Unit 4:
Usually comes up in Q5 or Q6
Ms. Marshall Leaving Cert Business
1






By the end of this chapter you should be able to:
Explain the changing role of a manager from
controller to facilitator;
Understand the importance of employee
participation;
Understand how technology changes the role of
management;
Identify the strategies for managing change
(HL);
Discuss the importance of total quality
management (HL);
Ms. Marshall Leaving Cert Business
2
1.
2.
3.
4.
5.
Causes of
Change
Technology
Competition
Consumers
Economy
Employees
6. Laws
1. Promoting Teamwork
2. Controller to facilitator
3. Empowerment
4. Participation
5. TQM
Changing
role of the
manager
Strategies to
Manage
Change
3.
Ms. Marshall Leaving Cert Business
1. Commitment
2. Communication
Consultation & Negotiation
4. Funding
5. Rewards
6. Training
3






1. Changing Technology
2. Competition
3. Consumer Demand/Expectations
4. Economic Environment
5. Changing employee expectations
6. Changing laws and regulations.
Ms. Marshall Leaving Cert Business
4



The Impact of New
Technologies on Business
opportunities:
New products: Some new
products owe their existence
and success to technology e.g.
reserving seats on airlines and
making hotel reservations from
any part of the world at any
time.
Marketing: Many businesses
now use the internet to market
their goods and services. By
creating a website a large
number of potential customers
can be reached at minimal
cost/e-marketing/e-selling.


Ms. Marshall Leaving Cert Business
New business methods: Home
banking; home insurance
quotes; videoconferencing;
home offices.
E-business: Many business
functions can be carried out
using the internet e.g. E.D.I.
Electronic Data Interchange
where goods can be ordered
automatically from a supplier
when stocks go below a certain
level.
5


Tele-Working: With the
use of broadband it is not
necessary for employees
to work together in the
same building. This leads
to savings on office costs
and allows a business to
hold on to staff who may
prefer to work from home.
Training: In many
occupations the training of
workers can be done by or
with the help of computers
and the different software
packages available.


Ms. Marshall Leaving Cert Business
Redundancies: fewer
employees needed due to
technology. Some skills or
industries becoming
obsolete.
New opportunities: new
types of jobs have been
created, such as web
developers and computer
programmers.
6



Communications: Management
& staff can be equipped with
laptops, mobile phones and email links which enable instant
communication leading to
increased business
efficiency/global
communications.
Spans of control can be
widened. Ability to monitor
larger groups or groups which
are geographically apart.
Organisation size can be
reduced: Fewer employees
needed/lower costs and
increases in efficiency.


Ms. Marshall Leaving Cert Business
Production: Managers can use
applications such as computer
aided design (CAD) make the
design process easier and
increase productivity. Computer
aided manufacture (CAM) where
all equipment can be computer
controlled all add to the
efficiency of production/fewer
repetitive tasks.
Decision- Making: information
on businesses, people, countries,
products, in the world at the
touch of a button. Leads to more
informed decision making
7
How introduction of technology affects an enterprise’s
Business costs.
 Capital Costs: There are huge capital costs associated with
technology development. There is an increased risk to the
enterprise because costly equipment has to be bought prior to
selling the goods and creating cash flow e.g. robotics for example,
is a very expensive process involving a very complex production
line.
 Labour Costs: Changing technology reduces the number of
workers required, e.g. using robotic equipment instead of people
in automated production facilities. The emphasis is on quality and
a far higher level of skill is required of the personnel. Multi-skilling
(where people have a wide variety of job skills) is common in
technologically advanced enterprises, and can reduce costs as
fewer staff are required.

Ms. Marshall Leaving Cert Business
8
Training Costs: Decision-making at all levels, from
top management down, is helped. Communications
between the functions in the enterprise and between
the people in the enterprise are improved. Training
costs in the organisation must increase to help the
process.
 R&D Costs: Modern technology increases the speed
of innovation and therefore shortens the life cycle of
products, requiring new products or new
developments/applications of old products. The
associated research and development costs can be
daunting. More personnel are required in this area.

Ms. Marshall Leaving Cert Business
9




Competitors are changing by:
Updating their products or introducing new
ones.
Introducing new and cheaper ways of doing
business, e.g. Internet banking
Growing in size to avail of economies of scale
and forcing less competitive firms out of
business.
Ms. Marshall Leaving Cert Business
10




Consumers tastes and fashions are constantly
changing due to the impact of mass
communications such as the internet,
television and other media.
Rising levels of education are making
consumers increasingly quality conscious.
Increasing competition and choice is leading
to fewer loyal customers.
Ethical and green issues are becoming more
important to many consumers.
Ms. Marshall Leaving Cert Business
11


External changes such as interest rates, taxation,
oil prices and market deregulation make
markets more unpredictable and dynamic.
The global credit crunch and domestic banking
crisis have resulted in a collapse of the housing
market in Ireland, directly resulting in thousands
of lost jobs in construction, auctioneering,
architecture and solicitors firms. This has
affected most firms in Ireland, directly or
indirectly, as consumers have less access to
credit and less disposable income.
Ms. Marshall Leaving Cert Business
12






Employees:
Have a higher level of education and skills to
bring to the job
Want jobs that are interesting and well paid,
with good working conditions.
Want more flexible and family friendly
working conditions
Are becoming more diverse (women in the
workplace, immigration).
Want their workplace to be ethical
Ms. Marshall Leaving Cert Business
13

Irish and EU laws have affected businesses in
a number of areas, e.g. updated consumer
law – the consumer protection act 2007, or
the Competition policy restricts certain
mergers and takeovers.
Ms. Marshall Leaving Cert Business
14
Promote
Teamwork
Move from
controller to
facilitator
How the role
of the
manager has
changed
Empowerment
Encourage
Employee
Participation
Promote a
commitment to
quality
Ms. Marshall Leaving Cert Business
15



Teamwork is discussed in chapter nine, it is
also relevant as a way of managing change.
Controller managers are the type of boss who
tell employees what to do and expect it done
without question. Opinions are not sought
from employees.
Facilitator managers believe staff can enjoy
work, have ambition and are open to change.
Ms. Marshall Leaving Cert Business
16
Controller
Facilitator
Gives orders and expects them to be
carried out without question
Gives direction, Provides advice, support
Constant supervision and direction
Trains employees to develop their skills
and talents
Employees have no say in decision
making
Provides all the necessary resources
Employees have to do it his way
Delegates
Interested in staff opinions and wants
employee participation
Encourages empowerment of employees
Ms. Marshall Leaving Cert Business
17


The empowerment of workers means placing
real power, which includes decision-making, and
full responsibility in the hands of those workers
where it is most effective, i.e. as close as
possible to the customer. Empowerment is far
more than delegation.
Workers who deal with the organisation’s
customers every day are given great influence
over the operation of the enterprise. Decisionmaking and control is in the hands of workers
who use their skills and knowledge in the
interests of the organisation.
Ms. Marshall Leaving Cert Business
18





The management skills that help to achieve and support the empowerment of workers in
effective groups are:
1. Enabling. Enabling involves making sure that all the resources necessary for
empowerment, e.g. time, money, training, personnel, etc. are made available. Staff must
feel competent and have the skills and knowledge to be effective team members.
2. Facilitating. Facilitating involves the removal of all blocks, hurdles, restrictions, rules,
systems procedures, indeed anything that prevents staff from achieving what they are
capable of.
3.Consulting. The manager consults staff regularly, as often as is necessary, on all issues
concerning the job. Suggestions and recommendations are taken seriously. The knowledge
and experience of the staff are recognised as valuable and useful to the enterprise.
4. Collaborating. Staff are encouraged to hold meetings and chair or facilitate the conduct
of business. Their work must be shown to be important to the organisation as a whole and
discussions must be open, honest and constructive to allow for successful change to take
place.
5. Mentoring. Mentoring involves the widely experienced manager working through others
rather than directly applying personal skill and knowledge to a particular situation. Being a
mentor is being in a role of influence and advice. It involves acting as a role model and
coach to colleagues and staff.
Ms. Marshall Leaving Cert Business
19






Benefits of Empowerment in Organisations
Improved service: to customers as employees can
deal with their problems or queries.
Improved morale – workers have control over how
they work.
Improved skills – gives the workers the opportunity
to improve existing skills and develop new skills.
Improved motivation – allows staff to influence
business decisions.
Improved productivity – makes the working of the
organisation more effective because employees are
using their own initiative.
Ms. Marshall Leaving Cert Business
20





This means involving employees to a greater
extent in decision-making and the running of
the business. It is also known as industrial
democracy.
It can be achieved in the following ways:
Works councils
Worker directors
Share ownership
Ms. Marshall Leaving Cert Business
21
Method of Participation
Explanation
Expansion
Work Council
Groups of employees,
elected by their
colleagues, who are
allowed to have a say in
the business’s plans and
strategy.
Every business with more
than 1000 employees must
have a works council.
Worker Directors
The business allows the
employees to have seats
on the company’s BOD.
This director is elected by
the other employees and
gives them a say at the
highest level.
Share Options
Employees can buy shares
at a reduced rate.
Means they have a vote at
the company’s AGM
Ms. Marshall Leaving Cert Business
22
Increased motivation: employee’s esteem needs are
satisfied because they feel more important as they are
involved in decision making in the business.
 Intrapreneurship: the business benefits from the
employees input into the business, often offering
solutions to problems and suggestions for
improvement.
 Improved Communication: works councils and
worker directors facilitate better communication
between employees and managers. This leads to
better industrial relations, reducing the chance of
strike.

Ms. Marshall Leaving Cert Business
23







TQM is a process which tries to ensure quality in all
aspects of a firm’s operations, it strives for 100%
perfection 100% of the time. TQM puts the efforts of the
firm into meeting the present and future needs of its
customers.
Employees are given responsibility to ensure that the
products meet the requirements of consumer. Quality
assurance and teamwork are central to the TQM
approach.
4 basic principles of TQM are:
1) Focus on Customers
2) Continuous Improvement
3) Teamwork (Total Company Involvement).
4) Empowerment
Ms. Marshall Leaving Cert Business
24


1. Focus on the Customer: The business
conducts market research to find out what
the customer wants and makes exactly that
product for them.
2. Continuous Improvement: the business
strives for 100% perfection. Each time they
produce a product they want to do better
than the last time. This involves improving
processes, products and quality and reducing
costs.
Ms. Marshall Leaving Cert Business
25
3. Teamwork: employees working in teams to achieve
a common goal, e.g. improvement in a specific are.
Brainstorming leads to more ideas and solutions to
problems for the business. Employees are motivated
as teamwork satisfies their social needs and they do
not want to let their team mates down.
 4. Empowerment: workers means placing real power,
which includes decision-making, and full
responsibility in the hands of those workers where it is
most effective, i.e. as close as possible to the
customer. Empowerment is far more than delegation.

Ms. Marshall Leaving Cert Business
26







The benefits of TQM to a manufacturing business
Improved Quality: There should be an improvement
in the quality of products produced.
Reduction in Cost: There will be less waste.
Meet the Requirements of Legislation; Sale of
Goods and Supply of Services Act 1980.
Workers are better motivated: Because they see
management are committed to quality.
Job satisfaction: Workers feel a sense of
achievement.
Increased Sales: The firm will develop a reputation
for providing quality goods which will
Ms. Marshall Leaving Cert Business
27





Improved Quality – employees, managers work together to make
perfect products. The emphasis on continuous improvement leads
to better quality, which will in turn lead to increased sales and
profits.
Reduced Costs – products are now made perfectly. This leads to
lower costs because the business does not waste money on
repairing or giving refunds on faulty products.
Increased Motivation – employees are more motivated and
committed because they feel valued. Empowerment satisfies their
esteem needs and teamwork their social needs.
Increased Customer Satisfaction – focusing on the customer
means you are providing them with what they want. The reliable
quality will lead to customers trusting the brand and hence,
increase sales and profits.
E.g. Guinness Quality Team (see p181 for full Guinness example –
well done in your textbook).
Ms. Marshall Leaving Cert Business
28




Fear of losing their jobs – technology
replacing people, making skills obsolete
Fear of losing power
Fear of failure
Laziness
Ms. Marshall Leaving Cert Business
29






1.Management commitment: to the change process. Leading by
example is one way of showing this commitment to change.
2.Communication: between all parties throughout the change
process. This will reduce uncertainty and tensions.
3. Funding: for the proposed changes/ funding of new
technologies and staff involvement/training.
4. Consultation & Negotiation –consultation with trade unions
and employee representatives regarding the proposed
changes/involve all in the decision making process. Negotiation
will be needed to determine remuneration packages, productivity
agreements, changes in work practices etc.
5. Reward: reward employees for accepting and adopting change.
E.g. bonus.
6. Train Employees: in order to overcome their fear of failure
employees must be retrained to ensure they can still do their job
to the best of their ability.
Ms. Marshall Leaving Cert Business
30
2012 Q6
 Discuss the benefits and risks of empowering
employees within a business. (20 marks).
2008 Q5 (2011 Short Question/ 2013 mock)
 Discuss two strategies a business
organisation can use to manage change. Use
examples to support your answer. (20 marks).
Ms. Marshall Leaving Cert Business
31
2007 Q5
Explain the term TQM and describe how it can
be of benefit to an organisation. (20 marks).
 2004 Q5
 Explain how Empowerment of Workers and TQM
have changed the role of managers. (20 marks).
 Illustrate how the introduction of technology
affects an enterprise’s (i) Business costs and (ii)
Business Opportunities. (20 marks).


Ms. Marshall Leaving Cert Business
32