Transforming A Business
SAC 2
Low-risk stratergies
High-risk startergies
Lewin’s three-step change model
Change and stakeholder
CSR considerations and change
Evaluating change
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Low-risk stratergies:
Are measures managment approaches that gradually encourage employees to accept and participate in a business change.
Communication as a low-risk startergy
Empowerment as a low-risk startergy
Support as a low-risk startergy
Incentives as a low-risk startergy
Communicatin as a low-risk stratergy involves mangers openly and honestly transferring information to employees, and listening to thier feedback so that employees are fully aware of the reasons for, and impacts of an upcoming chnage.
Empowerment involves managers providing employees with increased responsibilitys and authoritity during times of change.
Support as a low-risk stratergy involves managers providing employees with assictance as they move from current to new practices.
Incentives as a low-risk startegy involves managers providing financial or non-financial rewards to encourage employees to support change.
High-risk startergies:
Are autocratic managment approaches used to influence employees to quickly accept and follow a business chnage.
Manipulation as a high-risk startergy
Threat as a high-risk startergy
Manipulation involves influencing employeees to support a proposed change by providing incomplete and deceptive information about the transformation.
Threat 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.
Lewin’s Three-step Change model:
The unfreeze step involves moving a business to a state where stakeholders are prepared to undergo change.
The unfreeze step involves moving a business to a state where stakeholders are prepared to undergo change.
The change step involves moving a business towards its desired state.
The refreeze step involves ensuring a change is sustained within a business for the long term.
Change and Stakeholders
Effect of change on owners
Pros:
A business business change can provide a business owner with an increased return on their investment and greater financial security.
Business change can provide opportunities for business owners to use their leadership skills to connect with employees and develop stronger interpersonal relationship.
Cons:
A business change is unsuccessful, a business owner may experienece personal and financial implications.
A business owner may become overwhelmed and stressed by the increased workload and responsibitlies that may be associated with business change.
A business owner may be resented if employee roles are made redundant or significantly changed, negatively impacting the business’s corporate culture.
Effect of change on managers
Pros:
Business change can provide opportunities for a manger to develop new skills or advance their career.
A business may provide a manger with financial and non-financial rewards if the change is successfully implemented.
A Manager may be provided with increased authority and responsibility, Leading to further increases in their skills and employability.
Cons:
Increased workloads associated with change can lead to stress which may negatively impact a manager’s wellbeing.
If a business change is unsuccessful, a manager may lose their job and financial security.
Effect of change on employees
Pros:
Employees may be provided with new responsibilities and opportunities for career advancement that improve their motivation and overall job satisfaction.
A business change may require employees to undertake training to provide them with a different set of skills, helping improve their future employability.
Cons:
A business change may require employees to develop complex skills and learn difficult processes, which may increase stress levels and negatively impact their wellbeing.
if a business change is expected to result in redundancies employees may fear for their job or financial security.
A business change may require some employees to take on increased responsibility within the workplace which may negatively impact their performance if they are not prepared for this role.
Effect of change on customers
Pros:
If change improves the quality of a business’s goods and services, customers may experience increased satisfaction.
Customer satisfaction may increase if the change allows the business to offer lower prices for its goods and services
Customer may experience greater satisfaction from a business that implements new statregies to demonstrate corproate social responsibility.
Cons:
A business that sources cheaper inputs to reduce business costs may compromise the quality of its product, leading to customer frustration and reduced satisfaction.
If a business discontinues or change a goods or service, customer satisfaction may decrease if the new product fails to meet their needs.
Effect of change on suppliers
Pros:
Supplier demand may increse if a business require a greater amount of resources to meet its production needs
Cons:
If a business decides to switch to a different supplier or discontinue a product, a supplier’s sales may decrease due to a lower volume of orders from the business.
A business change may require its suppliers to involuntairly adjust their processes to meet the new demands of the business.
Effect of change general community
Pros:
If a business change creates job opportunities, local employment rates may increase which can improve the overall wellbeing of society.
Business change that involves opening or expanding into a new era can increase customer traffic and sales for surrounding businesses.
When a business change is successful, a business has greater ability to contribute to local social causes.
Business change that involves reducing waste can reduce the business’s environmental impact and improve overall living standards for the general community.
Cons:
A business change that result in redundancies may increase local unemployment rates and poverty levels, thus negatively impacting societal wellbeing.
If a business change involves store closure or relocation, customer traffic and sales for surrounding business may decrease.
If a business change involves switching to an overseas supplier, transporting inputs from another country can have a negative impact on the environment.
CSR considerations and change:
Is the ethical conduct of a business beyond legal obligations, and the consideration of social, economic, and environmental impacts when making business decisions.
Considering employees
Involves a manager addressing factors that promote staff wellbeing during periods of business change. Business change can often result in employees losing their jobs or having their roles changed abruptly. This can have negative implications on an employee’s financial and job security, which can have a devastating impact on their family and cause high levels of stress and fear in the workplace. Therefore, managers should take into account how a business change may impact the social, financial, and mental wellbeing of employees and implement strategies to reduce the negative consequences of change.
considering the general community
Involves a business reducing or eliminating practices that are detrimental to the wellbeing of society. A business change can result in the general community facing low employment rates and loss of economic activity. For example, if a business chooses to close one of its local stores, this would result in a loss of local employment rate is low in a population, more people are unemployed which often leads to increase in this levels of crime and poverty in society as people resort to illegal methods to survive. Therefore, it is vital for a business to conduct its practices in a socially-responsible and ethical manner as this allows the general community to continue developing.
considering the environment
Involves a business reducing the negative impacts of its activities on the planet. A business that undertakes unethical practices can cause significant and irreversible harm to the environmentally- responsible manner that aims to perserve the environment. As a result, customer and employees are more likely to purchase from and work for businesses that demonstrate CSR for the environment.