave employees feeling nervous (particularly about keeping their job), undervalued and resentful. This may result in increased staff absenteeism and staff turnover
Lewin’s 3-step change model
Kurt Lewin developed a change model that businesses could use to implement effective change successfully
- This theory is beneficial as it takes a structed approach to any change
Step 1: unfreeze
The unfreeze step involves moving a business to a stake where stakeholders are prepared to undergo change
- The need for change is identified, and then is communicated to stakeholders - Demonstrating the importance of change to stakeholders can increase support and create a sense of urgency towards the change
Step 2: change
The change step involves moving a business towards its desired state
- During this step, all processes, polices and practices are able to be changed and the necessary support put in place - Clear and transparent communication is important, as well as involving employees in the change - this reduces resistance
Step 3: refreeze
The refreeze step involves ensuring a change is sustained within a business for the long term
- Here, strategies are put in place to make sure that the change is stabilised and so that the business does not revert back to its pervious ways of operating - Management should constantly monitor and evaluate change during this stage to ensure the business is performing as desired
Effect of change on stakeholders
When businesses implement change, it can have a significant effect on stakeholders - a business should consider the impacts the change can have on the stakeholders
Stakeholders: those who have a vested interest in the business
A change could positively impact one group of stakeholders, while negatively impacting another
The positive and negative effects of change on stakeholders:
owners
advantages
- A successful business change can provide a business owner with an increased return on their investment and greater financial security
An owner involved directly in day-to-day operations will have the opportunity to learn new skills
disadvantages
- An owner, particularly a shareholder, may not be comfortable with the change, and sell their share of the business.
- An owner involved directly in day-to-day operations will be required to move out and away from their comfort zone
- A change may result in an owner losing their business, or shareholders losing the value of their shares
If change is unsuccessful, a business owner may experience personal and financial implications
The positive and negative effects of change on stakeholders:
managers
advantages
- Business change can provide opportunities for a manager to develop new skills or advance their career
- A business may provide a manager with financial and non-financial awards if the change is successfully implemented
A manger may be provided with increased authority and responsibility, leading to further increases in their skills and employability
disadvantages
- Increased workloads associated with change can lead to stress which may negatively impact a managers wellbeing
If a business change is unsuccessful, a manger may have a risk of losing their job and financial security
The positive and negative effects of change on stakeholders:
employees
advantages
- Employees may be provided with new responsibilities and opportunities for career advancement that improve their motivation and overall job satisfactions
- If a business change is successful, employees may experience improved job and financial security
- Employees that have contributed to the implementation of successful change may be provided with financial and non-financial rewards
- A business change may require employees to undertake training to provide them with a different set of skills, helping improve their future employability
disadvantages
- A business change may require employees to develop complex skills and learn difficult processes, which may increase stress levels and negatively impact their wellbeing
- If a business change is expected to result in redundancies, employees may fear for their job or financial security
A business change may require some employees to take on increased responsibility within the workplace which may negatively impact their performance if they are not prepared for this role
The positive and negative effects of change on stakeholders:
customers
advantages
- If change improves the quality of a businesses goods and services, customers may experience increased satisfaction.
- Customer satisfaction may increase if the change allows the business to offer lower prices for its goods and services
- Customers may experience greater satisfaction from a business that implements new strategies to demonstrate corporate social responsibility
disadvantages
- A business that sources cheaper inputs to reduce business costs may compromise the quality of its products, leading to customer frustration and reduced satisfaction
- Customers may be dissatisfied if a business change increases the price of its products
If a business discontinues or changes a good or service, customer satisfaction may decrease if the new product fails to meet their needs.
The positive and negative effects of change on stakeholders:
suppliers
advantages
- Supplier demand may increase if a business requires a greater amount of resources to meet its production needs
- If change results in an increase in the amount of resources needed by the business, suppliers may experience increased sales
disadvantages
- If a business decides to switch to a different supplier or discontinue a product, a suppliers sales may decrease due to a lower volume of orders from the business
A business change may require its suppliers to involuntarily adjust their processes to meet the new demands of the business
The positive and negative effects of change on stakeholders:
General community
advantages
- If a business change creates job opportunities, local employment rates may increase which can improve the overall wellbeing of society
- Business change that involves opening or expanding into new area can increase customer traffic and sales for surrounding business
- When a business change is successful, a business has a greater ability to contribute to local social causes
- Business change that involves reducing waste can reduce the business environmental impact and improve overall living standards for the general community
disadvantages
- A business change that results in redundancies may increase local unemployment rates and poverty levels, thus negatively impacting societal wellbeing
- If a business change involves store closure or relocation, customer traffic and sakes for surrounding businesses may decrease
If a business change involves switching to an overseas supplier, transporting inputs from another country can have a negative impact on the environment
CSR considerations when implementing change
Its important for a business to implement change in an ethical and socially-responsible manner that minimises the negative outcomes of the business transformation
CSR: corporate social responsibility is the ethical conduct of a business beyond legal obligations, and the consideration of social, economic and environmental impacts when making business decisions
CSR considerations for employees
a manager should address factors that promote staff wellbeing during periods of business change
Managers should take into account how a business change may impact the social, financial, and mental wellbeing of employees and implement strategies to reduce the negative consequences of change
CSR considerations for customers
During periods of change, businesses need to make sure that their goods or services remain at the required quality, and that they continue to be safe and reliable - a change should not result in dangerously defective or harmful products
CSR considerations for suppliers
When considering suppliers, businesses should ensure suppliers uphold the same CSR standards as them
- If the change involves changing suppliers, businesses should aim to support local suppliers or ensure global suppliers are not exploiting their workers
CSR considerations when dealing with suppliers:
· Purchasing supplies from local suppliers
· They should consider the working conditions of the employees in overseas suppliers · They should look to support their suppliers to ensure their ongoing success
CSR considerations for the environment
Considering the environment involves a business reducing the negative impacts of its activities on the planet
- Its important that businesses conduct their practices in an environmentally-responsible manner that aims to preserve the environment - Changes could increase pollution or harm wildlife habitats - Business should implement changes that improve the impact on the environment
Reviewing KPIS
- The objectives of the business should be reflected in KPIS used to analyse business performance
- Through reviewing KPIS, a business can identify areas for improvement and decide on new goals for the future
- A business typically undertakes change to achieve an objective and improve its performance - therefore, KPIs can be used to identify whether a business change has achieved the desired objectives or if further changes are required
CSR considerations for the General community
Considering the general community involves a business reducing or eliminating practices that are detrimental to the wellbeing of the society
- A business change ay result in the general community facing low employment rates and loss of economic activity - Its important for a business to conduct its practices in a socially-responsible and ethical manner as it allows the general community to continue developing
Importance of reviewing KPIS
Following the implementation of change, its important for a business to review its KPIS to assess the success of its transformation
- Through analysing KPIS, a business can evaluate the overall effectiveness of a business transformation and determine its next course of action
A business needs to assess of a change has been successful - to do this they can review their KPI data to see the impact the changes have had
By reviewing KPIs, a business can evaluate the effectiveness of its transformation by:
- Analysing size and extent of its change
- Identifying whether the change has successfully achieved its objectives
- Identifying whether the change has negatively impacted another area of performance
- Determining whether more effort and time are required for the change to achieve desired objectives
- Considering alternative management strategies to achieve the desired result or improve areas that were negatively impacted by the change
