Business – Unit 4, Area of Study 2 – Change Management

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Any alteration in the internal or external environments.
Organisational Change
The adoption of a new idea or behaviour resulting in a difference in the form of operations in a business
Managing Change
– some changes are forced, some are planned.
– ability manage, embrace and adapt change will determine competitive advantage and survival.
– success managers are those who adjust.
– changes must occur at a pace that allows the business to absorb them into operations.
initiate change rather than react to events.
to wait for a change to occur then respond to it.
Internal Environment (Sources of Conflict)
– Crisis
responding to unplanned changes will require decision-making from management in order to reduce the disruption in an organisation.
Internal Environment (Sources of Conflict)
– Innovation
changes often come from the desire to develop new and improved ways of doing things.
Internal Environment (Sources of Conflict)
– Corporate Culture
– changes can be difficult as they are usually formed over years.
– recognizing what culture is required in order to achieve success is crucial if change occurs.
Internal Environment (Sources of Conflict)
– Polocies
change comes as new policies are developed and implemented.
Operating Environment (Sources of Conflict)
– Customers
to ensure profitability, businesses must be responsive to changes in customer tastes and preferences so they can satisfy.
Operating Environment (Sources of Conflict)
– Competitors
– need to monitor the activities of their competition and determine what effect they could have on the marketplace.
– knowledge of changes enables an organisation to make modifications to existing activities and plan new ones.
Operating Environment (Sources of Conflict)
– Suppliers
should always be on the lookout for new or backup, even when they are being met by their present suppliers.
Operating Environment (Sources of Conflict)
– Interest Groups
– some seek to directly influence behaviors in a business.
– alter behaviors surrounding products, marketing techniques and operational procedures.
Macro Environment (Sources of Conflict)
– Economic Forces
– Australian economy has cycles of booms and busts.
– after this period they gradually slow until a recession or depression, and eventually pick back up again.
Operating Environment (Sources of Conflict)
– Political and Legal Forces
when new laws are passed, organisations must comply with legislative requirements.
Operating Environment (Sources of Conflict)
– Technological Forces
– a business that wants to be locally, nationally or globally competitive must adopt appropriate technology.
– if it is slow to adopt technology, they are likely to fail due to competitors striving and gaining more market share.
Operating Environment (Sources of Conflict)
– Global Forces
– operate in world market
– strengthened by globalization.
Operating Environment (Sources of Conflict)
– Geographic Forces
– Australia location within the Asian-pacific create problems for expanding.
– exporting, requires business to develop strategies to manage overseas transportation, currency flacutations, diverse customer base.
Operating Environment (Sources of Conflict)
– Social Forces
constantly confronted by society change in attitudes and values.
Force-Field Analysis
outlines the process of determining which forces drive and which resist a proposed change.
Driving Forces
Forces that initiate, encourage and support the change.
Restraining Forces
those that work against the change, creating resistance.
Restraining Forces that Impede Change:
– Management
– some may make hasty decisions which are poorly timed and unclear.
– others may be indecisive and put off making a decision which creates uncertainty.
– situations may eventually cause employees to lose confidence in decision-making abilities of management.
Restraining Forces that Impede Change:
– Employees
– any change to an organisation and operating procedures will eventually impact on level and type of staffing.
– may also resist due to being worried about not being able to adapt to new procedures which threaten work routines.
Restraining Forces that Impede Change:
– Time
– in come situations, not enough time is allowed for people to think about change, accept it, and implement it.
– in other situations, timing is poor.
Restraining Forces that Impede Change:
– Competitors
when the dominate the marketplace, other business may be reluctant to initiate major changes because they fear it will be waste of time and resources.
Restraining Forces that Impede Change:
-Low Productivity
– when a change is implement is will usually cause some disruption to operating systems and work patterns.
– major changes may result in a complete breakdown of corporate culture.
– fear of reduction is why business resist change.
– the loss of security, feelings of lack of control, fear of the unknown and uncertainty create low productivity.
Restraining Forces that Impede Change:
– Organisational Inertia
managements inactivity or lack of response when faced with proposed changes.
Restraining Forces that Impede Change:
– must be complied with.
– when the legislation places restrictions on certain operational practices and procedure creates a restraining force.
Restraining Forces that Impede Change:
– Cost
– financial costs like:
– new equipment
– redundancy payments
– retraining the workforce.
– reorganizing plant layout.
Kotters Theory
1. Create Urgency
– a sense of urgency around the need for change needs to be developed which may create motivation to get things moving.
Kotters Theory
2. Form a Powerful Coalition
Convincing people its important – takes a strong leadership and visible support from people in the organisation
Kotters Theory
3. Create a Vision
link concepts to an overall vision that people can understand and remember – helps them to understand why you are asking them to do something.
Kotters Theory
4. Communicate Vision
have it communicated in day-to-day operations within the business – frequently and powerfully.
Kotters Theory
5. Remove Obsticles
vision has been accepted – now hopefully employees want to achieve the benefits of the change so that obstacles that may impede progress are removed.
Kotters Theory
6. Create short-term wins
within a short time frame there needs to be results so that employees can see the changes.
Kotters Theory
7. Build on change
the business provides opportunities to build on what went right and identify what can be improved.
Kotters Theory
8. Anchor the changes in corporate culture
Corporate culture often determines what gets done, so the values behind the vision must show day-to-day work.
Low-Risk Stratagies
– to achieve successful change it rely’s on communication, employee involvement, in the change process by using training, support and negotiation.
ADVANTAGES: creates a better workplace that accepts change.
DISADVANTAGES: takes longer
High-Risk Stratagies
Manipulation – devious exertion of influence over employees to get them to do what you want them to do.
Threat: direct or indirect
DISADVANTAGES: more risk of unsatisfaction
the process of positively influencing and encouraging individuals to set and achieve objectives.
Transformational Change
often results in a complete restructure through the whole organisation
Incremental Change
results in minor changes usually involving only a few employees.
Impact of Change on Organisational Structure
OUTSOURCING: contracting of some organisational operations to outside suppliers.
– flat structures
– work teams
Impact of Change on Corporate Culture
– changes in external or internal should be reflected in its culture
Impact of Change on Human Resources
– recruitment and selection altered to reflect the needs for knowledge and skills required.
– training (teamwork, problem solving, decision making and change management)
– performance and reward systems (reinforce behaviors)
Impact of Change on Operations Management
-take advantage of technology
– new advancements in production technology.
– flexible manufacturing
– emphasis of quality assurance
Categories: Change Management