“All change is not growth, as all movement is not forward.” Ellen Glasgow.

“All change is not growth, as all

movement is not forward.”

Ellen Glasgow.

Thought for the day:

Managing Change:Internal causes of change

HIGHER LEVEL

http://images.google.co.uk/imgres?imgurl=http://blogs.curtin.edu.au/cv/files/2009/10/temp-2.jpg&imgrefurl=http://blogs.curtin.edu.au/cv/2009/10/seeking-program-leaders/&usg=__KBk6p0a9RVLGQ7PDrtXq81XtB-E=&h=316&w=400&sz=19&hl=en&start=16&um=1&itbs=1&tbnid=vrzeywls5KaMvM:&tbnh=98&tbnw=124&prev=/images?q=leaders&um=1&hl=en&tbs=isch:1

Target Learning Objective Who? Keywords

Explain the causes of change and factors causing resistance to Change

ALL

Level 1

Examine the dynamic nature of organizations and the relative importance of driving and restraining forces.

MOST

Level 2

Evaluate different strategies for reducing the impact of change and resistance to change

SOME

Level 3 & 4

1.6 Organizational planning tools

Change Management

A business is like nature, subject to the forces of change. People have to adapt in order to survive, which is known as a change

process. Change process is the technique and process used to plan implement and

evaluate changes in a business operation to achieve a certain goal.

Change includes new product, organizational structure, new policies, new targets, mergers, acquisitions, disposals, crisis management, relocations and pay deals.

The implement change does not mean to force them because that would cause uncooperative people resisting the new rules; the key is to win support.



ALL

Level 1


MOST

Level 2


SOME

Level 3 & 4


Factors Causing Change

Six main factors that will influence change

1.Customers- people always want newer, better, higher quality products at low prices. Businesses are challenged to innovate smarter production lines, marketing methods and cost cutting methods too. Peoples desires and taste may change too businesses will have to adapt to this ever changing preferences of the customers.

For example, smartphones, particularly Android smartphones. Customers always want the latest specs, hardware and technology and also the latest operating system. Recently the Ice Cream Sandwich Android 4.0 just came out, manufacturers must update their previous models to the new operating system and offer it on their new devices in order for customers to stick with their brand, otherwise customers might buy a smartphone from another company that offers the new system with better specs, and since technology is constantly evolving, outdated technology is always rejected or abandoned.


2. Competitors – other companies will try to out better you in every aspect in order to win over your customers. To maintain market share the business will need to change its practices in order to keep up with the competition.

Taking the same smart phones concept, HTC recently bought down the Beats by Dr.Dre brand and exclusively shipping beats ear buds as the standard ear phones compared to other companies cheap 5 dollar earphones, this gives HTC an edge because people would consider HTC more often than say Nokia because they have the Beats branding earphones, logo, and specialized audio enhancing software preinstalled in their smartphones. To many people, Beats is cool, Beats is hip, and this is a way HTC is fighting their competitors, to make themselves different.

Factors Causing Change 3.Management- the business will need to be aware of market trends to

ensure that the business is still competitive. They need customer feed back to figure out what they need to improve on to meet customers expectation.

For Example Apple, when Steve Jobs was still alive he micro managed the company from head to toe. From revealing a product to the public to the lunch line in the company cafeteria, he did not miss a spot, and thats what made Apple so great and innovative, because under his "distortion fields" everyone was able to do the impossible, to achieve the impossible, and create the impossible. He has Genius bar people constantly helping everyone with their issues and always getting feedback, he even replied customer emails from time to time. Good management comes productive employees which equals to more company earnings.


4. Technological Progress – everything become embedded with technological advancement, ebay and amazon revolutionized how products are sold today online, people have to follow in order to attract customers.

Today online shopping is so easy that you don't even have to step out the door for groceries, everything can be done online. Once one company offers it, if others don't do the same, they are going to lose all their business to the other company. For example today amazon offers many online deals that are not offered anywhere else. You can order things from the phone, you can buy or download ebooks, you can download music videos and much more. Many of its current features is to fight the Apple iTunes store. Since old fashion records are well out of business the next big thing is buying content online. This was also the biggest leap for the music industries once the Apple iTunes store was revealed because it made it convenient for people to buy songs, instead of going through cd stores trying to find that one single album.

5. Government- changes in legislation like employment laws can have a great impact on a business. New laws will force businesses to change like greener cars or greener production line.

For example in Denmark they the government recently issued a "fat tax" which was whenever you bought something that contained high saturated fat you were charged with a separate tax among the original that is already paid. This law would drive customers away from buying their products due to the extra money they need to pay for their products, this can effect a business because people would eventually stop spending money on their products which might lead them to bankruptcy.


6. External Factors- changes in fashion, state of economy, will create change in a business. These outside factors are not within the businesses controls .

External factors include the state of the economy wether its in recession or not, this will effect wether or not the customer will buy things, for example during a recession not many people would buy a car because they need all the money they have. Other external factors may include the environment such as the Japan radioactive disaster, this affected the fisherman's who depended on fish for their living but because parts of the ocean is contaminated with radioactive material thus making the fish radioactive which leads to fisherman's not being able to make a living.

Businesses today will have to adapt to these factors in order to survive. Lots of restaurant or businesses fail because they do not meet up to these expectations. Customers are number one.


New owners and leaders: Causes changeLose jobs (senior leaders in a take over – don’t

need two)Better jobRetireNew leaders trigger changeWhen a existing business is successful, some

corporate strategies may continue to be used by the new leader.

When not doing well must come up with new corporate strategies.

Change in organisational size

Reasons for the growth of firmsInternal or organic growthExternal growthVertical integrationHorizontal integrationConglomerate integration

Retrenchment

Halting recruitment or offering early retirement/ voluntary redundancy.

Delayering Closing a factory, outlet or division of the

business. Making targeted cutbacks and

redundancies throughout the business.

New owners and leaders

Managing growthManagement structures & hierarchiesDelegationStaff responsibilitiesMotivation....leadership style. Restructure...bring in a management team

New owners and leaders

Management buyouts and private equity takeovers.Finance for buyoutsReasons for buyoutsRewards for buyoutsRisks for buyouts

Are buyouts a good thing?

From private to public limited companyFrom public to private limited company

When answering questions about problems with business growth, try to take an integrated approach and consider financial, marketing, operations management and human resource issues.



ALL

Level 1


MOST

Level 2


SOME

Level 3 & 4


Resistance To Change

Resistance to change is one of the major barriers to effective management. There are 4 main reasons.

1. Self-interest- takes priority over corporate objectives, may be more interested in the implications of change for themselves than benefits that change might bring for the organization, feeling change requires extra effort.

People often feel like everything is good as it is, that changing it is just going to make it worse. For example some people have to take up night shifts and some people have to take on morning shifts. When suddenly morning shifts have to do night shifts they think that it is more tiring and they are not getting paid more so they think to themselves why should they switch?


2. Misunderstandingsstaff often feel change is not necessary as things are going well, uncertainties will arise due to the anxieties of the unknown and of the future. If reason is not communicated properly then employees would be scared.

If a company is suffering through rescission the company might adjust shifts so that everyone gets a shift and everyone gets paid instead of people getting laid off. Some people might misinterpret it and think of it as getting fired, then they start feeling insecure about their jobs.


3. Different assessments of the situationwhen management and staff disagree on the advantages and disadvantages of change.

For example when the board of Apple thought that the Macintosh was a fair program and that it should be discontinued, the staff meaning save jobs didn't think so and continued to praise it either way.


4. Low tolerance of changePeople prefer to work in a familiar environment, employees feel insecure when people are put out of their normal environment, or what they were used to. People may feel fear to adapt to change, or not being able to work in a newer environment.

Using a similar example from before, Steve jobs did not like change at least change that involved him, he was put to only manage the Macintosh team instead of the Lisa and Macintosh team altogether he did not feel happy about it and he felt like he wasn't valued at the company.


Ambivalence could also happen throughout which is where people are afraid to raise their voices against certain management changes, people may conform to the majority in group situations due to the fact if they resist they would be overlooked for promotional opportunities.nce was typically anyone that worked under steve jobs, under his 'distortion fields" anything seemed possible and anything less than perfect was intolerable. Steve Jobs wanted change but no one dared to go against him in anyway.

This is a pie chart of the different resistance to changes. It shows which part takes more of a percentage and which happens more than others.

http://www.youtube.com/watch?feature=player_embedded&v=hcz1aZ60k7w



ALL

Level 1


MOST

Level 2


SOME

Level 3 & 4


Six Change Approaches

Six ways to deal with resistance to change.

1. Education and CommunicationTo inform and educate staff about the change beforehand, early approaches and communication helps stakeholders see the rationale for change, which also reduces unsupported and incorrect rumors.

Teaching people things before taking an exam is always better than walking in blind on an exam. Same with business, if peoples working style or habits needs change, employees should be noted instead of being automatically put up to change.


2. Participation and Involvement.When employees are involved in decision-making, it can help and motivate / improve morale amongst the workforce. But this is a time consuming effort where it involves lots of consultations so that the work force can accept this change.

Having employees involved in change always eases the process because they have a say in what should be changed. This will help them ease into the change process because they would be changing to something that they want, thus motivating them to adapt.


3. Facilitation and SupportA paternalistic approach, allowing employees the freedom to act but giving them support when needed. Managerial support is also given which comes in many forms such as counseling employees to deal with their fears, retraining of staff to enable them to accommodate the new changes.

This way of approach eases the change process for employees, for example old fashioned companies going from all paper to all computer, this process is hard but with facilitation and support this gives employees a better understanding on how to use these computers and helping them get their work done.


4. Negotiations and AgreementThis is a more aggressive way of approach where managers sole incentive is to remove or limit any resistance to change. For example by inviting employees to accept amendments in their contract to accommodate the change, or force resisting employees to early retirement or redundancy incentives to leave the organization

For example, when the contracts are about to expire employees need to sign a new one, when they need to sign a new contract the terms would change making it so that the employees have to put up with the change that the company has enforced.


5. Manipulations and Co-OptionInvolves brining the people resistance to into the change process. To give them a representation but to convert the representatives thinking so that the advantages of change can be put into works. This helps the people realize what the management is really trying to do and often times their opinions wont be affected by a single person.

For example if employee A does not want their working hours to be extended, because all the other methods did not work they bring him into the change process. They show him what management is really trying to do, thus converting employee A's thinking thus leading him to comply with the changes.


6. Explicit and Implicit CoercionThis is a last resort strategy if employees resist against change. Coercion ( fancy name for bullying) can be used by managers to force staff to accept change. Examples include transfer of employees, dismissals or not promoting them.

For example if employee A does not want to follow the change process and decides to act differently, if an opening for a promotion has opened up, the original plan would have been to promote employee A but because of his uncooperative manner to change the opportunity might be passed on to employee B. But this is a last resort option, usually it does not resolve to this.



ALL

Level 1


MOST

Level 2


SOME

Level 3 & 4


Planning Change

“All change is not growth, as all movement is not forward.” Ellen Glasgow.

Change should only be persued if there is a clear set of goals. There are two types of forces of change. A Driving force, pushing for change, and restraining forces, act against a change.

Before organizing change...

A manager must ask him or herself- Why is change needed?- What do we hope ot achieve with such change?- Who is affected by this change na d how are they likely to react to the change?- How will we know that the change has been successfully achieved?

PLAY

Planning Change

All these alter because business constantly faces change.One way to help is something called a Force Field Analysis, frame work to help managers understand the pros and cons for a particular situation. With knowledge of the forces managers can decide on a course of action.

For example a driving force might be reduced staff costs, to increase competitiveness, increased output of sales. Where as restraining forces may be equipment costs for new production lines, the cost of training staff to use these machinery, and technical break downs. Driving forces are reasons why a company wants to have change, and restraining forces are what might fail and the problems that the company may stumble upon implementing the change.

Lewin’s Force Field Analysis

Founded in 1951 by Kurt Lewin. He said that a successful business tends to be constantly adapting and changing and that businesses that do not succeed are fixed in outdated practices and are unable to see any way forward.

4 stages for a force field analysis

1.List encouraging forces for change and burdening forces against change. (For example if i wanted to increase my profits that would be under my driving forces, and restraining forces might include cheaper labor or materials used. )

2.Implement a weight for each of these forces from 1 to 5 (weak to strong) ( For example, changing the employee cafeteria food would be listed as 1 which is weak, and maximizing sales would be rated a 5 because it is top priority.)

3.Draw a diagram for the opposing forces ( like picture below)

4.Show the effect of each forces by rating it.

play



ALL

Level 1


MOST

Level 2


SOME

Level 3 & 4


Change Management Models and Frameworks

4 steps to change management model

1.Identify the proposed change and why this change needs to take place.

2.Brainstorm the driving forces and the restraining forces of the change

3.Develop and communicate an understanding of these uses and stakeholders

4.Take action to take advantage of the driving forces to overcome the restraining forces.

Important to have action plans, which is step four based on steps two and three.It is also very important to keep the stakeholders in mind while making changes or adjustments, good management will lead to good results.

Change Management Models and Frameworks Communication, education, clear goals, rationale, compromise,

consultation, training and incentives are the main ways to get employees to accept change.

1.For example i want the company to increase its sales by 20% because oursales are down and if it does not incase we might go under. 2. Driving forces includes more profit, increased competitiveness, increased output, restraining forces include equipment cost, staff training costs, technical difficulties etc.

Iceberg Model

Founded by Wilfried Kruger, argues that there are two levels of change but managers only focus on the tip of the iceberg.

Top level- Cost, Quality and Time

Bottom level – People: Attitudes, beliefs, perceptions, acceptance, and behavior of stakeholders (positive or negative).

In order to have change you need the commitment of the workforce teamwork is key. Managers who fail to look at the bottom of the iceberg find themselves having a hard to implement change successfully. There are four key groups that can ease or hinder the change process.

Iceberg Model

Opponents –have negative attitude towards change, as they do not generally see any personal benefit from it.

Promoters – have positive attitude towards change, therefore more people would think its beneficial.

Hidden Opponents – negative attitude towards change but accepts change in a way, to avoid conflict or getting in trouble, but they do not express their discontent in public.

Potential Promoters – positive attitude towards change, but not fully convinced by the whole concept of why they need to change.

Incentives or “bullying” should be used towards opponents and consultation with the hidden opponents. Managers all have a difficult time dealing with change.

Change Phases model

Founded by J.P Kotter in 1990, suggests that there are eight reasons why change management might fail.

- Allow too much complexity- Fail to win support form staff- Do not have clear vision- Fail to communicate a vision to stake holders- Allow obstructions to the vision- Do not focus on small continuous changes to win support- Declare success too soon- Ignore corporate culture when implementing change

Change management involves thoughtful planning and insightful implementation. A realistic time fram should be given and make sure no one is alienated. There should be a consultation process as the employees are affected by the changes.

Change Matters

CHANGE MATTERS! All successful managers must be able to react quickly to changes in the external environment. Change is rapid and unpredictable in todays market , it is a growing skill that is vital for a manager to possess. Change can push the limits of a companies current state of mind. These are certain qualities or skills a manager needs.

- A vision to see how a change will benefit the orgnaizaiton, providing clear statements to the staff.- Good communicating skills- Trust building so that the staff trusts you in your judgement.- Tolerance, a way of managing where everyone can cope effectively with change.- Change cannot happen through just one person, get staff spirits off , actively involved in the change process.- Listening and inquiry skills, to listen to complaints and to act accordingly.- Good budgetary and financial skills.Always believe in the companies vision when making changes , the vision will ultimately benefit the company. Persistence and perseverance are important characteristics of effective managers. “Gentle words open up iron gates “ reflects the importance to involve the staff, but always keep in mind that no one likes to be forced to do something, especially when it comes to change.

Storey’s Change Model

Four approaches to managing founded by Professor John Storey in 1987.

Total Imposed package –Where the management team makes decisions and then informs the employees on certain changes. It is solely based on the vision of the management, but there are limitations of this approach which is the culture in which if the employee likes to be directed that way, other wise it would be very hard to implement changes.Imposed piecemeal initiative – the gradual approach not extreme, but still imposed on the employees. This approach benefits employees to adapt to the change. These kind of initiative is an imposed method but in small dosages.Negotiated total packages – Opposite of number one, it aims to seek a package of change via negotiations with staff. Advantages include that the employees are more likely to push for change. But this approach only works to a certain degree of change, not suitable if management does not have a clear vision.Negotiated piecemeal packages – This method is a gradual implementation of change through a series of negotiations with the workforce.

Stakeholder Analysis

Stakeholder analysis and stake holder mapping are similar concepts, they both help managers figure out how to deal with change. This diagram helps managers look at the stakeholders level of influence and their reaction to change.

Stakeholders who have a high degree of influence and are committed should be approached in a different manner compared to someone who has a low level of influence and is not dedicated.

The bottom line is that whichever model a manager uses, the future performance of the organization is judged based on how these changes were implemented or the affect of the changes.

For example the local community would be something put under manage closely, and customers would be on high priority because they are the companies major source of income.

Change Management and Business Strategy Change management is a business strategy that is vital in todays business

environment. However when managers seek change to keep up with their competitors or to improve their business they often face resistance from the staff. There are multiple ways to overcome resistance (which was covered above). The key is to find the root of the problem so that the managers can handle the forces against change.

Change is compound, meaning more than one in order for the original change to work. Meaning you cannot change just one thing to make everything work. Planned changes will always be easier than unplanned changes. The most difficult type of change is a crisis, which tests the managers on how they can react and how they can handle the situation to retain any competitive advantage.

Change management must be studied, to increase their focus on quality products and services. Another way of change management is to implement market research to establish consumer habits or changes and to create a strategy to deal with this change.

Change is inevitable, business lives in an unstable environment, meaning managers need to adapt in order to keep up to date and remain competitive.

Activity....

Discus the likely impact on stakeholder groups if Asda integrated, by takeover, with Morrison’s supermarket

(40 marks)

‘The ability of management to adapt to internal change is the key to a firm’s long-term success’. To what extent do you agree with this view?

(40 marks)

How would you approach a 40mark question?

Managing Change:Causes of change

Corporate Plan

‘ a methodical plan containing details of the organisation's central objectives and

how it intends to achieve them’.

Corporate Plan

What do Corporate Plans contain?A typical Plan:The overall objectives of the organisation: e.g Profit

target/ Sales growth/market shareThe strategy or strategies to be used to meet these

objectives. E.g increase sales of existing products – market penetration

The main objectives for the key departments of the business derived from the overall objective.

The value of Corporate Plans

The plan is not just for senior management, it is essential to share the contents of such a documents with:

Potential investorsMajor lendersOther stakeholders (government grants)All staff – in the form of specific and tangible

objectives for all depts, sections and individuals – that are based on the original objectives and strategies in the corporate plan.

The main influences on a corporate plan:

Internal influences

Financial resourcesOperating capacityManagerial skill and

experienceStaff numbers and skillsCulture of the

organisation

External influences

Macro-economic conditions

Bank of England and government economic policy changes

Likely technological changes

Competitors actions

Contingency Planning (disaster-recovery planning)Define: preparing an organisation’s resources for unlikely

eventsUnplanned events can deverstate a business of any sizeFireFloodsDamage of stock Illness of staff IT system failureAccidents

This can all make it difficult or impossible to carry out normal everyday activities

At worse: important customers can be lost or the firm could go out of business all together.

http://www.youtube.com/watch?v=kJDnQNvHfWE

Effective contingency planning allows a business to take steps to minimise the potential impact of a disaster and , ideally, prevent it from happening in the first place.

http://www.youtube.com/watch?v=L_7glqBqiro

(Swear word first scene… stop at 1:28)

The Key steps in Contingency planning:

1. Identify the potential disasters that could affect the business

Oil industry = oil tank running aground.


2. Assess the likelihood of these occurring:Some more likely thank othersPlan for common, but the most unlikely

occurrence have the greatest total risk to a business failure.


3. Minimise the potential impact of crisis

Effective planning can sometimes cut out the risk altogehter.


4. Plan for continued operations of the business.

The sooner the business can begin trading again, the less the impact is likely to have on customer relationships.

Contingency Planning

Benefits Reassures Staff, customers,

local residences that concerns for safety are a priority

Minimises negative impact on customers and suppliers in the event of a disaster

Public relations response is much more likely to be speedy and appropriate with senior managers being used to promote what the company intends to do, by when and how

Limitations Costly and time consuming

– not just planning but training

Needs to be constantly updated as the number and range of potential disasters can change over time.

Staff training needs to increase is labour turnover is high

Avoiding disasters is still better than planning for what to do if they occur.

Write a detailed Plan for two essays:

‘Contingency Planning is a waste of resources as major accidence are often unavoidable, but in any case, they rarely occur’ To what extent do you agree with this view. (40 marks)

‘The value of a corporate plan to a firm’s long term success cannot be overestimated – it is the key to future profitability’ Discus this view (40 marks)

Managing Change:

Making strategic decisions

Making strategic decisions...Significance of

information management; the ability to process information to make a decision.

The value of different approaches to decision making; (ST to LT, functional to organisational, tactical to strategic...decisions are going to be constrained by INTERNAL & EXTERNAL factors.

[1] Scientific approach to decision making...Logical & research-based approach to decision making

Advantages Disadvantages

Scientific approach to decision making...

[2] Intuitive approach...

Based on a HUNCH...a feeling/ instinct

Most likely to be used by small business

To be appropriate; individual must have expertise & experience

May lead to more creative & innovative decision making.

HOWEVER....

Factors to consider between scientific & hunch-based decision making....

The marketing model = SCIENTIFIC APPROACH to decision making

REMEMBER THE OTHER DECISION MAKING TOOLS....

AnsoffsPorters Decision trees

[3] The Marketing Model

1 Objective

s

Market research

Forecasting

Draft market plans

Budgetary control

What are the constraints at the different stages?

[4] Decision Trees Visual approach to decision making Maps out the different options available Possible outcomes are listed Points @ which decisions have to be made

Most effective when...

What must be considered is....

Advantages & disadvantages of this tool are...

However I recommend that....

Remember:

= decisions = uncertain outcomes

Advantages Disadvantages

Decision Trees....

Influences on corporate decision making :

Very similar to SWOT factors (think both internal & external...)

Consider... Ethical position Resources available Power of stakeholders

TASK: Dyson’s magic carpet ride

1. Assess the extent to which scientific decision-making model might have benefited the company in deciding on its production move from England to Malaysia. (40 marks)

(K8, A8, An10, Ev14)In groups, read & discuss the case study.

Link to any other relevant concepts

Planning practice... Plan your STRUCTURED response & then feed back to each other... How did you approach the question?

“All change is not growth, as all movement is not forward.” Ellen Glasgow.

Documents

Transcript of “All change is not growth, as all movement is not forward.” Ellen Glasgow.