AREA STUDY 2 - TSFX
Transcript of AREA STUDY 2 - TSFX
AREA STUDY 2
IMPLEMENTING CHANGE
REFER BACK TO PAGE 2 OF NOTES
CHECKLIST OF THE KEY KNOWLEDGE YOU EXAMINED IN THE LATER PART OF
TERM 3
REVIEW EACH DOT POINT AND USE MIND MAPS TO RECALL KEY INFORMATION TO
IDENTIFY WHERE YOU STILL HAVE GAPS TO BE ABLE TO REVISE AND REVIEW IN
PREPARATION FOR THE EXAM
AREA STUDY 2 – IMPLEMENTING CHANGE –
KEY KNOWLEDGE IMPORTANCE OF LEADSHIP IN CHANGE MANAGEMENT (DESCRIBE)
MANAGEMENT STRATEGIES TO RESPOND TO KEY PERFORMANCE INDICATORS INCLUDING:
STAFF TRAINING
STAFF MOTIVATION
CHANGE IN MANAGEMENT STYLES/SKILLS
INCREASED INVESTMENT IN TECHNOLOGY
IMPROVING QUALITY IN PRODUCTION
COST CUTTING
INITIATING LEAN PRODUCTION TECHNIQUES AND
REDEPLOYMENT OF RESOURCES (NATURAL, CAPITAL, LABOUR)
MUST LEARN, UNDERSTAND AND BE ABLE TO APPLY
AREA OF STUDY 2 – IMPLEMENTING
CHANGE - CONTINUED
MANAGEMENT STRATEGIES TO SEEK NEW BUSINESS OPPORTUNITIES
DOMESTICALLY AND GLOBALLY ( NOT PRESCRIBED)
OVERVIEW OF PRINCIPLES OF THE LEARNING ORGANISATION (SENGE)
HIGH RISK AND LOW RISK STRATEGIES TO OVERCOME RESISTANCE TO CHANGE
( LINKS TO OTHER PARTS OF THE COURSE)
KEY PRINCIPLES OF THE THREE -STEP CHANGE MODEL ( LEWIN)
EFFECT OF CHANGE ON STAKEHOLDERS INCLUDING MANAGERS, EMPLOYEES,
CUSTOMERS, SUPPLIERS AND GENERAL COMMUNITY
( LEARN WITH EXAMPLES)
CSR CONSIDERATIONS WHEN IMPLEMENTING CHANGE ( LINK TO OTHER PARTS
OF COURSE)
IMPORTANCE OF REVIEWING KPI’S TO EVALUATE THE EFFECTIVENESS OF
BUSINESS TRANSFORMATION ( DO NOT NEGLECT TO REVISE)
AOS 2.1 – LEADERSHIP IN CHANGE
MANAGEMENT Leadership will help to reduce any resistance to change in a business
Defined as: the ability of a manager or business owner to motivate and influence employees to work towards business objectives. If change is to be implemented successfully then this skill is essential to build trust and to help reduce employee resistance to the change.
Effective leaders influence people and provide a SUPPORTIVE environment for them to achieve team or business goals.
Leaders can market and promote the change to achieve staff cooperation and acceptance
Need to demonstrate empathy and listening skills and communicate a clear vision to staff
Can guide staff and the business through the period of change acting as role models during this change process
Without strong leadership the change process may fail or take longer than expected
PAGE 29 & 30 OF NOTES
AOS - 2.2 Management Strategies to
Respond to Key Performance Indicators
AOS 1 ( Unit 4) – identified 9 KPI’s that provide data to managers about business performance
Now we need to consider possible strategies ( plans, tactics) to address this data if there are problems
Essentially linking different areas of the course- will challenge you with higher order thinking questions
Be clear about the strategies you propose and how they will benefit the business to improve the specific KPI’s
Data driven questions possible
Let’s review these strategies
HIGHLY EXAMINABLE
Page 31 – 32 of notes
Staff Training
Staff training (either on or off- the - job) can be offered to:
improves productivity growth - through increased staff skills
improves sales figures – through better sales skills of staff
reduces the number of workplace accidents – increased skills, better
knowledge of job
boosts morale leading to lower staff absenteeism and staff turnover as staff
gain greater job satisfaction
New skills means increased motivation, building staff confidence
Can be linked to improved quality of product – affects number of customer
complaints – should reduce these as staff are better equipped to deal with
customer issues
Staff Motivation & Changes to Management
Style Staff motivation is linked to higher levels of job satisfaction and can be monitored
through feedback from staff surveys and the outcomes of performance appraisals.
If the business offers rewards and recognition programs, adopts a more participative management style and encourages staff input then the data from key performance indicators like the ones listed below will improve:
rate of productivity growth (higher)
level of staff turnover (lower)
rate of staff absenteeism ( lower)
If the business adopts a more employee focused management style like consultative or participative where management use communicating, leading and interpersonal skills more effectively then this will also improve the data gathered from the following key performance indicators:
level of staff turnover
rate of staff absenteeism
Management Strategies including Investment in Technology,
Improved Quality of Production
Businesses are always exploring ways to reduce their costs and improve the quality of
their product to retain loyal customers.
If they increase their investment in technology through the use of automated
production lines, development and maintenance of a dynamic business website and the
use of a quality approach to monitor the standard of the product delivered to
customers then the following key performance indicators should improve:
rate of productivity growth – greater efficiency
percentage of market share – business gained competitive edge over rivals
reduction in the number of customer complaints – less errors or defects
reduces levels of wastage – less landfill
increased net profit figures – lower costs
COST CUTTING – Business taking action
to spend less
CAN INCLUDE:
FINDING CHEAPER SUPPLIER
ELIMINATING UNNECESSARY COSTS
ASSESSING VALUE OF ADVERTISING CAMPAIGN
AVOIDING SMALL FREQUENT ORDERS, BUYING IN BULK FOR DISCOUNTS
LOWERING SALARY COSTS THROUGH REDUDANCIES, OUTSOURCING, OVERSEAS
MANUFACTURER OR REPLACING LABOUR WITH TECHNOLOGY
QUICK WAY TO ADDRESS KPI’S LIKE NET PROFIT FIGURES, RATE OF
PRODUCTIVITY GROWTH, LEVEL OF WASTAGE
INITIATING LEAN PRODUCTION TECHNIQUES
LEAN PRODUCTION/MANAGEMENT SYSTEMATIC METHOD OF REDUCING WASTE
WITHIN MANUFACTURING PROCESS
FOCUSING ON WHAT ADDS VALUE BY DECREASING EVERYTHING ELSE THAT DOES
NOT
MINIMISING RESOURCES USED IN PRODUCTION PROCESS
EFFICIENCY OF SPACE, MACHINERY, LABOUR, MATERIALS AND SHORTER
PRODUCTION TIMES
AFFECTS KPI’S LIKE PERCENTAGE OF MARKET SHARE, NUMBER OF SALES, NET
PROFIT FIGURES
REDPLOYMENT OF RESOURCES
HOW CAN BUSINESS USE ITS RESOURCES IN A DIFFERENT WAY
NATURAL RESOURCES – LAND, SEA, AIR – RECYCLING, REUSING – USE RESOURCES IN MORE
THAN ONE WAY
LABOUR RESOURCES – MOVE TO DIFFERENT AREAS OF BUSINESS, OFFER ADDITIONAL
SKILLS, LESS REDUDANDCIES AND A BOOST TO MORALE POSSIBLE
CAPITAL RESOURCES – TOOLS, EQUIPMENT, BUILDINGS, MACHINERY E.G. RELOCATE
FACTORIES OVERSEAS TO HELP REDUCE COSTS
AFFECTS KPI’S ; RATE OF PRODUCTIVITY GROWTH, NET PROFIT FIGURES, PERCENTAGE
OF MARKET SHARE AND LEVEL OF WASTAGE – AIMING TO MAKE THE BUSINESS MORE
SUCCESSFUL BY REMOVING THOSE ELEMENTS THAT ARE NOT WORKING
2017 EXAM
TWO KPI QUESTIONS IN EXAM LAST YEAR:
Q4B ( REFERRED TO IN EARLIER SLIDE)
Q1C – REFERENCE TO LEVEL OF STAFF TURNOVER AND IMPACT ON ANOTHER KPI AT
GADGET – 2 MARKS
46% GOT ZERO
NEEDED TO PROVIDE LINK BETWEEN CHANGE IN STAFF TURNOVER AND ANOTHER
SEPARATE KPI
DESCRIBE HOW CHANGE IN STAFF TURNOVER COULD AFFECT ANOTHER KPI
GOOD FIT ANSWERS – NET PROFIT FIGURES, RATE OF PRDUCTIVITY GROWTH, NUMBER OF
SALES
REMEMBER LINKS AND DETAILED ANSWERS GET THE MARKS
QUESTION TIME – Page 33
Let’s do:
Question 22
Describe question – 3 marks – 3 clear points
Question 23
Explain – 6 marks again 6 clear points
6 marks = 10 minutes
SAMPLE ANSWERSQuestion 22 - 3 marks
If customers are making complaints with a business then this indicates
that their expectations are not being met by that business. ( 1 mark)
If the business does not address these complaints then customers will
look to alternative businesses to make their purchases resulting in loss
of sales and revenue. (1 mark) If the business implements a quality
approach like quality control or offers more training to staff then this
could improve customer satisfaction boosting sales and profits. ( 1
mark)
Question 23 - 3 marks
Redeployment of resources is the process of moving natural, labour or
capital resources from one section of the business to another. ( 1
mark) This can cut costs, reduce losses the business may be incurring
in areas where customers are not making purchases and improve
efficiency as the resources are can be utilised more to increase profit.
(2 marks)
AOS 2.3 Management Strategies to seek
new Business Opportunities – domestically or
globally
Managers will continually to seek new business opportunities to improve business
performance as it can be another source of change – Why?
Attract new customers
Increase Number of Sales
Increase Net Profit
Increase Market Share
Notes on Page 34
AoS 2.3 Strategies Domestically/Globally
Not listed in the Study Design
Range of Options
Suits discuss, evaluate, analyse type questions
Options to consider:
1. Multiple branding
2. Franchising
3. Government programs
4. Product differentiation
5. Online Presence – can suit both/choose for one
6. Exporting
7. Others
(NOT ON 2017 EXAM)
MULTI- BRANDING
DEFINITION: Multiple branding is a strategy in which the business will offer a
number of products under different brand names BUT THEY BELONG TO THE
SAME COMPANY
( NOT PRODUCTS BUT BRANDS)
STRENGTHS:
• Obtain more shelf space, leaving less for competitors’ products
• Can address gaps in the market and fulfil a range of customer needs (eg. As societal attitudes
evolve, businesses can expand to address these – Coca-Cola and Vitamin Water)
LIMITATIONS:
• May negatively impact image/reputation if customers perceive the business to only be
pursuing profits and be less customer-oriented
• Risk/Possibility of failure – expanding a business with multiple brands may result in high initial
costs and possible failure
• Notes on Page 34
Product Differentiation
DESCRIPTION:
Process of distinguishing a product or service from others
More attractive to a particular target market
Focuses on point of difference/distinct from competitors' products
and substitutable products
ADVANTAGES: competitive edge, can charge premium prices, build loyal
customer base
DISADVANTAGES: imitations could appear on market, difficult to
maintain point of difference without rivals entering market for extended
time frame
( FAMILIAR THROUGH PORTER)
Notes on Page 35
Government Programs
DEFINITION: Expanding domestically with the assistance of government-
funded programs and subsidies/grants, particularly from Business
Victoria.
STRENGTH:
• Programs can provide subsidies for training or new equipment
LIMITATION:
• Business may not be eligible for these subsidies or any assistance
• Notes on Page 36
GLOBAL OPPORTUNITIES - EXPORTING
Selling your good or service on a global scale, by selling in overseas markets.
Globalisation has made international trade easier and government bodies such
as AusTrade can help businesses enter export markets.
STRENGTHS:
Helps expand customer base, increase sales and profits (Australia has a small
population/ expanding globally can increase potential customer base)
If business produces a surplus and limited demand domestically, allows the
business to sell surplus overseas
Enables business to produce in larger volumes and achieve economies of scale
Notes on Page 37
GLOBAL OPPORTUNITIES – EXPORTING -
CONTINUED
LIMITATIONS:
Barriers to exporting may exist e.g. tariffs, government laws or
language barriers
Competition globally may be stronger than domestic
Not suitable for small businesses due to high initial costs involved –
e.g. Restaurant/hairdresser
May require high initial capital start-up costs and can be a risky
strategy as some Australian products may not be successful on a global
scale due to different social values and attitudes
ONLINE PRESENCE
Another means of exporting globally
Creating an online shop and platform
Allowing customers to pay online and arrange for shipment of goods.
STRENGTHS:
Can open up the business to new markets, expanding customer base and increase sales and profits
Ability to shop open on 24/7 basis
WEAKNESSES:
Possibility of shipment problems (e.g. damaged goods) and the need to establish new distribution channels
Can be costly to set up
May not suit all business types – e.g. restaurant or hairdresser
QUESTION TIME – PAGE 38 - Q24 ( 2 MARKS) Q25 (1 MARK) Q26 ( 1 MARK)
Q 27 (1 MARK) - 5 MARKS – 8 MINUTES –
Review of Questions on Page 38 Short answer – need responses that are precise and to the point for the marks
Question 24 – 2 marks
Allows business to grow and achieve some of their business objectives e.g. increased profit.
Gaps in the market or potential to operate globally which is the case with this swimwear company is another reason leading to increased sales, market share and profits.
Question 25 – 1 mark
➢ Easier as there are less costs, business already has a reputation it can build, owners know the market conditions they face
Question 26 – 1 mark
➢ Increases the number of customers so there is greater scope for increased sales and profit as a result
Question 27 - 1 mark
➢ One business will offer a number of products under different brands that belong to the same business
AOS 2.4 OVERVIEW OF THE PRINCIPLES OF
THE LEARNING ORGANISATIONS - SENGE
Senge developed the five principles to enable businesses to experience growth and
outperform their competition
Believed their survival was linked to the creation of a learning organisation
What is a learning organisation?
Business where people expand their capacity to do their job and learn together;
constantly seeking to improve performance to achieve individual and business
objectives
Five principles of: systems thinking, personal mastery, mental models, building shared
visions and team learning
Describes how a business can manage success, continue to develop and gain more from
its employees
Notes on pages 39 - 43
AoS 2.4 SENGE - CONTINUED
The learning organisation is a business that is flexible,
adaptable and productive
Reduces resistance to change
Remember - all five principles are interrelated
Implementation of these principles leads to a continuous
learning processes creating a competitive business
Businesses that a proactive and ready for change will be
more successful
Revisit, review and understand the 5 principles
Summary diagram on Page 40
SYSTEMS THINKING – look at organisation
as a whole
THE BUSINESS NEEDS TO SEE THE BIG PICTURE
UNDERSTAND THE BUSINESS AS A WHOLE
HOW EACH PART CONNECTS WITH THE REST OF THE BUSINESS
THE INTERRELATIONSHIPS AND CONNECTIONS OF THE DIFFERENT
ELEMENTS OF THE BUSINESS
HELPS BUSINESS BE PROACTIVE AND READY FOR CHANGE –
EMBRACES CHANGE RATHER THAN FEAR IT
PERSONAL MASTERY – focus on
improved skills
PEOPLE IN THE BUSINESS UNDERTAKE CONTINUAL LEARNING
EMPLOYEES COMMIT TO DEVELOPING THEIR SKILLS WHICH WILL HAVE A
FLOW ON EFFECT FOR THE BUSINESS
THERE WILL BE LESS RESISTANCE TO CHANGE
THE GROWTH OF THE EMPLOYEE ALIGNS WITH THE GROWTH OF THE
BUSINESS
THE BUSINESS NEEDS TO SUPPORT LEARNING BY ALLOWING EMPLOYEES
TO CHALLENGE THEMSELVES AND PURSUE THEIR PASSION
MENTAL MODELS – create a culture of
openness to change
NEED TO CHALLENGE WORKPLACE ASSUMPTIONS AND HOW
THINGS ARE CURRENTLY
AS THE BUSINESS GOES THROUGH TRANSFORMATION OR
CHANGE EMPLOYEES AND MANAGEMENT NEED TO
CONSIDER WHAT THEY DO AND WHETHER THEY ARE
BLOCKERS OR SUPPORTERS OF THE CHANGE
STAFF AND OTHER STAKEHOLDERS ARE MORE AWARE OF
OWN BELIEFS, VALUES AND BEHAVIOURS
BUILDING A SHARED VISION – all employees
want to work to achieve same objectives
THE BUSINESS NEEDS TO DEVELOP A VISION THAT IS SUPPORTED BY ALL
MEMBERS OF THE BUSINESS
VISION COMES FROM A RANGE OF PEOPLE – SPREAD AND REINFORCED
SEEKS TO GAIN COMMITMENT NOT COMPLIANCE
EVERYONE IS ON THE SAME PAGE AND WORKING TOWARDS THE ACHIEVEMENT
OF BUSINESS GOALS
If people feel enthusiasm for goals and direction of business then vision is
reinforced with a deeper level of commitment for the business transformation
to occur
TEAM LEARNING –improve capabilities of
whole business working collaboratively
TEAM MEMBERS WORK TOGETHER TO ACHIEVE COMMON
GOALS
A SHARED VISION REQUIRES COLLABORATION
THE BUSINESS WILL BENEFIT BY THE INDIVIDUALS
LEARNING TOGETHER
CREATES POSITIVE RESULTS FOR THE WHOLE TEAM
ROLE OF LEADERSHIP
LEADERS IN A LEARNING ORGANISATION CAN BE ONE OF THREE MODELS WITH A
MORE CONTEMPORARY APPROACH TO LEADERSHIP
DESIGNERS – CREATE A COMMON VISION, DECIDE ON POLICIES AND STRATEGIES
AND CONTINUOUSLY IMPROVE IN THESE AREAS
TEACHER – SET UP AN ENVIRONMENT WHERE LEARNING IS FOR EVERYONE
STEWARD – BE PART OF THE GROWTH OF THE BUSINESS AND PROTECT THE
VISION OF THE BUSINESS
NOT EXAMINABLE
NOTES ON PAGE 42
SENGE THEORY - IN SUMMARY
DEVELOPMENT OF AN INNOVATIVE WORKPLACE
MORE PEOPLE ORIENTATED
CONTINUALLY TRANSFORMS TO BECOME COMPETITIVE
EVERY MEMBER IS PROACTIVE AND COMMITED TO CHANGE
AS THE BUSINESS CHANGES
WORK INDIVIDUALLY AND AS A GROUP TO ACHIEVE
EXCELLENCE
EXAMPLES INCLUDE IKEA AND SCHOOLS
IF YOU GET ASKED TWO DESCRIBE 2 PRINCIPLES – 4
POINTS – GIVE DETAILED ANSWERS
SUMMARY - CONTINUED
IMPROVES MORALE AND MOTIVATION OF EMPLOYEES
LEARNING AT A RATE FASTER THAN CHANGE IS ESSENTIAL TO MAINTAIN A
COMPETITIVE ADVANTAGE OVER RIVALS
LEARNING INCREASES PRODUCTIVITY
ABLE TO SETTLE PROBLEMS QUICKLY
IMPROVED ABILITIES OF EMPLOYEES AND TEAMS TO EMBRACE AND ADAPT TO
CHANGE
Lets do Question 28 – 2 mark for the definition
And Question 29 – 2 marks
4 marks – 6 minutes
Page 42 - 43
QUESTION TIME AGAIN
SAMPLE ANSWERSQuestion 28 – 2 marks
Learning organisation is a concept that all businesses are dynamic
entities which are constantly having to adapt to change if they are to
remain competitive and achieve their business objectives. There is an
employee focus where there is commitment to personal mastery with
a shared vision and team approach to facilitate this change.
Question 29 – 2 marks
A shared vision is important as this means that all the members of the
business are focused on and working together to achieve the change
and help the business achieve its objectives. If people feel enthusiasm
for the goals and the direction of the business then the vision is
reinforced with a deeper level of commitment for the business
transformation to occur.
AoS 2.5 LOW - RISK STRATEGIES TO
OVERCOME EMPLOYEE RESISTANCE
Managers can use a range of strategies to overcome
resistance and implement change effectively (4 listed in
Study Design)
Low-risk strategies promote an environment for change
and are more likely to be accepted by employees who
are the main resistors to change due to the fear of job
losses, changing job descriptions and the need to adapt
to different systems and processes implemented by the
business
Notes on Page 44
AoS 2.5 -LOW-RISK STRATEGIES -
CONTINUED
Low-risk strategies include:
Communication: - CREATES TRUST, SHOWS MANAGERS WILLING TO LISTEN
TO EMPLOYEE CONCERNS AND IDEAS
Needs to be a two-way process of exchanging information with key
stakeholders (always include a definition)
Employee need to be informed of all changes to the business and have the
opportunity to provide feedback
Open communication will build trust with employees as decision-making is
transparent reducing the potential for resistance
AoS 2.5 - LOW - RISK STRATEGIES -
CONTINUEDEmpowerment:
Involving employees in the decision-making processes
Employee participation in change process promotes a sense of ownership of this process
Encourages negotiations between employees and management to improve support for the change
Alleviates employee fear and anxiety as employees are encouraged to participate in the change process
Identification of individual employees who can act as change agents helping to promote a positive and supportive culture for the change to occur
Adopting a more consultative or participative management style will help employees cope with the change as they have a say in the process
AoS 2.5 - LOW-RISK STRATEGIES -
CONTINUED
Support:
Business change can lead to job losses and the need for new skills
Provision of services like job referrals, for those being terminated can help
boost morale of the remaining staff
Provision of training can also help alleviate resistance to new processes as
employees gain more confidence to adapt to the change
Listening to staff concerns by management and business owners can also be
helpful to reduce anxiety and stress and lead to less resistance to change
AoS 2.5 - LOW-RISK STRATEGIES -
CONTINUED
Incentives:
The offer of bonuses, promotions, additional training, career
advancement and additional responsibility can help to reduce
employee resistance
Incentives motivate employees to perform better and be more
open to the change as they provide some form of recognition that
employees are valued and have a role to play during this period
of transition for the business
AoS 2.5 - LOW-RISK STRATEGIES -
CONTINUED
BENEFITS
CREATES A POSITIVE WORK ENVIRONMENT WHEN BUSINESS UNDERGOES CHANGE
IF SUCCESSFUL EMPLOYEES MORE LIKELY TO EMBRACE CHANGE IN FUTURE
LIMITATIONS
CAN TAKE TIME AND NOT SUITABLE IF QUICK CHANGE NEEDED
CAN BE COSTLY TO TRAIN, OFFER COUNSELLING AND INCENTIVES
AoS 2.6 - HIGH RISK STRATEGIES TO
OVERCOME EMPLOYEE RESISTANCE
Number of high-risk practices that management could use to overcome staff resistance,
Have a negative impact on the relationship between managers/business owners and employees
Manipulation - altering of information about change in some way to present it in a more positive light
Considered deceptive as used to influence employees to behave in a certain way.
Can be considered unethical as control of information is held by management and they influence people to obtain certain outcomes
AoS 2.6 - HIGH RISK STRATEGIES TO
OVERCOME EMPLOYEE RESISTANCE -
CONTINUEDThreats- statements of intention by management to trigger
certain behaviours/ reactions from employees
Threaten employees with potential job losses, job
transfers, loss of promotions, or poor employee
references, can lead to acceptance of the change in the
short term but creates a negative corporate culture and
lower morale in the longer term
May be suitable in a time of crisis to enable change to
occur
AoS 2.6 - HIGH-RISK STRATEGIES
BENEFITS:
CAN BE USED IF FAST RESPONSE TO CHANGE IS NEEDED
CAN BE USED AS LAST RESORT IF LOW- RISK STRATEGIES NOT WORKING
LIMITATIONS
CAN PROMOTE A LOSS OF TRUST AND BUILD RESENTMENT
CAN CREATE TOXIC WORK ENVIRONMENT
AoS 2.5 & 2.6 LOW AND HIGH-RISK
STRATEGIES TO OVERCOME EMPLOYEE
RESISTANCE
Not in exam last year
Have been in previous years as both strategies are in the old Study Design
Potential for discuss, evaluate, justify type questions
Remember low-risk more effective because will help reduce resistance to
change by employees but more time consuming
High-risk strategies effective in short term -will get the desired results, but
can damage working relationship between managers and employees in the
longer term
Question 33 on Page 46 – discuss is the task word – two strengths and two
limitations of each strategy – 4 marks – 6 minutes
SAMPLE RESPONSE FOR Q33A LOW RISK STRATEGY THAT COULD BE USED IS COMMUNICATION.
THIS IS THE PROCESS OF TRANSFERRING INFORMATION FROM THE SENDER TO
THE RECEIVER.
BY INFORMING STAFF ABOUT THE DETAILS OF THE CHANGE THERE MAY BE LESS
RESISTANCE.
IF EMPLOYEES CAN SEE AND UNDERSTAND THE OVERALL BENEFITS OF THE
CHANGE THEN THEY MAY UNDERSTAND ITS NECESSITY.
HOWEVER THE PROCES OF COMMUNICATING IS TIME CONSUMING AND EACH
EMPLOYEE WILL HAVE A DIFFERENT LEVEL OF RESISTANCE.
SOME MAY ALSO TAKE LONGER THAN OTHERS TO UNDERSTAND AND ACCEPT THE
CHANGE
(2 MARKS)
SAMPLE RESPONSE FOR Q33 -
continued
ANOTHER LOW RISK STRATEGY TO OVERCOME EMPLOYEE RESISTANCE IS THE
PROVISION OF INCENTIVES BY THE BUSINESS.
THIS STRATEGY COULD INVOLVE THE OFFER OF BONUSES TO THOSE EMPLOYEES
WHO ACCEPT THE CHANGE PROMPTLY SUCH AS PROMOTIONS, ADDITIONAL
TRAINING, CAREER ADVANCEMENT OR MORE AUTONOMY.
THIS TYPE OF STRATEGY CAN REDUCE RESISTANCE TO CHANGE AS EMPLOYEES
FEEL THAT THE BUSINESS HAS FAITH IN THEIR ABILITY AND IS WILLING TO
RECOGNISE THE CONTRIBUTION THAT THEY CAN AND WILL MAKE.
HOWEVER THIS STRATEGY COULD BE COSTLY TO THE BUSINESS AND THE
BENEFITS TO BE GAINED BY THE CHANGE MUST OUTWEIGH THE COST. IT ALSO
MAY NOT BE SUSTAINABLE OVER A LONGER PERIOD OF TIME (2 MARKS)
AOS 2.7 - Key Principles of Three Step
Change Model - Lewin
Lewin’s Three Step Change Model considered a cornerstone for
understanding business change
Helps businesses prepare and plan for a successful transition
Remember for successful change to occur the business must first start
by understanding why the change is taking place
Tips to answer questions on Lewin’s three step change model:
Be able to clearly identify and describe each step then apply to a
scenario if the question calls for it
Look at the mark allocation for this question and the task word
( apply)
Notes on Page 47 - 48
LEWIN – STEP 1 – UNFREEZE STAGE
➢ First stage of change involves preparing the business to accept that change is necessary
Involves breaking down the status quo before the business can build upon a new way of
operating
The team driving the change needs to show why the existing way of doing things cannot
continue
Could do this by referring to declining sales figures, poor financial results, negative customer
feedback etc. to enable everyone in the business to understand why the change is necessary
Leadership group needs to challenge the beliefs, values attitudes and behaviours that
currently define the business
Most difficult and stressful part of the change process
Business is forced to re-examine itself to gain support for what is to come next.
This helps stakeholders to ‘buy in’ and prepare for the change
IDENTIFY WHY CHANGE IS NEEDED AND WHAT NEEDS TO CHANGE
LEWIN – STEP 2 – CHANGE STAGE
After the uncertainty created in the unfreeze stage, the change stage is
where people begin to resolve their doubts and look for new ways to do
things.
People start to believe and act in ways that support the new business
direction
Take time to embrace the new direction and participate proactively in the
change
Need to understand how it will benefit them
Not everyone will fall in line because the change is necessary and will benefit
the company
Managers need to foresee problem situations and deal with these promptly
Time and communication are two key ways to support the change process.
LEWIN – STEP 3 – REFREEZE STAGE
If change is taking shape
People have embraced new ways of working then the business is at the refreeze stage
The organisational chart and business is stable and people are fulfilling their new or
adjusted work roles
The refreeze stage helps people institutionalize the change
Employees feel confident and comfortable with the new ways of working
New ways embedded in culture to stop business from going back to old ways
Business may also celebrate successes of change
Policies are rewritten and implemented to reflect the change
Question 35 - 6 marks – 10 minutes
Question 35 - Page 49 continued
Need to clearly explain each step and then apply it to a merger – two
existing businesses joining to become one larger business
Examples of mergers have been TABCORP and Tattersalls group,
Westpac and St George Banks
Mergers – some jobs lost, others created, new culture, new processes
and procedures
Try to write an answer in the given time allocation
SAMPLE ANSWER
You have a sample solution which we can now look at as a guide to what
you should write
See:
Page 8 of the solutions
2017 EXAM – PART B QUESTION 4
APPLY LEWIN MODEL TO CASE STUDY – 6 MARKS
3.1 AVERAGE/ REASONABLE EFFORT WITH ONLY 9% GETTING ZERO
UNDERSTAND HOW MODEL WORKS THEN LINK IT TO CASE STUDY X 2
MARKS
CLEARY DESCRIBE EACH STEP THEN APPLY IT TO SCENARIO –
DEMONSTRATE YOUR UNDERSTANDING OF HOW IT WORKS
AGAIN TASK WORK AND MARK ALLOCATION DRIVE THE TYPE OF ANSWER
REQUIRED
Page 50 -51 notes
AOS 2.8 – THE EFFECTS OF CHANGE ON
STAKEHOLDERS – LISTED IN THE STUDY DESIGN
REMEMBER FOR SOME STAKEHOLDERS THE CHANGE WILL BE
POSITIVE
FOR OTHERS IT WILL BE NEGATIVE
READ THE QUESTION, UNDERSTAND THE NATURE OF THE
CHANGE AND THEN ANSWER
DON’T FORGET THE MARK ALLOCATION AND THE TASK
WORD
Effect of Change on Stakeholders
including Managers
Stakeholder Effect of change
Managers
Management style
Change of process
Change of structure
Change of Employment
conditions
• Adopting a more consultative style of management to deal with employee
resistance and seek input during the period of change
• Alters the recruitment and selection of employees, offer more training and
review induction of new employees to adopt the new process
• May create new departments, teams or management positions
• Job losses for employees and some management levels
EFFECT OF CHANGE ON EMPLOYEES
Employees
Change in operations by
adopting more
technology for example
Changes due to takeovers
and mergers
Changes in competition
• Job losses, retraining, altered job descriptions and roles
• Cultural shift in business with new job roles, new divisions,
new managers
• Push to adopt different work process, learning new skills,
working different hours especially if trading hours have been
extended
EFFECT ON CUSTOMERS AND SUPPLIERS
Customers
Lifeline of the business
Some will like the change
some will react against it
• Loyal to business after change implemented
OR
• Choose to go to competitors as resisting change
Suppliers
New production methods
Outsourcing of resources
• Attract more businesses to purchase product range
• Altering the workforce of the business with more flexible work
arrangements
• Sourcing materials from overseas reduces costs and alters the
structure and employment needs of the business
EFFECT ON GENERAL COMMUNITY
The General
Community:
Expansion of
businesses
Decline of businesses
• More job opportunities and range of products
• Job losses, flow on effects on other businesses, more
pressure on government benefit payouts, less demand
for goods and services
QUESTION TIME AGAIN – NEARLY DONE
LETS DO QUESTIONS 37 AND 38 ON PAGE 52
Q37 = 2 MAKS
Q 38 = 2 MARKS
TOTAL OF 4 MARKS = 6 MINUTES
Sample Questions on Page 52 – 2 marks
Question 37 – 2 marks
More responsibility for the production of a good or the delivery of a service
Business may offer additional training to address the issue of customer
complaints, especially if business is going through a period of change
If less customer complaints then helps staff stay motivated and committed to
business
Question 38 – 2 marks
Change can have a positive outcome if the manager lead its in an effective
manner leading to improved results. This may mean the manager earns a
bonus or promotion. If the change involves restructuring or downsizing then
the manager may lose their job especially if middle management are a target
to reduce costs and improve efficiency which is then a negative outcome.
AOS 2.9 - CORPORATE SOCIAL RESPONSBILITY
CONSIDERATIONS WHEN IMPLEMENTING CHANGE
All businesses are expected to behave in a socially responsible manner.
Many will adopt the triple bottom line approach which focuses on the three
pillars of sustainability which incorporate carbon footprint economic factors
and social factors.
Social factors focus on maintaining a mutually beneficial relationship with
employees, customers and the community.
Environmental factors focus on the impact by the business on resource usage,
the elimination of hazardous substances and the reducing of waste and
emission from the physical environment.
Economic factors focus on the business being able to be economically viable.
AOS 2.9 – CSR CONSIDERATIONS WHEN
IMPLEMENTING CHANGE
Businesses are expected to:
Give back to the community through their involvement in philanthropic
causes
Aim for environmental sustainability
Have some links and involvement with the wider community
Adopt ethical practices when sourcing materials from suppliers
Implement policies and processes that support the ethical behaviours of the
business
Notes on Page 54 & 55
CSR CONSIDERATIONS & CHANGE
Operations Management
With changes in practices and processes in operations the business can:
track productivity levels to ensure resources are used efficiently
review level of waste the business is producing to see if decreasing
review number of workplace accidents that have occurred over a period of time
Human Resources
Downsizing/Mergers – redundancies, entitlements and transition issues handled appropriately
If there have been changes made to employment processes/staffing business can:
review the level of staff turnover over a period of time
examine the rate of absenteeism
evaluate the results from staff satisfaction surveys
CSR CONSIDERATIONS - CONTINUED
Change of Supplier
Preference for local suppliers
Business should ensure fair working conditions and pay for workers if materials are being sourced from overseas
Business use suppliers with the same values and beliefs
Other considerations:
Reduce, reuse and recycle where possible in the business
Consider packaging and if it is environmentally friendly
Introducing strategies to reduce waste e.g. JIT
Question 43 - 1 mark
An obligation a business needs to ensure they consider when undertaking change to be environmentally friendly and not impact on stakeholders in a negative way.
AOS 2.10 - Importance of Reviewing Key Performance Indicators
to Evaluate the Effectiveness of Business Transformation
Businesses need to evaluate, reflect on and review the change and its impact on:
The business as a whole
Specific departments or areas of the business
Employment teams
Managers and individual employees
Should review and evaluate its performance on a regular basis using a range of data and KPIs to
provide information that is relevant, accurate, reliable and timely
Reviews should align with the goals of the business and the direction it’s taking
If process is overlooked then business cannot determine whether change implemented was
successful
Notes on Page 57
Lets look at Question 44 and 45 – 4 marks = 5 minutes
SAMPLE ANSWERSQuestion 44 – 2 marks – need two clear points that address question
Often it is poor business performance identified by various KPI’s such as lower
profit and sales that drives a business to implement change. Once the change has
occurred then the business should review performance using the same KPI’s to
see if improvements have been made. Failing to do this could lead to the failure
of the business
Question 45 – 2 marks – 2 clear points well explained .
As Woolworths is a publicly owned company net profit figures would be the main
KPI that would be reviewed to ensure revenue exceeds expenses. This is to
ensure that shareholders receive dividends to remain loyal to the business with
their investment. Profit figures will be linked to sales and market share If there
is a decline in net profit then Woolworths will need to implement some form of
change whether it is more items on sale, a greater variety of products or a
marketing campaign to attract and retain loyal customers.
REMEMBER
You should understand KPIs, other data and
trends and be able to apply these to a
given scenario to review and evaluate
change and transformation in a business.
EXAMPLE OF A BUSINESS THAT HAS
UNDERGONE CHANGE – LAST 4 YEARS
Bunnings international household hardware chain
Resisted going online until this year
Driving forces for change: technology, customer preferences, competition
Restraining forces – corporate culture, organisational inertia, management
Not fully e-commerce like other stores such as Coles and K-Mart
Range offers 20,000 products that are not stocked in Bunnings stores – bulky
items like shed, children’s playgrounds, extended range of taps and fittings
Major strategic shift for a highly profit business that is the success tory for
Wesfarmer’s
Dominated the hardware market for a long time – and now with Amazon here
it will be interesting to see how its KPI’s fare
THE COURSE IN A NUTSHELL
11 DIFFERENT STRATEGIES ACROSS UNIT 3 AND 4 – DO NOT CONFUSE
THESE
6 THEORIES:
3 MOTIVATIONAL THEORIES
3 RELATED TO CHANGE – Porter, Senge and Lewin
Easy to confuse so learn and apply properly
Be clear about what the task word in each question means
Additional examination tips on Page 59
COMMON MISTAKES MADE IN UNIT 4
NOT CLEARLY DEFINING EACH KPI CORRECTLY – E.G. STAFF TURNOVER,
CUSTOMER COMPLAINTS
CONFUSING THE FORCE FIELD ANALYSIS WITH THE 3 STEP CHANGE MODEL
NOT BEING ABLE TO EXPLAIN HOW A SPECIFIC FACTOR IS A DRIVING FORCE FOR
CHANGE
CONFUSING PORTER WITH SENGE
MISREADING THE TASK WORD – REMEMBER DISCUSS, EVALUATE, COMPARE,
EXAMINE, ANALYSE – HIGH ORDER THINKING QUESTIONS – HIGHER MARKS
SOLUTION – READ THE QUESTION CAREFULLY, LOOK AT THE TASK WORD,
LOOK AT THE MARKS, PLAN YOUR ANSWER IF MORE THAN 6 MARKS
CHECK YOUR ANSWERS BEFORE END OF THE EXAM
WHAT NEXT?
Reflect on what we have revised today –
GO HOME AND DO A PRACTICE EXAM - fresh in your mind
Study, Study, Study
Attempt as many practice exams as you can and seek feedback from your teacher ( AT LEAST 5 INCLUDING THE 2017 PAPER)
Your summary notes should be ready NOW
Remember revise, mind maps and then DO the exam questions under timed conditions
QUESTIONS?
THANK YOU
GOOD LUCK WITH THE EXAM