Business Management FINAL Unit 4

still hate business

Change Management

Process of implementing strategies that prepare an organism to undergo a transformation

Leadership in change management

Ability to positively influence and motivation employees to wards the achievement of business objectives

• Confidence

• Clarity

• Feeling of value in employees

Planning and prepation

Developing an action plan, describing the change and the time lines needed

Communication

Clear communication and instructions can in still confidence and trust in the employees, reducing resistance to change

Support

Effective leader will ensure employees are provided with assistance or service to help cope with change

Collaboration

Using a team and delegating tasks so that responsibilities are shared between employees

Accountability

Leader must be held accountable when a change is/isn’t working

• Represents level of integrity, trust and clarity 

Corporate Culture

Shared value and belief of a business and its employees

• Offical and Real

Real corporate culture

Shared values and beliefs that develop organically within a business and are practiced by employees daily

• Managers should develop stratergies to make offical = real

Strategies for developing corporate culture

• Sufficient training

• Appropriate rites, rituals and celebrations

• Establish new management structure

• Implement policies reflecting values

• Change the work layout

• Change the style of dress and language used in the workplace

• Create values statement

Management Stratergies

Once KPI’s have been evaluated, management strategies are used to respond to areas of poor performance and to maintain/improve areas of strong performance

Types of Management Strategies

• Staff training

• Staff motivation

• Change in management styles/skills

• Investment in tech

• Improve quality in production

• Cost cutting

• Lean management techniques

• Redeployment of resources

• Innovation

• Global sourcing of inputs

• Overseas manufacture

• Global outsourcing

Staff Training

Process of teaching staff how to do their job efficiently, improving their knowledge and skills

• Motivate employees

• Helps achieve KPIs

• Improve productivity

Staff Motivation

Individual, internal process that directs, energies and sustains a person’s behaviour → drive to apply effort over time

• Increase employee morale

• Enhance corporate culture

• Improve work ethic

Change in Management styles or skills

Management style directly influences staff engagement and the coordination of business activities

• Manager must use the most appropriate style/skill to the situation to effectively respond to KPIs

Increased innovation in technology

Application of knowledge that change people’s lives and change the way which a business operates

• Improve productivity

• Market Share

• Profitability

Improving quality production

Degree of excellence of goods or services and their fitness for a stated purpose

• Meet customer expectations

• Remain competitive

• Improve efficiency and differentiate

Cost Cutting

Process of reducing business expensives

• Decrease unnecessary expenses

• Maximise profits

• Save money

Initiating lean production techniques

Adopting lean management strategies to systematically reduce waste in production while also improving customer value (TOPZ)

• Can improve business reputation

Redeployment of resouces

Moving resources to different areas of the business to improve productivity and efficiency

• Can be associated with waste minimisation strategies and retaining its materials, employees and equipment

Innovation

Process of altering and improving, or creating new products or procedures

• Expand to new markets

• Need new customer needs

• Improving performance

• Develop competitive advantage

Global sourcing of inputs

Business acquiring raw materials and resources from overseas suppliers

• Minimise operating costs

• Better satisfy customers

Overseas Manufacturing

Business producing goods or services from outside to where its headquarters are located

• Reduce operating costs

• Improve quality

• Enter a new market

Global outsourcing

Part of a business operations are transferred to an external person or business in another country

• Gain expertise

• Allow a business to focus on more core objectives

Offical Corporate Culture

Shared values that a business aims to achieve, often outlined in a written format such as policies and objectives

• formal approach is required to develop offical CC

Senges theory of the learning organisation

A business can facilitate the growth of its members to be better equipped to deal with change and continuously transforms itself to adapt to changing environment

ALL STEPS ARE REQURED FOR A BUSINESS TO BE SUCCESSFUL

• Systems thinking

• Personal Mastery

• Mental Models

• Team learning

• Building a shared vision

Systems Thinking

Considers the interrelationship between parts of a whole system, underlines a business’ ability to understand differnt areas and sectors relationship

• Analyse how a change can impact the whole business

• Consider internal and external environments

Personal Mastery

Discipline of personal growth and learning, continuous development and improving leads to better performance

• High levels of PM are more likely to take initiative and have more responsibility for their work

Mental Models

Existing assumptions and generalisations that must be challenged so that learning and transofmration can occur

• Open minded concept

Building a Shared Vision

Aspirational description of what an organisation and its members would like to achieve

• business must promote and clearly communicate a vision that all employees believe in

• LEADS TO GENUINE COMMITMENT TO SHARED VISION

Team Learning

Collective learning that occurs when a team shares their experiences, insights, knowledge, and skills to improve practices

• Learning together = improved results and faster collective development

• Open dialogue = greater learning, positive and supportive corporate culture

Low Risk Strategies

measured management approaches that gradually encourage employees to accept and participate in business change, likely to generate positive outcomes in the short and long term

• Communication

• Empowerment

• Support

• Incentives

Communication LRS

Managers openly and honestly transferring information to employees, listening to feedback and being aware of reasons for change and its impacts

• Fostering trust

• Understand why a change is needed meaning less resistance

Empowering LRS

Managers providing employees with increased responsibility and authority during change

• Sense of ownership leading to less resistance

Support LRS

Managers providing employees with assistance as practices change such as training or counselling

• Reduce fear and anxiety

• Help employees feel more prepared for change

Incentives LRS

Managers providing financial and non-financial rewards to encourage employees to support the change such as pay rises or promotions

• If employees gain something from the change they will be more motivated to implement the change

Advantages of Low Risk Strategies

• Increased ideas (employee involvement)

• No misunderstandings

• Employee/employer relations are positive (trust)

• Employees more likely to accept change (esp in long term)

Disadvantages of Low Risk Strategies

• Change process is time consuming

• Expensive (support and incentives)

High Risk Strategies

Autocratic management approaches used to influence employees to quickly accept and follow a business change, appropriate when business requires immediate employee following of procedures

• Manipulation

• Threat

Manipulation HRS

Influencing employees to support a proposed change by providing incomplete or deceptive information

• Skilful to convince someone

• Can backfire if truth is discovered

• Cheap and inexpensive to overcome resistance

Threat HRS

Forcing employees to follow a change by stating that they may or will cause harm to them if they fail to do so

• Suggests negative consequences will occur if an employee fails

• Threats can lead to compliant but resentful employees

Advantages of High Risk Stratergies

• Immediate implementation of change → ensures rapid and successful change

• Appropriate for time critical situations

• Generally involve little financial cost

Disdvantages of High Risk Stratergies

• Likely to foster negative corporate culture (mistrust)

• Poor employee-employer relationship

• Employees feel nervous on job security → lead to increased staff absenteeism and turnover

Lewins Three Step Change Model

Change occurs at different levels → involves more than simply overcoming employee resistance
1. unfreeze 2. change 3. refreeze

Unfreeze

Moving a business to a state where stakeholders are prepared to undergo change

• Challenge beliefs, behaviours and values that currently exist

• Concerns can be raised and communication can occur

Change

Moving a business towards its desired state

• All processes, policies and practices are able to be changed and support can be put in place

• High levels of fear and confusion → SUPPORT/TRAINING IS A MUST

Refreeze

Ensuring a change is sustained within a business for the long term

• Strategies put in place to ensure the change is stabilised and doesn’t revert back

• Training

Corporate Social Responsibility

Ethical conduct of a business beyond legal obligations and the consideration of social, economic and environmental impacts when making business decisions

• Economic

• Social

• Environmental

Stakeholders

Individuals or groups that have a bested interest in the activities of the business change can have either positive or negative change

Owners

Owners impact from change will depend on their involvement in the management or daily operations

• Positive effects

• Opportunity to learn new sills

• Successful change = improved reputation

• Can require moving away from comfort zones

• Changes can incur financial hardships

Managers

Managers likely impacted at the same time change is implemented

• Successful change leads to rewards

• Opportunity to learn new skills and advance their career

• Successful change leads to increased authority

• Increased stress

• Job loss

Employees

Often are the ones most affected by change

• New responsibilities lead to improved motivation

• Better employment conditions

• Change can require training and improved employability

• Training can increase stress

• Redundancies

• Dissatisfied with change due to organisation intertia

Customers

Customers expect high quality at competitive prices

• Improved quality leading to increased satisfaction

• Fall in prices

• Cheaper inputs to reduce cost

• Decreased satisfaction if business changes a product

Customer considerations of CSR

• Change aligns with customer values

• Safe and reliable products

Suppliers considerations of CSR

• Source from local suppliers

• Not using suppliers who exploit their workers

• Suppliers uphold same CSR standards

Environmental considerations of CSR

• Introducing new tech → minimise errors/waste generated

• Changing suppliers → local supplier to minimise carbon emissions during transport

• Building new facility → one that creates minimal waste and pollution, sustainable and energy-efficient practices, et

Employees considerations of CSR

• Downsizing/ store closures → offer outplacement services to help find alternative employment

• New equipment → training and support

• Changes that affect job security → reallocating employees to a new job

Business Transformation

The new form or strucutre of a business after a change has been introduced

Importance of evaluating KPIs

Business can evaluate the overall effectiveness of a business transformation and determine the next course of action, and areas for future improvements and decide new goals for the future

Business Change

Altercation of behaviours, policies and practices of business

• Requires strong leadership and management skills

Proactive Approach

Business changes to avoid future problems or take advantage to gain competitive advantage

• Fulfilling gap in market

• Recognising change in trends

Reactive Approach

Business undertakes change in response to situation or crisis 

• Attempt to avoid

Key Performance Indicator

Specific criteria used to measure the efficiency and/or effectiveness of a business’ performance

Percentage of Market Share

The business’s share of the total industry sales for a particular good or service

Net Profit features

Measure of company profits once expenses and taxes have been deducted from revenue

Rate of Productivity Growth

Change in total output produced from a given level of inputs over time = business using the resources more effectively

Number of sales

Amount of goods or services that are sold over a period of time

• Determine if its able to achieve financial objectives

Rate of staff absenteeism

Number of staff who do not show up to work when scheduled

Level of staff turnover

Number of employees (or rate) leaving a business over a specific period of time and need to be replaced

Level of wastage

Amount of inputs and outputs that are discarded during production process

Number of customer complaints

Amount of customers who contact the business to express disappointment with the business

Number of website hits

Amount of customer visits that a business online platform receives for a specific period of time

Number of workplace accidents

Amount of injuries that occur at work over a specific period of time

Force field analysis

The process of determining which forces drive and which forces resist proposed change

• Giving weight to current forces

Advantages of force field analysis

• Determine whether the change is worth taking

• Allow a timeline to be developed and requirements to be identified

• Visual diagram leads to increased communication

Disadvantages of force field analysis

• Weighting of the forces is subjective

• Timelines can be subjective and not consider unexpected events

• Some forces may not be clearly identifiable at the time 

Force field analysis key principles

1. Give weighting to current driving and restraining forces
2. Rank the top restraining and driving forces to eliminate or strengthen them
3. List actions required to implement a response
4. Evaluate the response

Weighting (FFA)

Scoring and attributing a value to the driving and restraining force
level of impact on the business

Ranking (FFA)

Arranging the forces in order of value and determining the total score of driving and restraining forces

• help determine which driving forces can be strengthened and which restraining forces can be removed or minimised

Implementing a response (FFA)

Action that can be taken to strengthen the driving forces, reduce or eliminating the restraining forces, and/or the actual execution of the change

Evaluating the response (FFA)

Comparing the actual change to the anticipated change and determining whether further action needs to be taken.

Driving forces

Factors affecting the business environment that promote and support business change → factors that naturally push a change to occur

Owners (Driving)

Has a vested interest in the ability of a business to meet objectives and continue to adapt

• Driving if they believe it’ll be beneficial to the business

Managers (Driving)

Enables business performance is optimised and objectives are being achieved

• driving force when the proposed change will enhance the business' ability to meet objectives → usually have same viewpoint as owner

Employees (Driving)

responsible for achieving business objectives

• driving force if change will improve their work environment

Pursuit of profit (Driving)

Main objective of a business is to make a profit

• improve financial performance

Reduction of costs (Driving)

Increasing costs = negative impact on profit = financial consequences

Competitors (Driving)

Business must respond appropriately to changes made by competitors

Legislation (Driving)

Business must comply with laws and regulations

• forced to change → abide by the law

Globalisation (Driving)

The process by which the globe is becoming more interconnected, allowing for increased international trade and cultural exchange

• drives all business' to change so that they remain viable and competitive

Technology (Driving)

Fail to adapt to technology = impacts ability to compete and survive

Innovation (Driving)

Process that occur when something already established is improved upon

• pressure from competitors = business be innovative to increase sales and market share

Societal Attitude (Driving)

Collective values, beliefs, and views of the general public

• business align operations with societal attitudes and behaviours

Restraining Forces

Factors that actively try to stop business

Managers (Restraing)

Unsupportive if they believe the change will not be beneficial to the business’ performance or threatened by the change

Employees (Restraining)

Restraining force if outcome is uncertain, they fear they cannot adapt or if it impacts job security of work routine

Time (Restraining)

Time restrictions, deadlines, etc

Organisational Interia (Restraining)

Owners/managers resistant to change due to familiarity in structures already in place → have to change leadership to promote new directions

Financial Considerations (Restraining)

Changes incur costs

Legislation (Restraining)

Restraining force when changes places restrictions or limits on business practices or procedures