U4 AOS2 - Implementing change

responding to KPIs

-businesses use various measures (KPIs) to review their performance

-there are many strategies a business can choose from to implement a response after reviewing KPIs

strategy:

generic term to represent any business solution to a problem or a course of action to take advantage of an opportunity

management strategies

- staff training

- staff motivation

- change in management style or skills

- increased investment in technology

- improving quality in production

- cost-cutting

- initiating lean production techniques

- redeployment of resources (natural, labour, capital)

seeking new business opportunities

- innovation

- global sourcing of inputs

- overseas manufacture

- global outsourcing

Leadership (in change management)

The ability to influence and motivate individuals to achieve business objectives during a transformation.

Why leadership is important during business change

Change can be difficult for stakeholders as they move from the current state (status quo) to the new, unfamiliar state (desired/changed state); strong leadership helps assist stakeholders with this transition, particularly if some are actively resisting change.

Ways leaders demonstrate strong leadership during change (overview)

Building a shared vision, preparation and planning, ongoing communication, ongoing support, listening to employee concerns, resolving conflicts, motivating stakeholders, and being visible.

Staff training

Can be on-the-job or off-the-job; involves a business equipping employees with the knowledge and skills required to perform work tasks.

Staff training effect on Net profit

Better customer service leads to happier customers, more repeat sales, and increased profit.

Staff training effect on Workplace accidents

Teaches safe equipment use, resulting in fewer workplace accidents.

Staff motivation

The willingness of an individual to expend energy and effort in completing a task to improve business performance.

Staff motivation effect on Number of sales

Motivated employees enhance product knowledge and contribute innovative ideas, increasing competitive advantage and attracting more customers.

Staff motivation effect on Staff turnover

Provides employees with a greater sense of achievement and increases commitment as managers recognize their efforts.

Staff motivation effect on Productivity growth

Employees are more willing to increase the efficiency and effectiveness of the production process.

Change in management style

A manager altering the way they direct and communicate with employees to suit task complexity, experience, time, and preferences.

Management style effect on Net profit

Adopting a more restrictive management style reduces wasted resources and expenses, improving profit.

Management style effect on Absenteeism

A less restrictive management style increases self-confidence and trust, encouraging regular attendance.

Change in management skills

A manager altering how they approach tasks and collaborate with employees to suit the business situation.

Cost cutting

The process of reducing business expenses to decrease unnecessary costs, allowing for maximized profits.

Cost cutting effect on Level of wastage

Removing resources that do not add value means less input is needed and less is wasted.

Cost cutting effect on productivyt growth

Merging roles and streamlining processes → fewer inputs needed → more efficient → higher productivity.

Increased investment in tech → Market share

Tech improves product design and customer understanding → more competitive → bigger market share.

Increased investment in tech → Productivity growth

Tech speeds up operations and predicts demand → less time/labour wasted → higher productivity.

Increased investment in tech → Net profit

Tech cuts labour costs and boosts sales/repeat purchases → higher profit.

Improving quality → Customer complaints

Better quality → happier customers → fewer complaints.

Improving quality → Net profit

Better quality → more sales + fewer errors/wasted resources → higher profit.

Improving quality → Market share

Better quality → more repeat purchases and satisfaction → bigger competitive advantage.

Lean production → Level of wastage

Only producing what's needed (pull) + streamlined flow → less idle stock and waste.

Lean production → Productivity growth

Streamlined system (takt, one-piece flow) → inputs used more efficiently → higher productivity.

Lean production → Net profit

Less idle stock, less waste, fewer defects → lower costs → higher profit.

Redeployment of resources → Net profit

Reallocating resources cuts inefficiency → optimal use → higher profit margins.

Redeployment of resources → Level of wastage

Reallocating resources boosts productivity → less waste.

Redeployment of resources → Productivity growth

Moving labour/capital to where they're needed → nothing sits idle → more productive.

Innovation → Market share

Innovative products cut production costs and stand out → more competitive → bigger market share.

Innovation → Productivity growth

Innovative production techniques need fewer inputs → more efficient → higher productivity.

Innovation → Number of website hits

Unique, engaging marketing for innovative products → attracts more people online.

Global sourcing of inputs → Market share

Unique/high-quality overseas inputs → competitive advantage → bigger market share.

Global sourcing of inputs → Net profit

Cheaper overseas inputs → lower production costs → higher profit.

Global sourcing of inputs → Number of sales

Unique or higher-quality inputs → more satisfied customers → more sales.

Overseas manufacture → Net profit

Lower labour/operating costs overseas → higher profit.

Overseas manufacture → Number of sales

Lower costs = lower prices, plus skilled overseas labour = better quality → more sales.

Overseas manufacture → Market share

Lower prices while keeping margin → more competitive → bigger market share.

Global outsourcing → Net profit

Cheaper overseas wages = lower expenses → higher profit.

Global outsourcing → Market share

Outsourcing non-core tasks lets a business focus on core products that satisfy customers → more competitive → bigger market share.

Global outsourcing → Productivity growth

Skilled overseas workers do tasks more efficiently → time used better → higher productivity.

Corporate Culture

The values, ideas, expectations, and beliefs shared by members of a business.

Official Corporate Culture

The shared views and values a business aims to achieve, usually written down (e.g. mission statements, logos, slogans, policies) — the external view of the business.

Real Corporate Culture

The unwritten, informal rules that guide how people in the business actually behave — the internal view of the business (how people dress, act, and treat each other/customers).

Strategies for developing Official Corporate Culture

Mission statement, policies & procedures, employee code of conduct, training programs, symbols (name/logo/slogan), uniform guidelines.

Strategies for developing Real Corporate Culture

Hiring criteria, diverse hiring, workplace layout, celebrating employee contributions, depersonalised feedback on performance, management style.

Senge's Learning Organisation

A business that is flexible, adaptive, and productive, with a culture where people work together and continually learn to improve. Learning organisations tend to excel during times of rapid change, are less likely to face organisational inertia, and (if productive) have committed employees who help drive change.

Senge's 5 Principles (memory trick: MVPST)

Mental Models, shared Vision, Personal mastery, Systems thinking, Team learning.

Mental Models

Existing assumptions and beliefs held by individuals/the business about how things should work. They must be challenged for learning and change to happen — fixed mental models can hold a business back or block systems thinking.

Shared Vision

Developing a vision that everyone in the business believes in and wants to achieve. Creates commitment (not just compliance) and gives people a common direction.

Personal Mastery

Individuals continually learning and growing in line with their own values and passions. If people grow, the business grows — needs a culture that empowers employees and lets them challenge the status quo (e.g. Google's 20% rule).

Systems Thinking

Looking at the business as a whole, considering how all its parts affect each other, and weighing up flow-on effects before making a decision — rather than looking at issues in isolation.

Team Learning

Teams sharing experience, insight, knowledge, and skills together to improve practices — individuals with different skills learn and grow together toward the same goal.

Low-risk strategies (overview)

Measured management approaches that gradually encourage employees to accept and participate in a business change. The four strategies are: Communication, Empowerment, Support, Incentives.

Communication (low-risk strategy)

Managers clearly and honestly explain why and how a change needs to happen, and let employees ask questions/voice concerns (two-way). More communication → more trust → less resistance.

Empowerment (low-risk strategy)

Giving employees more responsibility and authority during change (e.g. specific roles, change teams, change agents) so they feel trusted and have input — builds commitment and motivation.

Support (low-risk strategy)

Helping employees deal with the stress/fear of change through counselling, mentoring, training, or discussion forums — including helping employees who lose their job find new work (keeps morale up for remaining staff).

Incentives (low-risk strategy)

Financial or non-financial rewards (bonuses, promotions, training, extra responsibility) to encourage employees to embrace change — reminds them of their value to the business.

Low-risk strategies → Advantages

Preserves employee morale, maintains commitment to the business, maintains motivation, reduces resistance.

Low-risk strategies → Disadvantages

Slower to initiate change; may need extra cost/time (e.g. for support or counselling).

How each low-risk strategy reduces resistance (summary)

Communication → employees understand why change is needed. Empowerment → gives employees ownership over the change. Support → overcomes fear and stress. Incentives → rewards employees for supporting change.

High-risk strategies (overview)

Autocratic management approaches used to quickly force employees to accept change. Fast-acting but riskier as they can cause negative consequences. The two strategies are: Threats and Manipulation.

Threat (high-risk strategy)

Forcing employees to accept change by warning of punishment if they don't comply (e.g. dismissal, pay cuts, poor references, loss of promotion). Works quickly but can cause resentment and damage relationships.

Manipulation (high-risk strategy)

Gaining employee support for change by giving selective or deceptive information — only telling them the benefits, not the drawbacks. Reduces resistance short-term but can damage morale/culture if discovered.

Risks of using Threats

Employees may seem to comply but stay resentful underneath — can lead to sabotage, grievance complaints, stress/harassment claims, and industrial disputes.

Low-risk vs High-risk strategies (comparison)

Low-risk = participative approach (communication, empowerment, support, incentives). High-risk = autocratic approach (threats, manipulation). Low-risk works better long-term as employees feel valued; high-risk (coercion) only works short-term.

Lewin's Three Step Change Model (overview)

A theory on managing business change in 3 steps: Unfreeze, Change, Refreeze — like an ice-cube analogy (thaw, move the coin, refreeze).

Step 1: Unfreeze

Preparing the business for change — identify what needs to change, build urgency, address resistance, and let stakeholders raise concerns. Outcome: disrupts the status quo (hard but essential step).

Step 2: Change

Moving the business to its desired state — adjust processes/policies, train and support staff, keep communication open, empower employees, and make sure the change is properly resourced. Outcome: change is gradually implemented (may be non-linear, with setbacks).

Step 3: Refreeze

Locking the change in for the long term — rewrite policies, celebrate wins, keep supporting staff, and review/evaluate. Outcome: change becomes permanent and embedded in the culture.

stake holders

Owners

Managers

Employees

Customers

Suppliers

General Community

Positive effects of change on owners

More profit 💰, better financial security, and opportunities to lead and develop relationships.

Negative effects of change on owners

More stress and workload, financial losses if change fails, and employees may resent them.

Positive effects of change on managers

New skills, career opportunities, rewards, and more authority.

Negative effects of change on managers

More workload and stress, and possible job loss if change fails.

Positive effects of change on employees

Career advancement, better job security, rewards, and new training/skills.

Negative effects of change on employees

More stress, fear of losing their job, and increased responsibility.

Positive effects of change on customers

Better quality products, lower prices, and businesses being more socially responsible.

Negative effects of change on customers

Lower quality, higher prices, or products/services being changed or discontinued.

Positive effects of change on suppliers

More demand for their products and increased sales.

Negative effects of change on suppliers

Fewer orders and sales, or having to change their processes.

Positive effects of change on the general community

More jobs, benefits for local businesses, support for social causes, and less environmental damage.

Negative effects of change on the general community

More unemployment, less business for local businesses, and possible environmental damage.

Corporate Social Responsibility (CSR)

When a business goes beyond its legal obligations to improve social, economic and environmental outcomes for stakeholders.

CSR as a driving force for change

CSR can encourage a business to make changes that improve its social or environmental impact while still achieving business objectives.

Business ethics

The application of moral standards to business behaviour.

CSR 3 Ps

people, planet, profit

CSR — People strategies

Employing local labour; flexible working conditions; reducing noise pollution in factories; Fair Trade employment; community development; counselling/resume writing/job-seeking support for redundancies.

CSR — Planet strategies

Natural resource conservation; reduce/reuse/recycle waste; renewable energy; ethical behaviour in the supply chain; waste management; reducing carbon footprint.

CSR — Profit strategies

Giving to nonprofits; sponsoring local events; supporting community education; worker-controlled funds; energy saving; recycling; reducing waste; business ethics; Fair Trade.

Strengths of CSR

Better business reputation → increased sales/brand loyalty; additional marketing opportunities; becomes an "employer of choice"; improved employee satisfaction and motivation; builds goodwill with society if future problems occur; benefits social health and welfare; leads to a sustainable future.

Limitations of CSR

Can be time-consuming to establish; can be expensive to support non-core activities.