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Unit 10: Managing Strategic Change - Coggle Diagram
Unit 10: Managing Strategic Change
Barriers to change
Can range from being a lack of clear objectives, inappropriate resources and untrained staff.
Kotter and Schlesinger
4 reasons for the resistance to change
Different assessments
- change is resisted because employees disagree with the reason for the change
Misunderstanding and a lack of trust
- employees are resistant to change because the change has not been fully explained to them.
Low tolerance for change
- change resisted because employees value security in the workplace.
Self- interest
- people are more concerned with how the change may affect them personally rather than the benefits the business receive.
6 methods of how to deal with change
Education and communication
Participation and involvement
Facilitation and support
Manipulation and co-option
Negotiation and bargaining
Explicit and implicit coercion
Change limiting factors
People having a resistance to change, how it may impact the people, external factors and the organisational structure.
Managing organisational culture
Only a small part of business culture can be seen, as much more in interchangeable.
Business culture assesses the values, attitudes and beliefs that are shred between people in an organisation
Sources of culture determined by Johnson and Scholes cultural world:
Rituals and routines
Organisational structures
Power relations
Control systems
Handy's cultural model:
identified 4 main types of culture
Task culture
- culture focuses on the fact that projects need to be completed and that the power comes from those who hold expertise.
Role culture
- decisions made through well established rules and procedures
Power culture
comes from the main personalities of the culture. Therefore, there are competitive attitudes between employees in gaining power.
Person culture
has a minimal structure, and works more on a client- by- client basis rather than project basis.
Changing organisational culture
Reasons for change
Business performance-
Organisational culture may not be a cause but a symptom for change, like lost competitive advantage, no flexibility so faster moving competitors can overtake
New leadership-
Bring in new strategies which identify a reason for change
External environment-
Interest rates, legislations or economy
Supporting change management-
In order to drive the change more in business
Problems with changing
Culture is usually deeply embedded into the business
Resistant to a change in power structure: who will be making the decisions?
Rituals and routines: daily actions and behaviour of individuals- how they deal with customers may change- hard to adapt to.
A paradigm in a business- hard to identify or describe but its a difficult thing to change as it has built up over time
Loyalty to existing relationships: people fail to accept a need for change, preference for existing arrangements
Fear of change: loss of power or skills, fear of unknown, inability to perform as well in new conditions, break up of work groups- motivation/effieciency?
Types of change
Incremental change- where business' make step by step changes daily to respond to incoming opportunities or threats.
Step change is introduced when more radical change is needed. It is often used when the business appears to be suffering from strategic drift.
The change here is substantial and obvious- involves the business significantly altering of their activities and management
Disruptive change- a form of step change that arises from a change in the external environment. A leading cause of disruptive change is improved technology as it provides new ways of delivering goods and services and barriers to entry.
Flexible working
Flexible organizations can respond quickly to changes taking place in the external environment- allows capacity to be increased or reduced quickly in response to external pressures.
An example of a flexible working strategy is outsourcing.
Flexible employment contracts
Allows employers to change terms in their contracts in certain circumstances.
Zero hour contracts- employees are paid for the hours they work for, and are called into work when necessary
Annual contracts- a fixed number of working hours are assigned for the year but length of the working day may vary
Handy's Shamrock model- contract workers, flexible workers and core workers. If only core workers are present, then flexibility can't be possible and vice versa.
Lewin's force field analysis
According to the model, in order for change to occur in the business then the driving forces must exceed the resisting forces.
Internal driving forces
: need for higher profits, for example the business may need to introduce a strategy that will reduce costs. Poor efficiency, a business may need to implement a change of training program or hire more experienced staff.
External driving forces: Customer demand and competition. One method of change may be adapting capacity to increase the amount of inventory that the business holds and therefore gain a competitive advantage
Provides a balance between forces that drive for change and forced that resist change.
Resistance to change: there is natural opposition because it may be sudden and is disruptive. Important- resistance to change can disrupt achieving organisational objectives.
Misunderstanding
- the change may have been communicated wrong or not enough sufficient information has been provided to the employees.
This may lead to a further resistance to change where the employee disagrees with the method of change or the reason for the change
Employees who disagree may leave the business over disagreement disputes which may lead to a chain reaction of staff leaving. This can increase retention rates and therefore cause a bad reputation.
However
depends on
the type of leadership style: businesses that follow a democratic approach will be more inclined to hear what employees think about a decision. In some cases, employees may be consulted before the decision is even announced.
Self interest
- individuals may become concerned with how the changes effect themselves even if the change will have an overall positive effect on the business. This may lead to the managers firing any employees who oppose= unfair dismissal and poor reputation.
Network analysis
A process that devices the most efficient way to complete a task
Critical path
- the sequence of activities within the task which have to be completed in a designated amount of time to prevent delays in overall completion of the task
Calculations
EST= calculated by adding up the duration of the previous activities leading to the new activity.
If there is more than one pathway leading up to a node, the highest total is taken as the EST
LFT= worked from looking right to left. Calculated by taking away the duration of previous activities by the final nodes EST.
For multiple pathways, the lowest total is taken as the LFT. For example, if one sum of pathways = 6, and another was 8, the LFT would be 6. However this tells us that the activity can finish after 8 days without the whole project being delayed.
Advantage- efficiency of resources is improved
. Limiting the amount of time taken to complete a project means that the time savings can become cost savings and this can improve the competitiveness of the business. Resources can be more efficiently used from the business being aware of when activities will be taking place. This is because businesses are assisted in stock ordering and resource planning. This should improve efficiency of resources because they can correspond to the available supply.
Depends on
- the pattern of the network analysis. If non- identifiable patterns are made from the network analysis then businesses won't be as certain that their resources will correspond to the supply
Advantage- relationship with customers can be improved.
CPA provides detailed information for when the schedule will be complete which means that they can make more reliable predictions to customers about when they will be met with their services. Managers also have to go through extensive planning which helps to reduce the risk of delays. This ensures that the prediction made is not just accurate but also less likely to be altered, making the customer likely to become loyal.
Depends on
- if customers are aware of the extensive planning CPA has. If their product is delayed by external influences, customers will not be dissatisfied because they are aware that it is not the businesses fault.
Disadvantage- CPA may cause rigidity.
Managers may view the timings and sequence of the activities as unchangeable. This may cause the manager to miss out on opportunities to reduce overall time for a project by failing to find a flexibility scope. Competitors using CPA may not have this attitude so can overtake the company by meeting customer while still benefiting from other CPA advantages.
Depends on
- the attitude of the manager. Very reliant on individual differences.
Disadvantage- may cause the business to mainly focus on time completing the product rather than the quality.
Depends on the pricing method that the business has gone with
Change management: Kotter and Schlesinger
Why do people resist change?
Self-interest:
caused from a feeling of threat to job security, status and financial position
individuals often will put themselves first in these situations especially if they a feel a lack of loyalty to their job
Disagreement:
people may be correctly informed and not be completely thinking of themselves and just genuinely disagree with the reason behind the change
Misunderstanding/information:
people may be misinformed about what the actual reason for a change is
may be misinformed about what the actual strategic position of the business is
Low tolerance:
affects people who need consistency and stability in the workforce
if this is a majority then resistance to change may increase
Methods to overcoming resistance to change
Education and communication
effective communication about why the change in needed is essential to avoid peoples resistance
this is because people see the logic of the change and misconceptions can be avoided
Participation and Involvement
:
involving employees in the program for change can lead to levels of commitment rather than just compliance
Facilitation and Support:
additional training or counselling which can help people throughout the change
Co-option and manipulation:
selective use of information which can persuade people to behave in a certain way
used as a last resort as it can be viewed as unethical
Negotiation and bargaining:
offering better financial rewards for those who are not resisting the change to motivate the people who are
Co-ercion:
telling people the possible negative consequences which may occur if they resist the change or telling people exactly what the consequences of their resistance will be
however it damages trust between employees and employers