3.6 - Managing Change Flashcards
(24 cards)
Causes of change: Organisational Structure
- Growth and expansion
- issues they may face: publicity, increased costs, risk, company culture, profits
What are the effects of change on a business?
Causes of change: Poor business performance
Can lead to:
- poor sales
- low performance
- stagnated growth
To improve:
- new objectives, goals & targets
- different strategies
- cutbacks and resets
Causes of change: New Ownership
may happen if the business has been bought or merged, business may face:
- new vision
- regulation
- redundancies
- clash of cultures
- issues of communication
Causes of change: Transformational Leadership
May happen if new leadership is brought into the firm that seeks to change it, business may face:
- may need to reinvest to achieve competitive advantage
- a new culture which challenges managers to develop new ways of thinking
- the business encourages the development of new ideas
Causes of change: The Market and other External Factors
Refers to:
- new entrants to the market
- EU changes
- changes to law and regulation
Issues they may face:
- increasing R&D budget to introduce more innovative products
- they may need to change corporate objectives
Effects of change: Competitiveness
- be aware of competitors actions and be prepared to react to them
- bench a mark with similar businesses to make sure they are keeping up
- invest in R&D to keep innovating and bringing new products to the market
- investigate new and emerging markets
Effects of change: Productivity
- invest in new equipment and machinery
- change production methods
- change quality management methods
- retrain managers so that their skills meet new technologies used
Effects of change: Financial Performance
- compare sales estimate with available production capacity
- budget for necessary increases in staff and capacity
- produce new cash flow forecasts
- discuss how to raise new capital
Effects of change: Stakeholders
- employees may feel unsure about their future (duplicate roles and redundancies OR new positive opportunities)
- shareholders may be reluctant to invest while there is period of change happening, may wait until circumstances are more settled
- customers may be delighted with new product range OR may not be pleased
- suppliers may see the change as an opportunity tit renegotiate old contracts with favourable terms OR may panic they will be replaced with new suppliers
Key factions of change: How does organisational culture affect change?
A strong or traditional culture may resist change, while a flexible and open culture is more likely to embrace it.
Key factors of change: How does organisational size affect change?
- Larger organisations often face more resistance, slower communication, and complex decision-making, making change harder to implement.
- smaller organisations have fewer layers of hierarchy, faster communication, and more flexible structures.
- E.g. changing from an LTD to a PLC has positive and negatives
Key Factors of change: Why is the time and speed of change important?
Rapid change can overwhelm staff and increase resistance, while slower change allows time for planning, training, and adjustment.
Key factors of change: What is resistance to change?
When employees or stakeholders oppose or struggle with change due to fear, uncertainty, or lack of understanding.
Name two ways to manage resistance to change.
Clear communication and involving employees in the process (e.g. consultation or training).
Why might employees resist change?
Fear of job loss, lack of trust in leadership, or disruption to routines.
What is scenario planning?
A strategic tool where businesses plan for possible future events or disruptions to reduce risk and improve preparedness.
What is the main purpose of scenario planning?
To identify potential risks and create contingency plans so the business can respond quickly and effectively.
Give two examples of scenarios a business might plan for.
Natural disasters, economic recession
What is risk assessment in scenario planning?
The process of identifying potential risks and evaluating the likelihood and impact of each.
What is contingency planning?
Helps businesses respond faster and more effectively to change or crisis.
Give some advantages of scenario planning.
Helps businesses respond faster and more effectively to change or crisis.
Give some disadvantages of scenario planning.
Time-consuming and costly; future events are unpredictable and plans may be inaccurate.
How does scenario planning support strategic decision-making?
By preparing for uncertainty, it reduces risk and helps protect long-term objectives.
