Change Management

Past examination questions (2011 sample and 2012 exam) and

Q
Some businesses find change challenging due to inertia. Explain one possible cause of
inertia that may hinder change in a business.
A
Possible causes of inertia may hinder change in a business because some employees may:
Only one needed
Be resistant to change due to self-interest. This occurs because people are more
concerned with the implication of the change for themselves rather than considering the
effects for the success of the business.
Be resistant to change due to a misunderstanding because the purpose of the change
has not been communicated effectively or has been interpreted differently.
Have a low tolerance to change because they prefer having security and stability in their
work.
Make different assessments of the situation. This occurs because workers and
management do not agree with the reasons for the change and with the advantages and
disadvantages of the change process.

Q
Fully explain a change management strategy that could be employed to manage workers
concerns about the movement of the company into the Chinese market. In your answer you
should:
Give one example of the change management strategy that may be applied in this
situation

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Fully explain the impact on the business by explaining one advantage and one
disadvantage of this strategy

A
Only one needed
Communication ~ Educate people about the changes beforehand. Communication, before
the change takes place, helps employees see the logic and reduces rumours. This
management strategy
Will increase information on the move over to China so workers will be more informed.
Does not mean that the company had dealt with the causes of the inertia, they have
merely provided greater information.
Participation and Involvement ~ When workers are involved in the change programme they
are more likely to agree with change rather than resist it. This management strategy
Is likely to lower resistance and may increase motivation because people feel more
involved
May cause change to take a longer time and be more costly, which would reduce
profitability
Support ~ Management can avoid potential resistance by being supportive of employees
during this difficult time. This management strategy
Will make employees feel they are supported by the company and they may be more
motivated and productive
May be expensive in meeting the housing and other needs of managers
Negotiation ~ Managers 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
May be expensive and time consuming, which would increase the costs of change and
reduce profitability
May mean that managers feel more supported and therefore motivated to move to China
Coercion ~ Managers can openly force employees into accepting the change by making it
clear that resisting change can lead to employees losing jobs or the firing of, or not
promoting, employees. This management strategy
Would create change quickly and is cheaper than other change management methods
Would only work well if managers do not have alternative employment, which may mean
the firm loses good managers and productivity
Q
Evaluate two leadership styles that could be employed to manage the change in the
companys strategy. In your answer you should
Explain how the leadership styles would be employed
Fully explain the possible positive and negative impacts these leadership styles may have
on NZ Pures venture in China
Come to a justified conclusion as to which leadership style you feel is more effective
A
Only one needed
Autocratic ~ authoritarian leaders make decisions independently and direct workers that
they have to move to China to support the development of the new factory

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Positive impacts
It may work effectively when timelines are short (as they are in this case) because
this leadership style does not need a prolonged decision-making process
It may work effectively with low-skilled workers because they are being told what
to do.
Negative impacts
Managers may be highly-skilled and feel undervalued, which will reduce
motivation
May be demotivating as there is little input from others in the team.
Democratic ~ these leaders offer guidance and support to the people who will be travelling to
China but they also allow these people to have input into the strategy
Positive impacts
It maximises input from all managers, which leads to a more effective and agreed
strategy
It may increase motivation because it makes people feel more valued
Negative impacts
It requires an experienced manager to lead the process
It may cause the implementation of the change to take longer than an autocratic
leadership style
Laissez-Faire ~ these leaders offer little or no guidance for group members and leave
decision-making up to group members
Positive impacts
Managers may be more motivated if they are allowed to make their own decisions
about travelling to China
It may be effective because NZ Pure has competent experienced management
Negative impacts
It is generally only effective in situations where timelines are longer, which they
arent in this case
It might mean that too few people travel to China because they may not choose to
go
Conclusion
A democratic leadership style would be more effective because this is a large change for NZ
Pure and the business would need support and input from all areas of management.
OR
An autocratic leadership style would be more effective because there is a very short timeline
and changes need to happen quickly.

Exam 2012

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Q
Explain why the ability to respond to change is an important characteristic of all modern
business.
A
Businesses are affected by many internal and external factors that cause change. Firms
must be able to respond to these changes if they are to continue operating.

Q
Fully explain how demonstrating rangatiratanga would allow the changes required. In your
answer you should refer to
Relationship development and maintenance
Problem-solving
A

Relationships will have to be built and maintained with workers on the production line,
to allow them to feel supported through the changes that will occur (Explain). This will
allow them to feel more secure during the changes, and therefore improve morale (Fully
explain).

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Problem-solving is an important element of rangatiratanga, as well as in the change

Q
Evaluate the strategies Sarah and Hayley could employ to overcome the resistance to
change. In your answers you should
Explain two change management strategies that could be implemented in the design
department
Fully explain the possible impacts of these strategies on the performance of the
department by explaining one positive and one negative outcome of each strategy
Provide a justified conclusion as to which would be the more effective strategy
A
Strategy 1
Top down change management - change will occur when the managers exercise authority
and impose sanctions, because they are the leaders and know what is required.
A positive outcome with the topdown/dictated approach, change will occur much
faster, because there will be less need to discuss issues with workers (Explain). This will
allow the business to return to full production levels more quickly (Fully explain).
A negative outcome is that the strategy may miss ideas from workers, which may make
the change less successful (Explain). This may reduce performance below what is
potentially available (Fully explain).
OR
A top down/dictated approach by managers would be contrary to aspects of
rangatiratanga, e.g. development, relationship-building, conflict resolution, peacemaking, etc.
Strategy 2
Involve the designers in planning and organising change, because they should be regarded
as intelligent people.
A positive outcome of an inclusive approach is that the designers will have input into the
changes, and so a wider range of ideas is shared (Explain). This will result in greater
buy-in by staff, and will maximise the potential benefits of change (Fully explain).
A negative outcome is that people against the changes will get a greater opportunity to
be negative about change (Explain), and this negativity might spread, decreasing
motivation across the workforce (Fully explain).
Conclusion
An inclusive approach should be chosen. This is because although it may take longer, the
workers will feel valued because they are involved. This may increase motivation and
therefore productivity. This also follows the principles of manaakitanga (Justify).

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