AREA STUDY 2 - TSFX

AREA STUDY 2

IMPLEMENTING CHANGE

REFER BACK TO PAGE 2 OF NOTES

CHECKLIST OF THE KEY KNOWLEDGE YOU EXAMINED IN THE LATER PART OF

TERM 3

REVIEW EACH DOT POINT AND USE MIND MAPS TO RECALL KEY INFORMATION TO

IDENTIFY WHERE YOU STILL HAVE GAPS TO BE ABLE TO REVISE AND REVIEW IN

PREPARATION FOR THE EXAM

AREA STUDY 2 – IMPLEMENTING CHANGE –

KEY KNOWLEDGE IMPORTANCE OF LEADSHIP IN CHANGE MANAGEMENT (DESCRIBE)

MANAGEMENT STRATEGIES TO RESPOND TO KEY PERFORMANCE INDICATORS INCLUDING:

STAFF TRAINING

STAFF MOTIVATION

CHANGE IN MANAGEMENT STYLES/SKILLS

INCREASED INVESTMENT IN TECHNOLOGY

IMPROVING QUALITY IN PRODUCTION

COST CUTTING

INITIATING LEAN PRODUCTION TECHNIQUES AND

REDEPLOYMENT OF RESOURCES (NATURAL, CAPITAL, LABOUR)

MUST LEARN, UNDERSTAND AND BE ABLE TO APPLY

AREA OF STUDY 2 – IMPLEMENTING

CHANGE - CONTINUED

MANAGEMENT STRATEGIES TO SEEK NEW BUSINESS OPPORTUNITIES

DOMESTICALLY AND GLOBALLY ( NOT PRESCRIBED)

OVERVIEW OF PRINCIPLES OF THE LEARNING ORGANISATION (SENGE)

HIGH RISK AND LOW RISK STRATEGIES TO OVERCOME RESISTANCE TO CHANGE

( LINKS TO OTHER PARTS OF THE COURSE)

KEY PRINCIPLES OF THE THREE -STEP CHANGE MODEL ( LEWIN)

EFFECT OF CHANGE ON STAKEHOLDERS INCLUDING MANAGERS, EMPLOYEES,

CUSTOMERS, SUPPLIERS AND GENERAL COMMUNITY

( LEARN WITH EXAMPLES)

CSR CONSIDERATIONS WHEN IMPLEMENTING CHANGE ( LINK TO OTHER PARTS

OF COURSE)

IMPORTANCE OF REVIEWING KPI’S TO EVALUATE THE EFFECTIVENESS OF

BUSINESS TRANSFORMATION ( DO NOT NEGLECT TO REVISE)

AOS 2.1 – LEADERSHIP IN CHANGE

MANAGEMENT Leadership will help to reduce any resistance to change in a business

Defined as: the ability of a manager or business owner to motivate and influence employees to work towards business objectives. If change is to be implemented successfully then this skill is essential to build trust and to help reduce employee resistance to the change.

Effective leaders influence people and provide a SUPPORTIVE environment for them to achieve team or business goals.

Leaders can market and promote the change to achieve staff cooperation and acceptance

Need to demonstrate empathy and listening skills and communicate a clear vision to staff

Can guide staff and the business through the period of change acting as role models during this change process

Without strong leadership the change process may fail or take longer than expected

PAGE 29 & 30 OF NOTES

AOS - 2.2 Management Strategies to

Respond to Key Performance Indicators

AOS 1 ( Unit 4) – identified 9 KPI’s that provide data to managers about business performance

Now we need to consider possible strategies ( plans, tactics) to address this data if there are problems

Essentially linking different areas of the course- will challenge you with higher order thinking questions

Be clear about the strategies you propose and how they will benefit the business to improve the specific KPI’s

Data driven questions possible

Let’s review these strategies

HIGHLY EXAMINABLE

Page 31 – 32 of notes

Staff Training

Staff training (either on or off- the - job) can be offered to:

improves productivity growth - through increased staff skills

improves sales figures – through better sales skills of staff

reduces the number of workplace accidents – increased skills, better

knowledge of job

boosts morale leading to lower staff absenteeism and staff turnover as staff

gain greater job satisfaction

New skills means increased motivation, building staff confidence

Can be linked to improved quality of product – affects number of customer

complaints – should reduce these as staff are better equipped to deal with

customer issues

Staff Motivation & Changes to Management

Style Staff motivation is linked to higher levels of job satisfaction and can be monitored

through feedback from staff surveys and the outcomes of performance appraisals.

If the business offers rewards and recognition programs, adopts a more participative management style and encourages staff input then the data from key performance indicators like the ones listed below will improve:

rate of productivity growth (higher)

level of staff turnover (lower)

rate of staff absenteeism ( lower)

If the business adopts a more employee focused management style like consultative or participative where management use communicating, leading and interpersonal skills more effectively then this will also improve the data gathered from the following key performance indicators:

level of staff turnover

rate of staff absenteeism

Management Strategies including Investment in Technology,

Improved Quality of Production

Businesses are always exploring ways to reduce their costs and improve the quality of

their product to retain loyal customers.

If they increase their investment in technology through the use of automated

production lines, development and maintenance of a dynamic business website and the

use of a quality approach to monitor the standard of the product delivered to

customers then the following key performance indicators should improve:

rate of productivity growth – greater efficiency

percentage of market share – business gained competitive edge over rivals

reduction in the number of customer complaints – less errors or defects

reduces levels of wastage – less landfill

increased net profit figures – lower costs

COST CUTTING – Business taking action

to spend less

CAN INCLUDE:

FINDING CHEAPER SUPPLIER

ELIMINATING UNNECESSARY COSTS

ASSESSING VALUE OF ADVERTISING CAMPAIGN

AVOIDING SMALL FREQUENT ORDERS, BUYING IN BULK FOR DISCOUNTS

LOWERING SALARY COSTS THROUGH REDUDANCIES, OUTSOURCING, OVERSEAS

MANUFACTURER OR REPLACING LABOUR WITH TECHNOLOGY

QUICK WAY TO ADDRESS KPI’S LIKE NET PROFIT FIGURES, RATE OF

PRODUCTIVITY GROWTH, LEVEL OF WASTAGE

INITIATING LEAN PRODUCTION TECHNIQUES

LEAN PRODUCTION/MANAGEMENT SYSTEMATIC METHOD OF REDUCING WASTE

WITHIN MANUFACTURING PROCESS

FOCUSING ON WHAT ADDS VALUE BY DECREASING EVERYTHING ELSE THAT DOES

NOT

MINIMISING RESOURCES USED IN PRODUCTION PROCESS

EFFICIENCY OF SPACE, MACHINERY, LABOUR, MATERIALS AND SHORTER

PRODUCTION TIMES

AFFECTS KPI’S LIKE PERCENTAGE OF MARKET SHARE, NUMBER OF SALES, NET

PROFIT FIGURES

REDPLOYMENT OF RESOURCES

HOW CAN BUSINESS USE ITS RESOURCES IN A DIFFERENT WAY

NATURAL RESOURCES – LAND, SEA, AIR – RECYCLING, REUSING – USE RESOURCES IN MORE

THAN ONE WAY

LABOUR RESOURCES – MOVE TO DIFFERENT AREAS OF BUSINESS, OFFER ADDITIONAL

SKILLS, LESS REDUDANDCIES AND A BOOST TO MORALE POSSIBLE

CAPITAL RESOURCES – TOOLS, EQUIPMENT, BUILDINGS, MACHINERY E.G. RELOCATE

FACTORIES OVERSEAS TO HELP REDUCE COSTS

AFFECTS KPI’S ; RATE OF PRODUCTIVITY GROWTH, NET PROFIT FIGURES, PERCENTAGE

OF MARKET SHARE AND LEVEL OF WASTAGE – AIMING TO MAKE THE BUSINESS MORE

SUCCESSFUL BY REMOVING THOSE ELEMENTS THAT ARE NOT WORKING

2017 EXAM

TWO KPI QUESTIONS IN EXAM LAST YEAR:

Q4B ( REFERRED TO IN EARLIER SLIDE)

Q1C – REFERENCE TO LEVEL OF STAFF TURNOVER AND IMPACT ON ANOTHER KPI AT

GADGET – 2 MARKS

46% GOT ZERO

NEEDED TO PROVIDE LINK BETWEEN CHANGE IN STAFF TURNOVER AND ANOTHER

SEPARATE KPI

DESCRIBE HOW CHANGE IN STAFF TURNOVER COULD AFFECT ANOTHER KPI

GOOD FIT ANSWERS – NET PROFIT FIGURES, RATE OF PRDUCTIVITY GROWTH, NUMBER OF

SALES

REMEMBER LINKS AND DETAILED ANSWERS GET THE MARKS

QUESTION TIME – Page 33

Let’s do:

Question 22

Describe question – 3 marks – 3 clear points

Question 23

Explain – 6 marks again 6 clear points

6 marks = 10 minutes

SAMPLE ANSWERSQuestion 22 - 3 marks

If customers are making complaints with a business then this indicates

that their expectations are not being met by that business. ( 1 mark)

If the business does not address these complaints then customers will

look to alternative businesses to make their purchases resulting in loss

of sales and revenue. (1 mark) If the business implements a quality

approach like quality control or offers more training to staff then this

could improve customer satisfaction boosting sales and profits. ( 1

mark)

Question 23 - 3 marks

Redeployment of resources is the process of moving natural, labour or

capital resources from one section of the business to another. ( 1

mark) This can cut costs, reduce losses the business may be incurring

in areas where customers are not making purchases and improve

efficiency as the resources are can be utilised more to increase profit.

(2 marks)

AOS 2.3 Management Strategies to seek

new Business Opportunities – domestically or

globally

Managers will continually to seek new business opportunities to improve business

performance as it can be another source of change – Why?

Attract new customers

Increase Number of Sales

Increase Net Profit

Increase Market Share

Notes on Page 34

AoS 2.3 Strategies Domestically/Globally

Not listed in the Study Design

Range of Options

Suits discuss, evaluate, analyse type questions

Options to consider:

1. Multiple branding

2. Franchising

3. Government programs

4. Product differentiation

5. Online Presence – can suit both/choose for one

6. Exporting

7. Others

(NOT ON 2017 EXAM)

MULTI- BRANDING

DEFINITION: Multiple branding is a strategy in which the business will offer a

number of products under different brand names BUT THEY BELONG TO THE

SAME COMPANY

( NOT PRODUCTS BUT BRANDS)

STRENGTHS:

• Obtain more shelf space, leaving less for competitors’ products

• Can address gaps in the market and fulfil a range of customer needs (eg. As societal attitudes

evolve, businesses can expand to address these – Coca-Cola and Vitamin Water)

LIMITATIONS:

• May negatively impact image/reputation if customers perceive the business to only be

pursuing profits and be less customer-oriented

• Risk/Possibility of failure – expanding a business with multiple brands may result in high initial

costs and possible failure

• Notes on Page 34

Product Differentiation

DESCRIPTION:

Process of distinguishing a product or service from others

More attractive to a particular target market

Focuses on point of difference/distinct from competitors' products

and substitutable products

ADVANTAGES: competitive edge, can charge premium prices, build loyal

customer base

DISADVANTAGES: imitations could appear on market, difficult to

maintain point of difference without rivals entering market for extended

time frame

( FAMILIAR THROUGH PORTER)

Notes on Page 35

Government Programs

DEFINITION: Expanding domestically with the assistance of government-

funded programs and subsidies/grants, particularly from Business

Victoria.

STRENGTH:

• Programs can provide subsidies for training or new equipment

LIMITATION:

• Business may not be eligible for these subsidies or any assistance

• Notes on Page 36

GLOBAL OPPORTUNITIES - EXPORTING

Selling your good or service on a global scale, by selling in overseas markets.

Globalisation has made international trade easier and government bodies such

as AusTrade can help businesses enter export markets.

STRENGTHS:

Helps expand customer base, increase sales and profits (Australia has a small

population/ expanding globally can increase potential customer base)

If business produces a surplus and limited demand domestically, allows the

business to sell surplus overseas

Enables business to produce in larger volumes and achieve economies of scale

Notes on Page 37

GLOBAL OPPORTUNITIES – EXPORTING -

CONTINUED

LIMITATIONS:

Barriers to exporting may exist e.g. tariffs, government laws or

language barriers

Competition globally may be stronger than domestic

Not suitable for small businesses due to high initial costs involved –

e.g. Restaurant/hairdresser

May require high initial capital start-up costs and can be a risky

strategy as some Australian products may not be successful on a global

scale due to different social values and attitudes

ONLINE PRESENCE

Another means of exporting globally

Creating an online shop and platform

Allowing customers to pay online and arrange for shipment of goods.

STRENGTHS:

Can open up the business to new markets, expanding customer base and increase sales and profits

Ability to shop open on 24/7 basis

WEAKNESSES:

Possibility of shipment problems (e.g. damaged goods) and the need to establish new distribution channels

Can be costly to set up

May not suit all business types – e.g. restaurant or hairdresser

QUESTION TIME – PAGE 38 - Q24 ( 2 MARKS) Q25 (1 MARK) Q26 ( 1 MARK)

Q 27 (1 MARK) - 5 MARKS – 8 MINUTES –

Review of Questions on Page 38 Short answer – need responses that are precise and to the point for the marks

Question 24 – 2 marks

Allows business to grow and achieve some of their business objectives e.g. increased profit.

Gaps in the market or potential to operate globally which is the case with this swimwear company is another reason leading to increased sales, market share and profits.

Question 25 – 1 mark

➢ Easier as there are less costs, business already has a reputation it can build, owners know the market conditions they face

Question 26 – 1 mark

➢ Increases the number of customers so there is greater scope for increased sales and profit as a result

Question 27 - 1 mark

➢ One business will offer a number of products under different brands that belong to the same business

AOS 2.4 OVERVIEW OF THE PRINCIPLES OF

THE LEARNING ORGANISATIONS - SENGE

Senge developed the five principles to enable businesses to experience growth and

outperform their competition

Believed their survival was linked to the creation of a learning organisation

What is a learning organisation?

Business where people expand their capacity to do their job and learn together;

constantly seeking to improve performance to achieve individual and business

objectives

Five principles of: systems thinking, personal mastery, mental models, building shared

visions and team learning

Describes how a business can manage success, continue to develop and gain more from

its employees

Notes on pages 39 - 43

AoS 2.4 SENGE - CONTINUED

The learning organisation is a business that is flexible,

adaptable and productive

Reduces resistance to change

Remember - all five principles are interrelated

Implementation of these principles leads to a continuous

learning processes creating a competitive business

Businesses that a proactive and ready for change will be

more successful

Revisit, review and understand the 5 principles

Summary diagram on Page 40

SYSTEMS THINKING – look at organisation

as a whole

THE BUSINESS NEEDS TO SEE THE BIG PICTURE

UNDERSTAND THE BUSINESS AS A WHOLE

HOW EACH PART CONNECTS WITH THE REST OF THE BUSINESS

THE INTERRELATIONSHIPS AND CONNECTIONS OF THE DIFFERENT

ELEMENTS OF THE BUSINESS

HELPS BUSINESS BE PROACTIVE AND READY FOR CHANGE –

EMBRACES CHANGE RATHER THAN FEAR IT

PERSONAL MASTERY – focus on

improved skills

PEOPLE IN THE BUSINESS UNDERTAKE CONTINUAL LEARNING

EMPLOYEES COMMIT TO DEVELOPING THEIR SKILLS WHICH WILL HAVE A

FLOW ON EFFECT FOR THE BUSINESS

THERE WILL BE LESS RESISTANCE TO CHANGE

THE GROWTH OF THE EMPLOYEE ALIGNS WITH THE GROWTH OF THE

BUSINESS

THE BUSINESS NEEDS TO SUPPORT LEARNING BY ALLOWING EMPLOYEES

TO CHALLENGE THEMSELVES AND PURSUE THEIR PASSION

MENTAL MODELS – create a culture of

openness to change

NEED TO CHALLENGE WORKPLACE ASSUMPTIONS AND HOW

THINGS ARE CURRENTLY

AS THE BUSINESS GOES THROUGH TRANSFORMATION OR

CHANGE EMPLOYEES AND MANAGEMENT NEED TO

CONSIDER WHAT THEY DO AND WHETHER THEY ARE

BLOCKERS OR SUPPORTERS OF THE CHANGE

STAFF AND OTHER STAKEHOLDERS ARE MORE AWARE OF

OWN BELIEFS, VALUES AND BEHAVIOURS

BUILDING A SHARED VISION – all employees

want to work to achieve same objectives

THE BUSINESS NEEDS TO DEVELOP A VISION THAT IS SUPPORTED BY ALL

MEMBERS OF THE BUSINESS

VISION COMES FROM A RANGE OF PEOPLE – SPREAD AND REINFORCED

SEEKS TO GAIN COMMITMENT NOT COMPLIANCE

EVERYONE IS ON THE SAME PAGE AND WORKING TOWARDS THE ACHIEVEMENT

OF BUSINESS GOALS

If people feel enthusiasm for goals and direction of business then vision is

reinforced with a deeper level of commitment for the business transformation

to occur

TEAM LEARNING –improve capabilities of

whole business working collaboratively

TEAM MEMBERS WORK TOGETHER TO ACHIEVE COMMON

GOALS

A SHARED VISION REQUIRES COLLABORATION

THE BUSINESS WILL BENEFIT BY THE INDIVIDUALS

LEARNING TOGETHER

CREATES POSITIVE RESULTS FOR THE WHOLE TEAM

ROLE OF LEADERSHIP

LEADERS IN A LEARNING ORGANISATION CAN BE ONE OF THREE MODELS WITH A

MORE CONTEMPORARY APPROACH TO LEADERSHIP

DESIGNERS – CREATE A COMMON VISION, DECIDE ON POLICIES AND STRATEGIES

AND CONTINUOUSLY IMPROVE IN THESE AREAS

TEACHER – SET UP AN ENVIRONMENT WHERE LEARNING IS FOR EVERYONE

STEWARD – BE PART OF THE GROWTH OF THE BUSINESS AND PROTECT THE

VISION OF THE BUSINESS

NOT EXAMINABLE

NOTES ON PAGE 42

SENGE THEORY - IN SUMMARY

DEVELOPMENT OF AN INNOVATIVE WORKPLACE

MORE PEOPLE ORIENTATED

CONTINUALLY TRANSFORMS TO BECOME COMPETITIVE

EVERY MEMBER IS PROACTIVE AND COMMITED TO CHANGE

AS THE BUSINESS CHANGES

WORK INDIVIDUALLY AND AS A GROUP TO ACHIEVE

EXCELLENCE

EXAMPLES INCLUDE IKEA AND SCHOOLS

IF YOU GET ASKED TWO DESCRIBE 2 PRINCIPLES – 4

POINTS – GIVE DETAILED ANSWERS

SUMMARY - CONTINUED

IMPROVES MORALE AND MOTIVATION OF EMPLOYEES

LEARNING AT A RATE FASTER THAN CHANGE IS ESSENTIAL TO MAINTAIN A

COMPETITIVE ADVANTAGE OVER RIVALS

LEARNING INCREASES PRODUCTIVITY

ABLE TO SETTLE PROBLEMS QUICKLY

IMPROVED ABILITIES OF EMPLOYEES AND TEAMS TO EMBRACE AND ADAPT TO

CHANGE

Lets do Question 28 – 2 mark for the definition

And Question 29 – 2 marks

4 marks – 6 minutes

Page 42 - 43

QUESTION TIME AGAIN

SAMPLE ANSWERSQuestion 28 – 2 marks

Learning organisation is a concept that all businesses are dynamic

entities which are constantly having to adapt to change if they are to

remain competitive and achieve their business objectives. There is an

employee focus where there is commitment to personal mastery with

a shared vision and team approach to facilitate this change.


A shared vision is important as this means that all the members of the

business are focused on and working together to achieve the change

and help the business achieve its objectives. If people feel enthusiasm

for the goals and the direction of the business then the vision is

reinforced with a deeper level of commitment for the business

transformation to occur.

AoS 2.5 LOW - RISK STRATEGIES TO

OVERCOME EMPLOYEE RESISTANCE

Managers can use a range of strategies to overcome

resistance and implement change effectively (4 listed in

Study Design)

Low-risk strategies promote an environment for change

and are more likely to be accepted by employees who

are the main resistors to change due to the fear of job

losses, changing job descriptions and the need to adapt

to different systems and processes implemented by the

business

Notes on Page 44

AoS 2.5 -LOW-RISK STRATEGIES -

CONTINUED

Low-risk strategies include:

Communication: - CREATES TRUST, SHOWS MANAGERS WILLING TO LISTEN

TO EMPLOYEE CONCERNS AND IDEAS

Needs to be a two-way process of exchanging information with key

stakeholders (always include a definition)

Employee need to be informed of all changes to the business and have the

opportunity to provide feedback

Open communication will build trust with employees as decision-making is

transparent reducing the potential for resistance

AoS 2.5 - LOW - RISK STRATEGIES -

CONTINUEDEmpowerment:

Involving employees in the decision-making processes

Employee participation in change process promotes a sense of ownership of this process

Encourages negotiations between employees and management to improve support for the change

Alleviates employee fear and anxiety as employees are encouraged to participate in the change process

Identification of individual employees who can act as change agents helping to promote a positive and supportive culture for the change to occur

Adopting a more consultative or participative management style will help employees cope with the change as they have a say in the process

AoS 2.5 - LOW-RISK STRATEGIES -

CONTINUED

Support:

Business change can lead to job losses and the need for new skills

Provision of services like job referrals, for those being terminated can help

boost morale of the remaining staff

Provision of training can also help alleviate resistance to new processes as

employees gain more confidence to adapt to the change

Listening to staff concerns by management and business owners can also be

helpful to reduce anxiety and stress and lead to less resistance to change


CONTINUED

Incentives:

The offer of bonuses, promotions, additional training, career

advancement and additional responsibility can help to reduce

employee resistance

Incentives motivate employees to perform better and be more

open to the change as they provide some form of recognition that

employees are valued and have a role to play during this period

of transition for the business


CONTINUED

BENEFITS

CREATES A POSITIVE WORK ENVIRONMENT WHEN BUSINESS UNDERGOES CHANGE

IF SUCCESSFUL EMPLOYEES MORE LIKELY TO EMBRACE CHANGE IN FUTURE

LIMITATIONS

CAN TAKE TIME AND NOT SUITABLE IF QUICK CHANGE NEEDED

CAN BE COSTLY TO TRAIN, OFFER COUNSELLING AND INCENTIVES

AoS 2.6 - HIGH RISK STRATEGIES TO

OVERCOME EMPLOYEE RESISTANCE

Number of high-risk practices that management could use to overcome staff resistance,

Have a negative impact on the relationship between managers/business owners and employees

Manipulation - altering of information about change in some way to present it in a more positive light

Considered deceptive as used to influence employees to behave in a certain way.

Can be considered unethical as control of information is held by management and they influence people to obtain certain outcomes

AoS 2.6 - HIGH RISK STRATEGIES TO

OVERCOME EMPLOYEE RESISTANCE -

CONTINUEDThreats- statements of intention by management to trigger

certain behaviours/ reactions from employees

Threaten employees with potential job losses, job

transfers, loss of promotions, or poor employee

references, can lead to acceptance of the change in the

short term but creates a negative corporate culture and

lower morale in the longer term

May be suitable in a time of crisis to enable change to

occur

AoS 2.6 - HIGH-RISK STRATEGIES

BENEFITS:

CAN BE USED IF FAST RESPONSE TO CHANGE IS NEEDED

CAN BE USED AS LAST RESORT IF LOW- RISK STRATEGIES NOT WORKING

LIMITATIONS

CAN PROMOTE A LOSS OF TRUST AND BUILD RESENTMENT

CAN CREATE TOXIC WORK ENVIRONMENT

AoS 2.5 & 2.6 LOW AND HIGH-RISK

STRATEGIES TO OVERCOME EMPLOYEE

RESISTANCE

Not in exam last year

Have been in previous years as both strategies are in the old Study Design

Potential for discuss, evaluate, justify type questions

Remember low-risk more effective because will help reduce resistance to

change by employees but more time consuming

High-risk strategies effective in short term -will get the desired results, but

can damage working relationship between managers and employees in the

longer term

Question 33 on – discuss is the task word – two strengths and two

limitations of each strategy – 4 marks – 6 minutes

SAMPLE RESPONSE FOR Q33A LOW RISK STRATEGY THAT COULD BE USED IS COMMUNICATION.

THIS IS THE PROCESS OF TRANSFERRING INFORMATION FROM THE SENDER TO

THE RECEIVER.

BY INFORMING STAFF ABOUT THE DETAILS OF THE CHANGE THERE MAY BE LESS

RESISTANCE.

IF EMPLOYEES CAN SEE AND UNDERSTAND THE OVERALL BENEFITS OF THE

CHANGE THEN THEY MAY UNDERSTAND ITS NECESSITY.

HOWEVER THE PROCES OF COMMUNICATING IS TIME CONSUMING AND EACH

EMPLOYEE WILL HAVE A DIFFERENT LEVEL OF RESISTANCE.

SOME MAY ALSO TAKE LONGER THAN OTHERS TO UNDERSTAND AND ACCEPT THE

CHANGE

(2 MARKS)

SAMPLE RESPONSE FOR Q33 -

continued

ANOTHER LOW RISK STRATEGY TO OVERCOME EMPLOYEE RESISTANCE IS THE

PROVISION OF INCENTIVES BY THE BUSINESS.

THIS STRATEGY COULD INVOLVE THE OFFER OF BONUSES TO THOSE EMPLOYEES

WHO ACCEPT THE CHANGE PROMPTLY SUCH AS PROMOTIONS, ADDITIONAL

TRAINING, CAREER ADVANCEMENT OR MORE AUTONOMY.

THIS TYPE OF STRATEGY CAN REDUCE RESISTANCE TO CHANGE AS EMPLOYEES

FEEL THAT THE BUSINESS HAS FAITH IN THEIR ABILITY AND IS WILLING TO

RECOGNISE THE CONTRIBUTION THAT THEY CAN AND WILL MAKE.

HOWEVER THIS STRATEGY COULD BE COSTLY TO THE BUSINESS AND THE

BENEFITS TO BE GAINED BY THE CHANGE MUST OUTWEIGH THE COST. IT ALSO

MAY NOT BE SUSTAINABLE OVER A LONGER PERIOD OF TIME (2 MARKS)

AOS 2.7 - Key Principles of Three Step

Change Model - Lewin

Lewin’s Three Step Change Model considered a cornerstone for

understanding business change

Helps businesses prepare and plan for a successful transition

Remember for successful change to occur the business must first start

by understanding why the change is taking place

Tips to answer questions on Lewin’s three step change model:

Be able to clearly identify and describe each step then apply to a

scenario if the question calls for it

Look at the mark allocation for this question and the task word

( apply)

Notes on Page 47 - 48

LEWIN – STEP 1 – UNFREEZE STAGE

➢ First stage of change involves preparing the business to accept that change is necessary

Involves breaking down the status quo before the business can build upon a new way of

operating

The team driving the change needs to show why the existing way of doing things cannot

continue

Could do this by referring to declining sales figures, poor financial results, negative customer

feedback etc. to enable everyone in the business to understand why the change is necessary

Leadership group needs to challenge the beliefs, values attitudes and behaviours that

currently define the business

Most difficult and stressful part of the change process

Business is forced to re-examine itself to gain support for what is to come next.

This helps stakeholders to ‘buy in’ and prepare for the change

IDENTIFY WHY CHANGE IS NEEDED AND WHAT NEEDS TO CHANGE

LEWIN – STEP 2 – CHANGE STAGE

After the uncertainty created in the unfreeze stage, the change stage is

where people begin to resolve their doubts and look for new ways to do

things.

People start to believe and act in ways that support the new business

direction

Take time to embrace the new direction and participate proactively in the

change

Need to understand how it will benefit them

Not everyone will fall in line because the change is necessary and will benefit

the company

Managers need to foresee problem situations and deal with these promptly

Time and communication are two key ways to support the change process.

LEWIN – STEP 3 – REFREEZE STAGE

If change is taking shape

People have embraced new ways of working then the business is at the refreeze stage

The organisational chart and business is stable and people are fulfilling their new or

adjusted work roles

The refreeze stage helps people institutionalize the change

Employees feel confident and comfortable with the new ways of working

New ways embedded in culture to stop business from going back to old ways

Business may also celebrate successes of change

Policies are rewritten and implemented to reflect the change

Question 35 - 6 marks – 10 minutes

Question 35 - Page 49 continued

Need to clearly explain each step and then apply it to a merger – two

existing businesses joining to become one larger business

Examples of mergers have been TABCORP and Tattersalls group,

Westpac and St George Banks

Mergers – some jobs lost, others created, new culture, new processes

and procedures

Try to write an answer in the given time allocation

SAMPLE ANSWER

You have a sample solution which we can now look at as a guide to what

you should write

See:

Page 8 of the solutions

2017 EXAM – PART B QUESTION 4

APPLY LEWIN MODEL TO CASE STUDY – 6 MARKS

3.1 AVERAGE/ REASONABLE EFFORT WITH ONLY 9% GETTING ZERO

UNDERSTAND HOW MODEL WORKS THEN LINK IT TO CASE STUDY X 2

MARKS

CLEARY DESCRIBE EACH STEP THEN APPLY IT TO SCENARIO –

DEMONSTRATE YOUR UNDERSTANDING OF HOW IT WORKS

AGAIN TASK WORK AND MARK ALLOCATION DRIVE THE TYPE OF ANSWER

REQUIRED

Page 50 -51 notes

AOS 2.8 – THE EFFECTS OF CHANGE ON

STAKEHOLDERS – LISTED IN THE STUDY DESIGN

REMEMBER FOR SOME STAKEHOLDERS THE CHANGE WILL BE

POSITIVE

FOR OTHERS IT WILL BE NEGATIVE

READ THE QUESTION, UNDERSTAND THE NATURE OF THE

CHANGE AND THEN ANSWER

DON’T FORGET THE MARK ALLOCATION AND THE TASK

WORD

Effect of Change on Stakeholders

including Managers

Stakeholder Effect of change

Managers

Management style

Change of process

Change of structure

Change of Employment

conditions

• Adopting a more consultative style of management to deal with employee

resistance and seek input during the period of change

• Alters the recruitment and selection of employees, offer more training and

review induction of new employees to adopt the new process

• May create new departments, teams or management positions

• Job losses for employees and some management levels

EFFECT OF CHANGE ON EMPLOYEES

Employees

Change in operations by

adopting more

technology for example

Changes due to takeovers

and mergers

Changes in competition

• Job losses, retraining, altered job descriptions and roles

• Cultural shift in business with new job roles, new divisions,

new managers

• Push to adopt different work process, learning new skills,

working different hours especially if trading hours have been

extended

EFFECT ON CUSTOMERS AND SUPPLIERS

Customers

Lifeline of the business

Some will like the change

some will react against it

• Loyal to business after change implemented

OR

• Choose to go to competitors as resisting change

Suppliers

New production methods

Outsourcing of resources

• Attract more businesses to purchase product range

• Altering the workforce of the business with more flexible work

arrangements

• Sourcing materials from overseas reduces costs and alters the

structure and employment needs of the business

EFFECT ON GENERAL COMMUNITY

The General

Community:

Expansion of

businesses

Decline of businesses

• More job opportunities and range of products

• Job losses, flow on effects on other businesses, more

pressure on government benefit payouts, less demand

for goods and services

QUESTION TIME AGAIN – NEARLY DONE

LETS DO QUESTIONS 37 AND 38 ON PAGE 52

Q37 = 2 MAKS

Q 38 = 2 MARKS

TOTAL OF 4 MARKS = 6 MINUTES

Sample Questions on Page 52 – 2 marks


More responsibility for the production of a good or the delivery of a service

Business may offer additional training to address the issue of customer

complaints, especially if business is going through a period of change

If less customer complaints then helps staff stay motivated and committed to

business


Change can have a positive outcome if the manager lead its in an effective

manner leading to improved results. This may mean the manager earns a

bonus or promotion. If the change involves restructuring or downsizing then

the manager may lose their job especially if middle management are a target

to reduce costs and improve efficiency which is then a negative outcome.

AOS 2.9 - CORPORATE SOCIAL RESPONSBILITY

CONSIDERATIONS WHEN IMPLEMENTING CHANGE

All businesses are expected to behave in a socially responsible manner.

Many will adopt the triple bottom line approach which focuses on the three

pillars of sustainability which incorporate carbon footprint economic factors

and social factors.

Social factors focus on maintaining a mutually beneficial relationship with

employees, customers and the community.

Environmental factors focus on the impact by the business on resource usage,

the elimination of hazardous substances and the reducing of waste and

emission from the physical environment.

Economic factors focus on the business being able to be economically viable.

AOS 2.9 – CSR CONSIDERATIONS WHEN

IMPLEMENTING CHANGE

Businesses are expected to:

Give back to the community through their involvement in philanthropic

causes

Aim for environmental sustainability

Have some links and involvement with the wider community

Adopt ethical practices when sourcing materials from suppliers

Implement policies and processes that support the ethical behaviours of the

business

Notes on Page 54 & 55

CSR CONSIDERATIONS & CHANGE

Operations Management

With changes in practices and processes in operations the business can:

track productivity levels to ensure resources are used efficiently

review level of waste the business is producing to see if decreasing

review number of workplace accidents that have occurred over a period of time

Human Resources

Downsizing/Mergers – redundancies, entitlements and transition issues handled appropriately

If there have been changes made to employment processes/staffing business can:

review the level of staff turnover over a period of time

examine the rate of absenteeism

evaluate the results from staff satisfaction surveys

CSR CONSIDERATIONS - CONTINUED

Change of Supplier

Preference for local suppliers

Business should ensure fair working conditions and pay for workers if materials are being sourced from overseas

Business use suppliers with the same values and beliefs

Other considerations:

Reduce, reuse and recycle where possible in the business

Consider packaging and if it is environmentally friendly

Introducing strategies to reduce waste e.g. JIT

Question 43 - 1 mark

An obligation a business needs to ensure they consider when undertaking change to be environmentally friendly and not impact on stakeholders in a negative way.

AOS 2.10 - Importance of Reviewing Key Performance Indicators

to Evaluate the Effectiveness of Business Transformation

Businesses need to evaluate, reflect on and review the change and its impact on:

The business as a whole

Specific departments or areas of the business

Employment teams

Managers and individual employees

Should review and evaluate its performance on a regular basis using a range of data and KPIs to

provide information that is relevant, accurate, reliable and timely

Reviews should align with the goals of the business and the direction it’s taking

If process is overlooked then business cannot determine whether change implemented was

successful

Notes on Page 57

Lets look at Question 44 and 45 – 4 marks = 5 minutes

SAMPLE ANSWERSQuestion 44 – 2 marks – need two clear points that address question

Often it is poor business performance identified by various KPI’s such as lower

profit and sales that drives a business to implement change. Once the change has

occurred then the business should review performance using the same KPI’s to

see if improvements have been made. Failing to do this could lead to the failure

of the business

Question 45 – 2 marks – 2 clear points well explained .

As Woolworths is a publicly owned company net profit figures would be the main

KPI that would be reviewed to ensure revenue exceeds expenses. This is to

ensure that shareholders receive dividends to remain loyal to the business with

their investment. Profit figures will be linked to sales and market share If there

is a decline in net profit then Woolworths will need to implement some form of

change whether it is more items on sale, a greater variety of products or a

marketing campaign to attract and retain loyal customers.

REMEMBER

You should understand KPIs, other data and

trends and be able to apply these to a

given scenario to review and evaluate

change and transformation in a business.

EXAMPLE OF A BUSINESS THAT HAS

UNDERGONE CHANGE – LAST 4 YEARS

Bunnings international household hardware chain

Resisted going online until this year

Driving forces for change: technology, customer preferences, competition

Restraining forces – corporate culture, organisational inertia, management

Not fully e-commerce like other stores such as Coles and K-Mart

Range offers 20,000 products that are not stocked in Bunnings stores – bulky

items like shed, children’s playgrounds, extended range of taps and fittings

Major strategic shift for a highly profit business that is the success tory for

Wesfarmer’s

Dominated the hardware market for a long time – and now with Amazon here

it will be interesting to see how its KPI’s fare

THE COURSE IN A NUTSHELL

11 DIFFERENT STRATEGIES ACROSS UNIT 3 AND 4 – DO NOT CONFUSE

THESE

6 THEORIES:

3 MOTIVATIONAL THEORIES

3 RELATED TO CHANGE – Porter, Senge and Lewin

Easy to confuse so learn and apply properly

Be clear about what the task word in each question means

Additional examination tips on Page 59

COMMON MISTAKES MADE IN UNIT 4

NOT CLEARLY DEFINING EACH KPI CORRECTLY – E.G. STAFF TURNOVER,

CUSTOMER COMPLAINTS

CONFUSING THE FORCE FIELD ANALYSIS WITH THE 3 STEP CHANGE MODEL

NOT BEING ABLE TO EXPLAIN HOW A SPECIFIC FACTOR IS A DRIVING FORCE FOR

CHANGE

CONFUSING PORTER WITH SENGE

MISREADING THE TASK WORD – REMEMBER DISCUSS, EVALUATE, COMPARE,

EXAMINE, ANALYSE – HIGH ORDER THINKING QUESTIONS – HIGHER MARKS

SOLUTION – READ THE QUESTION CAREFULLY, LOOK AT THE TASK WORD,

LOOK AT THE MARKS, PLAN YOUR ANSWER IF MORE THAN 6 MARKS

CHECK YOUR ANSWERS BEFORE END OF THE EXAM

WHAT NEXT?

Reflect on what we have revised today –

GO HOME AND DO A PRACTICE EXAM - fresh in your mind

Study, Study, Study

Attempt as many practice exams as you can and seek feedback from your teacher ( AT LEAST 5 INCLUDING THE 2017 PAPER)

Your summary notes should be ready NOW

Remember revise, mind maps and then DO the exam questions under timed conditions

QUESTIONS?

THANK YOU

GOOD LUCK WITH THE EXAM

AREA STUDY 2 - TSFX

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