BUSINESS 3.10 - Managing strategic change

What is internal change?

change occurring within a business

What are examples of internal change?

staff, business culture, change in leadership, poor performance, growth

What is external change?

changes in the external environment

What are examples of externa factors

PESTLE

What is incremental change?

introducing small changes in order to reach a particular goal

What is disruptive change?

an irreversible shift that transforms an industry or market arising from PESTLE factors

Why is change important to business?

competitive advantage, changing customer needs, advancing technology, improved working conditions/ job satisfaction

How can managers manage change?

Lewin’s force field analysis

What is restructuring?

changing organisational structure of a business

What are reasons for restructuring?

improved efficiency, takeovers

How can organisations be more flexible?

restructuring, delayering, flexible contracts, organic/mechanistic structures, knowledge and information management

What are examples of restructuring

dismissing employees, eliminating departments, closing factory locations, outsourcing

What are the benefits of restructuring?

reduced operational costs, cheaper outsourcing, improves communication

What are disadvantages of restructuring?

Can lose highly skilled workers, remaining staff may have to be retrained (increased labour costs), job insecurity for rest of staff

What is delayering?

removing one or more layers of hierarchy in an organisation

What are advantages of delayering?

Can re-design jobs so that there is greater delegation, more authority is given lower down in the organisation, improves communication, reduced costs

What are disadvantages of delayering?

not all organisations are suited to a flatter organisation, workers might not want more authority, motivation issues with rest of staff, period of disruption, reduce communication.

What are flexible working contracts?

giving employees a choice over the times they can work

What are advantages of flexible working?

greater freedom, improve morale and reduce lateness, reduced overtime costs

What are disadvantages of flexible working?

increased overhead costs (electricity, heating) as you will be open for longer, employee times may not align with organisation

What are organic (open) structures?

highly flexible forms of organisation, having no layers

What are mechanistic structures?

an inflexible, more traditional form of structure

What is knowledge management?

the practice of organising, storing and sharing information so that everyone in an organisation can benefit from its use

What is information management?

how businesses manage the information created by themselves

What are Kotter and Schlesinger ‘s 4 reasons for resistance to change

self interest, preference for current situation, disagreement on the need for change, misunderstanding

What are Kotter and Schlesinger’s six ways of overcoming resistance to change?

education, participation, facilitation (provide support), negotiation, manipulation, coercion (threat)

What is culture?

A set of shared values that influence how businesses achieve goals / operate

What are elements of culture?

stories, rituals, language, beliefs, artifacts, norms, ethics