1
Q
The importance of Leadership in management change
A
- Leaders require effective
- information skills (analyse information that relates to change.)
- Interpersonal skills (being able to show empathy and relate/communicate with employees)
- Decision making skills (making timely and well-informed decisions to implement change.)
- If manager can display effective leadership skills, then resistance will be reduced.
- A leader can ‘sell’ the need for change automatically to overcome resistant points. Employees are likely to embrace change if they can trust manager and feel their support.
- Leadership- The process of positively influencing, encouraging, and motivating individuals, to achieve objectives.
2
Q
A successful manager will need to:
A
- Promote the change in a matter that will achieve cooperation and acceptance- be a role model
- Resolve conflicts, which often arises when change is implemented
- Keeps an open mind, seeks new ideas and feedback
- Cultivates a sense of belonging which pushing change
- Provides support, guidance, and training
- Builds and communicates a clear vision
3
Q
Management strategies to respond to KPI’s
A
• Businesses need to ensure that KPI’s are monitored and reviewed regularly so necessary changes can be implemented. To implement change to remain competitive a manager will need to develop appropriate strategies to respond to KPI’s data. More reactive.
4
Q
Staff training Management strategies
A
- Is the process of providing staff with the knowledge or skills required to perform task. Could be on the job or off the job training. Can increase skill level of employees, motivation, increased efficiency.
- KPI high level of staff turnover- staff may want training for career advancement, low rate of productivity growth- increased skill level will increase efficiency.
- Adv- improves employees’ knowledge and skill which improves productivity, improves quality and speed of output, reduces workplace accidents
- Disadv- Takes time away from production, financial cost of training employee can increase expense.
5
Q
Staff motivation Management strategies
A
- Is concerned with the desire or how driven employees are to achieve objectives. It is reflected by the level of commitment and energy employees bring to their job. A business could job re-design, performance related pay, setting goals with employees
- KPI increasing number of complaints- improves customer service, decreasing levels of sales and market share- increased productivity and improves customer service.
- Adv- improves morale which leads to improve corporate culture, encourages employer loyalty through things like performance related pay
- Disadv- not all employees are motivated by same types of rewards, reward may add extra cost to business, time consuming identifying best reward for employee.
6
Q
Change in management styles and skills Management strategies
A
- Style refers to the behaviour and attitude a manager uses when making decisions, directions and motivating staff when implementing plans to achieve business objectives. The factors are nature of task, managers personality, time, and experience. Then name some styles
- Skills are the abilities or expertise that a manager will used to achieve business objectives. Name some skills e.g interpersonal
- KPI- Decrease net profit- maybe time sensitive but managers may go persuasive or autocratic in style to use decision making, leadership, and clear communication skills. Increasing number of complaints- two-way communication with employees would assist in understanding problem areas. Staff Turnover- More staff will leave with autocratic style as they have no say.
- Adv- can alter style depending on situation, variety of styles to choose from that will suit situation and employees needs
- Disadv- some managers need support and training developing new skills, may take time for managers to change their style.
7
Q
Increased Investment in Technology Management strategies
A
- Technology is the practical application of science to the development of products or services to achieve business objectives.
- Technology can be implemented to increase productivity, improve safety, and improve quality.
- Effective use of technology assists a business make better use of its time and increase its output.
- The initial cost of technology may be expensive but in the long run it will most likely improve business performance.
- KPI- Increasing Level of waste- CAM/ production lines can result fewer defects or waste. Increased customer complaints- Use CAD may improve quality. Low number of sales- website can give larger access to customers.
- Adv- Improves speed of making output making it easier to meet deadlines, improves quality and reduces defects which may lead to improved customer satisfaction and increased sales, reduces cost per output.
- Disadv- Cost to install and train employees impacts profits, may lead to redundancies making employees resist change.
8
Q
Improving Quality in Production Management strategies
A
- Quality is the degree to which customers’ expectations is satisfied. Having a higher quality product is one way a business can maintain competitive advantage over rival businesses. Strategies could include QC, QA, and TQM.
- Decreases number of sales- Obtaining QA will give competitive advantage over competitors by improving reputation. Increasing levels of waste- Applying TQM minimises defects and reduces waste. Customer complaints- inspecting goods will result in less defects being passed on.
- Adv- High quality outputs leads to satisfied customers can be done by improving sales, less defects and less waste decreases costs.
- Disadv- Costs time and money to implement and train employees on quality strategies.
9
Q
Initiating Lean production techniques Management strategies
A
- Lean production is a business-wide approach that improves the efficiency and effectiveness of operations by reducing waste and improving quality to increase value for customers. POTZ
- KPI- high number of customer complaints- Aims for zero defects which will satisfy customers because no defects are being passed on to consumer. High level of waste- Using Pull focus or one piece flow can reduce waste of time, labour and excess motion.
- Adv- Reduces costs and without reducing quality, adds value to the good or service to the consumer.
- Disadv- Workers need to be trained for lean which takes time and costs for the business.
10
Q
Cost cutting Management strategies
A
- Involves strategies that aims to reduce expenses. Business will need to decide this without compromising quality. They do this to reduce selling price. Some include: JIT, reduce energy and water costs, using technology.
- KPI- Low profit figures- done to reduce expenses so business is profitable. Increasing level of wastage- decreasing level of waste- done by managing supply chain more effectively. Low number of sales- reduces costs of production to improve competitiveness.
- Adv- Increases net profit figures, can reduce levels of waste
- Disadv- Takes time to monitor costs and determine how to reduce costs, can lead to reduction in quality especially if inferior raw material is sourced, may lead to redundancies.
11
Q
Redeployment of resources Management strategies
A
- Refers to moving resources from one area of the business to another. Using them in different ways can improve the efficiency and effectiveness of a business.
- Natural- Occur in nature water, land wood etc. Business may decide to recycle water or resources from overseas supplier.
- Capital- includes equipment, buildings, and technology. Can redeploy to improve efficiency rather than allow a machinery to sit idle. A business could move productions overseas.
- Labour- Includes employees. May redeploy them in another area to reduce paying for redundancies or trained to gain job knowledge in another area of the business.
- KPI- High levels of turnover and workplace accidents- Employees are redeployed by automation where jobs are repetitive or dangerous. High level of wastage- Consider recycling natural resources such as water or solar power.
- Adv- Can lead to more efficient use of resource which can decrease expenses, can improve sales net profit and morale
- Disadv- May have negative effect on employee if they are transferred. E.g Low motivation, takes time to redeploy resources, there may be financial cost when redeploying resources
12
Q
Seeking new business opportunities domestically and globally
A
- Business may do this to respond to strong competition, gain higher profit margins, attract new customers, capitalising on business success.
- number of strategies that a manager can pursue to create new business opportunities that are proactive in nature. Two categories Domestic and globally
- Domestic opportunities- are new business opportunities that arise from within the domestic market which the business operates in. Expanding market share domestically is easier as it is cheaper, fewer regulations and no language barrier. Role of the manager to seek business opportunities to increase market share.
- Global Opportunities- refers to circumstances arsing beyond domestic market. Australia is a relatively small market and the ability to operate on a global scale brings opportunities for business to be more successful and increase market share beyond local market.
13
Q
Multiple Branding- domestic
A
- Businesses sells multiple brands in the same market. While customers feel like they have choice they are purchasing from one or two major businesses.
- Adv- business holds more shelf space, leaving no room for competitor, fills all price and gaps in the market by providing cheaper options, saturates the market
- Disadv- multi- branding can effect business imagine, customers may think business is profit orientated, customers can be confused by multi-branding and switch products
14
Q
Product differentiation-domestic
A
- A business uses brand names and advertising to establish some key differences between product and substitutional products. Businesses do this to make their product stand out to make it appear differently to existing products on market.
- Adv- charges a premium price, enters new market and attracts new customers
- Disadv- competitors can copy taking away market share, can also be costly, could take a long time to achieve brand image.
- Lush a makeup brand does this by committing ethical products and offers free sample which brands like Sephora don’t.
15
Q
Franchising-domestic
A
- Allows one business to operate under the trading name of another business’s established brand and sell its products. The franchisor grants the rights to use business name and franchisee purchases the franchise.
- Adv- Allows business to expand its operations without needing to borrow large amounts of capital, potential losses are minimised if not successful as costs are on franchisee
- Disadv- can result in loss of control, franchisee and franchisor can run into disagreements when negotiating changes, franchisee may not deliver product/ service consistently
16
Q
Government services-domestic
A
- Small businesses Victoria is a government department that offers advice and assistance to businesses seeking opportunity. Victoria provides specific programs and funding in areas such as: new energy job funds, providing workshops on how to grow business, bringing expert advice.
- Adv- access to experts in the area, free services and funding available
- Disadv- Limited access to financial assistance, advice may be generic and not suitable to individual businesses.
17
Q
investment in R&D -domestic
A
- Investment in R&D refers to activity’s companies undertake to innovate and introduce new products and services
- Adv- allows business to remain competitive and ahead of trends, opportunity to increase sale
- Disadv- Research is expensive and time consuming, can be risky as outcome may not lead to success.
- Coles- Identified 33% of people do not know what to have for dinner at 5pm
18
Q
Exporting- Global opportunities
A
- A business exports when it sends goods or services to another country for sale. Once business considered laws, culture and demographics, exporting can allow businesses to access larger markets. Austrade helps business to do so.
- Adv- access to larger markets, opportunity to increase sales and profit, assists in spreading risk of a business.
- Disadv- Must understand different culture, hidden costs involved in meeting regulations
- Coles- flagged its exporting opportunities in its $400 million meat segment
19
Q
Government Services Exporting
A
- Australian Trade and investment commission- role to advance Australia’s international trade and education, investment, and tourism interests by providing information, advice, and services. Achieved by making connections overseas and promoting Australian business. Austrade.
- Adv- access to experts in the area, free services, and funding available
- Disadv- Limited access to financial assistance, advice may be generic and not suitable to individual businesses.
20
Q
Online shopping Global
A
- Offering customers, the ability to browse available goods and services via the internet, order items and services, purchases, pay online and organise delivery.
- Adv- Allows the whole world to be a potential market for the business, encourages expansion of the customers base thus increasing market share
- Disadv- can be time consuming and expensive, technology will pose as a financial cost, staff will need to be trained
- Amazon example of successful online shopping how they can sell goods online to Australia from being an American company
21
Q
Taking advantage of new technology Exporting
A
- Using automation and robotics to support online orders
- Adv- can improve quality or service, can improve efficiency/ increase productivity as waste reduce and speed increases, possibility of creating new markets
- Disadv- investing in technology can be expensive to set up and maintain, staff may require training, employees may be replaced, may take time to research and implement
- Coles has partnered with Ocado which will employ AI technology for pick and pack online shopping orders.
22
Q
The principle of Learning Organisations (Senge)
A
- Senge developed a concept that business should aim to become learning organisations to excel in the future. He suggests that a business must have dynamic entities as they adapt and continually improve into the business they inspire to be. Organisations must continually expand peoples capacity, patterned of thinking and aspirations set free.
- Principles are system thinking, personal mastery, mental models, building shared vision, team learning.
23
Q
System Thinking
A
- The cornerstone of learning organisations. The ability to see the big picture beyond what’s occurring at a business. It is essential to look at management as a whole and the interrelationships between all parts. Senge argues a long-term approach should be taken not short-term.
- At Google they focus on the future of their business creating employees who can foster their innovation for the better of consumers.
24
Q
Personal Mastery
A
- Businesses learn through individuals who learn. Defined as the discipline of continually deepening personal vision. People who have personal mastery are continual learns who are aware of what they know, what they don’t know and how to improve. This includes developing skills looking objectively at oneself and abilities.
- For this to occur businesses need to provide training and development, performance management and appraisal and career progression.
- At Google they have fostered a culture where individuals are driven to learn and are surrounded in learning opportunities helps a business grow more towards a learning organisation.
25
Mental Models
* Are important set assumptions that influence how we understand the world and how we act. Requires people to become aware and reflect on own assumptions of values and beliefs. Includes meaningful conversations with others.
* For this to happen businesses need to give employees opportunity to learn new skills. The aim is for the business to move in the right direction by openness and honesty and the sharing of responsibilities. Open culture which encourages trust will be more successful of implementing change.
* Google has created a mental model where employees are openly allowed to express and reflect on their ideas openly on how they can help their billions of users by creating a culture that allows people to freely communicate to develop a better service to consumers.
26
Building shared vision
* Leaders who seek to build shared vision requires a set of principles to move personal vison to a shared one. To develop a share vision, it needs to come from a range of people not just the leader otherwise there is not necessarily a level of commitment. Having shared vision will motivate all members of the business to learn not because they are told to but because they want to. It will encourage risk taking and foster innovation.
* At Google they work in groups which fosters the building of share vision by sharing their skills to help aim towards one main vision of Google.
27
Team Learning
* The process of developing the capacities of a team to create the result its members truly desire. Senge refers to this as dialogue. This is the concept of communicating openly, through the capacity of members of a team to suspend assumptions and enter a genuine thinking together. With this greater learning will occur to create desired results.
* Google uses team learning to foster a culture that allows employees to openly communicate to allow learning off other employee’s skills and experiences
28
Benefits and Issues to consider for Senge
* Benefits- boosts level of creativity thinking innovation and business competitiveness, adaptable and flexible for the business to respond quicker to issues in the future, improves corporate image by becoming more people orientated. (Employer of choice).
* Considerations- requires cultural change which takes time, large businesses can struggle to share ideas and knowledge between all members.
29
Employee resistance/ Low Risk strategies to overcome employee resistance
Method of introducing change that is likely to be accepted with minimal resistance by employees and lead to a positive outcome.
30
Communications Low Risk strategies to overcome employee resistance
* The process of exchanging information between sender and receiver to produce a required response. Helps create open lines of communication by allowing two way process.
* By clearly and respectfully expressing in advance, why and how change needs to occur, managers can overcome resistance. Can be done by email, meeting, public announcements, but preferably should be done quickly, clearly, personably and allow feedback and contribution to decision making.
31
Empowerment Low Risk strategies to overcome employee resistance
* A management practice of sharing information, rewards, and power with employees so that they can take initiative and make decisions to solve the problem and improve services and performance.
* Based off the idea of giving employees skills, resources, authority, opportunity, motivation, as well as holding them responsible and accountable for outcomes of their actions. This will reduce resistance as by employees actively involved in decision making for change by giving them responsibilities to enact that builds commitment and motivation and enhances changes for success.
32
Support Low Risk strategies to overcome employee resistance
• The provision of guidance or assistance to encourage employees to accept change. Employees who remain at a business following any job loss will also feel supported if the business is confident with them going forward. Can be demonstrated through provision of training as employee confidence and motivation will increase. Business change may bring termination and support should be provided to them also. Could be assisting in employment which will maintain morale and current workers will support change if terminated colleges are treated well.
33
Incentives Low Risk strategies to overcome employee resistance
• Extrinsic motivators that encourage a desired outcome with a reward for employees. This is when rewards are generated when an employee performs as requested creates motivation to embrace change. This is related to changes in performance a business desire. Not following in changes will result to no reward. This strategy can reduce resistance as employees feel that the business has faith in their abilities and willing to move forward with these employees on board. Could be e.g performance deliveries, pay bonus, gift cards, free vacations.
34
Adv and Disadv Low risk strategies
Adv- preserves employees morale, maintains commitment to business, maintains motivation, reduce resistance.
Disadv- slower to initiate change, may require additional costs and time to supply
35
High Risk Strategies
• High risk strategies are considered high risk because of their failure may generate negative outcomes. These tactics run the risk of generating ill feeling between employees and employers, which can permanently damage working relationships.
36
Manipulation
* A management tactic where deception or persuasion are used or when information is withheld to achieve an objective.
* Manipulation involves exerting undue influence over an employee that may be deceptive to get them to behave a certain way. This approach will often create a culture of mistrust. E.g If a business wishes to introduce new technology, it may inform its staff of the exciting new training and promotional opportunities that the change will provide. However, it may withhold the fact that the new technology will result in several forced redundancies.
37
Threat
* This strategy involves the manager informing an employee that their job or promotion may be at risk if they do not accept the proposed change.
* A manager who will not or cannot invest the time and effort required for the other tactics may resort to the use of power to force change resistors to conform. This tactic usually involves some type of direct or indirect threat. Threats may involve loss of promotion, transfer, overtime or ultimately, termination and is associated with an autocratic management style. This strategy is generally considered to be unethical, immoral, and possibly illegal.
* The danger with this tactic is that people may appear to be compliant on the surface but are resentful underneath.
38
Advantages and disadvantages of high risk
* Adv- Ensures change is implemented quickly and matches exactly what the manager requires, useful in a crisis
* Disadv- motivation falls, manager distrust builds, can lead to greater resistance e.g turnover and strike, potential for fear.
39
Lewin’s three step change model
• Lewins three step change management model can be used by a business to implement successful change by breaking down change in 3 stages. Unfreeze, change, and refreeze. This will ensure change will be implemented smoothly and successfully.
40
Lewin's Three step change model Step 1: Unfreeze
* The unfreeze step moves a business to a state where stakeholders are prepared to undergo change. The first step is to unfreeze the current situation, identify what needs to change and then prepare the business for change.
* Minimise resistance to change (FFA), Communicate a clear vision
* Change may challenge beliefs and attitudes so it is essential that employees are prepared for and understand the reason for the change and where the business is headed.
* Change can only occur if old behaviour can be unlearnt and new behaviour can be adopted.
41
Lewin’s Three Step Change Model Step 2: Change
* The next step involves transitioning the business to a new position.
* New processes or practices are introduced. Employees are empowered and supported during the transition to overcome any fear or resistance
* Training, Counselling, Mentoring, Opportunities for employees to give feedback
42
Lewin’s Three Step Change Model Step 3: Refreeze
* This step involves ensuring that the new practices (the change) are embedded (frozen) in the business for the long term.
* The changes must be consolidated into the culture of the business otherwise employees may revert to the previous practices.
* To sustain the change, management could: Rewrite polices and job descriptions, continue to provide support for staff, Monitor and evaluate the change, (KPIs) adjusting when necessary
43
Change at Coles
* At the unfreeze step, Cain would prepare stakeholders, specifically employees, for the introduction of the automated online grocery system and subsequent opening of the distribution sites. During this step, Cain would share his vision for change and communicate this with stakeholders during the 2020 Investor Day
* At the change step, Cain would proceed with the change to introduce the automated online grocery system. This would involve redeploying employees, equipment, and inventory. To combat employee fear or stress during redeployment, Cain should provide appropriate support and training.
* At the refreeze step, Cain would solidify the change to the automated online grocery system. Cain would introduce new policies and job descriptions related to where employees have been redeployed to.
44
Benefits and Limitations of Lewin’s 3 step change model
* Benefits- a structured way to do change, minimise resistance to change
* Limitations- the system is very structured and may not happen like that and a business might need to do something outside of the structure
45
Effects of change on stakeholders
• Stakeholders have an invested interest in a business that may react and influence change. Business change can affect several stakeholders both positive and negative.
46
Effect of Change on Managers
* Manager has the responsibility of running a profitable or successful business. During change they will be the ones leading change thus will need to lead by example during times of change. Stress is put onto the manager to deal with any resistance.
* Positive effects- if manager have success linked to financial improvement they may get a bonus, change may have led to a new opportunity, if changed went as planned can expect a celebration for leading a business through this period.
* Negative effects- large change can come at an expense of high stress, some stakeholders may have been left worse off and may resent change, may have led to a diminished role for them
47
Effects of change on employees
* Are the ones working for a business. They are the ones who carry out change. During change they may become fearful of job security and comfortable to a routine and find it difficult to adapt.
* Positive effects- change may arise exciting and more challenging work, change may reduce safety risks, change may bring long-term job security.
* Negative effects- change can reduce need of employee or completely led to redundancy, change may cause need to learn new skills and demands now required to do may cause fear and need of re-training.
48
Effects of change on customers
* Expects to buy quality products at a reasonable price and high levels of service. During change businesses aim to implement change that meets their needs. Change customers are looking for are better quality, lower price, more efficient customer experience.
* Positive effects- change will benefit consumers as they better focus on their needs, change can bring higher quality products, can bring lower prices
* Negative effects- customers may feel quality has been sacrificed for price, may feel their loyalty has been taken advantage from by changing buying preferences
49
Effects of change on Suppliers
* Provide resources to a business that will be used in the production process. During change business can result in wanting faster processing and more demand if implemented correctly. This will cause suppliers to change to accommodate change.
* Positive effects- may gain more contracts or volume of order
* Negative effects- suppliers may need to respond quick to reactive orders which they need to respond to, big businesses may dominate a market and supplier may feel vulnerable to their demands
50
Effect of Change on Community
* Expects that a business gives back out of what they generate in profit. During change they may use outsourcing that can negatively impact relationship with community. They can also make positive impacts by choosing suppliers that will use local goods and services.
* Positive effects- successful business may more likely make charitable donations, businesses may become more visible through social media, successful business may employ more people reducing unemployment.
* Negative effects- can lead to redundancies, supplier closures, lower community incomes and wellbeing.
51
CSR considerations when implementing change
• As business change can impact a range of stakeholders, businesses should implement change in an ethical and responsible manner due to the increased awareness and public criticisms of business activities. Can be done by measuring triple bottom line. Economic value, people account and planet account.
52
Managers should consider the impact of change on the environment
* The health of the natural environment has a direct impact on society’s quality of life. Consequently, a business needs to balance economic and environmental concerns.
* Businesses are asked to be responsible and not take pursuit of profit at the expense of the environment to become sustainable while meeting business demand.
53
Managers should consider the impact of change on Employees
* Managers can consider employees by promoting their wellbeing during periods of change.
* This can be impacted due to their role changes requiring new skills, jobs being redundant. These factors can cause stress and security.
54
Managers should consider the impact of change on the community
* A business should also ensure that any change it makes is not detrimental to the general community.
* A business should consider the ethical implications of any change.
* The public and general community is increasingly interested in social responsibility and sustainability.
* E.g Using local suppliers to create local employment opportunities
55
Business ethics as a driving force
* is the application of moral standards to business behaviour.
* Businesses want to be seen as responsible corporate citizens, conscious of the high ethical standards expected of them by their customers and society at large.
* As such, businesses will make changes to policies, processes, and practices to ensure they are seen as ethical.
* E.g Avoid using misleading or deceptive product descriptions, Stakeholders must be dealt with honestly and fairly.
56
CSR Considerations
• E.g Change in supplier and the considerations that come name some, introducing new technology.
57
Benefits and Limitations of CSR considerations
* Benefits- better business reputation, additional marketing opportunity, benefits society health and welfare.
* Limitations- Financial cost, diverted time away from core business.
58
Coles CSR Considerations during change
* Coles’ Responsibly Sourced Seafood program details the company’s commitment to independently assessing all wild fisheries and aquaculture farms that supply Coles own brand.
* Coles’ own brand animal welfare policy focuses on reducing products sourced from close confinement systems such as battery cages and sow stalls.
* In July 2018, Coles phased out single-use plastic bags from all stores.
59
Reviewing KPI’s to evaluate transformation
* After business transformation it is important to know whether the strategies implemented have been successful.
* By reviewing the KPI’s we can:
* 1. Analyse the size and extent of any transformation
* 2. Areas we had the most success and the ones which require additional effort to be achieved
* 3. Consider an alternative management strategy if we didn’t achieve the results we are looking for.
60
How does a business know if a change has been successful?
* Once transformation has been implemented a business will need to review KPIs.
* If this doesn’t happen, it is very unlikely that the business will be able to determine whether a transformation was successful or whether there is a need to make any further changes or modifications.
61
Investment in Innovation- Domestic
* The process of improving, altering, or transforming an existing product or process.
* Adv- creates opportunity for a new market, satisfies the un-met needs of consumers, improves productivity as new ideas solve production issues
* Disadv- may be costly to implement marketing and production, new idea may be copied by competitor
* Coles- innovated fresh food to go meal options as well as vegan and breakfast options.
Business Management Unit 3/4
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