Part C – CHANGE MANAGEMENT AS 91379 9 (3.1): Demonstrate understanding of how internal factors interact within a business that operates in a global context.

Part C – CHANGE MANAGEMENT

AS 91379 9 (3.1): Demonstrate understanding of how internal factors interact within a business that operates in a global context

Causes of Change

Businesses today have to operate in rapidly changing markets and conditions. They must constantly be aware of, and be prepared to respond to, changes in a number of areas:

Change Management

This is the co-ordination of a structured period of transition from situation A to situation B in order to achieve lasting change in a business. It is a process that ensures the business responds to the environment in which it operates.

Resistance to Change

From employees, due toO Fear of the unknown O Lack of confidence they will be

capable of new practicesO Inertia ~ people suffering from

inertia are unwilling to do anything. They are scared of saying “yes” and scared of saying “no”

O Some might be resistant to change due to self-interest ~ they are are more concerned with the implication of the change for themselves rather than considering the effects for the success of the business.

O Some staff might misunderstand the purpose of the change.

O Some people have a low tolerance to change because they prefer having security and stability in their work.

O Business owners may also be resistant to change for similar reasons. They might fear operating in unknown markets and conditions. They might fear the costs of changes. They may fear they will be unable to adjust to new situations and be forced out of business.

O There may also be resistance in the culture of the organisation. Usual custom and practice reflect the values and beliefs of the organisation, and change may challenge these norms.

Change Management Styles

Top-downChange occurs by the management exercising authority over staff on the basis that only they know what is required. By dictating what is to happen, the change process can happen more quickly than with an inclusive approach, but is more likely to meet worker resistance.

InclusiveThis consultative strategy involves all parties in planning and organising the change. It respects employees as intelligent people who will have valid ideas to offer. Staff will have a greater “buy-in” and commitment to the change and there is less likely to be resistance.

Change Management Strategies

O Communication This involves educating workers about the changes beforehand. Communication, before the change takes place, helps employees see the logic and reduces rumours.

Participation and InvolvementWhen workers are involved in the change programme they are more likely to agree with change rather than resist it. This management strategyO Is likely to lower resistance and may

increase motivation because people feel more involved

O May cause change to take a longer time and be more costly, which would reduce profitability

O SupportManagement can avoid potential resistance by being supportive of employees during what might be a difficult time. O NegotiationManagers can overcome resistance by offering incentives to employees. This can be done by allow people who are resistant to change alter elements of the movement that they find threatening. This management strategy

O CoercionManagers can openly force employees into accepting the change.

Leadership Approaches

O Autocratic ~ authoritarian leaders make decisions independently and tell workers what they must do.

O Laissez-Faire ~ these leaders offer little or no guidance for group members and leave decision-making up to group members

O Democratic ~ these leaders offer guidance and support to workers but they also allow these people to have input into the strategy