Change management THE TIMES 100

Agenda Learning goals Management of change short PPT lesson Compare your answer with a partner Take up the answer as a class Agenda

Learning goals What is organizational change? Give examples of positive and negative internal drivers for change Be able to explain the two types of decision made by managers: strategic and tactical. Give examples of external drivers for change Give examples of barriers to change How can managers and organizations plan for change? Analyse why effective communication is so important in managing change Learning goals

Organisational change Change is inevitable in organisations It may be anticipated or unanticipated Firms may need to change their: Culture Size Product range Production processes Leadership styles Target markets Structure

Internal drivers for change Positive factors: Increase in size of the organisation through acquisition (buying another company) or increased sales New owners Investment in technology Negative factors Disappointing business performance Demotivated workforce Lack of innovation

External drivers for change Changes in the economy e.g. moving into recovery in the business cycle Legal and political changes e.g. the introduction CRTC about cable bundles. Social change e.g. the ageing population Technological change e.g. growth of the internet Changes in the market e.g. increasing competition or changing consumer tastes

Barriers to change Costs The culture of an organisation A lack of communication Managers feeling threatened A lack of understanding of the reasons for change Resistance of employees: Fear of the unknown Job security in question Loss of status for some workers

Planning for change There are three main questions to answer when planning change: Where are we now? Where do we want to be? How do we get there? The process will involve: Planning Implementation Review

Effective change management Effective change management will require: Clear objectives Careful planning Effective communication with stakeholders Participation of workers in the change process Positive leadership Guidance and training Building a change culture

Evaluating change A review of the change will discover if... The change has been successful, compared to its objectives Further change is required Without constant review firms run the risk of losing competitive advantage

Compare your answers with a partner and see if you have the same answer. Case study questions

Identify two things that might occur in the external environment which will require an organisation to make changes. Examples include:  the introduction of new legislation  the development of new technology  changes in the economy  market fluctuations. Answers to questions

2. Describe the two types of decisions that may need to be made 2. Describe the two types of decisions that may need to be made. The two types of decisions are: Strategic – these usually affect the whole organisation and are generally made by senior managers. Strategic decisions have long term implications. Tactical – these usually short to medium term decisions made on a department bases

3. Explain some potential barriers to change 3. Explain some potential barriers to change. Barriers to change include: • the culture of an organisation resisting the power structure • managers feeling threatened by the process of change • resistance from employees • a lack of understanding about why change is to take place • a lack of communication or trust • employees fearing the unknown.

4. Analyse why effective communication is so important in managing change. reaches the correct stakeholders lets stakeholders know the reasons for change allows stakeholders to ask questions encourages stakeholders to be involved in the change process helps to avoid rumours.

1. Some workers will resist change - TRUE 2 1. Some workers will resist change - TRUE 2. Good communication with employees will help to make the process more effective - TRUE 3. Change occurs very rarely - FALSE 4. Improving technology can be a driver for change - TRUE 5. It is better if employees are not involved in the change process - FALSE 6. Change is usually quick and inexpensive - FALSE What have you learned?

End of the case study questions Increase in size of the organisation through acquisition (buying another company) or increased sales Describe one internal factor and one external factor that might cause change in the business environment. New owners Investment in technology Negative factors Disappointing business performance Internal factors Positive factors: Demotivated workforce Lack of innovation End of the case study questions

External factors Changes in the economy e.g. moving into recovery in the business cycle Legal and political changes e.g. the introduction CRTC about cable bundles. Social change e.g. the ageing population Technological change e.g. growth of the internet Changes in the market e.g. increasing competition or changing consumer tastes

2. Explain two benefits of having well trained managers when managing change Well trained managers will be able to anticipate the change and better plan and prepare for it, this minimizes the impact of change and ensures continuous and productive business (keep change under control). Well trained managers support change and allow a business to meet their business object and maintain or gain a competitive advantage.

3. Using an example, analyse why individual employees might resist the process of change. An organization’s culture might not be conducive to change a lot of workers like to keep things the way they were.   Manager might feel threatened by the process of change and might feel that they jobs are at risk.

Employees might resist change because they do not understand why it is happening. Communication between management of all levels and employees might not be clear, which leads to mistrust. Most of the time people think that change brings job lose which causes fear due to job security.

4. Evaluate why an organisation might want to create a culture of change It may support the process of Total Quality Management (TQM). It also encourages employees to look forward to the process of change as the benefits have been made clear. Employees become involved and supportive, helping a company reach its objectives, increase profitability and competitiveness.  

Helps to reduce cost, when employees and managers are aware of the benefits of change they are not afraid and do not become demotivated. There is low turnover and company spends less money training new employees. Moreover existing employee become more proficient at their job and in-turn become efficient and productive