SCSA Business Management and Enterprise People

An external operating environmental factor that could influence a business manager to initiate change is the business’s customers. A business must continually ensure that its customers’ needs are being met. It also needs to respond quickly, changing the way it operates to satisfy its customers. For example, a business that only provides instore facilities may need to change its operations and provide an online option to meet customer needs and stay competitive.

Answers could include:

Political and legal external factors:

• changing legislation and the legal requirements of individual countries can drive change in a global business environment
• 'international border restrictions, regulations and legislation have decreased' hence more people are travelling, increasing rooms booked and memberships to their loyalty program.

Social external factors:

• evolving social norms can drive change as people's expectations and consumption behaviours change
• 'people have the confidence to travel internationally once again'
• international events may drive change in a global business environment
• 'popular events are back on, such as the Australian Open and the Formula 1 Grand Prix'.

Answers could include:

Managerial inertia:

• occurs due to managers' reluctance to the change due to factors, such as unfamiliarity, lack of understanding and motivation, poor communication of the vision, dislike of disruptions or uncertainty, lack of security, costs or the process of change itself and a preference to continue with the status quo.

Reasons for resistance to change:

• 'Wendy would like to move their head office in the Asia Pacific area to focus on increasing membership and customer service within that region', but staff 'are also unhappy with the change of head office to Singapore'.
• 'Everyone within each team can apply if interested, no matter the time at the organisation and/or experience', hence, 'some more experienced employees within the company have expressed disappointment and frustration that junior members of staff can apply for this promotional position creating resistance to change and arguments within the teams.

Answers could include:

• managing diversity can be a strategy for business growth as it enables a business to have employees who possess a wide range of talents, skills, experience and ideas, leading to business growth. The diversity amongst the staff will enable the potential for higher levels of creativity and innovation, hence being a strategy for business growth. Diversity leads to better understanding of client needs which then leads to increased client loyalty, sales and profit
• diversity includes employing people from a range of genders, ages, ethnicity, cultural and religious backgrounds and also includes employing people who may have differences in educational levels, skills, socioeconomic backgrounds, personality, geographic locations and family situations
• when Wendy is selecting her new Training and Development Coordinators, she needs to ensure that she chooses a diverse range of people who have a wide range of experience, skills, gender, ethnicity, age and backgrounds. This will ensure a dynamic team is selected that will bring a variety of ideas, creativity, and innovation to create further growth within the business.

Answers could include:

Step 6: Create short-term wins

• Wendy needs to create short-term targets where success can be achieved. This could be based around her loyalty program membership goals, employing the new roles and the first success training trips to Singapore
• Wendy could achieve this by choosing early targets carefully, as failure to achieve these targets will hinder any future success and commitment of her team.

Step 7: Build on the change

• to achieve long-term change, Wendy needs to build on what has gone well and identify where they can improve
• Wendy needs to achieve this by ensuring that any changes are regularly reviewed and improved upon; ensuring all policies are updated; seeking feedback from her staff and identifying where new changes are not being followed.

Step 8: Anchor the changes in corporate culture

• to make any change stick, it needs to become part of the core of Wanders Hotels values and goals. Wendy needs to make continuous efforts to ensure that the change is seen in every aspect of the business
• Wendy needs to implement this step by celebrating her team's success regularly; emphasising that success has come from the change; and ensuring that her Training and Development team are widely informed of the changes and can take help their team confidently with queries.

Advice for Wendy:
Kotter's 8 Steps change management model is an 8-step model that provides guidelines for the successful implementation of change. The model will allow for Wendy to have a clear idea about how to manage change and to effectively communicate the change to her employees. Kotter argues that involvement of staff instils commitment to the change. The model can be used to reduce resistance to change that Wendy is experiencing with her decision to allow everyone to apply for the new Training and Development Coordinator roles and creating a new head office in Singapore. By Wendy applying each of the 8 steps to her changes within the business she will reduce the amount of resistance, create a vision for her employees and steps towards successful implementation of change.

Changes in legislation may change business operations. For example, workplace safety laws may change. This would require businesses' current operating policies or processes to be rewritten, or physical changes to the premises to ensure compliance, e.g. PPE or fire safety.

Businesses must also adhere to governing body industry regulations or standards. A business may need to transform human resources to reflect changed professional qualification requirements to be licensed in an industry, e.g. real estate agents.

Management can use participation as a low-risk strategy when implementing change. Although challenging and time consuming for a manager to implement, participation is highly effective when implementing change. This is because existing stakeholders can directly contribute ideas and raise potential problems or fears experienced at various levels of an organisation. It also reduces resistance to change and minimises staff turnover, because it enhances organisational culture and increases the likelihood that the change will be successful, minimising resistance and implementation problems.

An example of using participation as a management strategy during transformation would be to include staff in decision-making throughout the process of change. Including a staff representative would provide staff with an ear and a voice throughout the process. Creating a regular column in the staff newsletter to inform of progress and seek feedback enables staff to participate in change by contributing their ideas, and expressing their concerns or fears, improving the likelihood of successful transformation. It also builds an environment that values and recognises employees’ contributions. This would reduce the level of staff turnover when implementing the change.

The final stage in Lewin’s change management model is refreeze. In this stage, the change is solidified and becomes a part of normal business operations. The ‘refreezing’ stage is crucial to ensuring the change is successful. The goal at this stage is to ensure that the people involved implement the change without resistance and that the change is normalised within the business.

A risk for a business if this stage is not implemented is that the previous behaviour could continue, and the change will not happen. For example, the business may need to modify the organisational structure to align with the change and to reinforce the new ways of working. If this is not done, it could jeopardise the change from being adopted.

Answers could include:

• staff downsizing for cost reductions in global operations
• transition from physical stores to online stores worldwide
• introduction of new products in global markets
• establishing strategic alliances with overseas businesses
• adaption of staff attitudes and work habits in changing global environments
• extent of a business's financial resources
• international expansion of domestic businesses.

Answers could include:

• Forcefield Analysis is a tool that can be used in change management to help employees understand the need for a change
• the model can be used to organise thinking where a brainstorming template is used to record the forces that support change and the forces that create any resistance to the change
• once the forces are identified, they are then given a rating, which could be out of 5 or 10, according to their importance. The lower the rating, the least impact a force has on the proposed change, the higher the rating, the greater the impact
• the change would look viable if the forces for change score higher than the forces which may create resistance to the change
• management may have to attempt to find ways to reduce the forces which resist change if these forces are rated more highly; similarly, they may have to develop plans to exploit the forces for change if these rate more highly.

Kotter’s eight-step change model places emphasis on involvement and acceptance of the change to ensure success. Corporate culture, as a driver of change, can impact on the success of transformation as it refers to the values or beliefs of a business. Forming a powerful coalition of key leaders will ensure that corporate culture is positive throughout the change. This is because corporate culture is driven by the leaders in a business, and it is the leaders that will ensure the change is implemented.

Answer(s) could include:

Internal factors that drive change:

• management’s desire to introduce change, e.g. costs can be a factor in driving change; if the cost of production is too expensive, outsourcing may be an option to save labour costs
• employees might initiate change to improve working conditions and/or skill development
• introduction of new technology for efficiency and/or cost savings
• staff attitude and work habits may drive change in a global environment.

External factors that drive change:

Political and legal:

• political decisions can have a huge impact on a business by changing laws or regulatory regimes
• changing legislation and the legal requirements of individual countries can drive change in a global business environment

Economic:

• interest rates
• inflation
• unemployment
• economic indicators

Social:

• evolving social norms can drive change as people change expectations and consumption behaviours
• international events and issues may drive change in a global business environment
• use of technology by consumers also drives change as it forces businesses to reconsider their own use of technology and interaction with outside parties
• prevailing social issues might impact on public image or relations

Technological:

• technology is rapidly changing and impacts on the way businesses are able to interact with stakeholders. This could drive change in the way a business distributes products, engages in e-commerce or uses social media to connect with customers

Environmental:

• changing attitudes to climate and environmental impacts might drive change in a global environment; businesses may need to consider their own environmental impact and how that might affect their ability to penetrate new markets.

Answer(s) could include:

Lewin’s Forcefield Analysis model is used by businesses to ascertain how viable a decision or change might be. It takes into account forces that drive change and restrain change, determining whether the change is the preferred option.

Lewin’s Forcefield Analysis model can be implemented through a series of steps:

1. describe the plan or proposal for change
2. identify the forces for change
3. identify forces against change
4. assign scores
5. analyse and apply the change.

The forces driving and restraining change must be appropriate to the type of business and the proposed change: driving change – long-term revenue, market demand, unsustainable costs, competition, customer expectations; restraining change – company culture, time restraints, conversion cost, staff attitude.

A business can use Lewin’s Forcefield Analysis model to prepare people for change by sharing with their stakeholders how the change would impact on them, and the factors that had been taken into account in preparing for the change.

The evaluation of forces should be clear and appropriate; it must be determined whether the proposed change is feasible.

By using Lewin’s Forcefield Analysis model, businesses can be transparent and clear in communicating the impending change and, therefore, properly prepare its people.

Change management is a system of ideas that effectively supports the concept of change in an organisation. Two common change management theories are Kotter’s and Lewin’s.

Lewin’s change management is not as effective as Kotter’s because it is too simple and does not provide detail with each step of the model.

Kotter’s change management theory is more effective, presenting a practical eight-step approach to successfully understanding and leading change. It provides detailed steps on how to implement the model and action the change. Additionally, Kotter’s theory focuses on the importance of overcoming resistance to change and thereby eliminating the resistance to facilitate effective transformation.

A macro external environmental factor that influenced change at the vet clinic is the legal environment. The legal environment relates to the laws that state how a business must operate. Stimulus 11 refers to the lobbying influence of welfare groups and veterinary associations in achieving legislative change, which resulted in updates to legislation. These updates mandate that vet nurses must have necessary training to perform complementary therapies. Therefore, the business needs to change to abide by the new laws.

When transforming a business, it is important that staff engage in retraining by upskilling in line with strategic priorities, such as by acquiring new technological skills or developing new ways of working. Continuous learning programs will support employee development when transforming a business. One example is the career development of employees, which enables them to update their skills and knowledge along with a future focus for career planning.

A management style is the way managers organise tasks and interact with employees to achieve business objectives.
A manager with an autocratic style may impose change on the business based on their judgments and opinions only. This style ensures the decision to change is made quickly, and the change commences without the involvement of staff.
A manager with a democratic style will drive change that responds to the wishes and judgments of their staff. The open communication associated with this style will ensure the need for change is clear and all are involved.

Answer(s) could include:

Skilled communicator:

• process or ability to exchange information accurately and timely, active listening
• more difficult in a cross-cultural setting due to language barriers
• Harrison will need to work on his communication and adapt to a more open style of communication.

Socially aware:

• an awareness of relationships, thus leading to the ability to understand the needs of team members
• the ability to understand other social and cultural customs leads to the ability to establish trust and long-lasting business relationships
• Harrison needs to be aware of the social norms in Singapore in order to not offend any employees.

Skilled decision-maker:

• knows when to make decisions quickly if required, but also able to balance the risk in decision-making to avoid damage to the business
• needed in a new cross-cultural setting as there is no history of past actions and performance to follow or provide advice
• Harrison is highly skilled in the production process and will be able to make decisions in a timely manner.

Future thinker:

• has a long-term vision of where the business is headed, so incremental planning can take place and the business is pro-active, rather than reactive in its responses
• can see the larger global picture, implement the vision on a global scale
• Quinn needs to develop a long-term vision regarding the direction of Laffitaya so he can be pro-active not reactive.

Self-discipline:

• able to control own emotions and have intelligence in dealing with a crisis or adverse situations
• a self-disciplined leader understands the impact that their actions and decisions may have in a cross-cultural setting, as it helps to provide greater certainty for staff
• Harrison may need to adapt his direct communication style to ensure that he controls his emotions in high pressure situations.

Responsible:

• ability to be independent, accountable, accept authority and be more aware that actions have consequences
• needed in a new cross-cultural setting to understand pre-established ideas, to understand where adaptation or new ideas are required, to demonstrate they can think for themselves, often seeing new perspectives, real purpose and outcomes
• Harrison must have the ability to take control and be answerable in a new cross-cultural setting.

Motivational:

• ability to use psychological forces/motivate people to strive for certain goals rather than simply act on orders
• Quinn needs to be aware in a new cross-cultural setting to provide motivation, direction and support for staff while recognising differences in intrinsic and extrinsic motivations, rewards and punishments in different cultural settings.

Answer(s) could include:

• Autocratic leaders are typically bossy and dictatorship-like style may put new workers offside and cause resentment. Changing to situational leadership, Harrison can be more democratic which could develop positive relationships with employees, recognising their success and adding to their motivation.
• Autocratic style limits creativity and ‘out-of-the-box’ thinking – a highly structured, rigid leadership style might not fit the culture of the global workplace, hence changing the leadership style to suit the situation can help improve creativity and innovation.
• Harrison normally makes all the decisions – this may not be wise when not understanding the culture or new business landscape and does not allow for skilled workers to contribute ideas. Harrison can adapt his style by listening to team members and taking on feedback which can be beneficial for the business.
• Harrison currently uses one-way communication – this may upset new team members and does not foster good teamwork and relationships, and this can limit performance. He can adapt this to an open communication style, encouraging feedback from employees.

Answer(s) could include:

Managerial inertia:

• This may occur due to the pressure from staff being reluctant due to factors such as unfamiliarity, lack of understanding, dislike of disruptions or uncertainty, lack of security, costs or the process of change itself.
• Adapting to technology can be a factor of managerial inertia. Laffitaya may be forced to change the way it operates the business. This could be in the way they communicate, use technology to transfer data or finance, or the way that they conduct their marketing and/or distribution.
• The lack of communication from Laffitaya to management about the benefits and improvements of the merger can cause resistance to the change.

Financial costs:

• This could result in Laffitaya staff fearing job losses due to new technologies, processes or equipment being costly.
• Employees may be concerned they will be made redundant due to outsourcing functions and/or combining jobs with ExNex Outdoors.
• Employees at Laffitaya may have to undergo significant and costly training and development, which they may resist so that the business does not reap the reward of these costs.

Answer(s) could include:

Step 4: Communicate the vision

• Quinn must ensure that employees throughout the workplace understand what is happening by understanding the vision of the business.
• Clear and regular communication is important to deal with fears and concerns about the change.
• Quinn can hold meetings, talk to individuals, give regular updates and seek feedback about how the change is progressing.

Step 5: Remove obstacles

• Planning for change includes anticipating what could go wrong or delay success.
• Quinn will need to identify obstacles blocking change and identify how to remove them.
• Quinn can reward people for making change happen and identify people who are resisting change and try to convince them of its importance.
• Quinn needs to address the staff regarding their concerns, as this obstacle could block the success of the merger.

Advice to Quinn about how Laffitaya could build on the change:

• Long term success is dependent on changing the workplace culture. Therefore, providing opportunities for employees at Laffitaya and ExNex Outdoors to learn about the new policies and procedures and leadership restructure.
• Quinn needs to ensure the employees at both Laffitaya and ExNex Outdoors believe in the benefits of the merger and how it will assist the company be successful. If the employees believe in the change, it is more likely to be a success.
• Quinn also needs to continue to review and improve its policies and processes to ensure the change is working.
• Quinn and Harrison need to ensure all policies and procedures and instructions are updated and communicated to all staff clearly.
• Quinn and Harrison also need to seek feedback from employees at both ExNex Outdoors and Laffitaya in order to build on the change and adapt as necessary.
• Quinn and Harrison also need to identify where the new policies are not being followed and manage any new issues that arise due to the changes.

One stakeholder group that may resist the change is employees who work at the store in order to help the achievement of objectives. Employees want job security and with the fact that 20% of staff who will be retrenched, this could cause resistance in employees. To overcome this support which is the verbal and initiatives in place to help employees manage the change. Alex could offer support in resume writing or interview skills to the employees that will be retrenched. This makes employees leaving feel supported, while also shows current employees that management cares for their staff. This could cause less resistance which helps the success of the change.

Is the ability for an individual to be inspired and encouraged to take on tasks and undergo different activities. In relation to this large gaming store, this would involve being influenced and inspired to take on business activities and perhaps to strive to have the best performance relative to the individual.

Performance related pay refers to attaching an employees performance or work with a financial, or non-financial, reward. In this case, Alex could implement this motivation strategy by offering and handout out financial rewards, such as bonuses, to employees who display behaviour that aligns with business objectives relating to the change, and thus, increases employee motivation, as they are now incentivised to undergo work tasks. Additionally, due to the possibility of some employees being retrenched, this would also incentivise them to be motivated due to the additional financial benefits, which may decrease their financial insecurity.