Manage change

• Change can be caused by

  internal factors

  external factors
• Internal factors (cause change)

  - change in leadership/' management

  - better than expected performance

  - poor financial performance

  -changes to staff - skills in workforce

  - business growth can lead to other changes

  - type of business
• External factors (cause change)

  - availability of new technology

  - change to production process/ methods - faster/ cheaper

  - consumer tastes changing - alter products

  - if economy slows - less disable income

  - changes in law

  - changes in ethical views and social awareness of customers

  - changes in competition
• Advantages of Change


  - take advantage of new effective ideas save money and time

  - business gains from implementing change outweigh disruption

  - more an donor essential because technological change is speeding up so keep up to date

  - without change company fall behind competitors - eventually lead to insolvency
• Two types of change

  incremental

  disruptive (step)
• incremental change


  is gradual

  - result of strategic plan in place

  - timescale for necessary change and timetable strategies to achieve
• disruptive change


  is sudden

  - forces firms to suddenly do things differently

  - may have to close or sell of subsidiary companies, spend on promotion or totally restructure
• force field analysis


  Kurt Lewin's model of system-wide change that helps change agents diagnose the forces that drive and restrain proposed organizational change

  
• what diagram shows (Force field analysis)

  - show plan, forces supporting plan and forces opposing plan
• after forces written down (Force field analysis)

  - numbered to show how significant they are from 1 (least) to 5 (most)

  - numbers added up to show titan force for and against plan
• analysis help decide (Force field analysis)


  whether a plan should go ahead

  - help managers work out how forces could be strengthened or weakened
• ways of managing change

  - changing organisational structure restructuring

  - delayering

  - organic structures

  - knowledge and information management

  - flexible employment contract
• Restructuring (managing change)


  - changing the organisational structure of a business

  - adapt to external environment and implement new strategy

  - decentralise t give more power and flexibility
• main reason for restructuring

  maximise efficiency of decision making, communication, division of tasks, reduce costs - more competitive
• Delayering (managing change)


  removing parts of an organisations hierarchy

  - easier to respond to changes
• advantages of delayering


  - reduce costs

  - improve communications

  - more responsibility to employees lower levels hierarchy

  - advantage over competitors - cutting costs - lower price
• disadvantage of delayering


  job losses - business risks losing some vital skills and experiences - reduces flexibility
• Two types of business structures

  mechanistic

  organic
• mechanistic structures


  - uses centralised structures with hierarchy of power

  - decision made by managers

  - tall structure so communcitaion por

  - suited for businesses don't adapt to change often

  - employees specialised in certain tasks and work separately
• organic structures (managing change)

  - uses decentralised structures - employees more say in decision making

  - uses flat structure - allow fast communication

  - best suited to changing environments

  - employees wrk in teams
• Knowledge and information management (managing change)

  - collection, organisation, distribution and application of knowledge and information iii a business

  - should be databases that allow easy to sort and find information require

  - employees record information

  - improve internal communications

  - have wide range of info easily accessible - data maintained and updated
• most useful data is

  directly relevant, correct, up to date and easy to analyse
• flexible employment contracts (managing change)

  - allow more flexible so more effective at managing change eg. more zero hour workers to cope with increase and decrease demand
• ways of flexible employment contracts

  - zero hour contracts

  - mixture core workers and peripheral workers

  - outsource some work
• advantages of flexible employment contracts

  - easier for business to hold on to valuable employees and open more job opportunities for skilled applicants

  -wider range of skilled employees

  - may not need to retrain people
• disadvantages of flexible employment contracts

  - allowing flexi-time could result in poor communication between workers whoo work at different times
• most common barrier to change

  resistance
• in order to manage change effectively

  businesses need to be able to overcome barriers to entry
• organisational structure (barrier to change)


  some structures make it difficult to manage change
• resources (barrier to change)


  businesses need to have correct resources in place before making a change
• poor management (barrier to change)

  when managers are unable to communicate effectively and engage workers - usually result of a lack of trust between manger and workers
• passive resistance (barrier to change)

  when people carry on with old ways despite being aware of new needs and being shown new processes - passive resistance is most common in employees and suppliers
• active resistance (barrier to change)

  when people argue against change and challenge motives for change. Workers can organise themselves through trade union and refuse to carry out tasks. Customers can also show active resistance by refusing to make further purchases from company
• Kotter and Schlesinger's 4 Reasons for resistance to change

  1. Self interest

  2. misunderstanding

  3. low tolerance of change

  4. different assessments of situation
• 1. Self interest (Kotter and Schlesinger's 4 Reasons for resistance to change)

  - people more concerned with own situation rater than success of company - if can't see how change directly benefits - they will resist it

  - people cant see successful business will have individual benefits
• 2. misunderstanding (Kotter and Schlesinger's 4 Reasons for resistance to change)

  - people resists change when dont fully understand what it means - more to lose than gain

  - poor communication from management can leas to incorrect information being passed down to workers - breeds uncertainty and confusion - increase anxiety among employees
• 3. low tolerance for change (Kotter and Schlesinger's 4 Reasons for resistance to change)

  - people het used tac omepleting tasks the way they know - they will resist change if they fear they won't be able to develop new skills required after the change

  - may believe that they wont perform as well in the new situation - will lose job security

  - may be loyal to existing relationship and methods that are known
• 4. different assessment of the situation (Kotter and Schlesinger's 4 Reasons for resistance to change)

  - key stakeholder may have strong disagreements over reasons for change and may be an inability to accept the next for change

  - may not be able to see advantages about change - may only see disadvantages
• Kotter and Schlesinger Six ways of overcoming resistance to change:

  1. education and communication

  2. participation and involvement

  3. facilitation and support

  4. negotiation and agreement

  5. manipulation and co option

  6. explicit and implicit coercion
• 1. education and communication (Kotter and Schlesinger Six ways of overcoming resistance to change)


  - managers need to raise awareness of reasons for change and how it will be carried out.-Education process usually involves discussions, presentation and reports - should clearly communicate reasons behind planned change and identify benefits for business and individuals