U4 AOS 2

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Change management

is the process of implementing strategies that prepare an organisation to undergo a transformation.

Leadership in change management

is the ability to positively influence and motivate employees towards achieving business objectives during a transformation.

In times of change, effective leaders will:

Stakeholder: An individual or group with a vested interest in the activities and performance of a business.

Build a shared vision: where they inspire employees and inform them of the reasons and benefits of change, as well as the consequences of not changing.

Provide ongoing communication: with clear instructions to employees and instilling them with trust and confidence as they move from current to new practices.

Resolve conflicts: that may arise as the change is being implemented.

Provide ongoing support: through counselling, training, and consultation where they aim to coach and mentor employees through the change process.

Key performance indicators (KPIs)

are specific criteria that measure a business’s efficiency and effectiveness in achieving its different objectives.

What are the 12 management strategies

• Staff training

• Staff motivation

• Change in management styles/skills

• Increased investment in technology

• Improving quality

• Cost cutting

• Lean production

• Redeployment of resources

• Innovation

• Global sourcing of inputs

• Overseas manufacture

• Global outsourcing

Staff Training

Definition:

On the job – coaching, mentoring, job rotation and job shadowing.

Off the job – conferences, lectures, simulations, role plays, workshops, online tutorials.

Staff Motivation

Definition: Motivation refers to the individual, internal process that directs, energises and sustains a person’s behaviour.

the following motivation strategies that were identified in Unit 3;

•performance-related pay

•career advancement

•investment in training

•support strategies

•sanction strategies

Change in Management Styles/Skills

Definition: A manager may choose to adjust their use of management styles and skills in order to implement change.

Management styles - autocratic, persuasive, consultative, participative and laissez-faire

Management skills - communication, delegation, planning, leadership, decision-making and interpersonal

Increased Investment in Technology

Definition: Technology can be used in numerous ways to improve the business. It can be implemented in all areas of the business.

Technology strategies include;

•       Automated production lines

•       Robotics

•       Computer-aided design

•       Computer-aided manufacturing

•       Artificial intelligence

•       Online services

Improving Quality

Definition: Improving the quality of production improves the quality of the end good or service that reaches the consumer.

quality management strategies: quality control, quality assurance, total quality management.

Cost Cutting

Definition: These are management strategies that focus on reducing expenses. Businesses will look to lower costs without having a significant impact on the overall value to customers.

Some strategies for cost cutting include;

•       Merging staff roles, removing roles entirely, or reducing the number of hours employees work to minimise wage expenses.

•       Shutting down business locations that are underperforming.

•       Stopping the production of goods with high amounts of unsold stock.

•       Sourcing materials from cheaper suppliers.

•       Recycling or reusing materials used in the production process

Lean Production

Definition: Lean production minimises business waste while improving the value to the end consumer, by applying the pull, one-piece flow, takt, zero defects strategy.

●      Pull

●      One-piece Flow

●      Takt

●      Zero defects

Redeployment of Resources

Definition: Redeployment is the transfer of resources from one area of a business to another so that they can be used more effectively and efficiently.

redeployment of natural, capital, and labour resources.

Innovation

definition: Innovation is the process that occurs when something that is already established is improved upon.

Global Sourcing of Inputs

Definition: Global sourcing of inputs involves a business acquiring raw materials and resources from overseas suppliers.

Overseas Manufacture

Definition: Involves a business producing goods or services outside of the country where its headquarters are located.

Global Outsourcing

Definition: involves transferring specific business activities to an external business in an overseas country.

Corporate Culture

Definition: The values, ideas, beliefs and expectations shared by people within a business.

How culture can help change

A positive culture that values:

• innovation

• learning

• communication

• teamwork

• adaptability

can make employees more receptive to change.

How culture can hinder change

A culture based on:

• resistance to new ideas

• rigid routines

• poor communication

• autocratic leadership

• fear of failure

can increase restraining forces and employee resistance.

Strategies to develop a positive culture

1. Clearly communicate values and vision

Employees need to understand:

• what the business values

• what it expects

• where the business is going.

2. Managers lead by example

Managers must demonstrate the behaviours and values they expect from employees.

3. Recruitment

Recruit employees whose values and beliefs align with the desired corporate culture.

4. Change management style

For a collaborative culture, a participative/employee-centred style may be more suitable than an autocratic style.

Learning Organisation: Senge

Definition: A learning organisation is an organisation that facilitates the growth of its members and continuously transforms itself to adapt to changing environments.

Senge's 5 principles

•Systems Thinking

•Mental Models

•Shared Vision

•Personal Mastery

•Team Learning

Systems Thinking

This principle views the business as an interconnected whole rather than isolated parts.

Mental models

These are the existing beliefs and assumptions individuals hold.

Shared Vision

A clear and inspiring description of what an organisation and its members would like to achieve. All employees want to work towards the same objectives

Personal Mastery

This focuses on individual growth and continuous learning aligned with personal values and goals. A focus on improving skills and addressing weaknesses continuously.

Team Learning

The collective learning that occurs when teams share their experience, insights, knowledge, and skills to improve practices. The capabilities of the organisation are improved as a whole by working collaboratively.

Low-Risk Strategies - Communication

as a low-risk strategy 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..

Low-Risk Strategies - Empowerment

as a low-risk strategy involves managers providing employees with increased responsibility and authority during times of change.

Low-Risk Strategies - Support

as a low-risk strategy involves managers providing employees with assistance as they move from current to new practices.

Low-Risk Strategies - Incentives

as a low-risk strategy involves managers providing financial or non-financial rewards to encourage employees to support change.

High-Risk Strategies

High-risk strategies to overcome employee resistance include;

•       Manipulation

•       Threat

Manipulation

Definition:as a high-risk strategy involves the use of covert tactics to influence employees to support a proposed change.

Examples

• providing only selected information

• distorting information

• hiding negative consequences

• "buying off" influential employees

• being deceptive about reasons for change.

Advantages of Manipulation

• can overcome resistance quickly

• can gain support from influential employees

• useful when change needs to occur quickly.

Disadvantages of Manipulation

• damages trust if discovered

• damages corporate culture

• can increase resistance

• unethical

• can reduce employee motivation.

Threat

Definition: as a high-risk strategy 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.

Examples

• loss of promotion

• loss of position

• loss of benefits

• transfer.

Advantages of Threat

• quick

• may overcome strong resistance

• useful when immediate change is required.

Disadvantages of Threat

• damages employee-manager relationships

• reduces morale

• creates resentment

• may increase conflict

• can negatively affect corporate culture

• employees may only comply superficially.

Low v High Risk Strategies

Seek small incremental change. - Seek radical or transformational changes. Involve

employees more in the process of change. - Minimises the involvement of employees in the change process.

Linked with the participative management style. - Linked with the autocratic management style.

Results in greater trust of employees and reduces restraining forces. - Result in higher levels of conflict with employees.

Owners

Definition: Owners are responsible for making major decisions about business change and guiding its successful implementation.

Owners - positive/negative

Positive

• Higher returns on investment, greater financial security

• Opportunity to use leadership skills and build stronger employee relationships

Negative

• Financial and personal loss if the change fails

• Stress from increased workload and responsibility

Managers

Definition: oversee specific areas or the whole business, coordinate employees, and ensure objectives are met.

Managers - positive/negative

Positive

·       Opportunity to develop new skills or advance career

·       Increased authority and responsibility, boosting skills and employability

Negative

• Increased workload may cause stress and impact well-being

• Risk of job loss and reduced financial security if the change fails

Employees

Definition: are central to implementing successful change, as they perform the work tasks that enable the business to achieve its objectives.

Employees - positive/negative

Positive

·       Improved job and financial security if change is successful

·       Training to develop new skills, improving future employability

Negative

·       Need to develop complex skills and learn difficult processes, potentially increasing stress               

·       Increased responsibilities may harm performance if employees are unprepared

Customers

Definition: are the individuals who purchase a business’s goods or services. Business change often involves adapting products to meet evolving customer preferences or improving performance. 

Customers - positive/negative

Positive

• Improved product quality can increase satisfaction

• CSR initiatives can enhance customer loyalty and satisfaction

Negative                                                                                                       

·       Cheaper inputs may reduce quality, causing dissatisfaction

·       Discontinuing or altering products may fail to meet customer needs

Suppliers

Definition: provide the raw materials and resources a business needs for production

Suppliers - positive/negative

Positive

• Increased demand if the business requires more resources for production

• Opportunity to form a stronger long-term relationship with the business

Negative

• Reduced sales if the business switches suppliers or discontinues a product

• Need to adjust processes to meet new business requirements, possibly without choice

General Community

Definition: Though the general community may not directly interact with a business, it is indirectly affected by business decisions and changes.

General Community - positive/negative

Positive

·       Creation of job opportunities improves local employment and societal well-being

·       Reducing waste lowers environmental impact and improves living standards

Negative

·       Store closures or relocations reduce traffic and sales for surrounding businesses

·       Switching to overseas suppliers can increase environmental harm from transportation

Corporate Social Responsibility

Definition:

is the continuing commitment of a business to go above and beyond its legal obligations to operate in a manner that addresses the wellbeing of employees, customers, the community and the environment.

 

CSR considerations when implementing change

Employees

• job security

• fair treatment

• training

• working conditions.

Customers

• product safety

• fair pricing

• quality

• honest communication.

Suppliers

• ethical sourcing

• fair treatment

• responsible supplier practices.

Environment

• waste

• emissions

• resource use

• pollution

• sustainability.

Community

• employment

• local businesses

• community wellbeing

• impact of relocating/outsourcing.

Advantages of considering CSR

• Enhances business reputation, helping maintain customer trust and loyalty through uncertain times.

• Improves employee morale during transitions, as staff feel valued and proud to work for a responsible company.

Disadvantages

• CSR efforts during change require financial resources that might limit investment in core change initiatives.

• Managing conflicting stakeholder interests is harder during change, as shareholders may resist CSR costs when profits feel pressured.

The Importance of Reviewing KPIs to Evaluate the Effectiveness of Transformation

This will allow the business to determine whether or not the implemented strategies have had their desired effect and the change has been successful.