Define how businesses can manage change effectively

Change

• In business terms, change is any alteration of the internal and/or external working environment of a business

Examples of change internally

• When employees performances amend either negatively or positively
• Management changes within the company
• Profit/cash-flow changes (financial changes and/or issues)
• Culture changes
• Change in production methods

Examples of change externally

• The fashion trend changes and therefore consumers have a new style they are interested in
• Technological advancements
• Changes to the economy
• Threats from competition
• Political factors

Importance of managing chANGE

• A businesses ability to manage, embrace and adapt to change determines their business's competitive advantage and survival. When businesses poorly adapts to change it leads to employee resistance, tension, anxiety, loss productivity and ultimately the decrease of profit.
• However the change may be either major (transformational) or minor (incremental)

Impacts of change: Organisational structure

• Organisational structure: Whilst a businesses environment changes, the business undergoes structural change, these include outsourcing, flatter organisational structures and work teams. This creates the streamline business operations (co-ordination & control), improve efficiency and empower employees to make their own decisions.

Impacts of change: Business culture

• Changes within the external or internal environments should be reflected on its business culture, if the business culture suits the external environment, managers and employees gain the attitude needed to compete successfully. A business culture as a consequence needs to adapt, if it does not fit the real-world criteria. Different attitudes, values & mindsets will then be adopted.

Impacts of change: Human resource management

• Some of the changes to the human resource management include the alteration of recruitment & selection to reflect the need for individuals who have the knowledge and skills required for the new changes, termination procedures, retraining and new performance appraisal and reward systems.

Impacts of change: Operations management

• Businesses constantly try to find ways of speeding up production time, shorten production development, streamline distribution and serve customers. Some of the operation management changes can include redeveloped factories in response to technological advancements, efficiency in process design and materials management, flexible manufacturing and improvement of human relations.

DIFFERENT WAYS TO MANAGE CHANGE: low risk

• Employees are the basis for low risk strategies when managing change. It involves keeping employees aware of the necessity of change and their contribution in the change process. The strategy focuses on communication, involvement, support and negotiation. Businesses must be able to identify the need for change, set achievable goals and have information systems.

Different ways to manage change: High risk

• High risks strategies can generate negative outcomes thus, the high risk strategies need to be used wisely ( when other tactics don't work, it is too expensive or there is no time) as it can lead to lowered resistance to change. Threat is a strategy used and it involves using force to make resistors conform whilst manipulation is when the manager deceive their employers so that they work harder.

Identifying the need for change

• In order to identify the need for change, managers must be able to understand the factors which have impacts on the business, in doing this, they will be ably to identify current trends and predict future changes. This means that managers need to have access to accurate and up-to-date information.

Identifying the need for change

• Business information systems: This is crucial for every business as business's success or failure is determined on their ability to collect, organise, process and retrieve information (summarising future possibilities, present situations and past performance) quickly. Information collected aids with decision making and planning for the future. This is a part of the mangers role in managing change effectively.

Identifying the need for change

• Business information systems:The information which are processed and organised to help with decision making include data about production costs and production schedules, data measuring sales, product development and customer satisfaction, data about financial transactions and cash flow, staff absentees, training requirements and overtime payments.

Employees Resistance to change

• When change is very rapid and comes from the external environment people within the business can be resistant to the changes. Reasons why change might be resisted include management, fear of loss of job, disruption to routine, time, fear of the unknown, inertia and cost.

Employees resistance to change

• Management: Managers poor timing and unclear creating employees loss of confidence in the management's decision-making abilities
• Fear of loss of job: Employees may become fearful of the change as it may threaten their job status therefore they resist or disapprove of the new processes as they feel the result will not accompany them such as loss of control/power

Employees resistance to change

• Disruption to routine: Employees fear that they won't adapt to the new procedures and that it will threaten to change their past work routines. This is the reason why training is needed when there is change.
• Time: When the changes are rapid, employees are usually not given enough time to think about the change, accept it and then implement it.

Employees resistance to change

• Fear of the unknown: Poor leadership and management when there is change can cause employees to experience anxiety through their fear of the unknown and uncertainty of the future.
• Inertia: This is when there is no enthusiasm to proposed changes this is due to the fact that change requires people to move outside of their comfort zones and people tend to like safe and predictable status quo

Employees resistance to change

• Cost: Implementing changes in businesses mean more financial cost, this is a major reason for resistance. Although businesses have the finance for change, they still must evaluate the costs and benefits of the change.
• Businesses must balance the forces that initiate, encourage and support the change (driving forces) and the forces that work against the change (restraining forces)

STRATEGIES FOR REDUCING RESISTANCE:
In reducing resistance to change, managers need to be aware of the reason why change is resisted. When these factors have been identified, each manager needs to create strategies which reduce the resistance. Research reveals that the workplace culture created by the manager and his/her leadership abilities can affect employee acceptance. Therefore the two most effective ways for reduce resistance to change is through creating a culture of change and positive leadership.

STRATEGIES FOR REDUCING RESISTANCE:

1. Offer support-this reduces fear and anxiety
2. Build trust with the employees
3. Make sure the changes are reasonable
4. Provide constant feedback
5. Indicate why the change is needed
6. Two way communication
7. Allow employees to contribute in the change processes
8. Indicate the positive & negative aspects of he change
9. Discuss future changes to reduce the fear of the unknown
10. Have a suitable time frame
11. Support change with new learning
12. Avoid the high-risk strategies if possible

Negative effects of ignoring change

• Businesses that do not embrace or adapt to the internal and external changes will cause their business to gradually fail as they need to keep responding to the never-ending pressure for change. Ignoring change will cause decreased profits, loss of customers and ultimately bankruptcy

ROLE OF POSITIVE LEADERSHIP AND MANAGEMENT CONSULTANTS
These consultants provide a wide range of business experiences, specialised knowledge and skills, an objective (external) viewpoint, access to the latest research and awareness of industry best practices. Their main role however, is to help businesses improve their performance by investigating existing business problems,developing plans for improvement and change management advice: a methodical approach to dealing with change, both from the perspective of a business and on the individual level. They create a supportive business culture, actively involve all stakeholders in the change process, undertake change readiness reviews and recognise early achievements.