Busman Unit 4 A0S 2.docx

Change management is the process of implementing approaches that prepares an organisation undergoing a transformation Implementing successful change within a business can often be challenging, especially if there are high levels of employee resistance. That's why, leadership is a vital element to c...

Change management is the process of implementing approaches that prepares an organisation undergoing a transformation Implementing successful change within a business can often be challenging, especially if there are high levels of employee resistance. That's why, leadership is a vital element to consider during change management to facilitate successful change. **The importance of leadership in change management** Leadership in change management is the ability to positively influence and motivate employees towards achieving business objectives during transformation. **To demonstrate strong leadership in change management, managers need to**: - - - Employees who understand the reasons for change are more likely to adopt changes. Clear instructions then provide clarity for employees to implement the changes. Managers also increase the likelihood of successful change through support strategies such as involving employees in decision making or equipping them with the necessary skills. **MANAGEMENT STRATEGIES TO RESPOND TO KEY PERFORMANCE INDICATORS** Key Performance Indicators (KPIs) allow businesses to assess their level of performance during and after business change. Businesses should respond to KPIs that highlight poor performance, through the use of appropriate management strategies. **KPIs** - - - - - - - - - **Staff Training -- KPIs: Staff Absenteeism, Staff turnover, Number of Workplace Accidents** - - - **Example**: On the job training -- coaching, mentoring, job shadowing Off the job training -- conferences, lectures, workshops AusPost machinery training in order to increase productivity **Staff Motivation -- KPIs: Rate of Productivity Growth, Staff Absenteeism, Staff Turnover** - - - **Example**: performance related pay **Change in Management Styles or Skills -- KPIs: Productivity Growth, Staff Turnover, Staff Absenteeism, Number of Customer Complaints, Profit, Sales, Market Share** - - - **Example**: - - - **Increased Investment in Technology -- KPIs: Productivity Growth, Sales, Market Share, Level of Wastage** - - **Example**: - **Improved Quality in Production -- KPIs: Market Share, Sales, Number of Customer Complaints, Level of wastage** - - - **Example**: - **Initiating Lean Production Techniques -- KPIs: Number of Customer Complaints, Sales, Net Profit, Market Share, Level of Waste** - - - **Example**: If number of customer complaints are high by continuously improving your product and aiming for zero defects the impact would be improved customer satisfaction as there is an increase in quality of the product and reliability of the business **Redeployment of resources -- KPIs: Level of Wastage, Number of Accidents, Net Profit, Productivity Rate, Level of Staff Turnover** - **Redeployment of labour resources**: The transfer of an employee to another job within the business. **Example**: If a business implements technology to replace human labour, that employee will be made redundant. A business can retain the employee's knowledge and skills by redeploying them to another area of the business Redeployment of **Capital resources**: Using money or other assets for a different purpose then the one they were originally intended for. **Example**: When a business introduces new technology, rather than selling the old machinery and equipment, the business can redeploy the machinery into another area of the business **Redeployment of natural resources:** The reusing and repurposing of raw materials **Example**: A farmer may redeploy land if it can be put to better use to produce an alternative product **THE PRINCIPLES OF SENGE'S LEARNING ORGANISATIONS** A learning organisation is a business that facilitates the growth of its staff and continuously transforms itself to adapt to changing environments. A learning organisation promotes the adaptability of all its members through the five principles of: - - - - - Senge states that all five principles must be present for a business to be considered a learning organisation. Senge believed that only those businesses that were able to be flexible, adaptive and productive during periods of change would be successful during periods of rapid change. If a business can harness and use the talents and engagement of staff, then it is more likely that people will be committed to the changes. **Systems thinking** is the ability to understand the interrelationships between different areas of a business - - - - **Mental models** is challenging the pre-existing assumptions and beliefs that people have about a business and its practices - - - - **Shared vision** is an aspirational description of what a business and its members would like to achieve - - - **Personal Mastery** is encouraging individual development and learning through business activities - - - - **Team Learning** encourages individuals to combine their strengths and abilities to continuously grow together - - - - Strengths and Weakness Of Senge's Theory Benefits Issues To Consider ---------------------------------------------------------------------------------- ------------------------------------------------------------------------------------ Boosts levels of creativity, thinking, innovation and business competitiveness Requires cultural change which can take time Continuously striving to improve Large businesses can struggle to share ideas and knowledge between all the members Adaptable, flexible, the business responds quicker to issues in the future Staff motivation should increase, boosts skills and empowerment Improving quality of outputs at all levels Improving corporate image by becoming more people oriented -- employer of choice **LOW-RISK STRATEGIES TO OVERCOME EMPLOYEE RESISTANCE** High levels of employee resistance can make it difficult for a business to implement change successfully as employees are core stakeholders of business. Low-risk strategies can be used to effectively reduce levels of employee resistance when businesses have the time and resources available. **[Low-risk strategies]** Low-risk strategies are gradual management approaches that encourage employees to accept and participate in a business change. - - - - **[Communication as a low-risk strategy ]** Communication as a low-risk strategy is managers initiating open and honest two-way communication with employees so they are fully aware of the reasons, impacts and their roles in an upcoming change. - - - - **[Empowerment as a low-risk strategy]** Empowerment as a low-risk strategy is managers providing employees with increased responsibility and authority during times of change. - - - - **[Support as a low-risk strategy ]** Support as a low-risk strategy is providing employees with assistance as they move from current to new practices. - - - **[Incentives as a low-risk strategy ]** Incentives as a low-risk strategy is managers providing financial or non-financial rewards to encourage employees to support change. - - - **[Advantages and Disadvantages of low-risk strategies]** +-----------------------+-----------------------+-----------------------+ | | **Advantages** | **Disadvantages** | +=======================+=======================+=======================+ | **Business** | Communication, | Empowerment may | | | empowerment and | result in tasks being | | | support all have a | carried out in a way | | | higher chance of | that management did | | | change being | not intend | | | successful in the | | | | long-term due to | Incentives could be | | | increased trust and | seen as bribes if not | | | cohesion between | executed properly | | | managers and | | | | employees | | +-----------------------+-----------------------+-----------------------+ | **employees** | Support and | | | | communication can | | | | effectively reduce | | | | employee's fear and | | | | stress levels related | | | | to change - | | | | Incentives and | | | | empowerment can | | | | provide employees | | | | with opportunities to | | | | advance their careers | | | | - All strategies can | | | | make employees feel | | | | valued by the | | | | business | | +-----------------------+-----------------------+-----------------------+ | **Time** | | All strategies are | | | | not useful in crisis | | | | situations as they | | | | take time to be | | | | effective | +-----------------------+-----------------------+-----------------------+ | **Money** | Employees embracing | Incentives can | | | the change will | involve financial | | | likely result in an | expenses for the | | | increase in revenue | business | | | or decrease in costs | | +-----------------------+-----------------------+-----------------------+ **HIGH-RISK STRATEGIES TO OVERCOME EMPLOYEE RESISTANCE** Employee resistance can prevent change from being successfully implemented as employees are core stakeholders of a business. When business change is a top priority, high-risk strategies can be used to ensure a business change is quickly accepted and followed by employees. **High-risk strategies** High-risk strategies are autocratic management approaches used to influence employees to quickly accept and follow a business change - - - - **[Manipulation as a high-risk strategy ]** Manipulation as a high-risk strategy is influencing employees to follow a proposed change by providing incomplete and deceptive information about the proposed change - - - **[Threat as a high-risk strategy]** Threat as a high-risk strategy is forcing employees to follow a proposed change by stating that they may or will cause harm to them if they fail to follow the change - - - These threats force employees to agree with a proposed business change as if they do not agree, it threatens their job security, financial security and workplace safety Advantages and **[Disadvantages of high-risk strategies]** +-----------------------+-----------------------+-----------------------+ | | **Advantages** | **Disadvantages** | +=======================+=======================+=======================+ | **Business** | Ensures change is | May lead to negative | | | implemented how the | corporate culture in | | | manager desires as | the future where | | | there is no employee | there is long term | | | input | distrust | | | | | | | | Relationship between | | | | management and | | | | employees is | | | | compromised Employee | +-----------------------+-----------------------+-----------------------+ | **Employee** | | May feel fearful of | | | | losing their job and | | | | feel as if they will | | | | be easily replaced | | | | | | | | Have low morale in | | | | the workplace and | | | | more likely to leave | | | | or be absent from | | | | work | +-----------------------+-----------------------+-----------------------+ | **Time** | High-risk strategies | Usually only | | | are useful in crisis | effective in the | | | situations where | short term as | | | change must occur | employees are | | | rapidly | unlikely to follow | | | | change under such | | | | harsh conditions over | | | | long periods of time | +-----------------------+-----------------------+-----------------------+ | **Money** | High-risk strategies | Costs to replace | | | involves little | employees may | | | financial cost to | increase as these | | | initially implement | methods can increase | | | | staff turnover | +-----------------------+-----------------------+-----------------------+ **KEY PRINCIPLES OF THE THREE STEP CHANGE MODEL (LEWIN)** **[Unfreeze Step ]** The unfreeze step moves a business to a state where stakeholders are prepared to undergo change - - - - - - **[Change Step]** The change step moves the business towards the desired state - - - - **Refreeze Step** The refreeze step ensures the change is sustained within the business for the long term - - - - **THE EFFECT OF CHANGE ON STAKEHOLDERS** **[Effect of change on managers ]** Managers can be in charge of the entire business or an area of management Accordingly, managers coordinate employees and various business activities to ensure objectives are achieved To effectively achieve these objectives, managers are often required to lead business change  **[Effect of change on employees ]** Employees are individuals who work for a business by completing allocated tasks Often, employees are the stakeholders who are most affected by change **[Effect of change on customers ]** Customers are people who purchase goods or services from a business These goods or services can be affected by a business changing to achieve their objectives  **[Effect of change on suppliers ]** Suppliers sell raw materials and resources to other businesses for their production However, businesses may alter their production process for various reasons **[Effect of change on the general community]** The general community is made up of individuals and groups who do not directly impact with the business  **CSR CONSIDERATIONS WHEN IMPLEMENTING CHANGE** It is becoming more important for businesses to behave in a socially responsible manner when implementing change This is due to the increased awareness and public criticisms of business activities Therefore, managers should consider any impacts that business change may have on employees, the general community and the environment **[Considering employees ]** Managers can consider employees by promoting their wellbeing during periods of business change Business change can lead to employees having their roles changed abruptly, losing their jobs and wages In most cases, an employee's financial and job status impacts their families, which can lead to increased levels of stress and fear - **[Considering the general community]** Businesses can consider the general community by reducing or eliminating practices which are detrimental to society The general community can face low employment rates and economic activity as a result of a certain business changes When more people are unemployed, levels of crime and poverty in society generally increase -  **[Considering the environment ]** Businesses can consider the environment by reducing the negative impacts of their practices on the planet Serious and irreversible harm to the environment can be a result of unethical business practices - - **Advantages and disadvantages**  **EVALUATING CHANGES** **[The importance of Reviewing KPIs]** - - - - - - - - - The outcome of the review and evaluation process can be used to monitor and judge the effectiveness of a business transformation **[Evaluating KPIs]** All aspects and functions of a business can be evaluated. These include: - - - - **[Operations Management ]** Operations management is the core function of any business and is an area that is likely to be transformed If the business has made any changes, then it can evaluate these using KPIs such as: - - - Due to changes such as lean production techniques and the management and use of natural resources **Employees** If there were plans to improve the performance of employees, then this can be measured and assessed, using KPIs such as: - - - These will all give an indication of the level of staff commitment and motivation to the business - The results of a staff satisfaction survey can also be used as this can be tracked over time and tailored to suit the needs of the business and its objectives **[Financial Performance]** Financial Performance is crucial to a business's success and is an area that will generally be reviewed and analysed. Financial KPIs can include: - - - All businesses need to monitor these and for many small businesses the lack of review of financial information is a major cause of business failure To analyse the performance of the business it is necessary to break down the information so that it can be interpreted If profit figures increase and a business is able to expand its market share, then the changes and performance of the business can be deemed to be successful **CSR** If there were plans to improve the performance in Corporate Social Responsibility, using KPIs such as: - - -