Unit 4 Outcome 2 Flashcards
Overview of change management.
. All organisations must be able to adopt to a rapidly changing environment by taking a proactive approach to pressures.
. Organisations that do not have strategies to recognise pressures and changes in the environment will be impacted in a negative manner.
. Change is continuous and the only certainty in the businesses environment is that change will occur.
Why is change so important now?
. 20 years ago organisations were operating in stable environments with certainty and little change.
. Change is now rapid unpredictable and will usually impact on all areas of an organisation.
What is organisational change?
This is the process of altering the existing organisation in some way and re-establishing it in a new or modified form. This can occur through modification of corporate culture, implementation of new organisational structures, recruiting employees with new skills or developing different work practices.
Managing and embracing change.
All organisations change. Some changes are forced on an organisation, while others are carefully planned. The ability to manage and in many cases, embrace and adapt to change will increasingly determine an organisation’s competitive advantage and survival.
What are successful managers?
. They are managers which can anticipate and adjust to changing circumstances rather than managers which sweep along passively or get caught unprepared.
. These managers will be proactive rather than reactive.
What is the best way to manage change?
. Manage and embrace it . Successful managers . Be constructive . Evaluate . Predict
What is proactive?
To be proactive is to initiate change rather than simply react to events.
What is reactive?
To be reactive is to wait for a change to occur and then respond to it.
Being constructive to manage change.
Changes must occur at a pave that allow organisation to absorb and integrate them into their operations.
Evaluate change.
. All changes should be evaluates to assess the overall impact. This allows for the organisation to see if there are any negative impacts and therefore allows them to make adjustments if that is the case.
. Poorly managed change usually results in employee resistance, tensions, anxiety, lost productivity and ultimately, unmet objectives.
Managing change through prediction.
. The long-term survival of the organisation depends on the ability if managers to scan the environment, predict future trends and exploit change.
. While change may be the most daunting challenge confronting management, the rewards are great for those who are prepared to accept the challenge.
What are sources if change?
Sources of change refers to where the change comes from. For Large-Scale organisations these pressures can from the internal and external environments.
What are some sources of change from the internal environment?
. Management
. Employees
. Corporate culture
. Policies
Revision of internal environment.
Activities, functions and pressure that occur within an organisation over which it has control.
Explain the following source of change from the internal environment: Management
Management have the responsibility of running a profitable or successful organisation. The poor financial performance of a business would result in management reviewing processes, staff and systems. Management can therefore pressure an organisation to change for example processes in order to be more successful.
Explain the following source of change from the internal environment: Employees
Employees are an integral part of any organisation and will often demand change(eg. initiatives that achieve a work–life balance, such as a flexible and responsive workplace that enables that staff to balance their work and family/personal responsibilities)
Employees working for an organisation expect to be paid fairly, trained properly and treated ethically in return for their vital contribution to production. Employees working in an innovative environment, where ideas are shared and acted on, are likely to recommend changes to policies, production processes or products.
Explain the following source of change from the internal environment: Corporate Culture
Changing corporate culture can be a difficult task given that an organisation’s culture is usually formed over years, through the interaction of employees within the organisation. If corporate culture impedes success, it must be changed. A poor/inappropriate or negative corporate culture can have an adverse effect on productivity and/or competitiveness
Explain the following source of change from the internal environment: Policies
Internal change comes about as new polices are developed and implemented. Policies that are outdated, inappropriate or non-existent are a pressure for change; for example, it is expected that organisations will have an environmental policy
What are some sources of change from the operating environment?
. Customers
. Competitors
. Suppliers
. Interest groups
Revision of operating environment.
This is the environment immediately external to an organisation with which it has close interaction when conducting its business activities.
Explain the following source of change from the operating environment: Customers
To ensure future profitability, an organisation needs to be very responsive to changes in customer tastes and preferences so it can constantly satisfy customers’ needs. The needs and wants of customers/clients change over time, causing them to change their consumer preferences or expectations about an organisation, which pressures an organisation to change accordingly
Explain the following source of change from the operating environment: Competitors
Organisations need to monitor the activities of their competition and determine what effect they may be having in the marketplace. Knowledge of such change enables an organisation to make modifications to its existing business activities and to plan new ones. (Large organisations must keep up with their competitors and change as required in order to remain competitive).
Explain the following source of change from the operating environment: Suppliers
Organisations should constantly be on the lookout for nee or backup suppliers, even when their needs ate being met by their present suppliers. This makes them less vulnerable to supply difficulties.
Factors that affect a supplier’s ability to provide inputs can be a pressure for change for an organisation; for example, industrial action, a price rise or the shortage of a product.
Explain the following source of change from the operating environment: Interest Groups
Some groups seek to directly influence the behaviour of organisations. Trade unions, for example, can bring about change in an organisation, especially in regard to wages and working conditions. Consumer and conversation action groups my attempt to modify an organisation’s behaviour with regard to its products, marketing techniques and operational procedures.
What are some sources of change from the macro environment?
. Economic forces
. Political and legal forces
. Technological forces
. Global forces
Revision of macro environment.
This refers to the broad operating conditions in which an organisation operates and over which it has no control.
Explain the following source of change from the macro environment: Economic forces
The Australian economy experiences a cycle of ‘booms’ and ‘busts’. After a period of prosperity, business activity gradually slows down until a recession or depression is reached.
The state of the economy will affect a business and may necessitate change; for example, during an economic downturn a business may decide to reduce staff numbers; higher inflation will put pressure on costs and may cause a business to reduce costs; higher interest rates may cause a business to introduce ways of reducing its costs; and a high Australian dollar has put pressure on export businesses, some of which have had to make changes such as moving production offshore where costs are lower.
Explain the following source of change from the macro environment: Political and legal forces
Whenever new laws are passed, organisations must comply with the new legislative requirements. Therefore changes in laws and government policy can be a pressure for change
. Eg. changes to industrial relations legislation, such as: the Fair Work Act 2009, resulted in the adoption of changes by organisations to meet minimum legislated employee entitlements; and the introduction of new privacy laws requiring organisations to establish a privacy policy detailing how they will handle personal information and when it can be used for direct marketing
Explain the following source of change from the macro environment: Technological forces
An organisation that wants to be locally, nationally or globally competitive must adopt the appropriate technology. If it is slow to exploit technology, an organisation is likely to fail, because its competitors will strive to capture grater market share and develop a sustainable competitive advantage.
. Eg. most organisations use social media to promote their products or services; Australian retailers have had to introduce online shopping websites in order to compete with overseas online retailers and Australian Internet-based shopping stores.
Explain the following source of change from the macro environment: Global forces
Australian organisations operate on the world market. This process has been strengthened by globalisation. This is a trend which sees people, goods, money and ideas moving around the world faster and more cheaply than previously. Competing on an international level means organisations are pressured to be the best they can be in order to compete, this can involve change.
What are driving forces?
These are factors which support the change.
What are restraining forces?
These are factors which work work against the change.
What is Kurt Lewin’s change model
It is known as the force-field analysis and is a model for understanding the change process. It outlines the process of determining which forces drive and which forces resist a proposed change.
. If driving forces are greater than the restraining forces then the change will be successful.
. If restraining forces for change are greater than driving forces then the change will not be successful.
. If driving forces and restraining forces are equal then the change will be unsuccessful.
What are some driving forces?
. A positive corporate culture - a positive corporate culture where employees are more likely to take a positive view of change.
. participative management style – a management style based on consultation and employee participation and a positive relationship between employees and management.
. a clear vision - The organisation is able to plan ahead and put strategies in place ahead of time
. high productivity - High productivity means that an organisation can easily modify operations in order to accommodate change
What are some restraining forces?
. Management . Employees . Time . Competitors . Low productivity . Organisation inertia . Legislation . Cost . Poorly communicated vision
Explain the following restraining forces: management, employees, competitors and low productivity
MANAGEMENT: Managers may make hasty decisions (also poorly timed and unclear) or may be indecisive. Both cause employees to lose confidence in the decision making abilities of management. Can also resist change when elimination of management positions is taking place
EMPLOYEES: change eventually impacts on level and type of staffing. May also resist due ti fear if not being able to adapt to new procedures.
COMPETITORS: when an organisation dominates a marketplace, other organisations may be reluctant to even bother initiating major changes. (Seen as waste of time and resources).
LOW PRODUCTIVITY: change = disruption to existing operating systems and work patterns eg. Corporate culture = feeling of mistrust = productivity decrease (fear if reduction in productivity is why some organisations are hesitant to embrace change).
Explain the following restraining forces: time, cost, legislation, organisation inertia and poorly communicated vision
TIME: in some circumstance, not enough time is allowed for people to think about the change, accept it and implement it. In other situations the time is poor.
COST: major reason for resistance to change is financial cost of its implementation. Must weigh costs and benefits of change. (Financial costs of change include: purchasing new equipment, redundancy payments and reorganising plant layouts)
LEGISLATION: this must be complied with, and it can act as a restraining force. This occurs when it places restrictions on certain operational practices and procedures.
ORGANISATION INERTIA: this refers to management’s inactivity or lack of response when faced with proposed changes.
POORLY COMMUNICATED VISION: employees feel alienated from the organisation and do not feel appreciated. Therefore, they are less likely to embrace chan and undertake proposed changes.
What is the change management process?
This is the sequence of steps that a manager would follow for the successful implementation and adoption of change. John Kotter developed an eight-step model of the change management process.
What does Kotter believe?
He believes that for successful change management to occur, the manager/leader responsible for implementation of the change must take into account all elements of the organisation, including both:
. visible factors (policies, uniforms and procedures)
. non-visible factor (people’s aspirations, beliefs, feelings, the corporate culture and the personalities involved)
What are Kotter’s eight steps to his model?
Step 1. Create urgency Step 2. Form a powerful coalition Step 3. Create a vision for change Step 4. Communicate the vision Step 5. Remove obstacles Step 6. Create short-term wins Step 7. Build on the change Step 8. Anchor the change in corporate culture
Explain the following step of Kotter’s theory: Step 1. Create urgency
. Examine the current market opportunities and threats and analyse the organisation’s competitive position. Inspire people to want to change.
. Develop a sense of urgency around the need for change to help spark the initial motivation needed to get things moving.
. ‘We need to change because …’
Explain the following step of Kotter’s theory: Step 2. Form and powerful coalition
. Assemble a group of leaders to lead the organisation through the changes.
. Get the right people in place with the right emotional commitment to making the change successful.
. These people must have the required skills to introduce the change.
. ‘These people are the best choice to guide you through the change.’
Explain the following step of Kotter’s theory: Step 3. Create a vision for change
. Clarify how this vision will be better than what has happened in the past.
. A vision will help everyone understand what is being asked of them and directions given to them will make sense.
. A vision is needed because without it there is no cooperation and commitment, making change impossible.
. ‘It will be better because …’
Explain the following step of Kotter’s theory: Step 4. Communicate the change
. Communicate the essential aspects of the vision, especially to people who will be affected. Everyone must understand and accept the strategy and work towards achieving the vision.
. All aspects of operations need to be tied to the vision.
. This helps to dispel fear of the unknown.
. ‘It will be best to achieve our goals this way because’
Explain the following step of Kotter’s theory: Step 5. Remove obstacles
. Continually check for barriers to change. (Eg, scared employees)
. Identify change leaders who can implement the change and reward those who can make the change happen.
. ‘You have the authority to …’
Explain the following step of Kotter’s theory: Step 6. Create short-term wins
. Create short-term targets (rather than large-scale targets) that become short-term successes, as these will help motivate staff.
. This helps employees recognise that changes have actually been worth the effort.
. Change does not occur overnight.
. ‘One step at a time. Be patient …’
Explain the following step of Kotter’s theory: Step 7. Build on the change
. After every success in the process, analyse what went right and what needs improving.
. Set goals to continue building on the momentum that has been achieved and encourage continuous improvement.
. ‘Keep pushing one step at a time.’
Explain the following step of Kotter’s theory: Step 8. Anchor the change in corporate culture
. Institutionalise new approaches and create a new culture so the changed state becomes the norm.
. Include change ideals and values when hiring and recruiting staff.
. Make plans to replace key leaders of the change team as they move on.
. ‘We will keep it going by …’
How can resistance to change be overcome?
By using high-risk or low-risk strategies.
. Many people are fearful and do not welcome or want change.
. Change can be stressful as it can create uncertainty and if not handled properly by management, it can be seen as a threat.
. The greatest cause of change failure is attributed to people resistance.
What are some low-risk strategies for reducing resistance to change?
. Support . Communication . Training . Participation and teamwork . Negotiation
Explain the following low-risk strategy: two-way-communication
. The greater the sharing of information during the change process, the greater the level of trust between management and employees.
. Maintaining open lines of communication assists in the sharing of information at all levels of the organisation.
. Leaders and managers also need to listen to feedback from employees and answer any questions they have (this makes employees less fearful and resistant to change).
Explain the following low-risk strategy: support
. Organisational change may result in some positions being terminated, so those likely to have their employment terminated need to be given appropriate support.
. This could involve the provision of assistance to find new employment
. Even if employees aren’t losing their jobs, morale will be low if they see their friends being treated poorly.
Explain the following low-risk strategy: training
If change is to be successful, employees taking on different roles and duties need to be thoroughly trained to take on their new duties. Good training programs inspire confidence in staff that they will not be left behind in the the process of change.
Explain the following low-risk strategy: negotiation
It is important that stakeholders feel they have input in decisions which can have a direct effect on them. Encourages negotiation processes can empower employees and enhance their support for the direction of change.
Explain the following low-risk strategy: participation and teamwork
. Giving everyone the opportunity to participate in functional teams, working together on clearly specified tasks, allows everyone to ‘buy in’ to the process.
. Allowing employees to be involved in the change management process and encouraging them to gain a sense of ownership of the change is regarded as the most effective way of ensuring that change occurs and succeeds.
What are low-risk strategies?
Low-risk strategies are usually more successful when managing change because it considers how employees feel, which therefore creates less resistance to change. Both strategies can be effective, however low-risk strategies have less detrimental outcomes for the organisation if they happen to fail.
What are high-risk strategies?
These are more hazardous actions taken to manage with change because the failure of thee strategies usually generates negative outcomes. With high-risk strategies there can be an ill feeling between employees and employers, which can permanently damage working relationships.
What are some high-risk strategies?
. Manipulation
. Cooptation
. Threat
Explain the following high-risk strategy: Manipulation
. This is the skilful or devious exertion of influence over someone to get them to do what you want.
. Eg. An organisation wishes to introduce now technology and informs staff of the exciting mew training and promotional opportunities, however they withhold information regarding the number of job losses that will arise as a result.
Explain the following high-risk strategy: Cooptation
. This involves the selection of an influential person among the potential resistors to be involved in the development and implementation of the change process.
. This is done to hopefully prevent more resistors to change.
. However it can backfire of the individual recognises what is being done and feels used.
Explain the following high-risk strategy: Threat
. A manager who will not or cannot invest the time and effort required for the other tactics may resort to the use of power to force change resistors to conform.
. Threats may involve loss of promotion, transfer, overtime or ultimately termination.
. The danger with tis tactic is that people may appear to be compliant on the surface but are actually resentful underneath.
What are some significant issues which may result in the need for change management?
. Corporate social responsibility . Businesses ethics . Globalisation . Mergers and acquisitions . Technological development . Legislative compliance . Privatisation
Explain why corporate social responsibility may result in the need for change management?
. During the past 20 years there has been a growing pressure on organisations to improve corporate social responsibility (CSR).
. This involves managing organisational processes in order to produce an overall positive impact on the community.
. Examples of significant CSR’s include ecological sustainability (needs of present population are met without endangering the ability if future generations to meet their own needs).
What are some change management strategies for meeting corporate social responsibility expectations?
. Policies of conservation, recycling and restoration
. Organisations evaluate full environmental effects of operations (so they know where to change)
. Production processes need to be modified to being them into line with ecologically sustainable practices.
Explain why business ethics may result in the need for change management?
. This is not concerned with legal obligations, but with what is morally right or wrong.
. Business ethics refers to the application of moral standards to organisational behaviour.
What are some change management strategies for meeting business ethical expectations?
. Managers should encourage standards of honesty and integrity, and expect ethical behaviour from all employees.
. Stakeholders must be dealt with honestly and fairly.
. The organisation should avoid using misleading or deceptive product descriptions.
. Employees should be provided with a safe working environment, their confidential information kept secret; and discrimination abolished.
. A corporate code of conduct should be implemented as it provides internal stakeholders with ethical standards to uphold.
Explain why globalisation may result in the need for change management?
. Globalisation of business has increased the level of international competitiveness within the global economy.
. Organisations need to be able to perform at their very best in order to compete with world wide competition.
What are some change management strategies for globalisation?
. Global managers need to have a good understanding of how globalisation will influence their organisation.
. GM’s must thrive on the unexpected, communicate quickly and effectively, and integrate technology into their work practices.
. In order to compete internationally, organisations may restructure, outsource non-core functions or subcontract production, or relocate production to other countries.
Explain why mergers and acquistions may result in the need for change management?
. Through mergers and acquisitions many private sector businesses have grown to become transnational corporations.
. A merger is a combination of two companies to form a new company.
. An acquisition is the purchase of one company by another with no new company being formed.
What are some change management strategies for mergers and acquisitions?
. When 2 organisations come together, employees of the new,y formed organisation may experience a ‘culture clash’. Gaps between cultures are identified and policies along with practices may need to be rewritten.
. Managers should adopt similar and consistent management styles to help make the newly found organisation is a success.
Explain why technological development may result in the need for change management?
As the use of technology increases, organisations and employees experience dramatic changes to the way they conduct their activities .
What are some change management strategies for technological development?
. Before introducing new technology, analyse the effects of it. Identify restraining forces that may impede change.
. Employees will need to acquire new skills.
. HR will be requires to manage those employees who are made redundant from the introduction of new technology
Explain why legislative compliance may result in the need for change management?
. In the past 10 to 20 years, significant changes have occurred in the legal framework within which Australian organisations operate.
. In addition to the new legislation, there have also been new interpretations of existing laws, which will have a major impact on organisational conduct.
What are some change management strategies for legislative compliance?
. Accurate method of record keeping
. Managers should be familiar with the laws that regulate their activities, and those of the organisation.
. Ongoing training must be provided for managers and employees so that they are full aware of their legal obligations.
Explain why legislative compliance may result in the need for privatisation?
. Privatisation has had a major impact on public sector organisations.
. Privatisation is the process of transferring the ownership of a government businesses to the private sector.
. Privatised organisations change their legal and managerial structure.
What are some change management strategies for privatisation?
. Managers (especially HR unit) will have to crate a new corporate culture.
. HR unit will be required to employ people who fit in with the new organisational culture and deal with those employees who may be retrenched.
. Changes to employees’ remuneration packages will have to be implemented by the HR unit.
. Managers in the new organisation will have to adopt management styles that reflect the culture of the organisation.
What is the role of leadership in change management?
If change is to be successfully implemented it is important that there is an effective leadership team in place to drive and oversee the change.
Successful change managers must:
. articulate the organisational vision for the future
. motivate and inspire staff to work towards successful change as envisaged
. have strong and effective communication and interpersonal skills
. have effective and clear plans and strategies developed before undertaking the change
. gather the necessary resources to implement the change.
What are the 3 important elements which Kotter’s proposed model of effective change management is based on?
. Thorough preparation and planning
. Clear communication
. Cooperative participation with all stakeholders
What is leadership?
This is the process of positively influencing and encouraging individuals to set and achieve objectives.
Importance of leadership during change.
. If a manager can display effective leadership skills then there is more chance for change to be successfully implemented because resistance will be lessened.
. Effective leadership involves positively influencing and encouraging individuals to set and achieve objectives.
. During times of change, managers need to support employees and act as a bridge for employees as they cross from existing work practices to new and unfamiliar territory.
Possible impact of change on the internal environment.
. When an organisation responds to the forces of change, the result will be a change to its structure, HR and its operations functions.
. There are two main types of change, being transformational change and incremental change.
What is transformational and incremental change?
TRANSFORMATIONAL CHANGE: This often results in a complete restructure throughout the whole organisation. (Major change)
INCREMENTAL CHANGE: This results in minor changes, usually only involving a few employees. (Minor change)
What are some factors in the internal environment which can be impacted as a result of change?
. Organisational structure . Corporate culture . Human resource management . Operations management . Employees . Policies and procedures
How can the structure of an organisation be impacted by change?
. Organisations meed to continually improve and develop if they are to survive change.
. As the organisational environment changes, organisations undergo structural changes.
Main structural changes include:
. Outsourcing
. Flatter structures
. Work teams
How can corporate culture be impacted by change?
. For an organisation to survive in the long term, changes within the external and internal environments should be reflected in its culture.
. If organisational culture fits the external environment, managers and employees have the attitude they need to compete successfully.
How can human resource management be impacted by change?
. Organisational change will ultimately have a profound impact on employees at all levels within an organisation.
. Consequently adjustments to the HRM function are necessary in order to improve the effectiveness of changes made.
Some HRM changes occur/include:
. Recruitment and selection (fine appropriate people)
. Appropriate termination procedures (when employees becoming redundant)
. Training offered
. Rewards system (reinforce good behaviour)
. Clear vision (developed and clearly communicated
How can operations management be impacted by change?
. For many organisations, reducing production costs has become the basis for gaining a competitive advantage in the marketplace.
Some of the main operations management changes include:
. Refitting and reorganised facilities
. Flexible manufacturing allows production plants to be smaller, more specialised, and closer to important markets.
. Emphasis on quality control
How can employees be impacted by change?
. Less job stability
. Fear that they won’t understand technology
. Need training
How can policies and procedures be impacted by change?
. As new visions for change are introduced policies need to be changed or introduced in order to go further.
. Processes then need to be made or altered in order to clearly show steps to enable a policy.
