Managing Change Planning for Change Revitalising General Motors is like teaching an elephant to tap dance. You find the sensitive spot and start poking. H Ross Perot Changing the direction of a large company is like trying to turn an aircraft carrier. It takes a mile before anything happens. And if it was a wrong turn, getting back on course takes even longer. Al Ries What do these quotes tell you about planning for change? BUSS4.8 Planning for Change

In this topic you will learn about: Purposes of corporate plans Including contingency plans Assessing internal and external influences on corporate plans Assessing the value of corporate plans BUSS4.8 Planning for Change

What is a Corporate Plan? A detailed, medium to long term plan outlining the actions a business will take to achieve its corporate objectives Corporate Plans What are Corporate Objectives? The medium to long term quantifiable targets to fulfil the mission statement What are Functional Objectives and Strategies The goals and actions taken by each functional areas in order to meet the CO Finance Marketing Revision Opportunity: Draw a grid as shown opposite on to A3 paper. Write down everything you can remember from BUSS3 under each heading. Share your notes to fill in as much of the grid as possible. HR Operations Mgt. BUSS4.8 Planning for Change

Purpose of Corporate Plans Clear sense of direction Directors and all staff if communicated effectively Encourages accountability Identifies and gives consideration to range of strategic options Encourages progress to be tracked Allows for progress to be reviewed Monitoring of corporate plan Preparing a corporate plan Detailed corporate plan Review BUSS4.8 Planning for Change Discuss the benefits of each stage

Influences on Corporate Plans Internal Resources Financial Workforce Operational capacity Culture Leadership Mission statement External Market conditions Economic environment Political and Legal environment Social environment Technological environment The whole of BUSS4 looks at the external environment and managing change all aspects of which will influence corporate plans BUSS4.8 Planning for Change

Value of Corporate Plans Shows strategic thinking and planning Shared with Employees Potential investors Other stakeholders “Joined up” thinking and planning Common sense of direction Limitations Responsiveness to change Must be flexible Can not predict future Can limit spontaneity Can not avoid the unexpected! BUSS4.8 Planning for Change

A CRISIS RARELY GOES AS PLANNED! Contingency Planning The very nature of this unit reflects that businesses have to be able to respond to change and change can be unpredictable What is contingency planning? The process by which organisations try to prepare for unexpected and potentially disastrous events What is crisis management? The manner in which an organisation responds to an unexpected and potentially disastrous event Guardian Heston Blumenthal on the Fat Duck food poisoning scare Heston Blumenthal talks to Matthew Fort about the food poisoning scare that closed the Fat Duck, and what next for the restaurant A CRISIS RARELY GOES AS PLANNED! What steps can a restaurant take to avoid a crisis? What are the costs to a business? Can a crisis be avoided? How important is it to limit any damage? BUSS4.8 Planning for Change

The process of developing a contingency plan Acceptance Preventative Measures Catalogue Possibilities Business Impact Analysis may form an important part of this (see next slide) Crisis Plan What contingency plans exist in your school or college? How do you test and review these? Testing Review BUSS4.8 Planning for Change

Business Impact Analysis Potential Threats What could go wrong? Probability How likely is it to happen? Estimated effect What will the cost to the business be? Financial and reputation Speed How quickly will it impact on the business functions? How quickly can the business respond? Mission Critical Functions Will it stop the business performing its main function? BUSS4.8 Planning for Change

Contingency Plans Value Sense of security Limits damage Speeds up recovery process Informs staff training Preventative measures can be part of CSR Limitations Costly and time consuming Including opportunity cost Needs reviewing Lack of predictability BBC Fifa makes 2010 Cup back-up plan Blatter will appear on BBC One's new Inside Sport programme on Monday Football's governing body has contingency plans in case South Africa cannot host the World Cup in 2010, Fifa president Sepp Blatter has said. Fifa has a contingency plan in case South Africa is not ready for the World Cup. Should there be a Contingency plan in case London is not ready for the 2012 Olympics? BUSS4.8 Planning for Change

Contingency Plan Cadbury’s testing out of date Cadbury’s withdraws products made in China Cadbury’s is fined BBC Cadbury's testing 'out of date' The way the chocolate maker Cadbury's tests for salmonella is out of date, according to government scientists. Cadbury recalls China chocolates The makers of Cadbury chocolates have decided to withdraw products made in Beijing after a scandal over contaminated dairy products in China. Cadbury's £1m salmonella fine Cadbury has been fined £1m for breaking food and hygiene laws relating to a salmonella outbreak. In each case: Identify the cause of each event Identify the potential threat What actions could have been taken to prevent these events? Rank each event on a scale of 1 – 10 in terms of seriousness to the future success of Cadbury’s. Justify your answer BUSS4.8 Planning for Change

HOT OFF THE PRESS! http://www.bbc.co.uk/news/business-32060966 What type of integration? Merger/Takeover? Horizontal/Vertical? Which stakeholders will benefit and why? Which stakeholders will loose out and why? How does this deal meet both companies’ corporate objectives? BUSS4.8 Planning for Change

In 2012, many companies such as Thorntons, the chocolate retailer, and Comet, the electronics retailer, announced poor financial results as a result of difficult trading conditions. Several commentators claimed that such businesses had been unprepared for changes in their external environment. To what extent do you think that it is possible for businesses to prepare effectively for changes in their external environment? Justify your answer with reference to Thorntons, Comet and/or any other organisations that you know. Source: AQA June 2013 (40 marks) BUSS4.8 Planning for Change

Plan your paragraphs Conclusion What is your theme? What evidence do you have from your businesses? What key business terms and theory can you use? Can you contrast mass and niche markets or different businesses in your industry? What does success depend on? What is your final judgement? Can you question the question? Are there similarities between industries? Conclusion BUSS4.8 Planning for Change