Nature and Sources of Change
Change is any alteration in the business and work environment.
The ability to manage and, embrace and adapt to change will increasingly determine a business’s competitive advantage and survival.
The crucial management issue is how to manage change to make it as productive as possible.
External influences:
External changes result from factors outside the control of the business but which may affect its performance.
• Changing nature of markets - globalisation has integrated world markets
• Economic - economic fluctuations impact on the market place and influence demand
• Financial - deregulation created a more open financial system
• Geographic - adoption of a global outlook
• Social - demographic, attitudinal and cultural trends
• Legal - legislation and laws
• Political - federal, state and local government policies
• Technology - scientific, technological innovations can improve productivity
Internal influences:
Internal changes are largely within the control of the business and come from the desire to improve business operations.
• Accelerating technology - office equipment, computers, robotics used in the production process
• E-commerce - the use of the Internet to do business
• New systems and procedures - technology can revolutionise a business’s activities and operating procedures
• New business cultures - workplace culture will need to become more flexible and adaptable
As the business environment changes, organisations examine and modify their business structures.
Structural change refers to changes in how the business is organised – the organisational structure.
The aim of these changes is to make business operations run smoothly, improve efficiency, streamline coordination and empower employees to make their own decisions.
Management must respond to change by:
- being flexible and innovative
- constantly reassessing the business’s position
- restructuring the business to maintain a competitive edge.
The main structural responses to change include:
- Outsourcing: contracting out non-core functions due to downsizing.
- Flat management structures: reduced levels of management.
- Strategic alliances: two or more businesses join together.
- Network structures: subcontracted production and related business functions.
Change is any alteration in the business and work environment.
The ability to manage and, embrace and adapt to change will increasingly determine a business’s competitive advantage and survival.
The crucial management issue is how to manage change to make it as productive as possible.
External influences:
External changes result from factors outside the control of the business but which may affect its performance.
• Changing nature of markets - globalisation has integrated world markets
• Economic - economic fluctuations impact on the market place and influence demand
• Financial - deregulation created a more open financial system
• Geographic - adoption of a global outlook
• Social - demographic, attitudinal and cultural trends
• Legal - legislation and laws
• Political - federal, state and local government policies
• Technology - scientific, technological innovations can improve productivity
Internal influences:
Internal changes are largely within the control of the business and come from the desire to improve business operations.
• Accelerating technology - office equipment, computers, robotics used in the production process
• E-commerce - the use of the Internet to do business
• New systems and procedures - technology can revolutionise a business’s activities and operating procedures
• New business cultures - workplace culture will need to become more flexible and adaptable
As the business environment changes, organisations examine and modify their business structures.
Structural change refers to changes in how the business is organised – the organisational structure.
The aim of these changes is to make business operations run smoothly, improve efficiency, streamline coordination and empower employees to make their own decisions.
Management must respond to change by:
- being flexible and innovative
- constantly reassessing the business’s position
- restructuring the business to maintain a competitive edge.
The main structural responses to change include:
- Outsourcing: contracting out non-core functions due to downsizing.
- Flat management structures: reduced levels of management.
- Strategic alliances: two or more businesses join together.
- Network structures: subcontracted production and related business functions.
Reasons for Resistance to Change
Resistance to change can sometimes be common among businesses, managers and employees.
The main reasons for resistance to change are:
- Financial costs: new equipment; redundancy payments; retraining workforce; reorganising plant layout.
- Inertia: lack of interest; refusal to cooperate by managers/employees; fear of failure.
- Cultural incompatibility in mergers and takeovers: possible ‘culture clash’; different work practices.
- Staffing considerations: de-skilling; acquiring new skills; loss of career prospects or promotional opportunities.
Managing Change Effectively
The environment created by the manager can greatly affect employee acceptance of change.
Steps to successful change:
Identify the need for change.
Set achievable goals.
Create a culture of change: teamwork; change agent.
Use Change Models
• Force-field analysis: identify, analyse and balance the driving and restraining forces.
• Lewin's unfreeze/change/refreeze model:
- Unfreeze: employees made aware of the reasons for change (possible use of outside change agent)
- Change: Implement changes. New skills and behaviours introduced.
- Refreeze: Changed behaviour rewarded to make sure it lasts.
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