10.1 - Managing change Flashcards
Organic growth
Growth from within the business - from retained profits, for example, Branding and promotions, product development and innovation.
Rationalisation
Explain delayering
Rationalisation is when a business minimises its workforce and equipment needed in order to become more efficient, for example making redundancies and delayering.
Delayering is the removal of one or more levels of hierarchy within an organisation which can reduce costs and improve communication.
Strategic gap analysis
Strategic gap analysis requires an evaluation of the difference between a business endeavours best possible outcome and the actual outcome.
It aims to determine what steps a company takes to achieve a particular goal and how successful it is.
Flexible organisation
To respond to change businesses need to have a more flexible approach to their organisations. This includes:
- Restructuring
- Delayering
- Flexible employment contracts
- Organic structures vs. mechanistic
- Knowledge and information management
Chain of command
How people relate to each other in a business and communicate and who they report too. Do they have a middle management layers that report up and up until information is passed on to the people at the top?
First mover advantage
When a business is the first to launch an innovative product with new ideas and features, or the first in a new market. They have the advantage of creating strong brand loyalty before facing competition. However, they often have to then maintain that status to stay in the lead.
Operational gearing
A term to describe the effect that fixed costs can have on the relationship between sales and operating profit. If a business has no operational gearing, profits would rise at the same rate that sales increase (100% profit form sales).
Unfair dismissal
When workers are dismissed under unfair circumstances. Examples include:
- Membership with a trade union
- Employee exposed wrongdoing in your workplace (whistleblowing)
- Maternity/paternity leave
- Adoption leave
- Shared parental leave
- They refuse to give up a right under the Working Time Regulations 1998—such as the right to a rest break
change management
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Barriers to change
Although change in inevitable, it is nearly always resisted in organisations. Kotter and Schlesinger identified four key reasons for it:
1) Parochial self-interest - Individuals are only concerned with the implications for themselves
2) Misunderstanding -Communication problems or inadequate information
3) Low tolerance to change - A sense of insecurity, especially if there has been a lot of change recently
4) different assessment of the situation - There could he disagreements for the need for change or the advantages or disadvantages of it.
Other organisational barriers to change include:
- Existing power structures - If a highly mechanistic structure is in place it may prove difficult to make changes
- Resistance from work groups - Employees collectively resist the change (Unions)
- Failure of previous change initiatives - possibly because it was managed poorly
- Habit - people are comfortable and don’t want things to change
- Economic - Employees may perceive change as affecting their pay or rewards and therefore may want to keep the status quo
- Fear of the unknown - the unknown is uncomfortable and may lead to anxiety. This is especially true when dealing with technology.
Benchmarking
Benchmarking is the practice of comparing business processes and performance metrics to industry bests and best practices from other companies. Dimensions typically measured are:
- Quality
- Time
- Cost.
Management consultants
Management consultants work with businesses to improve their performance by providing expert advice to solve problems and encourage growth.
They work with businesses across a wide range of sectors, including business strategy, finance, HR and marketing.
What are the internal types of change?
A change made internally:
- Management style
- Organisation structure
- New product lines
- Number of employees
What are the external types of change?
A change in the external economy that a business cannot control:
- Competition lowering prices
- political factors
- consumer demands
- change in laws/legislation
What is incremental change?
Implementing small changes to solve a problem rather than a large disruptive change (small improvements). For example:
- A new model of a product released
- New use of digital technology
