IB Business and Management Business Organisation and Environment 1.8 C

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IB Business and Management Business Organisation and Environment 1.8 Change and the Management of Change

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IBBusinessandManagement.com IB Business and Management The IB Diploma Business and Management course delivered IN STYLE, ONLINE. ©

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z Change & the management of change 1.8

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z Organizations & change Businesses are dynamic in nature and are always subject to the forces of change New product development New policies & targets restructuring Change management: the processes & techniques used to plan, implement & evaluate changes in business operations in order to achieve a required objective

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z Resistance to change Self-interest Impact of change on Themselves vs. company misunderstandings Communication problems Different assessment of situation Low tolerance of change Insecurities, familiarity, etc. Ambivalence – not pro change just easier to go along with it, fear

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z Factors causing change

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z Kotter: Six change approaches Before any change mangers need to ask themselves … Why is change needed? Who is affected by this change? How are they likely to react? How will we know when change is successfully achieved? Question 1.8.2: p. 141

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z Planning change Driving forces Push for change Restraining forces Act against a proposal for change equilibrium (current situation) Driving forces e.g. productivity gains Should only be pursued with a clear set of goals Restraining forces e.g. resistance & fear of change

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z Lewin’s force field analysis Steps to take List Encouraging & burdening forces for ∆ Allocate a weight to each of these 1(weak) to 5(strong) Draw a diagram showing forces for & against ∆ Show the relative effect of each force by a # 1 2 3 4 Doesn’t solve probs. Associated with ∆ mgmt. but works out how to improve chance of success Change: introducing new technology (automation) Driving forces Forces for change Reduced staffing costs Increased competitiveness Increased output Restraining forces e.g. resistance & fear of change Equipment costs Staff training costs Staff redundancies Technical breakdowns 3 4 2 3 2 4 2 Total: 9 Total: 11 Question 1.8.3: p. 144

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z framework & models 4 steps to any mgmt model Identify Proposed change & rationale for change Develop & communicate understanding of key issues to stakeholders Brainstorm driving & restraining forces for change Actions to take advantage of driving forces & overcome restraining forces 1 2 3 4

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z Iceberg model People: attitudes, beliefs, perceptions, acceptance & behaviour of stakeholders 2 levels of change but management focus on top level Cost, quality & time Biggest barrier to change

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Don’t focus on small, continuous change Declare success too soon z Change phases model 8 reasons why change may fail. Management may … Fail to win staff support No clear vision Allow too much complexity Fail to communicate vision Allow obstructions to vision Ignore corporate culture Change must be s.m.a.r.t Change must be part of a consultation process

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z change masters Successful managers must be able to react quickly to change in the external environment Push the limit as to what can be done with existing resources Come up with new ideas to improve the business Key skills or qualities include …

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4 approaches to managing the change process in an organization Story’s change model z

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z Used to identify which stakeholders need to be involved in the change process by looking at their level of influence & their reaction to change Stakeholder mapping

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z Exam Tip! Worked example: Question: recommend how a business proposing to relocate its operations overseas should manage the change process to reduce potential conflict [8 marks] -Define change management -Relevant issues for mgmt: Careful planning & communication of vision Explanation of rational to key stakeholders Communicating key benefits with supporting data Consultation & negotiation with key stakeholders how to Handle fear of the unknown Organization Attitudes towards change Strong leadership allows mgmt to deal with resistance Question 1.8.4: p. 149

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