Business Studies in Action: HSC Course 3rd edition
Chapter summaries
Topic 1: Business management and change
Chapter 3 Managing change

Change is any alteration in the business and work environment.

The ability to manage and, embrace and adapt to change will increasingly
determine a business’s competitive advantage and survival.

The crucial management issue is how to manage change to make it as productive
as possible.

External changes result from factors outside the control of the business but which
may affect its performance.
External influence
Changing nature of markets
Economic
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Financial
-
Geographic
Social
Legal and political
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Technology
-

Explanation
globalisation has integrated world markets
economic fluctuations impact on the market
place and influence demand
deregulation created a more open financial
system
adoption of a global outlook
demographic, attitudinal and cultural trends
federal, state and local government policies and
legislation
scientific, technological innovations can improve
productivity
Internal changes are largely within the control of the business and come from the
desire to improve business operations.
Business Studies in Action: HSC Course 3rd ed. Chapman, Norris, Devenish and Merritt. Chapter summary. Page 1
Internal influence
Explanation
e-commerce
-
New systems and procedures
-
New business cultures
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Accelerating technology

office equipment, computers,
robotics used in the production
process
the use of the Internet to do business.
Business-to-business (B2B0 and business-toconsumer (B2C).
technology can revolutionise a business’s
activities and operating procedures
Workplace culture will need to become more
flexible and adaptable.
As the business environment changes, organisations examine and modify their
business structures.

Structural change refers to changes in how the business is organised – the
organisational structure.

The aim of these changes is to make business operations run smoothly, improve
efficiency, streamline coordination and empower employees to make their own
decisions.


Management must respond to change by:
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being flexible and innovative
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constantly reassessing the business’s position
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restructuring the business to maintain a competitive edge.
The main structural changes include:
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Outsourcing: contracting out non-core functions due to downsizing.
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Flat management structures: reduced levels of management.
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Strategic alliances: two or more businesses join together.
-
Network structures: subcontracted production and related business
functions.
Business Studies in Action: HSC Course 3rd ed. Chapman, Norris, Devenish and Merritt. Chapter summary. Page 2

Resistance to change can sometimes be common among businesses, managers and
employees.

The main reasons for resistance to change are:
-
Financial costs: new equipment; redundancy payments; retraining
workforce; reorganising plant layout.
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Inertia: lack of interest; refusal to cooperate by managers/employees; fear
of failure.
-
Cultural incompatibility in mergers and takeovers: possible ‘culture
clash’; different work practices.
-
Staffing considerations: de-skilling; acquiring new skills; loss of career
prospects or promotional opportunities.

The environment created by the manager can greatly affect employee acceptance
of change. Manager needs to:

-
identify the need for change
-
set achievable goals.
A change agent, is a person, or group of people, who act as a catalyst, assuming
responsibility for managing the change process.

Five steps to successful change:
1
Identify change issue.
2
Set achievable goals.
3
Create a culture of change: teamwork; change agent.
4
Implement the change.
5
Evaluate and modify the change as appropriate.
Business Studies in Action: HSC Course 3rd ed. Chapman, Norris, Devenish and Merritt. Chapter summary. Page 3

Lewin force-field analysis: identify, analyse and balance the driving and
restraining forces.

The Lewin change process:
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Unfreeze: employees made aware of the reasons for change (possible use
of outside change agent)

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Change: Implement changes. New skills and behaviours introduced.
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Refreeze: Changed behaviour rewarded to make sure it lasts.
A socially responsible business will attempt to achieve two goals simultaneously:
maximising profit (double bottom line) and providing for the greater good of
society (triple bottom line).

Social responsibility: how well a business manages the social, environmental and
human consequences of its actions.

Ecological sustainability: production methods that conserve and protect the
environment.

Quality of working life: workplace practices that improve employees’ wellbeing.

Technology: cushion its negative impact on employees.

Globalisation/cultural diversity: manage multiculturalism and employee
diversity.

E-commerce: training of employees, privacy and security issues.
Business Studies in Action: HSC Course 3rd ed. Chapman, Norris, Devenish and Merritt. Chapter summary. Page 4