Chapter 8- Management of Change (Suggested Answers)
What is this chapter about?
The forces of change, their impact on organisations and the strategies managers can use for effective change management.
Activity 8.1
- Economic
- Legal
- Social
- Corporate culture
- Technological
- Environmental/Social
- Legal/ Social
- Economic
- Technological
- Corporate Culture
Activity 8.2
Organisational Change Micro Macro Pressures External
Within Economic Control Employee Internal Organisation
Activity 8.3
1. Change in organisations occurs because of pressures from internal and external forces.
2. Internal Environment- includes all the elements/forces which the organisation has some degree of control over. Eg. People, Resources, Policy and Procedure, Culture, Work Processes pg 18-19
External Environment- include elements/forces outside of the organisation that the organisation has little control over. Eg. Legal, Geographical, Social, Economic, Political, Technological.
3. Changes in fashion trends- the constant changes in prices of clothes.
Society in general are more health conscious- business are more aware of this and have changed their products and service to reflect this change. Eg. McDonalds- Healthy choice meals
Cultural changes- Melbourne is more and more multicultural, people are more accepting of different cultures. Eg. Respecting that everyone has a right to their own religious practices.
4. External Forces-
Generally organisations have little control over these forces.
Economic- the increased value of the Australian dollar means that we are able to import more because out dollar buy more (is worth more). That also means less exports though, as overseas buyers must pay more to convert their currencies into Aussie dollars to buy our produce and services. They may take their trade to a country where they can get a better exchange rate.
Another Economic Force- The economic downturn in the US has forced organisations to implement internal changes to cut costs and keep up with overseas competitors. Eg. Starbucks were unable to maintain the running of a large number of their stores in the US and in turn, Australia and had to close 70% of their stores down as well.
Geographic- When cyclone ‘Nargis’ hit Burma/Myanmar, it’s effects upon the population and its country were devastating. With an estimated number of 300,000 people killed and the land virtually destroyed (under water) this would have had a huge effect on the country’s infrastructure (ie. foundations- buildings, people, services). Many organisations in other countries will be affected by this especially if they have trade connections with Burma/ Myanmar. Eg. Myanmar/Burma’s top commoditiy is rice. They export around about 400,000 tons a year, but since the cyclone hit key rice growing areas, the price of rice has risen due to the cut in supplies. This will affect business’ profitability has costs increase.
Social- Society has become more accepting of people’s freedom of sexual preference. This can be seen through the increased coverage in the media of such tv shows as- L word and talk show’s such as Ellen (Degeneres). In terms of business, this has created a whole new market that organisations must be aware of as they can be targeted to increase the org’s market share of a good or service.
Political- Organisations must operate within legal regulations and policies, for example they must abide by current taxation laws. If the Government decide one year in their budgetary policy, that they want to increase the tax rate for all business’, then this may have huge implications on some organisation’ abilities to operate at a profit. Cutting costs and restructuring may be the only way to offset the increase in tax paid.
Legal- Changes in legislation have meant organisations have had to change they way they operate. For example, under the Tobacco Act 1987, which since has been amended in 2006, smoking was banned in workplace and enclosed areas. For organisations like the Crown casino or general clubs, this posed a problem as a large percentage of their patrons were smokers, and were now not allowed to smoke indoors. These establishments would stand to lose revenue with the decrease of patrons.
Internal Force-
Organisations have more control over these forces. Pg 238 Some examples:
Corporate Culture-
Definition- The shared values and beliefs that dictate the behaviors of all employees within an organisation.
The culture (belief and values) of the organisation can be seen within:
- The organisation’s mission statement
- The most evident management style
- The morale of employees
- Type of dress expected
- Divisions or departments
- Physical environment provided by management for employees
So the force for change can be any one or combination of the above. For example, if a drop in productivity is linked to a decrease in employee motivation (dot point 3) because of the middle level management’s style of autocratic behaviour (dot point 2), an organisation can target those areas to change the culture of their organisation. They may implement processes to change the way management delegate and manage subordinates by sending them to get training in new skills and mgt styles.
New Management Styles- See above
Management Skills- See above
Stakeholders (Suppliers, Shareholders, Competitors)- Suppliers can affect an organisation in many ways. Change in prices, Prompt delivery of goods, Reliable with costing (few mistakes made). Its important for an organisation to try and maintain a good relationship with all stakeholders.
Changing Employee Expectations- Eg. If there is an expected increase in pay or working conditions for an industry and an organisation chooses to ignore these. Good employees may leave for other like organisations that have better remuneration packages. The organisation may be left with the less skilled employees that are not as confident pursuing other employment as those performance- based employees.
New Policies- Suppose there is an increase in accidents on a worksite. An organisation may bring in new policies for OH &S to make the workplace a safe place for employees. They may implement an incident form policy where all accidents on site must be reported and an incident form must be filled out. This process will locate problem areas and thus assist in minimising the risks that have been identified. Less risks mean safer employees, less accidents, happier staff, higher productivity. Employer of choice.
Activity 8.4
1. SARS Severe Acute Respiratory Syndrome. International Factor. Affects all countries, spreads quickly through air travel and highly infectious through airborne particles. Undetectable in early stages.
2. Any Australian organisation that trades in exports or imports to SARS hit countries will have difficulty running their business’ smoothly as people from both countries would be are to put themselves and their employees at risk.
3. Greatly affects the tourism industry in Australia. People fearing for their health and safety will not make travel to any of the SARS-hit regions. Also affect business’ that require face to face business contact in order to operate or make business transactions.
4. To offset the performance decline in some industries, business’ have adopted a number of measures and rescue packages to boost the communities confidence in their business’.
5. Those that did little to react would find it very difficult to trade and therefore surviving on little to no revenue would most likely result in bankruptcy.
Activity 8.7
Restraining Forces- The forces that pressure against change……..
Driving Forces- The forces that encourage and drive the change……….
Equilibrium- When the sum of the driving forces equal the sum of restraining forces
Force- field analysis- Identifying and analysing the driving and restraining forces for change
Status quo- The current condition or state of things
Activity 8.10
1. Management theories can be used as rough guides to mange or solve problems.
7. Both Lewin’s and Kotter’s theory involve empowering and involving the employees to accept the change. The success of the change relies heavily on management’s ability to convince the employees to adopt the change with as little resistance. That’s means making the change as ‘attractive’ as possible to the employees.
Activity 8.15
1 & 2. Good communication skills, good at negotiation, provide clear guidance and is informative, not autocratic, good listener, compromises, can adjust mgt style according to situation (contingency theory/situational approach), dynamic personality.
3& 4 Leadership important because change is difficult to implement without vision. A leader with good vision (where the company should be in the future) can strategically plan and then communicate this down to each management level.
5. Open communication means two way communication. Employee resistance to change is almost always inevitable so it’s important for the employees feel their concerns are being heard in regards issue arising from the change. This will allow for a smoother transition into the change as employees will feel more reassured about the process and their involvement.
6. Good communicator, patient, confident, well spoken, good negotiator, good listener, dynamic, able to adapt to different situations and people quickly, culturally aware.
Activity 8.18
Use Lewin’s theory
Stage 1 Unfreeze- overcome resistance to change by preparing the org and employees
Stage 2 Change- develop new attitudes and implement the change. New processes are instigated and new behaviours set in place
Stage 3 Refreeze- Managers provide reinforcement of the changes made. Make checks. Encouragement and praise of employee’s efforts are important if the change is to be accepted and maintained
Use Kotters theory
1. ESTABLISHING THE NEED FOR CHANGE
2. FORMING A GUIDING TEAM
3. CREATING A POSITIVE VISION
4. COMMUNICATING THE VISION
5. EMPOWERING STAFF TO IMPLEMENT THE CHANGE
6. PLANNING FOR AND CELEBRATING PROGRESS
7. CONSOLIDATING IMPROVEMENTS
8. INSTITUTIONALISING THE NEW ORGANISATIONAL BEHAVIOUR
All scenarios use any of the ‘Strategies for resisting change’ pg 246
· Gradually introduce changes
· Provide constant feedback
· Use a change agent
· Clearly communicate reasons for change
· Identify restraining and driving forces
· Two way communication
· Teamwork
· Allow staff to participate
· Delegate tasks
· Training and development
a) Nominate change agent. Gather the employees and give employees plenty of notice about the situation. Give full details of the situation. Allow for discussion in group. Discuss and talk about any concerns. Show empathy for employees, give recognition to all employees. Offer redundancy packages to some of the staff when appropriate. Offer to assist in finding new employment. Give good references. Train staff to use machinery. Reward everyone once training is done. Monitor change. Get feedback from staff about the change. Give encouragement and support for those that may still be resistant to change because of redundancies.
d) Hold meeting. Outline the situation in person and with writing. Discuss and talk about any concerns. Set out a timeline of events of when the change is happening. Delegate any roles. Give plenty of time for staff to study and adjust to the new layout. Give training for new equipment. Implement rearrangement of factory of layout. Evaluate the success of the change. Ask employees about the situation and their opinions. Evaluate productivity, job satisfaction and motivation.
Activity 8.19
1 & 2 Important in moving forward in terms of business. Brought about new business opportunities. Internet based Point of Sale (POS). Allows customers to pay bills and complete banking activities. Brings customers in the Post Office allows for advertising of new items and generate sale from potential impulse buying.
3. E- commerce is used to describe business transactions conducted electronically. Means that people can pay bills or do their banking anytime of the day. Therefore Aust Post not restricted by store hours. Faster and efficient with no face to face transaction. Saves time of customer- no need to drive. Saves time and money for Aust Post, less traffic in stores allows for better service.
4. Better service. Reliable. Quick. Fast. Accessible because all online. Saves time and money.
5. POLC and Change theory
Plan- what is the best way to implement
Organise- Inform everyone organise teams to implement
Lead- Open communication with senior managers and always inform employees of progress.
Control- Monitor and evaluate the implementation of new tech. how? KPI’s
Customer service satisfaction, Employee satisfaction, Employee feedback, Profit- look at whether sales have increased over year,
Activity 8.29
1. Main global influences affecting the Australian business environment are:
Increased globalisation- increase in competition
Changes in Govt protection policies- local business’ no longer protected from overseas competition
Move to increase overseas market opportunities- maximise export potential
2. The 2006 Australian Export Awards include Rio Tinto Iron Ore; ResMed; Aconex; Victoria Racing Club; Rising Sun Pictures; and Wild Child. The award-winning exporters have said passion, dedication and forming strong relationships with partners are all part of the winning mix to achieve export success. “Rio Tinto Iron Ore and Ausenco are export champions who have made a substantial contribution to their industries in employment, innovation, entrepreneurship and to the Australian economy,” Mr O’Byrne said.
3. Agriculture, coal, passenger motor vehicles, wool crude petroleum, education services and tourism.