AHBM Internal Environment Activities

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Business ManagementBusiness Management


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TASK 1 written questionsTASK 1 written questions

Read the summary of Fayols Classical School of Management and Mintzberg.

1 Why do critics claim Fayols model is inadequate?

2 What are the benefits of having a working model of management roles?

3 Does Fayol recognise that managers have to be leaders in addition to their

management tasks? Explain your answer.

4 What flaws are there in Mintzbergs research?

5 Mintzberg claims strategy isnt planned but emerges through management

action. Do you consider this to be a useful description of a manager in acontemporary organisation? Explain your answer.

Unit 2 Internal Environment

Role of Management

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TASK 2 discussionTASK 2 discussion

Read the article below which is an extract from The Economist, 21 October 2009

last accessed 30 November 2009.

IT MAY SEEM OBVIOUS THAT MANAGERS MUST HAVE SOMEWHERE TO GOBEFORE THEY SET OUT ON A JOURNEY

The idea of management by objectives (MBO), first outlined by Peter Drucker and then

developed by George Odiorne, his student, was popular in the 1960s and 1970s. In his book

The Practice of Management, published in 1954, Drucker outlined a number of priorities for

the manager of the future. Top of the list was that he or she must manage by objectives.

John Tarrant, Druckers biographer, reported in 1976 that Drucker once said he had first

heard the term MBO used by Alfred Sloan, author of the influential My Years with General

Motors.

With the benefit of hindsight, it may seem obvious that managers must have somewhere to

go before they set out on a journey. But Drucker pointed out that managers often lose sight

of their objectives because of something he called the activity trap. They get so involved in

their current activities that they forget their original purpose. In some cases it may be that

they become engrossed in this activity as a means of avoiding the uncomfortable truth about

their organisations condition.

MBO received a boost when it was declared to be an integral part of The HP Way, the

widely acclaimed management style of Hewlett-Packard, a computer company. At every level

within Hewlett-Packard, managers had to develop objectives and integrate them with thoseof other managers and of the company as a whole. This was done by producing written plans

showing what people needed to achieve if they were to reach those objectives. The plans

were then shared with others in the corporation and coordinated.

Bill Packard, one of the two founders of Hewlett-Packard, said of MBO:

No operating policy has contributed more to Hewlett-Packards success MBO is the

antithesis of management by control. The latter refers to a tightly controlled system of

management of the military type Management by objectives, on the other hand, refers to a

system in which overall objectives are clearly stated and agreed upon, and which gives peoplethe flexibility to work toward those goals in ways they determine best for their own areas of

responsibility.

MBO urged that the planning process, traditionally done by a handful of high-level managers,

should be delegated to all members of the organisation. The plan, when it finally emerged,

would then have the commitment of all of them. As the plan is implemented, MBO demands

that the organisation monitor a range of performance measures, designed to help it stay on

the right path towards its objectives. The plan must be modified when this monitoring

suggests that it is no longer leading to the desired objective.


Role of Management

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One critic claimed that MBO encouraged organisations to tamper with their plans all the

time, as and when they seemed no longer to be heading towards their latest objective. Many

firms came to prefer the vague overall objectives of a mission statement to the firm, rigid

ones demanded by MBO.

After a while, Drucker himself downplayed the significance of MBO. He said:

MBO is just another tool. It is not the great cure for management inefficiency

Management by objectives works if you know the objectives: 90% of the time you dont.

Management by objectives is now largely ignored. Its once widely used abbreviation, MBO,

has been taken over by management buy-out, the purchasing of a company by a group of its

managers with the aim of making as much money for themselves as possible.

1 Why was MBO first considered as beneficial to Hewlett Packard?

2 Why did so many managers and organisations find MBO difficult to implement?

3 Why has MBO been disregarded as a management theory/


Role of Management

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1 What possible benefits may MBO bring Magnox Computers?

2 What problems might occur if MBO was introduced?

3 To what extent should organisations focus on the future rather than the

present?


Discuss the extent the roles and qualities of a manager may differ from those

required of an entrepreneur.


Role of Management

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George McGarry works as a sales representative for Magnox Computers, a

local computer specialist which sells computer networks to companies in

Oxford. George has been working there for nearly a year now although heenjoys his work he finds that he is not always clear what he has to do.

Obviously his job is to sell computer systems but which areas should he be

focussed on existing customers of finding new business? Although his boss

seems very pleased with him, George is not entirely certain what he is doing!

Take last week, for example. George did very few deals, but did manage to

make a few new contacts. His boss was delighted and said that was good for

long term growth. Only a few months ago, however, George had been

criticised for spending too much time on the future and not enough time on his

weekly sales total. In his 6 month appraisal he had been given a 20% bonusbut he had no idea how this had been calculated. When questioned his boss

said; there is no point in us sitting down and agreeing long-term targets

because theyll only change week to week.

Adapted from Business Studies, Marcouse et al 2005


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TASK 1 articleTASK 1 article

Read the Priestly article in the pupil library and consider:Read the Priestly article in the pupil library and consider:

11 The merits of Scientific Management as outlined by the author.The merits of Scientific Management as outlined by the author.

22 The differences between Scientific Management today and in its early yearsThe differences between Scientific Management today and in its early years

of implementation.of implementation.


Management Theory

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TASK 2 case studyTASK 2 case study

CASE STUDY

Tania was delighted to get the night shift job at the local bakery and looked forward

to her first shift. It would be tiring after a day at college, but 48 for 8 hours on aFriday would guarantee good Saturday nights in future.

On arrival, she was surprised to be put straight to work, with no more than a mumbled

youll be working packing machine B. Fortunately, she was able to watch the previous

shiftworker before clocking off time, and could get the hang of what was clearly a

very simple task. As the 18.00 bell rang, the workers streamed out, but not many had

yet turned up from Tanias shift. The conveyor belt started to roll again at 18.16.

As the evening wore on, machinery breakdowns provided the only welcome relief fromthe tedium and discomfort of Tanias job. Each time a breakdown occurred, the

ringing alarm bell was drowned out by a huge cheer from the staff. A few joyful

moments followed, with dough fights breaking out. Tania started to feel quite old as

she looked at some of her workmates.

At the 22.00 mealbreak, Tania was made to feel welcome. She enjoyed hearing the

sharp, funny comments made about the shift managers. One was dubbed Norman

because he was fat, wore a white coat and never agreed to anything. Another was

called Turkey because he strutted around, but if anything went wrong, went into a

flap. It was clear that both saw themselves as the bosses. They were not there to

help or to encourage, only to blame.

Was the bakery always like this Tania wondered? Or was it simply that these two

managers were poor?

1 Analyse the working lives of the shift workers at bakery, using Herzbergs

two factor theory.

2 If a managerial follower of Taylors methods came into the factory, how

might he or she try to improve the productivity level?

3 Later on, after Tania had left the factory, she read in the local paper that

the factory was closing down because of poor productivity levels. The

article also grumbled about the poor attitudes of the local workers who hadworked there. Consider the extent to which there is some justification in


Management Theory

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this view.

TASK 3TASK 3 short answer questions short answer questions

1 Which features of a McDonalds could be described as following the Taylor

Scientific Theory.

2 Explain how Taylor made use of Time and Motion Study.

3 Identify the main consequences of Taylors work.

4 Explain the meaning of the term the Hawthorne Effect.

5 Explain two effects upon firms of Mayos work on Human Relations.

TASK 4 extended responseTASK 4 extended response

Discuss the extent to which each of the classical school of management and the

human relations school of management may have influenced management behaviour in

firms such as Stagecoach. (12)


Read the summary of McGregors Theory X and Y in the pupil library.Read the summary of McGregors Theory X and Y in the pupil library.

11 Describe a manager who follows Theory X and Theory Y.Describe a manager who follows Theory X and Theory Y.

22 If you have a Theory X manager how does the author suggest how you shouldIf you have a Theory X manager how does the author suggest how you should

deal with them?deal with them?


Management Theory

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The Toyota Story

The genesis or source of the Toyota production philosophy is Japanese culture and historicmanagement/labour/supplier relationships that have evolved from it. This philosophy has

developed over a long period of time and is based on a number of important beliefs:

Management, labour and suppliers all share responsibility for sustained improvement in

Toyotas production plants. With positive results, all stakeholders benefit.

A workforce with good morale and job satisfaction is more likely to produce quality

products at competitive prices. Toyota has effectively institutionalised many successful

working practices including:

Cross skilled training for flexible production

On the job training and job rotation for all assembly line workers

Participation of all employees in programmes specifically designed to focus on the

dynamics of team work development

The establishment of the basic principle that all workers should think of themselves in

certain respects as managers, especially with respect to their immediate working

environment, rather than viewing themselves primarily as mechanical machine

operators.

The maximum number of tasks and responsibilities should be transferred to those

employees who actually add value to the car on the line.

A system needs to be developed that traces defects to their ultimate cause and

resolves these problems at source. Toyota believes that employee morale starts with

a safe workplace. Their managers back up their slogans and meetings with a Safety

First War Room designed to respond proactively to all safety issues.

They show each employee how each job on the assembly line relates to other jobs in the team

module, and how each module is related to the assembly line as a whole.

They believe that the only way to make improvement a continuous process is to establish a

creative thinking group of employees/suppliers who are constantly seeking new ideas form

which to make improvements, so every employee/supplier is expected to work with their head

as well as their hands. They assign responsibility for operational results to a work team with

a strong team leader. The team engages in collective work that requires joint efforts and

generates positive energy.


Motivational Theory

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The result is a highly motivated workforce achieving high levels of productivity.

Adapted from Vaghefi, Woods and Huellmantel (2000), Toyota Story 2: Still Winning the

Productivity Game, Business Strategy and Review, Vol 11, Issue 1 pp 59-70

1 Identify which motivational practices Toyota have utilised effectively.

2 Explain the implications and consequences of a motivated workforce.


Motivational Theory

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Read the following article and answer the questions that follow.

Driven to distraction

Jan 14th 2010

From The Economistprint edition

Two and a half cheers for sticks and carrots

Illustration by Brett Ryder

This is bonus season in the financial world. That means, of course, that it is bonus-bashing season

everywhere else. The righteously outraged have no shortage of arguments on their side, from themind-boggling size of the bonuses to the fact that the banks were recently rescued with public money.

But if they want to mix a bit of theory with their spleen they now have a book to help them: Daniel

Pinks Drive: The Surprising Truth About What Motivates Us. It seems that bankers are not just

slaves to greed. They are also slaves to a discredited management theory: the idea that the best way

to motivate people is to use performance-related rewards.

Mr Pinks argument is hardly new. Eminent management theorists have been dismissing payment-by-

results as simplistic and mechanical ever since Frederick Taylor tried to turn it into the cornerstone

of scientific management in the early 20th century. But Mr Pinks book is nevertheless well-timed. The

widespread fury about bonuses is sparking a wider debate about the way bankers and other lavishly

remunerated people are paid. Drive is a decent summary of the anti-Taylorist school of thinking. And

Mr Pink, once Al Gores chief speechwriter and now a prolific management writer, is a highly motivated

self-publicist.

Mr Pink argues that the rich world is in the middle of a management revolution, from motivation

2.0 to motivation 3.0 (1.0 in this schema was prehistoric times, when people were motivated mainly

by the fear of being eaten by wild animals). In the age of routine production it made sense for

organisations to rely on sticks and carrots or extrinsic motivators, as he calls them. But today, with

routine jobs being outsourced or automated, it makes more sense to rely on intrinsic rewards, or the

pleasure we gain from doing a job well. Look at the success of collaborative marvels such as Wikipedia,

Firefox or Linux, which were created by volunteers. Or look at the rise of social entrepreneurs or themovement to promote low-profit limited-liability firms.

Mr Pink argues that carrots and sticks are not only outdated, but can also be counterproductive

motivation killers and creativity dampeners. Paying people to give blood actually reduces the number

who are willing to do so. Providing managers with financial rewards can encourage them to game the

system or, even worse, to engage in reckless behaviour.

So how should firms motivate people? Mr Pink argues that the answer is to give them more control

over their own lives and thus allow them to draw on their deep inner wells of diligence and drive.

Software companies such as Atlassian andof courseGoogle are giving workers time to pursue their

own projects. Even low-tech firms such as Whole Foods and Best Buy are giving people more controlover how and with whom they work.


Motivational Theory

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How convincing is all this? Mr Pink insists that all he is doing is bringing the light of science to bear on

management: Theres been a mismatch between what science knows and what business does. But this

argument depends on a highly selective reading of the academic literature. Four reviews of research on

the subject from the 1980s onwards have all come to the same conclusion: that pay-for-performance

can increase productivity dramatically. A study of an American glass-installation company, for example,

found that shifting from salaries to individual incentives increased productivity by 44%. More recent

research on workers at a Chinese electronics factory also confirms that performance-related pay(especially the threat of losing income) is an excellent motivator (see article).

Linking pay to performance does not just increase motivation. It also helps to recruit and retain the

most talented. The worlds brightest students are overwhelmingly attracted to organisations that

make extensive use of performance-related rewards such as partnerships and share options. Firms are

adept at using these rewards to encourage long-term loyalty: people work in the salt mines for years in

the hope of becoming partners or senior managers. Companies that eschew extrinsic rewards risk

lumbering themselves with sluggish dullards.

Self-determined to do better

What about Mr Pinks other worries, about creativity and self-determination? It is certainly true

that creative people value the intrinsic things in life. But an enthusiasm for intrinsic rewards can go

hand in hand with a taste for extrinsic gain. American universities attract star professors from all

around the world by the simple expedient of paying them lots of money. Successful writers employ

agents to get the highest possible advances (Mr Pink himself probably hopes to make some money from

his book). Creative centres such as Hollywood and Silicon Valley are also hotbeds of payment-by-

results. It is true that some of the worlds best companies are putting more emphasis on purpose. But

it is quite possible to mix this with pay-for-performance; indeed, companies that Mr Pink lauds, such as

Google and Whole Foods, are highly skilled at using sticks and carrots.

All this suggests that Mr Pink has it backwards: far from abandoning sticks and carrots organisationsare making ever more use of them. Companies are keener than ever on holding bosses feet to the fire

by linking their pay to performance through stock options and the like and on firing them if they fail.

But they are also trying to widen pay differentials further down the organisation: about 90% of

American firms use merit pay, for example.

There is no doubt that sticks and carrots can be badly used. They can encourage risky behaviour, as

they have in the banking system, or persuade policemen to focus on minor traffic infractions rather

than violent criminals, as they have in Britain. But properly managed they can be immensely powerful

tools for boosting productivity and attracting the right people. For all the battering he has taken over

the past hundred years, Frederick Taylor still has the edge over his critics.


Motivational Theory

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http://www.economist.com/businessfinance/displaystory.cfm?story_id=15271260http://www.economist.com/businessfinance/displaystory.cfm?story_id=15271260


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Research into individual performance-related pay (IPRP) in the UK over the past decade has

failed to show that such systems have an effect on performance.

The whole idea of linking pay to performance is based on two questionable assumptions. First,

it perpetuates the illusion that companies are rational, top down, directed organisations and

that managers have the foresight to know what to do in the forthcoming year. This is the

myth of the all-seeing boss. In reality, change is quicker and messier than that. Second, and

even more worrying, is the belief that people need incentives to get them to behave in an

acceptable way. Employees cannot be trusted, it seems. Economists have a lot to answer for

with their assumptions that people will be lazy and self seeking with guile unless there is a

reward carrot (or the stick of unemployment) available. This is the foundation for most

economic theories of reward. They never change, despite all the evidence that employees

place much more value on non-financial satisfaction and the rewards of a job well done.

In recent years, emphasis has been placed on the bundle of HR policies that help to driveorganisational performance. These typically include job enlargement, greater employee

discretion, involvement, relative autonomy and training and development. Combined, these

things are linked to improved performance.

The real problem is that managers continue to introduce pay systems as a single-issue

initiative, expecting the new pay system to alter behaviour and bring about cultural change.

It doesnt, unless supportive behaviour is already in place. By themselves, pay systems do not

change organisational culture.

Towers Perrins latest study (1999) of reward management in 460 organisations across theEU found that 94% had made significant changes in the past 3 years, and 96% planned

further interventions. They are using rewards to reinforce the achievement of business

goals and aligning pay systems with the needs of their changing organisations. This means a

less hierarchical and more customer-orientated approach. New ideas are being tried be it

sharing all your takings in a day with employees, as Ikea did recently, or introducing broad-

based share options for employees as Asda has done. Companies are looking for competitive

advantage through their people. As well as considering business strategy, organisational

capabilities and long-term goals and when we plan and execute our strategic reward

interventions, we need to place at least as much weight on employees needs and values and

the realities of organisational life in the short term. All levels of staff and managementshould be involved in this process. Thats the route to trust, motivation and commitment to

reward. Once changes are made, focus on their operating effectiveness and continue to

monitor and improve them against their original goals. Think about how the buy-in and

genuine sense of involvement of all employees can be obtained.

Adapted from Purcell, J (3 February 2000), Pay per view, People Management

Financial incentives do not allow motivation to flourish.


Motivational Theory

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Using the Economist and Purcell article above discuss this statement providing

arguments for and against the use of financial incentives as a motivational tool.


The table below shows the results of Herzbergs research into the factors whichcause positive job satisfaction and those which cause job dissatisfaction. The

length of the bars shows the percentage of responses and their width shows how

likely their effect was to be long term.

1 Which of the factors has the least effect on satisfaction ordissatisfaction?

2 One of Herzbergs objectives was to question whether good human

relations were as important in job satisfaction as claimed by Mayo. Do

you think he succeeded?

3 Responsibility had the longest lasting effect on job satisfaction. Why

may this be the case?

4 Discuss which of the factors is the most important motivator.


Motivational Theory

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Consider the following scenarios which aspects of leadership theory areConsider the following scenarios which aspects of leadership theory are

exemplified?exemplified?

1 Your organisation has recently undergone another major turnaround in terms of new

job methods being implemented. (This is the third such change in less than two years.)

Senior management have required that job specifications and procedures be rigidly

adhered to. Most of your team have been with the company for over five years and

know their jobs well. Youve recently heard a lot of grumbling and questions about why

the changes are needed. One of your best people even said they were thinking of

leaving due to the crisis of top management not being able to get their act together.

2 Youre the night supervisor of a fast food restaurant. Most of your staff are part-

time, young and/or inexperienced. Job procedures are clearly spelled out. Theobjectives are high quality, fast food service with a friendly smile.

3 Recently your customer service group has been hit with an overwhelming workload due

to unanticipated problems over how to use and service a new piece of equipment thats

selling like hot cakes. Many unaddressed problems now exist in terms of information

needs, training users and documentation. Your entire team is made up of relatively

technically orientated people. Youre all under high levels of pressure to perform

working overtime and even weekends.

4 Youve recently been named project manager of a team to come up with new ideas for

marketing your present product line as well as to identify feasible new uses,

applications and innovations. Your team is mostly composed of exceptionally talented

people in their respective technical areas. Your expertise lies mostly in marketing.

Your job is to produce a report including a set of plans and priorities for projects that

might build your companys future.


Leadership

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Read the summary of Hersey and Blanchards situational leadership theory.

1 Why is this theory described as using a contingency approach to

leadership?

2 Explain 2 of the 4 leadership styles in depth.

3 Explain reasons for this theory being criticised?


Staffs objections to a manager

John is a young management accountant who, after completing his institutes

examinations, was put in charge of a small but well established accounts

department.

At his first progress review with his line manager, he was very confident and

enthusiastic about numerous initiatives he had already taken or was planning to

take. John expressed disappointment that his staff were so reactionary and unco-operative.

Enquiries made by Johns manager of the staff in the accounts department had

uncovered general dissatisfaction with Johns leadership. The younger ones were

frightened of him and felt he had no interest in them. They felt he was always in a

hurry, and they had no idea of whether their work was up to his requirements or

not.

The older ones, who had worked in the department for a number of years, were

very worried about his apparently arbitrary and risky decisions. Others were

resentful and frustrated that John never bothered to listen to their ideas. John

was informed of these comments.

You are required to recommend the leadership behaviour that John should adopt

to improve this situation.


Leadership

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TASK 4TASK 4 case study case study

Access thetimes100.co.uk and read the case study on Enterprise-Rent-A-Car.

Explain why this organisation uses a range of leadership styles to improve the

overall performance of the organisation.


Leadership

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1 Teamwork must be embedded in the culture of an organisation. Explain the

meaning of the term culture and explain why it is hard to change the culture

of a business?

2 What kind of workplace culture would a Theory X manager like to establish?

3 Identify 3 advantages to an employee and employer of team working.


Teamwork

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TEAMING WITH TALENT

Even if you are happy to accept that the group is always better than individuals

working in isolation, how do you set about constructing a team when your businessis that of designing and selling computer software? Of if you are reviving a failing

school. Belbin began a decade of research at the Henley Management Centre into

team dynamics and discovered that there is a formula that works across business

disciplines.

We would get a group of people together and ask them to self-select what they

considered to be the best team. They would invariably choose the best set of

individuals. We would then select the remnants according to the Belbin formula.

We would set them some tasks, and the Belbin-formula team would always win.

Wipe the floor with the others.

The idea behind the Belbin method is to build jobs around people. Define a job

only by its core requirements, eg artist needs to be able to draw, then using the

minimum specifications, look at the person. For every business team to function it

will need the natural leader, the born organiser, the scatty creative. Or to use the

jargon, the coordinator, the shaper and the innovator. Even the sad anorak in

the corner of the office, the one incapable of seeing the wood from the trees, can

play a vital role in a Belbin team. They are the finishers, the ones who make sure

the task is seen through and completed, mainly by dint of worrying themselves sick

about it.

The winning team is out there, sitting opposite you or just around the corner. The

nag, the prat, the office bully each could play a part in turning your company into

a winning outfit. All you have to do is identify them.

Adapted from White, J (1999), Teaming with Talent Management Today


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Until recently the plant at Super Cement Ltd was operated using an old-fashioned

relationship between managers and employees. Basically, the managers made the

decisions that they then passed on to employees in a tightly written rulebook andlists of instructions. This had worked well for a number of years as employees were

used to doing what they were told because their work was highly routine.

However, over the years the cement industry has

changed and become a lot more competitive. As a

result Super Cement has replaced much of its existing

plant with new automated machines requiring a smaller

workforce. The equipment is more reliant on computer

control and other types of automation. This means that a lot more responsibilityneeds to be given to ground-level employees. In addition it is essential for employees

to work in teams who pool skills and knowledge. These teams need to be tightly

bonded to ensure maximum success.

1 Why would the old top-down approach of management no longer be

appropriate?

2 What team working skills do you think the new type of employee at

Super Cement needs to learn?

3 How should Super Cement go about making sure that its employees

develop these new skills?

4 Describe and justify an appropriate communication system for the team.


Teamwork

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TASK 3 TASK 3 case studycase study

Thank God Its Friday

The British company Whitbread have established a small, up-market chain ofrestaurants called Thank God Its Friday, which is abbreviated to Fridays or

TGIF. The marketing is directed towards the relatively young and affluent. Part of

this strategy has been to avoid the traditional hierarchy of the good-food

restaurant Maitre dHotel, Chef de Rang, Commis Waiter and so forth and

empower the person with whom the customer deals directly: the Waiter. This

person can take decisions on such things as complimentary drinks without

reference to anyone else. There is no manager, but each restaurant has a team

leader known as the Coach.

At the beginning of a shift the Coach will call team members together for a team

meeting, when information can be passed on about the days special offers, team

targets or objectives, selling strategies and when any problems can be highlighted.

Individual team members can be innovative in using their own strengths and

personal style to help achieve quality, service and sales objectives.

1 How would you describe the type of team operating at TGIF restaurant?

2 Why would you consider this type of team-working to be appropriate in a

restaurant?

3 What benefits will there be to the staff of TGIF from team-working?

4 What skills are the waiters in TGIF likely to need in order to operate

effectively as team members?

5 What are the communication benefits of team-working in TGIF?


Teamwork

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Read the following case study consider the drivers and resistors of change.

RCL Leisure

Richard Corsie was a successful bowler who won a Commonwealth Games gold medal

representing Scotland and was world champion three times. The company began by

acquiring a bowls club in Abbeyhill, Edinburgh, of which Corsie was a member. Total

membership was 1250 and the club had a bar which could seat 10 people. He wanted

better facilities and he knew from listening to members that most shared his view.

Expansion on the existing site proved impossible and the company looked for a new site,

even though this would increase the length of time before improvements could be made.

To cater for the existing membership, it had to be on the east side of Edinburgh. Thecompany originally set a budge of 2 million.

It took the company two years to find a suitable site. However, early in 2001, the

company opened a new eight-rink indoor bowling arena in east Edinburgh near to the large

Fort Kinnaird shopping centre. It cost 3.75 million but also has corporate function suites

and a restaurant complex, the Inn Over The Green. Some old members were unhappy at

the move but most have a sense of belonging and a loyalty to the new club. Richard Corsie

believes that this will keep the churn rate low. This is the phrase used to describe the

turnover of members. In some other leisure centres, like health and gym clubs, it is very

high.

Richard believes he was able to take advantage of the fact that the expectations of the

bowling public are rising and they want better facilities. Bowling, though, has an outdated

image and, as a result, is ignored by mainstream leisure operators.

Adapted from G Ogilvy, Strong bias in leisure market, Scotland on Sunday, 16 December 2001.

Identify the driving forces and the restraining forces which RCL faced when deciding on

the change to build the new leisure centre. Imagine this is the time immediately after theoriginal bowling club had been bought. Illustrate the forces on a force field diagram.

Include the assets for change on your diagram.


Management of Change

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TASK 2 quick quizTASK 2 quick quiz

Quick true of false this is a common sense topic.

1. All businesses operate within a constantly changing environment.

2. Technological changes only affect organisations that produce high-tech goods.

3. Lewin analysed change by differentiating between driving forces for change and

restraining forces against change.

4. Drivers and resistors will remain static for long periods.

5. The introduction of call centres as a link between consumers and organisations haschanged investment strategies within organisations.

6. Examples of driving forces for change are strength of culture; contractual

agreements; global markets and increased competition.

7. Assets for change are things that can help the organisation achieve change but are not

driving forces for change.

8. Individuals embarking on a change (such as leaving school) can experience restraining

forces for change (such as fear of the unknown).

9. The National Health Service is subject to changing social factors, economic factors,

technological factors, environmental issues and changes of government.

10. Madonna has used her assets for change such as her ambition, ownership of her own

record label, openness to new musical influences and her youth-appeal to maintain her

popularity.



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TASK 3 personal reflectionTASK 3 personal reflection

TASK 4 researchTASK 4 research

Use www.thetimes100.co.uk to read the Aegon case study. Create notes thatsummarise:

Why change was necessary for this organisation?

How a new culture was created?

How change was implemented was it an effective process?



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How do you react to change? In order for you to lead change effectively, it is

necessary to understand your own feelings and reactions to change. List your

reactions, thoughts, feelings, values, abilities and beliefs about change. Focus ona specific change if that helps. How might this influence you in leading others

through a period of change?


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It was Friday 15 June at 1600 hrs. An urgent inter-office memo from Paul

Johnson, Chief Executive of Vision Corporation, had just been issued to all

employee mailboxes. All departments had been briefed by their respectivemanagers to expect a memo. Employees had been given none of the particulars

about it, but rumours were already flying as they anxiously awaited its arrival.

Molly Brown, one of Visions managers, who had no more information than anyone

else in the organisation, was one of the first to read the memo. It read as follows:

TO: All Personnel

FROM: Paul Johnson, Chief Executive

DATE: 15 June

SUBJECT: Company Status Update

As you may or, may not, know, Vision Corporation has been experiencing financial

difficulties. In order to address these difficulties, Vision will be merging with our

main competitor, Bywright. This plan will be effective from 1 July of this year.While it may call for some changes from us, I believe that this move represents a

wonderful growth opportunity for the company as a whole. I look forward to your

ongoing co-operation and support.

1 How do you think Molly and the other managers might react to this memo?

2 How do you think the general employee population will react to this memo?

3 How would you react to this memo if you were a member of the management

team?

4 What problems do you see in the Chief Executives approach?

5 If you were the Chief Executive what would you have done differently?



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Defence Aviation Repair Agency (DARA)

Dara repairs aerospace equipment, e.g. fighter jets, helicopters. It was created in 1999

by a merger of existing parts of the Ministry of Defence, a government department. TheAgency remained part of the Ministry of Defence. However, it would no longer be funded

by the government and was required to survive by competing for business in the open

market. The management of the company was given two years to turn the organisation into

a commercially successful operation which could get business from both the government

(e.g. RAF planes) and the private sector.

Dara met this target on time. It also exceeded other targets, e.g. orders were 8.3

million above target; operating costs were cut by half; turn-round times fell by 30%; the

number of employees fell by 35%. These gains have meant considerable change.

The company inherited a military style culture which was hierarchical. Employees were

used to working within a framework of tight rules and regulations and liked this. They had

little appreciation of costs and were reluctant to take decisions. However, they were

committed to delivering a high quality product.

The company introduced a programme called New Ways of Working, which involved the

introduction of self-directed teamworking. This meant that employees worked in multi-

discipline and multi-skill teams and were responsible for determining their own ways of

working, order of work, etc. Previously employees worked in isolation or with one or twoothers doing the specific tasks they were allocated. The new programme also involved a

flat structure, hands-off leadership and open-door policies. The inflexible pay and grading

structure used by the Ministry of Defence was scrapped and a new system, based on

broad pay bands, was introduced.

Employees were given a pay rise in return for a commitment to accept the new culture.

However, many were fearful of the changes and felt they would not work. Dara tackled

this by a multi-directional communication strategy which included face-to-face shop

floor briefings at all four plants by the chief executive, regular newsletters, encouraging

all staff to send their views via the company intranet. There was also training by

consultants in self-directed team working and a leadership development programme for

team leaders.

Overcoming the opposition to change was not easy but it has worked. Employees are happy

with the new system. They have much more say in decisions and a greater sense of

ownership they can even control their annual leave as long as their team meets it

targets.

Adapted from Flying information, by Eila Rana, People Management, 7 November 2002



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1 Why was change necessary for Dara?

2 Why do you think employees were opposed to it?

3 What is meant by self-directed teams?

4 What type of approaches to change does this case study illustrate?

5 Communication and training were key aspects of the change programme. How do

you think each of these contributed to its success?



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CULTURE CHANGE AT BT

In 1990 British Telecom (BT) employed 250,000 people. In 1998 its 110,000

workforce achieved higher standards and the businesss performance was better.Staff cuts had been necessary to remain competitive. But staff attitude surveys in

the 1990s began to show concerns about staff morale and motivation.

In 1993 BT formed a new customer division to deal directly with customers. To be

effective the new managing director realised there had to be a consumer-focussed

and motivated workforce. So BT introduced a new way of working called for a better

life. This would involve communicating with staff, giving them a sense of hoe the

business was doing and encouraging them to stretch themselves. The new way of

working would change how staff operated and instil them with a sense of excitementand belonging. Previously the company had staff manuals for every eventuality, even

telling staff exactly what phrases to say. The new system (own, decide, do)

encouraged staff to:

Know instinctively how to contribute to the success of BT;

Take personal accountability for customers requirements;

Take decisive action on behalf of the customer;

Take considered risks on behalf of the customer.

Staff and managers had to change the way they worked. Managers were required to

take on more of a coaching role. A new management team was appointed with those

getting jobs being selected for their ability to coach rather than to supervise. Staff

were expected to be more creative, assertive and to take considered risks. One

member of staff, for example, working in a BT shop found that a phone a customer

wanted was out of stock. The assistant tracked the model to another shop and

delivered it to the customer on the way home from work. Overall the exercise has

been quite expensive, but retraining over 20,000 employees was bound to be. And to

what extent has this change in the companys culture been successful? Staffattitude surveys have shown that employees are far more willing to take important

decisions and even take risks.

Source: adapted from People Management Oct 1998



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1 What performance indicators might be used by BT to assess the

effectiveness of change?

2 Examine the possible effects of changes at BT on:

(i) employees; and (ii) the business.

3 Discuss whether the new corporate culture at BT would help the

management of change.



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Read the article by Gerard Blair and then answer the questions that follow:

1 Explain 3 consequences of poor time management.

2 To what does Blair attribute blame for such poor time management in practice?

3 How does Blair justify the use of a time log in improving efficiency?

4 How does Blair suggest managers should handle large projects?


The Depute of a large Secondary School is considering delegating responsibility for

prizegiving and S5/S6 Induction to a classroom teacher.

What would you consider to be good practice

before handing over responsibility?

when handing over responsibility?

after handing over responsibility?

TASK 3 practicalTASK 3 practical

Open the file Priorities List. You are a Sales Manager in a Livingston based

organisation the fits kitchens. It is Monday morning and you have a desk overflowing

with files and a list of tasks to do see below. Your task:

prioritise the tasks on your Priorities List justifying why you have chosen thisorder

complete an Action Plan detailing the tasks you would require to complete for

each priority


Personal Effectiveness

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Mr Gordon rang yesterday

about his order. He is really

annoyed as 2 of the cupboards

in his new fitted kitchen are

scored. The kitchen was fittedlast Tuesday this is his third

call.

Must call Karen at

Jamieson Interiorsregarding us using them

as a supplier in the

future.

Order lunch for stafftraining day on Friday

Kenny Martin is returning to

work tomorrow after being off

work with stress for the past

month.

Feedback from

contractors working on

office roof asbestos

testing has come back as

positive

One fitter is retiring at the end

of next week and one of the

office staff is going on

maternity leave. Lunch needs

to be organised.

AHBM Internal Environment Activities

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