Managing Change; Unit 4 - Notes

Notes made from a combination of resources including the Malcolm Surridge text book and Philip Allan revision guide.

Covers the 'manaing change' third of the course; Introduction to Change, Interal Causes of Change, Planning for Change, Leadership, Culture, Strategic Decisions and Implementing and Managing Chnage

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Introduction to Change
Firms will experience new laws, taxes, changes in `customers' tastes, changes in technology, changes
in staff and changes in the activities of the competitors.
External Change:
"It happens to you"
Change is happening all the time in the external environment and the job as a manager is to anticipate
such change and prepare for it
Nature of the change and the significance of any particular change will depend on the industry
Significance of change for any firm will depend on the particular circumstances of the firm
Sources of change:
PESTLE
Competitors
Supplies
Buyers
Providers of Substitutes
Internal Change:
Staff may want higher rewards or to be more involved in decision making
Require changes in the way a firm is manager
Changes that affect a firm from the inside
Analysing Change:
Consider the nature of the risk of the change
Some changes are slow and can be planned and expected; some are sudden and less predictable
Firms may not realise their market is disappearing
Changes can create undesirable outcomes (threats) or desirable outcomes (opportunities)
Effect of any change depends on what it is, internal position of each firm, quality of the management
and the extent to which the change was expected are prepared for
Proactive v Reactive Approaches:
Proactive: Looking ahead and anticipating change wherever they can
Reactive: Waits for change to happen and then responds
Changes can't be avoid
Marketing Myopia: Describes firms that are short sighted and miss the trends developing within their
markets (Theodore Levitt)
Internal Causes of Change

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Changes in Organisational Size:
Internal change can occur as a result of the challenges and opportunities of growth
Owners want the firm to grow cause they:
May benefit from economies of scale
Have more power over their markets
Will be safer from takeover
Will have more status
Internal growth occurs when the firm sells more of its products
Internal growth is slower than external growth
Adjusting During the Growth of a Firm:
Managers must examine the firm's structure and the roles of the people within…read more

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Types of Integration:
Horizontal:
One firm joins with another at the same stage of the same production process
Allows for greater market share
Achieves economies of scale
Opportunity to enter a different market segment
Vertical:
One firm joins with another at a different stage of the same production process
Forward Vertical is when the other firm is at a later stage
Backward Vertical is when the other firm is at an earlier stage
Allows for a firm to control key stages of the production process…read more

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Welcomed: the firm will give information
Hostile: the firm will have no inside knowledge
Going International:
Firms can also grow by expanding overseas
It provides new marketing opportunities when further expansion in the domestic market may be
difficult
The decision to sell overseas can be a difficult one to take
Problems:
Usual expansion problems
Dealing with exchange rate fluctuations
New legislation
Having to familiarise itself with market trends and consumer behaviour
Process:
1) Firms begin to sell abroad by exporting
2) Firms may then extent…read more

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Retrenchment:
There will be times when the managers decide to shrink the firm
Because of lack of demand / problems controlling large scale firm
When managers withdraw from a market
Involves:
Closures
Sale of different divisions
Redundancies
May pull out of a market:
Demand no longer exists
Cannot manage of larger scale
No longer has competitive advantage
Wants to raise money
Should consider:
How decision is communicated to the media and potential investors
Consultation with employees to ensure they understand the reasons why the firm…read more

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For change to occur there must be greater pressure for change of the resistance to change needs to
decrease
Greater pressure to bring about change is often caused by poor performance as managers want to
do something about it; it can also help employees understand why the change is necessary
Typical changes:
Replace some staff
Restricting
New processes and systems
Mergers or takeovers
Greiners Stages of Growth:
Greiner
There are 5 stages of growth:
1) Creativity
2) Direction
3) Delegation
4) Coordination
5) Collnatoration
Creativity:…read more

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Planning for Change
A corporate plan sets out what the firm as whole is trying to achieve and how it intends to achieve
this:
Corporate objective
Corporate strategies
These must be turned into specific objectives for each function
SWOT Analysis:
Strengths and weaknesses of a firm are internal and relate to the present situation…read more

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Opportunities and threats facing the firm are external and in the future
Managers will consider:
How to build on its strengths (Internal Audit)
How to exploit its opportunities (Internal Audit)
How to protect itself against threats (External Audit)
How to protect itself from its weaknesses (External Audit)
Value of Corporate Planning:
Makes sure that managers are looking ahead and thinking about what they want to achieve and how
All other plans can be derived from the corporate plan
A plan can become out of date…read more

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Understanding the overall strategy and objectives and know your resources so they can make the
right decisions at any moment
Contingency Planning:
This type of planning occurs when a firm prepares for unlikely events
Plans might include:
Using 2 supplies for the same part or component
Paying a fee to be able to use computer facilities / office space elsewhere
Training employees in several tasks
Ensuring new products are in development
Firms can't afford to have a contingency plan for every possible event that might…read more

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Leadership
Leaders and Managers:
A leader is someone who has followers who want to follow their direction
A manager is someone who has been appointed to run the /part of the firm
Kotter:
"leadership and management are two distinctive and complementary systems of
action...…read more

Comments

davidsalter

This is a comprehensive (23 page) document which fully covers the reasons for change and how to manage it. Suitable for unit 4 and can be used as the main notes but will need to be adapted for revision purposes.

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