U4 - AoS2 (BM)

Leadership is the ability of a manager to influence and motivate people to work towards the achievement of organisational objectives.

• In change, leaders should:
• - Prepare and plan: what to be changed, timeline, decision-making.
• - Communicate: stakeholders, two-way communication, empathy and listening skills
• - Support: counselling, training or mentoring to help stakeholders cope with the change and address any resistance
• - Collaboration: involve the stakeholders, especially the employees in the change process.
• - Accountability: make the managers accountable for the change, to gain the trust from employees and other stakeholders

• - If a leader does not have the skills to communicate change to staff effectively, employees may become cynical and resist the change.
• - Leaders need to focus on building relationships with employees, management, shareholders, and external stakeholders.

• Staff training:
• - Training is the process of providing an employee with the knowledge of specific skills required to do a job.

• - Can be on-the-job or off-the-job
• - Ensures that staff have appropriate skills to perform responsibilities accurately and productively.
• - Leads to personal growth and opportunities for career development.
• - Staff who have access to training and development are more likely to be motivated.

- No. of customer complaints, no. of workplace accidents, rate of productivity growth, level of staff turnover.

• Staff Motivation:
• - Motivation is the willingness or drive to exert high levels of effort in order to reach organisational objectives, while also satisfying individual employee's need to achieve

• - Performance related pay
• - Investment in training
• - Career advancement/development
• - Sanctions
• - Support

- Rate of productivity growth, no. of customer complaints, rate of staff absenteeism, level of staff turnover, net profits.

• (change) in Management Styles and Skills:
• - (mgmt styles) the manner and approach of providing direction, implementing plans, and motivating people.
• - Autocratic (Task oriented)
• - Persuasive (Task oriented)
• - Consultative (Employee oriented)
• - Participative (Employee oriented)
• - Laissez-faire (Employee oriented)

• - (mgmt skills) the ability to do something well, gained through training and experience
• - Communication
• - Delegation
• - Planning
• - Leadership
• - Decision-making
• - Interpersonal

• - Trends in KPIs may highlight the need for managers to improve certain skills to improve business performance.
• - E.g. issues with profit, market share or sales might indicate that the manager needs to increase communication with stakeholders or improve decision-making ability.

• Increased Investment in Technology:
• - the practical application of science to achieve a commercial or industrial objective.

• - Automated production line: Process where raw materials enter, and finished products leave with little or no human intervention.
• - Computer-aided design: Program that facilitates creation and modification of design.
• - Computer-aided manufacturing: Computer-controlled manufacturing that involves control of machinery, tools and equipment through a computer.
• - Website development: Establishing and maintaining an accessible and easily locatable online platform.

- Productivity growth, wastage levels, workplace accidents, net profits.

• Improving quality in production:
• - Quality is the degree of excellence in a good or service and its ability to satisfy the customer.

• - Quality control: Involves the use of random inspections at various points in the production process to check for defects and taking corrective action if necessary.
• - Quality assurance: A system established to ensure that predetermined quality standards are achieved by building quality into the work processes. Involves the use of an external certification body which audits against international standards.
• - TQM: A holistic approach to quality where all members of an organisation focus on continuous process improvement, customer focus, defect prevention and universal responsibility.

- Customer complaints, sales, wastage levels, market share.

• Initiating Lean Production Techniques:
• -Lean production involves a systematic process for eliminating waste so the end customer gets the most value from their perspective with fewer resources.

• - Based on principle that productivity improvements will come through identifying and eliminating areas of waste in operations system.
• - Involves identifying and removing all activities and processes occurring that do not add value to a product as it is being produced.

- Levels of wastage, net profit, market share, sales

• Cost Cutting:
• - Reduce costs associated with materials e.g. choose a cheaper supplier

• - Controlling and monitoring cash flow e.g. negotiate payment terms with suppliers to have as long as possible to pay for materials
• - Selling assets to raise funds e.g. machinery
• - Making staff redundant
• - Reducing energy costs or use tank water to reduce water costs

- Net profit, productivity growth, wastage levels, number of sales.

• Redeployment of resources (natural, labour, capital):
• - is the process of moving employees from one area of a business to another, often as an alterative to termination of employment.

• - Natural resources: land, water, raw materials
• - Labour resources: human effort in production
• - Capital resources: machinery, technology, finance facilities

• - Allows the business to keep employees who already know the business and corporate culture
• - Reduces the impact on staff morale due to less redundancies
• - Saves money by not having to provide redundancy packages.

- level of wastage, rate of productivity growth, staff turnover.

• Innovation:
• - is the process of altering and improving or creating new products or procedures.

• Responding to KPIs:
• - A business can use innovation to enhance its ability to fulfil a market need and develop a competitive advantage
• - Can increase customer interest in its products, more readily develop a loyal customer base

• Seek new business opportunities:
• - Engage with customers to identify their needs
• - Grow its brand by meeting the needs of customers that have not been met by other businesses yet --> competitive advantage

- Sales, net profit, productivity growth, wastage levels, customer complaints, staff turnover, workplace accidents

• Advantages:
• - can create a competitive advantage over competitor products
• - can help create broader product range which can provide opportunity for increased sales but also reduces risk for shareholders.
• - Creating a culture of innovation can improve corporate culture.
• - Creating a culture of innovative thinking can lead to more efficient processes which can reduce business costs.

• Disadvantages:
• - Expensive to invest in research and development to enhance ideas.
• - Time consuming to research the market.
• - Uncertain financial returns as research is speculative and there is no guarantee that the innovation will be successful.
• - Innovation may be replicated by competitors. This may be overcome by applying for a patent, however this is expensive and time consuming to apply for.

• Global Sourcing of Inputs:
• - involves a business acquiring raw materials and resources from overseas suppliers.

• Responding to KPIs:
• - Higher quality resources with cheaper prices
• - To reduce operating costs and better satisfy customers

• New business opportunities:
• - higher-quality and authentic resources which may be unique and unable to be sourced locally

- net profit, sales, customer complaints, wastage levels, percentage of market share.

• Overseas Manufacture:
• - involves a business producing goods or services outside of the country where its headquarters are located.

• Responding to KPIs:
• - Take advantage of skilled labour resources and reduced operating costs, whilst potentially improving the quality of their final output

• New business opportunities:
• - To swiftly enter new overseas markets with its products, thus, allowing it to become a global brand and competitor

- net profit, sales, market share, customer complaints, productivity growth

• Global Outsourcing:
• - involves transferring specific business activities to an external business in an overseas country.
• --- e.g., outsource customer service

• Responding to KPIs:
• - The business can focus more on its core business activities and increase the quality of its operations system
• - Minimise expenses and gain expertise from the external business

• New business opportunities:
• - strengthen its commitment to its core business values and purpose

- net profits, sales, market share, customer complaints, productivity growth.

• Corporate culture is the shared values and beliefs of people within an organisation:
• - determines how people behave, act towards one another and what is or isn't accepted behaviour.

• Official Corporate Culture:
• - The set of values and beliefs that the business wants to present to the public.
• - Visible through company documents, mission and values statement, slogans, logos etc.

• Real Corporate Culture:
• - The actual or prevailing values and beliefs of a business.
• - Can be identified through observation of what actually occurs and the real relationships and interactions between people e.g. language used, management style etc.

• Strategies to develop corporate culture:
• - Creation of a formal written mission, vision and values statement

- Implement a participative or consultative management style that empowers employees

- Implementation of policies that facilitate work-life balance e.g. flexible work hours

- Changing physical environment e.g. open plan layout to enhance communication

- Symbols e.g. posters, signage around the workplace

- Language used e.g. inclusive, formal, informal, specific business jargon can act to bind worker

- Rewards and recognition

- Narratives and role models

- Rituals and celebrations

- Recruiting staff members that fit in with desired culture

Learning organisation: in situations of rapid change only those businesses that are flexible, adaptive and productive will be successful. The business needs to work out how to harness people’s commitment and their capacity to learn.

Senge argues that there are five disciplines that ensure a business is able to innovate and learn. All principles must be implemented in order to be a learning organisation

• FLAP:
• - Flexible
• - Learning Organisation
• - Adoptive
• - Productive

• Systems Thinking:
• - The ability to see the big picture rather than seeing things in isolation - the overarching discipline
• - Long term impact

• - Senge argues that managers often use simplistic frameworks on complex systems - ineffective because focusing on short term 'cause and effect', and small segments of business.
• - Advocates use of 'system maps' - diagrams which show the key elements of systems and how they all connect.

• - ppl in the business think of it as a connected system of departments, processes and teams - not as separate areas which are not related.
• - ppl must understand each part of the system and how parts of the system fit together so they can adapt and change successfully.
• - each person must understand their role within the system and how it affects other part of the system

• Personal Mastery:
• - Is where the people within the business undertake continual learning.

• - business learn through individuals who learn - business need to support employees to learn and follow their passions.
• - ppl who have high levels of personal mastery are in continual learning mode, and are aware of what they do and do not know, and what they can work on improving.

- note: compulsory training programs will not develop personal mastery. instead, businesses need to foster a climate where challenging the status quo is expecting, + employees encouraged to create and pursue own visions.

• Mental Models:
• - Deeply entrenched assumptions, generalisations and images of how people understand the world

• - Values and beliefs impact the way people behave.
• - MM require ppl to self-reflect on their assumptions and view of the world.
• - Senge believes that MM must be identified, and if they are detrimental to ideals of a LO, or will restrain a change process, they need to be replaced with mental models that have a desired effect.

• Building a shared vision:
• - involves creating a ‘shared picture of the future’ that all people within the business believe in.

• - Shared visions can encourage and inspire others to experiment and innovate in the business.
• - The vision should come from a range of people, not just the leader to increase commitment.
• - Visions spread because they are reinforced as people talk and their enthusiasm and ideas spread to others.
• - Shared visions develop commitment rather than compliance.

• Team Learning:
• - is a process where members of the group develop the group’s capacity to create desirable results for all

- Senge suggests that when individuals learn together members will learn more rapidly than what could have occurred otherwise.

• Advantages:
• - encourages business and ppl within business to constantly improve, and reflect on what they are good at, and what they need to improve on.
• - creates more flexible and adaptive business that can respond to change quickly and effectively - business and ppl not set in their ways as they are always thinking about the future.
• - increases employee motivation as they are encouraged to be involved in change and contribute their ideas improvements (link to maslow's need for self-actualisation)

• Disadvantages:
• - high organisational inertia (tendency to not change) may mean a business becoming a LO may cause culture problems, and lead to greater resistance.
• - time consuming to change to become a LO. Business may not be able to afford loss of time causing poor productivity.

- Employees often resist change because they feel isolated, fear, frustration or uncertainty.

• Low-Risk Strategies:
• - Participative approach to implementation of change, use of communication, empowerment, work groups and support for those who are impacted upon.

• Communication:
• - Process of creating and exchanging information between people that produces the required response.

• - Managers should use two-way communication so all stakeholders are aware of changes and the benefits that should result.
• - Communication should be open and honest and allow employees to voice concerns.
• - When details of the change are explained employees may find the changes are not as bad as they feared and may be happy to support the implementation.

• Incentives:
• - Inducement offered if performance or improves. 

• - Sometimes it’s necessary to offer enticements or rewards to encourage employees or customers to embrace change. 
• - This needs to be seen as encouragement, not a bribe to simply go along with the changes.

• Support:
• - Designed to show care, encouragement and acknowledgement for employees’ work.

• - Managers need to be aware of fears employees have concerning change and offer assistance.
• - E.g. if employee loses employment due to change they can be supported in finding new employment.
• - E.g. if an employee finds the changes difficult they can be supported by training and counselling.

• Empowerment:
• - Giving employees permission to make limited decisions without having to consult superiors.

• - Employees should be empowered to participate in the change by involvement in decentralised decision making.
• - If employees are involved in making decisions and offering suggestions about change process they are less likely to resist it.

• Advantages:
• - Employees are more likely to become a driving force for change as they have been empowered to make decisions about the change.
• - Employees feel more supported, decreasing staff absenteeism and staff turnover.
• - Leads to a more adaptive, flexible corporate culture.

• Disadvantages:
• - Can be time consuming to provide support or involve employees in decision making.
• - Can be expensive to provide support e.g. paying for training or counselling services.
• - Employees may not have the skills or knowledge to meaningfully participate in decisions about the change.

• - High-risk strategies are another way businesses can overcome resistance to change.
• - These strategies will allow a manager to overcome resistance quickly.
• - However, there is a greater risk they will result in negative consequences.

• High-risk strategies:
• - Autocratic approach to implementing  change, involving the use of force, threats and manipulation of situation.

• Manipulation:
• - Changing information in order to provide an altered message.

• - Managers may resort to manipulation of information to push a change through.
• - This may involve leaving out important information or making changes sound more advantageous to employees than it really is.
• - Managers could also offer bribes to get employees to accept change.

• Threat:
• - Forcing employees to embrace the change or receive retribution.

- Managers may threaten workers’ job security in order to implement change. E.g. threaten loss of job or demotion.

• Advantages:
• - Desired behaviours will be displayed quickly, as employees want to avoid the threat.
• - Cheap for the business as it doesn’t involve investment in support resources.

• Disadvantages:
• - Lead to low morale because employees will fear management.
• - Negatively impact corporate culture leading to higher absenteeism and turnover.
• - Employees are more likely to make mistakes or injure themselves as they fear management and will be afraid to ask questions.

• - Lewin argued that a successful change project involves three steps
• - Lewin’s model provides businesses with a structured approach to managing change – it allows them to be proactive in their approach to change
• --- The model has clear steps or stages that can be managed
• --- Managers can communicate a clear plan to stakeholders
• - The steps form a checklist that managers can work their way through – it makes the process easier to implement..

• Unfreeze:
• - Businesses can often find change difficult.
• Unfreezing is about preparing the business for change and includes:
• - Identifying what needs to change.
• - Creating urgency by demonstrating a need for change.
• - Challenging current beliefs that may resist change.
• - Assisting people to ‘unlearn’ their current behaviour. 

• Move:
• - With the business unfrozen and prepared for change, they can begin moving to the new desired state.
• - The business needs to assist employees to change their behaviour through: open communication, support, encouragement, provision of resources.
• - Employees are now ‘learning’ new ways of doing things.

• Refreeze:
• - Reinforcing the change and embedding it into the culture so that it can remain for the long term.
• - Successful refreezing involves changing behaviour of employees, groups, corporate cultures, policies and procedures within the business.
• - Without refreezing, there is a chance that once the change has been implemented, the business moves back to its old ways.
• - Continuous support and training is provided to help reinforce the changes.
• - Reward desired outcomes.

• Managers:
• - A person responsible for controlling and dealing with a group of staff. 

• - Re-evaluate management style used with employees e.g. participative to involve employees in change more positively
• - Develop management skills to implement change e.g. leading employees
• - Change of processes that managers need to carry out to achieve change
• - Loss of employment e.g. due to restructure, implementation of technology

• Employees:
• - A person working for a business for wages or a salary.

• - Emphasis on work groups or teams
• - New training and development of employees if jobs change
• - Loss of employment through downsizing
• - Changes such as new technology can:
• --- Alter an employee’s job
• --- Improve safety for employees
• --- Improve productivity

• Customers:
• - Those who purchase goods or services from a business.

• - May find that their choice is limited or has grown
• - May find that some products/services are no longer available/replaced
• - Prices of some products may increase/decrease 
• - May find that some products or services have changed e.g. recipe

• Suppliers:
• - Provide a business the resources required for the production process.

• - Code of conduct for suppliers may be introduced
• - Restrictions on conditions of supply or products might occur
• - Some suppliers might develop strong relationships with a business
• - A business may decide to operate on a more socially responsible way, impacting the types of suppliers they deal with
• - A business may decide to move their operations overseas, and use different suppliers

• General Community:
• - A group of people with common interests living together within a larger society.

• - Businesses may take their business offshore, resulting in reduced employment opportunities in the local community
• - If business expands to a new location this could:
• --- positively stimulate the local economy in that community
• --- increase traffic or resources in that community
• - If business closes down its factory:
• --- people and families may need to move to other areas to find a job
• --- this will impact on other businesses, housing and facilities in the community