3.6 managing change

avatar
Created by
J w

Cards (31)

  • managing change

    the combination of activities involved in planning for, implementing, coordinating and monitoring the process of change
  • internal contraction

    delayering, closing down unprofitable elements
  • external contraction

    selling off elements of the business
  • change in business size as a reason for change

    selling more products, acquisitions or divestment
  • new ownership as a reason for change

    change to overall aims and objectives of the business
  • transformational leadership as a reason for change

    new strategic direction and vision for the business
  • positive effects on competitiveness due to change

    - closure of less successful competitors
    - USP achieved through innovation leading to competitive advantage
    - favourable economic change to support global competitiveness
  • negative effects on competitiveness due to change
    - new entrant to the market
    - change in legislation affect ability to compete
    - dominant businesses as a result of a merger or takeover
  • positive effects on productivity due to change
    - increased productivity as a result of innovation
    - technological advancements
    - shared expertise from a merger or takeover
    - technical economies of scale form growth
  • negative effects on productivity due to change
    - new machinery may disrupt production times
    - reduced capacity utilisation as a result of poor economic conditions
  • positive effects on financial performance due to change
    - low interest rates being favourable for highly geared firms
    - less competitive environment leading to rising sales
    - EOS as a result of changing size
    - increases profitability from greater efficiency
  • negative effects on financial performance due to change
    - falling profits as a result of the economic environment
    - greater legislation
    - external shocks leading to a loss of international competitiveness
  • positive effects on stakeholders due to change
    - improved ability of information to reach customers (internet or legislation)
    - greater return to shareholders from improved profitability
  • negative effects on stakeholders due to change
    - mergers or takeovers leading to less competition, loss of jobs, fall in share value
    - loss of jobs and therefore UK employment following a strategy to moving production abroad
  • incremental change

    change that is implemented over time with a number of small changes being made on a regular basis to achieve ongoing improvements
  • disruptive change

    change that is rapid and unexpected having a dramatic effect on the way in which an industry to business operates
  • Kotter and Schlesingers model of resistance to change
    - parochial self-interest: fear that change will result in them being personally worse off
    - prefer that status quo: happy with the way things are and therefore don't want to change them
    - different assessment: proposed change is not correct and suggest a better solution
    - misunderstanding and fear: motives for change are wrong and mistrust decision makers
  • contingency planning

    a course of major action designed to help a business respond successfully to a major future even that may or may not occur
  • scenario planning

    the process of identifying uncertainties that may affect the future of the business and putting in place solutions
  • scenario planning features

    - risk assessment
    - impact analysis
    - strategy development
    - plan development
    - testing and training
    - maintenance and review
  • risk acceptance

    the full cost of mitigation is greater than the cost of the risk
  • risk assessment

    identifying and evaluating the potential risks that may be involved in an activity that a business proposes to undertake
  • risk limitation

    acceptance of a risk and implementing control that reduce the risk
  • risk transference

    involvement of handling risk off to a willing third party
  • risk mitigation

    identify, assess and prioritise risks and plan responses to deal with the impact of the impact of the risks on the operations of the business
  • risk factors

    - natural disasters
    - IT system failures
    - loss of key staff
  • risk migration

    the actions taken by businesses to minimise or eliminate risk through a process of identifying, assessing and prioritising
  • crisis management

    the manner in which an organisation responds to an unexpected and potentially disastrous events
  • succession planning

    the process by which organisations try to prepare for unexpected and potentially disastrous events
  • strengths of succession plans
    - sense of security
    - limited damage
    - speeds up recovery process
    - informs staff training
    - preventative measures can be part of CSR
  • limitations of succession plans
    - costly and time consuming: opportunity costs
    - needs reviewing
    - lack of predictability