Business Study Book

Unit 4 – Topic 2 Jaxon Brown

What happens in the Post-Maturity Stage?

- Renewal

- Steady State

- Decline

Merger Acquisition

Kotter’s Change Management Model Lewin’s Change Management Theory

Vison for Change / Strategic Plan Management Strategies

Overcoming Resistance to Change

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Business Topic Summary
The Concept of Change.
- Change refers to the continual alteration of strategies, processes or structures in response to internal
pressures and external forces. Change is constant and inevitable in business.
- Successful businesses are those that can respond, manage and adapt to change or drive change in the
market.

What is Change Management?

- Change Management is the process of transforming a business from its current state to a desired future
state.
- Change Management requires a structured approach, that includes; planning, implementing, controlling and
reviewing processes in a business.
- The aim of Change Management is to implement strategies for effecting change in a business.

What are Drivers of Change?

- Drivers of Change are the forces that initiate and compel a change.
- This can be an internal or external pressure that shapes the change, this could include;
- Corporate Culture – refers to the shared values, attitudes and beliefs that characterise members of
an organisation and guide its practises. It essentially describes ‘the way things are done’ and for it to
be effective, it needs to reflect the people who work there and the strategic plan of the business.
Corporate Culture can be a driver of change in a business. It can drastically affect whether
organisations can implement change easily, and whether the change is successful.
- Management Styles – An internal driver of change is the Management Style in a business.
Management make decisions about the future goals of a business; they have the responsibility of
operating and managing a business and its people. The way that management responds to change
will drastically impact the outcomes for a business – for either good or bad. Therefore, Management
Styles in a business can be a key driving force for change.
- Organisational Structures – The Organisational Structure of a business refers to the hierarchy within
an organisation. It’s a system that outlines the roles and responsibilities and the different levels of
management. As the business evolves, organisations may need to modify their structure – possibly
during merges, acquisitions, international growth and economic downturn. Hence why
Organisational Structure can be a key driver of change by changing their internal chain of command.
- Competition – An external driver of change is a business’s competition. A business needs to
understand and monitor its competitors, this includes knowing competitors’ strengths, weaknesses,
monitoring changes in the industry and understanding customers’ needs. A business must stay up-
to-date with what competitors are doing, and must effect change to combat this
- Legislative Compliance – Changes in law (legislative Compliance) can force a business to implement
change. A business needs to comply with legislative requirements and therefore when new laws are
passed, must apply change in response. Changes in laws influence changes in strategic management
as well. A business needs to adjust to incorporate the requirements of the new law and therefore
may need to change some aspects regarding the operations of the business.
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What is Resistance to Change?
- Resistance to change is the act of opposing change in the workplace/in an organisation.
- Common reasons for Resistance are fear, mistrust and issues relating to communication or timing.
- To overcome this Resistance, leadership management strategies can be used, these include; Communication,
Participation, Negotiation, Manipulation or Threat.

Business Topic Summary

Strategies for Overcoming Resistance to Change.
- The range of Change Management Strategies fall into two distinct categories; Low Risk and High Risk.
- Low Risk strategies rely on Communication, Participation, and negotiation to overcome Resistance to
Change.
- High Risk strategies rely on Manipulation and Threat to overcome Resistance to Change.
- Communication – The most important tool a leader can possess during a period of change is
effective communication. It is the key to successful implementation of change. Establishing a
collaborative environment where communication is encouraged will be advantageous to leadership
and employees. Communication refers to sending and receiving information through verbal and non-
verbal means.
- Participation – Participation is the key to successful implementation of change. It is the act of being
involved/taking action throughout change. When employees are engaged in opportunities to
contribute their ideas, suggestions and express their concerns/fears, the whole organisation can
benefit, and employees feel valued and empowered.
- Negotiation – Negotiation is simply communicating with others in order to come to a mutual
agreement. It involves communicating by listening and responding with the aim of reaching an
agreed outcome. This is typically used to identify potential resisters and negotiating with them to
gain their support. The process may include offering incentives such as financial rewards/flexible
working hours.
- Manipulation – Manipulation, in the context of organisational change, is the skilful handling of
someone – or sometimes, the scheming exercise of influence over them – to achieve a desired
outcome. It can be an effective technique when resistance to change is high. An example of this may
be only communicating the benefits of a change, and not the negatives.
- Threat – Threat involves forcing employees to accept the change or receive retribution or some form
of negative punishment. Possible threats could include demotion, transfer, or loss of employment
(dismissal). Using threat to create fear can be used in the hope that employees embrace the change
quickly, however, this may lead to high turnover rates whilst in transformational change.

Vision for Change and Strategic Planning.

- The Vision for Change is the ‘why’ of the change, and, describes the desired or future state of the
organisation after the change has been implemented. This may include; high staff overheads, expensive
processes, limited distribution network…ect.
- Strategic Planning is the ‘how’ of the change and is about defining the overall purpose and goal of a
business, and, determining how the desired results will be achieved. The strategic plan should outline the
characteristics of the change, tactics for implementing the change and the risks associated with the change.

What are Consultants and Professional Services?

- Consultants – Consultants provide advice on specific areas of a business. They are external experts who are
hired by a business to examine efficiency and effectiveness. Consultants have a range of knowledge, skills
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 and expertise and provide advice, recommendations, and suggestions to address an issue during
change/post maturity. A Consultant may find opportunities to differentiate a business from competitors,
examine processes to find improvements, and, complete a cost-benefit analysis to determine opportunities
and identify ways to reduce costs in the business, such as downsizing.
- Professional Services – Professional services providers are external to the business. They offer specific
knowledge to a business and are experts in field. They provide a service to a business and are accountable
for their actions – unlike a consultant who only provides advice. (ie. Lawyers, Accountants…ect)

Business Topic Summary

What are Internal and External Influences?
- A business needs to examine, understand, and manage influences of change on the internal environment
and the external operating and macro environment.
- The internal environment, including Owners/Management, Employees, Organisational Structure and
Organisational Culture, can influence change.
- The external operating environment factors outside a business that can influence change include;
Customers, Suppliers and Competitors.
- External or Macro environmental factors that can influence change include; Socio-Cultural, Technological,
Economic, Environmental, Political, Legal or Ethical.

Theories and Models of Change.

- Change Management is the application of a Theory and a Model to implement change. There are many
management Theories and Models regarding change, which outline how to manage the change most
effectively.
- A Change Management Theory is a system of ideas that is the basis for a concept of change.
- A Model is the step-by-step process to change.

Lewin’s Change Theory and Model.

- Kurt Lewin’s change management model is based around a three-step process to change:

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 - The three-step process involves creating the need for change (Unfreeze), empowering the change (Change),
and, solidifying the change (Refreeze).

Business Topic Summary

Lewin’s Force Field Analysis.
- Kurt Lewin also created a change model called Force Field Analysis, which aims to assist management in
implementing change.
- The force field analysis is a simple yet effective tool for understanding the forces that will drive, and the
forces that will restrain/resist a proposed change. For a situation to change, a driving force must be
strengthened, or a resisting force weakened.
- Among the benefits of a force field analysis are that it provides a quick visual summary of key factors
supporting or opposing a change and creates a plan of action to implement the change.

Kotter’s Change Management Model.

- John Kotter’s eight-step model of change is designed to improve an organisations ability to change
successfully. It is an easy step-by-step model, providing clear description and direction for implementation.
- Kotter’s Model focuses on preparing for, and accepting change, and places an emphasis on creating the need
for change, then creating a team to facilitate this change.

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 - The first three steps focus on creating a ‘climate for change’, essentially making the organisation more
open/accepting of change.
- Steps 4-6 link the change to the organisation by enabling key stakeholders, by communication.
- Then the final two steps are aimed at implementation of the change to achieve success.

Business Topic Summary

Impact of Change on Internal Stakeholders.
- The two key internal stakeholders impacted by transformational change in a business are the Management
and the Employees.
- Implications of change for the management within a business could include; the need for management styles
to change, training of management in new processes or the appointment of new management.
- Employees of an organisation provide the strength for internal change and their processes and relationships
must be checked and reinforced to ensure continued effectiveness and efficiency.
- Impacts on employees could include; new roles, the need for upskilling and training, restructuring and
recruitment, or staff redundancy packages offered.

Impact of Change on External Environment.

- A change can have an impact on the external operating environment of a business. Factors such as
Customers, Suppliers and Competitors can be impacted, and further impacts can become present within the
External Macro environment (STEEPLE).
- Customers may resist, embrace or promote the change.
- Suppliers to a business may be impacted by change – for example, if the business is operating in a new
market or adopting new methods of production.

Performance Management.
- Performance Management is a process by which management reviews the overall performance of the
business and of employees to determine how business goals can be better reached.
- Reviewing performance after transformational change can assist management in ascertaining the
effectiveness of the change.
- Key Performance Indicators (KPI’s) are objectives, set by a business, which can be measured to allow
individual employee and overall business performance to be assessed. They use specific criteria such as
efficiency and effectiveness to measure performance.

Outcomes of Performance Management.

- Business transformation is all about outcomes, maximising business efficiency and performance and
becoming a leader in an industry. The two main performance outcomes for an employee after performance
management are Redundancy or Retraining and Development.
- Redundancy occurs within an organisation when a position is no longer required. When a business is
transitioning through change, performance management will determine workforce employment
requirements.
- Retraining is the process of learning new skills, such as how to use new technology. A transformation could
result in the need to retrain and provide development opportunities for employees to maintain and increase
job satisfaction.
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Management Strategies.
- Transformational changes can include the restructuring of the key functional areas of a business – Finance,
Human Resources, Marketing and Operations.
- Financial Management strategies are initiatives aimed at improving the finance function of a within
an organisation. This may include; Profitability or implementing a new accounting software program.
- Human Resource Management strategies maintain employee relations when transforming a
business to facilitate the change.
- Marketing Management strategies should focus on the customer and increasing the market share of
the business (Promotion, Price, Place, People, Product).
- Operational Management strategies ensure the efficiency of operations so a business can gain a
competitive advantage, and should include improving productivity and reducing production costs

Year: 12 Unit: Unit 4, Topic 2

Summative examination (EA) – Examination –
Subject: Business Assessment:
combination response
I feel I can do
I only
confident some of I don’t
need a
LG LEARNING GOALS and SUCCESS CRITERIA with
this…
little help
this but
need a lot
know this
at all-yet!
with this
(Date/Ref) of help

SC1. Describe the concept of change

SC2. Describe the characteristics of each of the 3 options of a post-
mature business:
 Steady state
 Decline
1  Renewal
SC3. Describe the internal environmental factors and the external
macro environmental factors that influence change
SC4. Describe what is resistance to change
SC5. Describe the relationship between vision for change and
strategic planning

LG1 Students will be able to explain the environment of change in the

post-maturity phase of the business lifecycle

2 SC6. Explain the drivers for change including corporate culture,

management styles, organisation structures, competition and legislative
compliance
SC7. Explain the theories and models of change management, including
Lewin and Kotter
SC8. Explain the leadership and management strategies for overcoming
resistance to change, including communication, participation,
negotiation, manipulation and threat.
SC9. Explain the role of performance management when transforming
a business, including outcomes of redundancy, retraining and
development in renewal.
SC10. Explain the role of consultants and professional services assisting

7
 management for a business in the post-maturity stage

LG2 Students will be able to explain business concepts, strategies and

processes relating to change management theories and drivers for
change at the post-maturity stage
SC11. Explain the relationship between change management theories,
including Lewin, Kotter, and business transformation
SC12. Explain the relationship between force field analysis and change
management
SC13. Explain the relationship between the strategies for overcoming
resistance to change and human resources management
3
SC14. Explain the relationship between strategic planning and vision for
change
SC15. Explain the relationship between drivers for change and
transformation and renewal.
LG3 Students will be able to explain the relationships between
change management theories and models and the process of change

SC17. Select data and information relating to the stakeholders of a

business in the post-maturity stage of the lifecycle to analyse power
interest (using Power Interest Grid)
SC18. Select data and information relating to a business that has
undertaken change management and analyse the strengths, weaknesses,
opportunities and threats (SWOT analysis)
4 SC19. Select data and information relating to a business in the post-
maturity stage to analyse to analyse pressures for or against change
(force field analysis)

LG4 Students will be able to select data and information relating to

transformation of a business to analyse the business situation

SC20. Evaluate financial management strategies for transforming a

business to make a decisions and propose a recommendation using
criteria
SC21. Evaluate the human resources management strategies for
transforming a business to make a decision and propose a
recommendation using criteria
SC22. Evaluate marketing strategies for transforming a business to make
a decision and decision and propose a recommendation using criteria
SC23. Evaluate operations management strategies for transforming a
business to make a decision and decision and propose a recommendation
using criteria

LG5 Students will be able to evaluate management strategies to make

decisions and propose recommendations

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SUCCESS CRITERIA SC 1-3

SC1. Describe the concept of change.

Change, in simple terms, is best defined as the process causing a function or practise in business to become different.
As the business environment changes, an organisation must adapt if it wishes to be successful.

SC2. Describe the characteristics of each of the 3 options of a post-mature business :

- Steady State – an outcome of post-

maturity where the business may experience minor decline but is able to maintain this level and continue to
trade in the market.
 The business maintains its day-to-day practises.
 The same marketing strategies have been used time and time again.
 The business is not trying to build their customer base.
- Decline – decline occurs when the sales reduce, or demand decreases for a business and its products/services.
 The business maintains its day-to-day practises; however, it sees a decline in its financial performance.
 The business does not engage in any competitively geared marketing.
 The business does not replace any staff that have left, and, chooses not to retain any underperforming
staff/train staff.
- Renewal – an outcome of post-maturity where a business may transform or reposition to ensure the future
success of the business.
 The business has been transformed/repositioned to ensure for future success.
 The business may re-enter the Maturity Phase.

SC3. Describe the internal environmental factors and the external macro environmental factors that influence
change.

9 Internal Environmental Factors. External Macro Factors.

 Business Leaders: Owners + Managers.  Socio-Cultural
 Employees. - (ie. Recycled, Vegan, Halal…ect)
 Organisational Structure.  Technological
SUCCESS CRITERIA SC 4-6

SC4. Describe what is resistance to change.

Restraining forces act to block drivers of change, they make the change process more difficult to implement and
can lead to resistance to change. Resistance to change is the action taken by someone when a change is
occurring, this person often sees the change as a threat, and thus creates resistance. These restraining forces can
be fear, apathy, reduction in output, lack of training, strike action and hostility.

SC5. Describe the relationship between vision for change and strategic planning.

Vision for Change: a desired or future state in which the organisation will be in after the change has been
implemented. (THE WHY)

Strategic Planning: is about defining the overall purpose and goal of a business, and then determining the process
for this to be completed. (THE HOW)

SC6. Explain the drivers for change including corporate culture, management styles, organisation structures,
competition and legislative compliance.
Corporate Culture – refers to the shared values, attitudes and beliefs that characterise members of an
organisation and guide its practises. It essentially describes ‘the way things are done’ and for it to be
effective, it needs to reflect the people who work there and the strategic plan of the business. Corporate
Culture can be a driver of change in a business. It can drastically affect whether organisations can implement
change easily, and whether the change is successful.
Management Styles – An internal driver of change is the Management Style in a business. Management
make decisions about the future goals of a business; they have the responsibility of operating and managing
a business and its people. The way that management responds to change will drastically impact the
outcomes for a business – for either good or bad. Therefore, Management Styles in a business can be a key
driving force for change.
Organisation Structures – The Organisational Structure of a business refers to the hierarchy within an
organisation. It’s a system that outlines the roles and responsibilities and the different levels of
management. As the business evolves, organisations may need to modify their structure – possibly during
merges, acquisitions, international growth and economic downturn. Hence why Organisational Structure can
be a key driver of change by changing their internal chain of command.
Competition – An external driver of change is a business’s competition. A business needs to understand and
monitor its competitors, this includes knowing competitors’ strengths, weaknesses, monitoring changes in
the industry and understanding customers’ needs. A business must stay up-to-date with what competitors
are doing, and must effect change to combat this.
Legislative Compliance – Changes in law (legislative Compliance) can force a business to implement change.
A business needs to comply with legislative requirements and therefore when new laws are passed, must
apply change in response. Changes in laws influence changes in strategic management as well. A business
needs to adjust to incorporate the requirements of the new law and therefore may need to change some
aspects regarding the operations of the business.
10
SUCCESS CRITERIA SC 7-8

SC7. Explain the theories and models of change management, including Lewin and Kotter.
KOTTER’S EIGHT STEP MODEL OF CHANGE

John Kotter’s eight-step model of change is designed to improve an organisations ability to change
successfully. The first three steps focus on creating a ‘climate for change’, essentially making the
organisation more open/accepting of change. Steps 4-6 link the change to the organisation by enabling key
stakeholders, by communication. Then the final two steps are aimed at implementation of the change to
achieve success.
LEWIN’S FORCE FIELD ANALYSIS

Kurt Lewin also created a change model called Force Field Analysis, which aims to assist management in
implementing change. The force field analysis is a simple yet effective tool for understanding the forces that
will drive, and the forces that will restrain/resist a proposed change.

SC8. Explain the leadership and management strategies for overcoming resistance to change, including
communication, participation, negotiation, manipulation and threat.
Communication – The most important tool a leader can possess during a period of change is effective
communication. It is the key to successful implementation of change. Establishing a collaborative
environment where communication is encouraged will be advantageous,
Participation – Participation is the key to successful implementation of change. It is the act of being
involved/taking action throughout change. When employees are engaged in opportunities to contribute
their ideas, suggestions and express their concerns/fears, the whole organisation can benefit.
Negotiation – Negotiation is simply communicating with others in order to come to a mutual agreement. It
involves communicating by listening and responding with the aim of reaching an agreed outcome. This is
typically used to identify potential resisters and negotiating with them to gain their support.

11
 Manipulation – Manipulation, in the context of organisational change, is the skilful handling of someone – or
sometimes, the scheming exercise of influence over them – to achieve a desired outcome. It can be an
effective technique when resistance to change is high.
Threat – Threat involves forcing employees to accept the change or receive retribution or some form of
negative punishment. Possible threats could include demotion, transfer, or loss of employment (dismissal).
Using threat to create fear can be used in the hope that employees embrace the change quickly.

SUCCESS CRITERIA SC 9-8

SC9. Explain the role of performance management when transforming a business, including outcomes of
redundancy, retraining and development in renewal.
- When a business is undergoing transformational change, performance management will determine
workforce employment requirements.
- If an employee’s position is no longer required due to the change, then a redundancy will be offered.
- However, open, clear communication is crucial to avoid any misinterpretation of decisions, and, will help
avoid any unwanted trauma to the remaining staff.
- Employees are a business’s most crucial asset and once a transformation has occurred, it is crucial that
staff are retrained, and development is provided to maintain and increase job satisfaction.

SC10. Explain the role of consultants and professional services assisting management for a business in the post-
maturity stage.
Consultants – Consultants provide advice on specific areas of a business. They are external experts who are
hired by a business to examine efficiency and effectiveness. Consultants have a range of knowledge, skills
and expertise and provide advice, recommendations, and suggestions to address an issue during
change/post maturity.
Professional Services – Professional services providers are external to the business. They offer specific
knowledge to a business and are experts in field. They provide a service to a business and are accountable
for their actions – unlike a consultant who only provides advice. (ie. Lawyers, Accountants…ect)

SC11. Explain the relationship between change management theories, including Lewin, Kotter, and business
transformation.

Kotter’s eight-step model of change, Lewin’s force field analysis, and, the transformation of a business are
heavily linked, with all having an emphasis on preparing for and accepting change, which hence, will make
the business more easily transformed into the desired state. Both Kotter’s and Lewin’s theories are heavily
based on addressing the restricting/driving forces, and, using them towards successful business
transformation.

SC12. Explain the relationship between force field analysis and change management.

A force field analysis is a tool used to identify and analyse the positive factors (driving forces) and the
negative forces (restraining forces) in an environment where change is occurring. This model is heavily linked
to change management, as the business can identify any drivers/restraining forces to the change, and,
manage these stakeholders accordingly.

SC13. Explain the relationship between the strategies for overcoming resistance to change and human resources
management.

12
SC14. Explain the relationship between strategic planning and vision for change.

SC15. Explain the relationship between drivers for change and transformation and renewal.

13
 SUCCESS CRITERIA SC
16

SC16. Select data and information relating to the stakeholders of a business in the post-maturity stage of the
lifecycle to analyse power interest (using Power Interest Grid).

POWER INTEREST GRID

14
SC17. Select data and information relating to a business that has undertaken change management and analyse
the strengths, weaknesses, opportunities and threats (SWOT analysis).

SC18. Select data and information relating to a business in the post-maturity stage to analyse to analyse pressures
for or against change (force field analysis).

15
 SUCCESS CRITERIA SC
19

SC19. Evaluate financial management strategies for transforming a business to make a decision and propose a
recommendation using criteria.

Financial management strategies are initiatives aimed at improving the finance function within an
organisation. Typically, in finance, there are two core strategies/areas;
- Profitability - Profitability focuses on minimising costs to maximise profits. Managing costs is crucial
during business transformation. A business needs to set targets and forecasts using industry
benchmarks. These plans need to be revised frequently during the transformation period to ensure
desired outcomes are achieved.
- Growth – During a time of transformational change, business requirements could change due to new
markets, acquisitions or mergers. This may include;
- Selling assets – selling assets that are no longer used by the business.
- Improving cash flow – following up on outstanding customer payments, taking out loans.
- Increasing prices – more profit, taxation, new costs to the business.
- Reducing expenses – changing suppliers, buying in bulk, switching to cheaper alternatives.

16
 SUCCESS CRITERIA SC
20

17
SC20. Evaluate the human resources management strategies for transforming a business to make a decision and
propose a recommendation using criteria.

List 4 ways a HR manager can assist with List the 9 ways a manager could improve employee relations when
organisational change. transforming a business.

- Increasing employees’ understanding of - Rebuilding and promoting corporate culture.

the change. - Promoting a clear vision for the change and its benefits for the
- Improving employee skill and proficiency employees.
levels through training initiatives. - Developing training or retaining programs for existing employees.
- Improving communication levels within - Implementing performance management programs such as
the organisation during the change performance appraisals and KPI’s.
process. - Initiating reward systems to reinforce the new behaviours and
- Enhancing relationships and building a outcomes with both tangibles and intangible.
corporate culture that embraces the - Maintaining existing employees by offering flexible working
change. arrangements or other incentives.
- Implementing a code of conduct to uphold ethical standards
- Recruitment and selection of new employees required to meet the
needs of the change.
- Offering redundancy packages for outgoing staff.

1. Emma & Roe – a offshoot of the larger Michael Hill brand, is a generally unprofitable business with an
unsustainable sales growth. The company’s products were mainly aimed as direct competitors to brands
such as Lovisa and Colette, however, due to the hostile environment of the jewellery industry, this has
consequently influenced the need for change in the business, and Emma & Roe has chosen to
restructure their business, including the operations, finance and employees’.

2. The business, Emma & Roe, has chosen to restructure their business back into ‘Michael Hill’ stores in
response to the unsustainable sales growth over the preceding quarters. To initiate the change,
management completed a strategic review of Emma & Roe, once the business was found to be
unsustainable, the business relocated some staff to Michael Hill stores, and terminated/offered
redundancy payments to the rest.

5. ss

18
 SUCCESS CRITERIA SC
21

SC21. Evaluate marketing strategies for transforming a business to make a decision and decision and propose a
recommendation using criteria.

- A business needs to maintain its competitive advantage during transformational change, this may
include the strategic role of marketing to maximise its scale and profits. Some marketing management
strategies that can improve the competitive advantage when transforming a business are;
- Product - consider the unique selling proposition USP of the products being sold.
- Price - price effectively to avoid financial consequences (priced too low, profit is reduced).
- Place - position the business to reach customers, suppliers, and distribution networks.
- Promotion - select promotional techniques to create the most cost-effective marketing strategy.
- People - employ a team that meets marketing objectives of a business.

1. The American Family Life Assurance Company (AFLAC) has been in operations since 1955, whilst only having a
12% brand recognition rate before the launch of their new marketing campaign. Because of this low recognition
rate, a new marketing campaign was needed, which consequently influenced the need for change.
2. To initiate the change, AFLAC enlisted support from the professional service – Kaplan Thaler marketing group.

19
 SUCCESS CRITERIA SC
22

SC22. Evaluate operations management strategies for transforming a business to make a decision and decision
and propose a recommendation using criteria.

The Eight Suggested Operational Strategies when transforming a Post-Mature Business

- Introducing production technologies to support changes in the production process.
- Introducing ecologically sustainable practises.
- Outsourcing operational processes or production.
- Increasing the capacity of the business to accommodate changes. This could include changes to equipment and
resources.
- Improving facilities or resources for employees, such as simplifying or changing operational sequences.
- Refitting or reorganising the business to improve the efficiency of the operations.
- Moving the business to a more suitable location.
- Implementing quality controls to ensure customer satisfaction.

1.

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 IN CLASS WORK / HOMEWORK

21
CHAPTER REVIEW – 8.1 24 / 08 / 2020

1. The internal environment has a direct impact on the need for change in a business. Those factors
within a business that can influence change include the owner (or owners), management,
employees, organisational structure and organisational culture.
2. Changes in the external operating environment can have a major impact on the operations of a
Post-Maturity phase business. These operating environmental factors outside a business which can
influence change include; Customers, Competitors and Suppliers. For instance, since customers are
the lifeblood of a business and crucial to its survival, customers can have a direct influence on how
a business operates (ie. Working hours, Prices, Catalog…ect)
3. The external macro environment is a complex ecosystem that can drastically impact the operations
of a Post-Maturity phase business, and hence influence change. These external factors include;
Socio-Cultural, Technological, Economic, Environmental, Political, Legal and Ethical.
4. Change Management, in simple terms, is a phrase that is used to describe the management needed
when businesses transitions from one state to another. When businesses transition through
change, it requires a structured approach that includes, planning, implementation, controlling and
reviewing processes. During any change, communication is crucial for success. Essentially, Change
Management is a planned and structured approach that moves a business from its current state,
into the desired future state.
5. Driving forces of change are forces that support a change. (ie. Customers wanting new products).
6. Restraining forces of change are forces that resist the change (ie. Cost of new technology).
7.
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 a. Corporate Culture refers to the shared values, attitudes and beliefs that characterise
members of an organisation and guide its practises. It essentially describes ‘the way things
are done’ and for it to be effective, it needs to reflect the people who work there and the
strategic plan of the business. Corporate Culture can be a driver of change in a business. It
can drastically affect whether organisations can implement change easily, and whether the
change is successful.
b. An internal driver of change is the Management Style in a business. Management make
decisions about the future goals of a business; they have the responsibility of operating and
managing a business and its people. The way that management responds to change will
drastically impact the outcomes for a business – for either good or bad. Therefore,
Management Styles in a business can be a key driving force for change.
c. The Organisational Structure of a business refers to the hierarchy within an organisation. It’s
a system that outlines the roles and responsibilities and the different levels of management.
As the business evolves, organisations may need to modify their structure – possibly during
merges, acquisitions, international growth and economic downturn. Hence why
Organisational Structure can be a key driver of change by changing their internal chain of
command.
d. An external driver of change is a business’s competition. A business needs to understand
and monitor its competitors, this includes knowing competitors’ strengths, weaknesses,
monitoring changes in the industry and understanding customers’ needs. A business must
stay up-to-date with what competitors are doing, and must effect change to combat this.
e. Changes in law (legislative Compliance) can force a business to implement change. A
business needs to comply with legislative requirements and therefore when new laws are
passed, must apply change in response. Changes in laws influence changes in strategic
management as well. A business needs to adjust to incorporate the requirements of the
new law and therefore may need to change some aspects regarding the operations of the
business.
8. During any change processes, it is not uncommon for resistance to emerge, however, one of the
first undesirable aspects that arises is a negative corporate culture. If employees within a business
do not agree with the change, or the change is not effectively communicated, this may result in a
negative corporate culture, with heavy resistance to the change. This can take may forms, some of
which are; employee apathy, reduction in output, hostility in the workforce, strike action and high
turnover rates.
9. Kotter’s eight-step model of change is designed to improve a organisations’ ability to change
successfully, and to increase its chances of success. This model is seen to be effective since the
process is a simple step-by-step method. It focuses on preparing for and accepting change, rather
than on the change itself. Kotter’s model also places emphasis on creating the need for change and
creating a team to lead the change.
10. Both Kotter’s eight-step model of change and the transformation of a business are heavily linked,
with both having an emphasis preparing for and accepting change, which hence, will make the
business more easily transformed into the desired state.
11. Lewin’s change theory and model provides a framework for managing change within a business. It
involves preparing for change (unfreeze), making the change (change) and integrating the change
within a business (refreeze). This model guides businesses through the change in a simple 3-step
process which should ensure success.

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CHAPTER REVIEW – 9.1 29 / 08 / 2020

1. During the change process whilst a business is transitioning from its current state to the future
desired state, impacts can be felt within the internal operating environment of the business. Some
of these impacts on internal stakeholders include; new business visions, roles, methods and
organisational structures. Restructuring, which may result in additional training, recruitment or
reduction of staff, and, new management, potentially bring in a new management style/corporate
culture.
2. Once again, during the change process whilst a business is transitioning from its current state to the
future desired state, impacts can be felt within the external operating environment of the business.
Some of these impacts on external members include; outsourcing methods of production, resulting
in changes to the supply chain and consumer attitudes. Re-establishing existing customers by
offering incentives/rewards for their patronage, and, sourcing new suppliers from local, national
and international regions.
3. Performance management is a process in which management reviews the overall performance of
the organisation and its employees to determine how goals can be better reached.
4. Reviewing performance after transformational change can assist management in ascertaining the
effectiveness of the change, this may help in considering; if set objectives have been achieved, if
the performance was sound, and, if feedback from this process can be used to identify needs for
the business (post change).

5. Performance management, Change management and business transformation are all indeed
interrelated since they are all focused on one key aspect, management during
change/transformation.

6. Key performance indicators, also known as KPI’s, help an organisation define and measure progress
towards organisational goals. Once change has been determined, a strategy to achieve the goal can
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 be created, and then the performance during the transition is measured, then evaluated. This is the
basis of a KPI.

7. When a business is undergoing transformational change, performance management will determine

workforce employment requirements. If an employee’s position is no longer required due to the
change, then a redundancy will be offered. However, open, clear communication is crucial to avoid
any misinterpretation of decisions, and, will help avoid any unwanted trauma to the remaining
staff.

8. Employees are a business’s most crucial asset and once a transformation has occurred, it is crucial
that staff are retrained, and development is provided to maintain and increase job satisfaction.

9. Financial management strategies are initiatives aimed at improving the finance function within an
organisation. One of these strategies is profitability. Profitability focuses on minimising costs to
maximise profits. Managing costs is crucial during business transformation. A business needs to set
targets and forecasts using industry benchmarks. These plans need to be revised frequently during
the transformation period to ensure desired outcomes are achieved.

10. Human Resource Management Strategies (HRMS) are initiatives that are focused only on internal
stakeholders, principally employees. During a period of change, HRMS are particularly important in
communicating the change to employees and ensuring that the corporate culture embraces the
change. One of these strategies used to facilitate this is; offering reward systems and flexible
working arrangements. Incentives like these promote a healthy workplace, where employee’s
values are put first, which may result in less restraining forces of change.

11. During transformational change, a business still needs to maintain its competitive advantage,
therefore, marketing management strategies should focus on the customer and increasing market
share. An example of a marketing management strategy that could improve the competitive
advantage whilst transforming a business is Promotion. The promotion marketing strategy is based
around selecting promotional techniques to create the most cost-efficient marketing strategy – this
may include; Loss Leaders, which entice customers to buy more and increases market share of that
product.

12. A business under transformation may need to implement operational management strategies to
ensure efficiency of operations. Since the operations of a business will impact on all areas of the
business, when changing operations in response to transformation, an organisation may need to
find ways to improve production time, streamline operational processes, introduce new
technologies or systems to shorten development time.

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CHAPTER REVIEW – 9.2 29 / 08 / 2020

a. Reducing employment numbers by offering redundancy packages to a quarter of employees is

not a viable Human Resources Management Strategy. When offering redundancy packages to
any number of employees, restraining forces will become more evident, especially in the form
of a negative corporate culture – with employee apathy, reduction in output, hostility in the
workforce, strike action and high turnover rates becoming prominent in the workplace.

b. Refitting an entire organisation with new automatic robot systems to increase efficiencies in
production and processing is a viable Operational Management Strategy. Since introducing new
technologies/systems will improve production time, this will consequently streamline
operational processes and provide an operational advantage over other likewise businesses.

c. Introducing cost-saving devices such as switching to cheaper prices for consumables to reduce
expenses is indeed a viable use of Financial Management Strategies. Since the business is
actively attempting to cut costs and lower expenses, Profitability is being achieved. Managing
costs is crucial during business transformation, this strategy may even prove to create an
economy of scale.

d. Rebranding entire businesses by introducing a new marketing campaign is a viable Marketing

Management Strategy. This strategy is particularly focused on the Promotion aspect of the 5 P’s
of Marketing, the promotion marketing strategy is based around selecting promotional
techniques to create the most cost-efficient marketing strategy – this may include; Loss Leaders,
which entice customers to buy more and increases market share of that product.

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HOMEWORK 14 / 08 / 2020

1. Redundancy is best defined as the state of being no longer in employment because there is no
more work available.

2. Redundancy happens when an employer either;

- doesn't need an employee’s job to be done by anyone, or
- becomes insolvent or bankrupt.
Redundancy can also occur when a business;
- introduces new technology (eg. the job can be done by a machine)
- slows down due to lower sales or production
- closes down
- faces economic downturns
- relocates interstate or overseas
- restructures or reorganises because a merger or takeover happens.

3. Employees may become stressed and describe losing many things; their role, being part of a team,
financial stability, their self-worth and self-esteem. Sometimes shame and humiliation can be felt,
and these strong emotional reactions can impact upon family members too. Without effective
communication during this phases, employee apathy, reduction in output, hostility in the
workforce, strike action and high turnover rates may become present in the workplace.

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HOMEWORK 24 / 08 / 2020

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HOMEWORK 24 / 08 / 2020

1. Explain the process the business undertook to initiate the change.

2. Select information from the email relating to the stakeholders to analysis using a power interest
grid.

3. Interpret relationships, patterns and trends in the stakeholder power interest to draw conclusions
about the implications of transformation.

4. Create a short business report extract for the CEO, Amy Yates, about these implications.

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