Business Management Organisational Change
What are driving forces?
forces that initiate and encourage and support change some examples may include, culture, employees, management, low productivity, shareholders, profits (finance)
Globalisation (Macro Environment)
has seen money, goods and ideas more around the globe, no boundaries this is much faster. This has forced organisations to re-think operations.
Technology (Macro environment)
Any advancements in technologies, newer machinery that may replace the employees in the workplace.
Kotter Theory 8-
Institutionalise new approaches- Management needs to reinforce among staff on understanding of the link between the changes made and the future success of the organisation
Co-optation (high risk practise)
Involves the selection of an influential person among the potential resistors to be involved in the development and implementation of the change process. However the role is symbolic and very little authority.
The role of leadership in change management
Leadership is important when overcoming this resistance and ensuring a successful change is implemented. A leader should show empathy and has good listening skills to help stakeholders to overcome their concerns. Employees are often more likely to accept change if they feel their manager is looking out for their welfare.
Macro environment
Macro environment is one that is forever changing yet the organisation has no control over it.
The four stages of change for employees?
Negotiation- employees deny the change ignore it or panic Self-justification- employees give reasons for resisting and opposing change this allows them time to try to reign control of the situation Exploration- this may involve a SWOT analysis or some type of cost benefit analysis as a way to look at change in a context Resolution- this is when an employee focuses on the future and is positive about oppertunities
Employees (internal environments)
employees can be a source for a change in number of ways. Employees may also drive change through innovation
Internal environments
factors from the internal environments that can be sources for change include- management, employees, corporate culture, policies.
Suppliers (Operating Environment)
if suppliers aren't able to deliver on time , or deliver poor quality , are found to have unethical practises can all force change
What is organisational change ?
is the adoption of a new idea or behaviour by an organisation, this change is often due to change (or foreseeable change) internal or external environment. Organisation can be either proactive, or reactive.
Management (Internal environments)
managers aim to run a successful business. Poor performance can led to management reviewing practises objectives and staff.
Competitors (operating environments)
new competitors entering the market. Current competitots changing their operations improving
Policies (internal environments)
policies are often updated which forces an organisation to change the way it handles different situations.
Social (Macro environment)
societies attitudes.
Interest group (Operating environments)
such as trade unions can put pressure on an organisation to alter its conditions of employment safety procedures and wages.
Strategies for effective change?
the employees are the stakeholders that are affected the most and therefore can become the most resistant. They can feel isolated, fear, frustration, uncertainty and many other feelings too. The two possible strategies are low risk approaches and the high risk approaches.
Impact on change on human resource management-
things as recruitment and selection may be altered, training may need to be undertaken to develop teamwork skills decision making, performance appraisal and reward systems need to reinforce new behaviours.
Two way communication (Low practice)
This tactic assumes that if employees fully understand the change they are more likely to support it.
Customers (operating environment)
customers trends and preferences.
Corporate culture (Internal environments)
if culture is preventing an Organization from achieving its strategic objectives then it needs to change. Culture can also drive an org to embrace new behaviour.
Negotiation (Low Practise)
Agreements can be stuck between management and employees to ensure support for change. Negotiation can empower employees and enhance their support for change
High risk practise-
Autocratic approach to implementing change, involving use of force, threats and manipulation of situations.
During times of change a strong leader will
Be able to communicate a clear vision with stakeholders, Listen to employees concern, resolve conflicts that may arise as change is being implemented, motivate stakeholders on their benefits of the change, provide support for these struggling to adapt, focus on the needs of employees.
Impact on the internal environments- changes in structure.
Changes in structure, structural change can occur to forces an in recent years they have resulted in: Flatter structure, some middle management positions are abolished and the frontline receives greater responsibilities, Outsourcing, many of the non-core projects in contracts this helps costs to a minimum and create greater flexibility. Work teams- linking with flatter structure teamwork allows organisations to be more flexible and responsive this helps keel high and guaranteed creativity.
Impact on the internal environments (Corporate culture)
Changes within the external or internal environments would be reflected in its corporate culture this allows the organisation to compete in the new environments
Kotter theory- Step 4
Communicate the vision- managers must clearly communicate the vision and goals to staff. Many methods can be used. Showing examples of the change is an action can work positively.
Kotter theory- Step 7
Consolidate the improvements- support improvements with resources and ensure that old practices are not blocking further progress.
Economic (Macro environment)
Consumer confidence, exchange rates, interest rates global economy are all factors that pressure change
Kotters's theory- Stage 3
Create a vision- setting a vision and goals will help direct the change and give it something to work towards.
How is leadership important in Kotter's change process
Creating visions Communicating the vision Removing obstacles and empowering employees.
What is the force field analysis
Developed by Kurt Lewin and descried the driving and restraining forces for change, the idea is to have enough driving forces to overcome the restraining forces.
Management and Management styles (Driving and restraining forces)
Driving Forces- management that believes in the change and have the leadership qualities to drive the change. Restraining force- have an autocratic management style or not having the skills to lead a change can cause resistance.
Cost (Driving and restraining forces)
Driving- The ability to minimise cost will allow organisation to bring in change in an efficient and cost effective way. Resistance- If the cost involved in change are high it may mean that the change is postponed or not implemented as well as it should.
Organisational inertia (Driving and restraining forces)
Driving- an existing organisation that is dynamic and quick to take a new activity and challenges is likely o change with few problems. A new organisation may find that it is able to adopt change with even fewer difficulties. Resistance- organisations that are stable with little change over time are less likely to respond to changes quickly or in a positive way, an established organisation with a long history and tradition may find it more difficult.
Legislations (Driving and restraining forces)
Driving- changes in legislations may force an organisation to change Restraining- Laws may make it difficult for an organisation to implement a change this may be a major hurdle to overcome.
Employees (Driving and restraining forces)
Driving- employees along with a positive culture can help drive the change Restraining- Employees feel that the change is being forced upon them fear for the unknown can cause major resistance to the change.
Productivity (Driving and restraining forces)
Driving- if the change will result in an improved productivity then it can provide support for change. Restraining- If the impact on productivity is negative during the implementation stage or after completion it can cause resistance.
Competitors (Driving and restraining forces)
Driving- lack of competitors in a market may help support a change, competitors may set a precedence that another organisation can follow. Restraining- new competitors may make it difficult to implement a change.
Time (Driving and restraining forces)
Driving- organisations that are able to devote enough time to implement the change will help support it. Also the timing of the change in regards to the business environments may provide support. Restraining- Organisations that do not make time to implement the change effectively can make it difficult to change and thus causes restraint. The timing of change in regards to business environments may form resistance.
Participation (low practise)
Employees can be involved in the change process it can be difficult to resist change (decision) you have been apart of making.
Kotter Theory- Step 5
Empower staff to act on vision- managers must give staff confidence and encourage behaviours that supports the change. Encourage risk taking and remove obstacles.
Kotters Theory- Step 1
Establish a sense or urgency- examine the market identify any threats or opportunities and set a need for change. People are more willing to change if they see it as a response to an existing or future problem.
Practices to successfully implement change in an organisation
Evaluate leaders to ensure that they understand what the change it, use a system approach to ensure that all aspect of the organisation are considered when planning and implementing change. Using a team approach and involve stakeholders. Employer managers and employees to make decisions and implement change.
Operating Environment
Factors from the operating environments that can be sources for change include- customers, competitors, suppliers, interest groups.
What are restraining forces?
Forces that work against the change creating resistance this can be external but are often from internal environments some forces may include, management, time, employees, competitors, organisational inertia.
Kotters Theory- Step 2
Form a guiding team- This team works to make the change happen. They must work well together and be given power to lead change.
Changes can be ...
Incremental- small ongoing changes Transformational- major changes
Low risk Practices
Participative approach to implementation of change, use of communication, empowerment, work groups and support for those who are impacted. Some approaches include- two way communication, participation, support, Negotiation.
Support (Low practise)
People are affected must be supported through the process this can include listening a training in new skills.
Kotter Theory- Step 6
Planning for and celebrating progress- managers must recognise and reward employees who readily embrace the change and demonstrate the new behaviours.
Impact of change on operations
Reducing production costs it it important in gaining a competitive advantage some main changes in operation are: refitting factories with new technologies, smaller factories due to flexible manufacturing and emphasis on quality.
Manipulation (high risk practise)
With the aim of gaining support for the change management attempts to influence the employee view by the selective use of facts or deception.
Threat (high risk practise)
This tactic directs against those who resist the change. Possible threats include, retrenchment, transfer, loss of promotion, demotion
What is change?
any alteration to an organisation and or its work environment
What roles does leadership play in reducing resistance to change
being open and honest, communicating clearly to resistance, motivating and inspiring people towards the change.
Legal and Political (Macro environment)
changes in government, government funding and legislations.