1. CHANGE

2. Change in organisational size Change occurs when a business alters its structure, size or strategy to respond to internal or external influences. Reasons for change: - meet objectives - gain market share - increase shareholders returns - technological advances - economic, political and legal - consumer demand - employee pressures

3. Internal - Change in organisational size Organisational size - The classification of how large a business is, normally based on, the number of employees, company turnover and company balance sheet. Organic growth - Internal growth occurs when a business expands in size by opening new stores, branches, functions or plants. Organic growth tends to be slower and less expensive than external growth. Retrenchment - the downsizing of a business; to reduce costs and increase competitiveness. Mergers - two or more firms agree to become integrated to form one firm under one management. Mergers allow firms to exploit economies of scale. Takeovers - when one firm gains control over another and becomes the owner. This can be achieved by obtaining 51% of the shares.

4. Internal - Change in organisational size Horizontal integration - The integration of two organisations at the same stage of the production process. - Large organisations can exploit economies of scale - Increase its control of a market (reducing competition) Vertical Integration - the integration of two organisations at different stages in the production process. Conglomerate - A form of business growth characterised by the integration of two or more unrelated firms. - diversification spreads risks across different markets - power is extensively delegated - can cause problems to focus on businesses in different industries.

5. Internal - New owners/leaders Reasons for change by new owners/leaders: - own vision or mission - change in corporate objectives - overcome cultural differences - personal leadership style - desire to make a difference and introduce fresh ideas - self glorification Possible problems: - clash of cultures or hostility towards new owners/managers - funding of the change - resistance to change by existing employees

6. Internal - poor business performance When a business is failing to meet its objectives. If poor business performance is experienced then changes will need to be made as shareholders will demand answers and want actions. Possible causes: - failure to keep up to date with the market - new entrants in the market - poor decision making - unsuccessful mergers/takeovers - poor leadership - economic environment/political or legal changes Possible solutions: - change in ownership - improvements to the organisational structure - implement new strategy - introduction of more efficient processes.

7. Purpose of corporate plans Corporate plans - a detailed, medium to long term plan outlining the actions a business will take to achieve its corporate objectives. They include: - corporate aims and objectives - corporate strategies - functional objectives - contingency plans Purposes of corporate plans: - provide a clear sense of direction - allocates specific responsibilities to key personnel - identifies and gives consideration to a range of strategic options - encourages progress to be tracked and reviewed against targets. Contingency plans - the process by which organisations try to prepare for unexpected and potentially disastrous events. ValueLimitations - costly and time consuming - needs revising on a regular basis - may never be used - lack of predictability

8. Internal and External factors on corporate plans ValueLimitations - Shows strategic thinking and planning - Common sense of direction - Greater focus and chance to achieve the corporate objectives - Clear targets to monitor progress against - Greater understanding of the business - Informs investors and other stakeholders - can’t take into account unpredictable changes in the business environment. - internal changes can change the plan - opportunity cost of time and HR - may affect ability to respond to change - long term planning has to be reviewed Internal Influences factors within the businesses control External influences outside it’s control - The financial resources available - the HR skills available (quality of workers) - The operating capacity available - The marketing strengths eg the brand - The culture of the organisation - Leadership style and vision - Mission statement - Decision making process - The economic environment - The legal environment - The political environment - The competitive environment - the social environment -ethical consideration - The technological environment

9. Leadership Leadership - The ability to influence and direct people in order to meet the goals of a group. Leadership style - The approach a leader takes to achieving their objectives. Management - The process which company resources are used and decisions made in order to meet the objectives of the firm. (They can inspire and motivate workers and set objectives) McGregor’s Theory: Theory X - management believe workers are lax and avoid work, managers closely supervise the workforce. Theory Y - management believe workers seek job satisfaction and enjoy responsibility, managers delegate more.

10. Leadership Autocratic/ Authoritarian - A leadership style where all decisions are made at the top without consultation. - associated with a hard HR strategy. - adopted with unskilled workforces - preferred style of leadership during a crisis or rapid change - there may be resistance if change is not clearly communicated Democratic - The leader consults the team but makes the final decision themselves - associated with a soft HR strategy - requires a skilled workforce where workers can make strong contributions - decisions may be more informed - can find implementing change easier as they are more likely to gain acceptance Laissez-faire - A leadership style where the leader allows their team to make decisions and complete their work without supervision. - associated with entrepreneurial culture - requires experienced staff who can make decisions them selves - may be inappropriate at times of change when it needs to be managed. Paternalistic - The leader acts in a fatherly way towards the workforce. - decisions are based on the needs of the workforce - looks at the welfare of the workforce - leaders may find it easier to recruit project champions at times of change as the business would be well explained.

11. Internal and external factors affecting leadership styles Internal factorsExternal factors Expertise and experience of the workforce Changes in the political and legal environment; it may require leaders to implement change without consultation with the workforce as the change isn't negotiable Nature of the work and level of skill required The personal traits of the leader The power given to the leader The economic environment and the impact on the business performance The time frame associated with the task to be undertaken The organisational structureChanging nature of the industry

12. Role of leadership John Kotters 8 step change modelRole of leadership - what leaders can do Step 1 : create urgency Emphasise the need for change Start honest discussions that give dynamic and convincing reasons, this will get people talking and thinking. Step 2:Form a powerful coalition A project group Bring together a team of influential people who have different amounts of power. Step 3:create a vision for change Determine the central values Develop a short summary (one or two sentences) that captures the future of the organisation. Step 4 : Communicate the vision Talk often about the change vision Openly and honesty address concerns and apply the vision to all aspects of operations Step 5 : Remove obstacles Human or otherwise! Appoint change leaders and identify change resisters Step 6 : Create short term wins Success motivates employees Look for short term projects that can be implemented quickly and reward people who meet the targets Step 7 : Build on the change Real change runs deep Set goals to continue building on success. Step 8 : Anchor the changes in the corporate culture Talk about progress at every opportunity and recognise the key members of the change team

13. Organisational culture Organisational structure - The values and standards shared by people and groups within an organisation. Entrepreneurial culture The ethos of a business where risk taking and innovation are actively encouraged and rewarded, whilst failure not criticised. - workers are given individual responsibility (high degree of delegation - decentralised decision making Power culture The concentration of power amongst a few people central to the organisation. - Decisions can be made very quickly as there is little room for consultation - Assiosicated with centralised decision making and autocratic leadership Task culture A culture based on individual projects that are completed in small teams - The emphasis is on achieving set outcomes through cooperation - This requires support at senior level - associated with matrix structures and delegation

14. Reasons for changing organisational culture Problems of changing organisational culture - Change in owners/leaders - Change in corporate objectives - Poor business performance - Change in size, mergers etc because of difference in cultures - Responding to market conditions - Resistance to change - Lack of trust - Period of adjustment - Alienation of: - Suppliers - Customers - Other stakeholders Culture is important for the following reasons: - Impact on staff motivation - Effects decision making - Competitiveness of the business - Brand Image

15. Strategic decisions Strategic decisions - The medium to long term plans made by a business in order to meet its corporate objectives. Information Management - The use of accurate and up to date information to aid decision making. Intuition Decisions made that are based on instinct rather than scientifically Scientific decision making Decisions within an organisation that are made on basis of data - Decisions are supported by research - Outcomes are tested which reduces risk - Decisions made are objective - Use qualitative and quantitative information Including financial accounts, market research, competitor analysis, SWOT and PEST analysis and market analysis.

16. Influences on corporate decision making Internal InfluencesExternal Influences Corporate Objectives All decisions made are to help the business achieve its objectives External environment Businesses may have to make decisions to respond to PESTLE factors. Resources available May require high capital investment and need finance to back the decision External stakeholders Pressure group actions are deliberately designed to try and influence behaviour and hence decision making of firms. Internal stakeholders A powerful owner may be able to override the decision of other board members

17. Techniques to implement change Change - The adapting of business procedures in response to internal and external factors. Project Management - The activity of delivering the required change within a predetermined set of resources. eg time Project Champions - The people responsible for driving a project forward and gaining commitment Project groups - A group of specialists from different backgrounds tasked with achieving the desired programme of change

18. Factors that promote and resist change Factors that promote change (gaining acceptance from shareholders): Transparency and early involvement - Identify and share the reasons for change with stakeholders - Clearly state and communicate the objectives of change Keeping lines of communication open during the process - Keeping everyone informed on progress - View change from different stakeholders perspectives Resisting change (stakeholders reluctant to change) Reason for resistancePossible solution Parochial self interest (fear that change effects them personally) Reassurance and training (offers reassurance on job security) Misunderstanding and lack of information Communication Low tolerance to change - personal trait Empathy and respect Different assessments of a situationGiven them a voice