Management and change

• Internal influences

  Internal change comes from within the business e.g ideas from employees, management and a strong commitment to social responsibility. Examples of internal influences:

  • May come from a crisis e.g a product is found to be unsafe 
  • Poor financial performance e.g lower profits. Review financial statements 
  • Employees innovative ideas, or employee dissatisfaction 
• External influences

  External change comes from outside of the business (the business has no control over this but must respond appropriately):

  • New competition opens up 
  • An existing competitor changes its pricing policy
  • The introduction of new technology 
  • Advertising and increased online presence of competitors
  • Legislation/laws may change 
  • Society’s attitude and values
• Managing change effectively

  Involves being proactive not reactive to various circumstances.

   
• Identifying the need for change

  Managers should be aware of changes in the internal and external business environment. Managers need access to accurate and current information. 
• Business Information systems

  Business information systems are used to gather data, organise and summarise it. 

  E.g The operations manager needs data about production costs and schedules.

  Information leading a business into change:

  The marketing manager needs data about sales’, product development and customer satisfaction. 

  The finance manager needs data about financial transactions and cash flows. 

  The HR manager needs data about staff absences, training requirements, and overtime payments. 
• Setting achievable goals

  • The vision statement states the purpose of the business. A business must set goals that are achievable. E.g The vision statement for Ollie's organic food is: Ollie’s will be the leading provider of food that is grown organically. Ollie’s will be the most respected supplier of quality organic food. 
  • Goals could be to increase market share by 5% in 12 months or to decrease wastage by 10% over the next 3 months. These goals are realistic and measurable-they are achievable. 
  • Overall it refers to making the change achievable for the business 
• Resistance to change

  -Financial cost (managers and owners)

  -Purchasing new equipment (Managers and owners)

  -Reorganising plant layout (employees and managers)

  -Inertia (employees mainly)
• Driving forces when resisting to change

  • Opportunity for a larger market (more clients)
  • Greater profit potential 
  • Growth of the firm into the future 

  Restraining forces when restoring to change

  • Employee reluctance to move location
  • Intertaia  
• Strategies to reduce resistance to change

  • Outline the positive and negative aspects of the change 
  • Make sure communication is two way, not just from the top down
  • Provide constant feedback 
  • Build trust among employees 
  • Offer support-this reduces fear and anxiety 
  • Make sure the changes are reasonable 
• Management consultants

  A management consultant is someone who has specialised knowledge and skills within an area of business.  

  • Risk management 
  • Brand protection 
  • Business set up 
  • Executive recruitment 
  • Sustainability 
  • Managing change 

  What they have:

  • Expertise 
  • Knowledge and skills
  • An objective viewpoint 
  • Access to latest research 
  • Awareness of industry best practices