The management of Change
VCE Business Management Unit 4
UNIT 4
MANAGING
PEOPLE AND
CHANGE
COVERS ALL
AREAS OF STUDY
© Cambridge University Press 2012
Why do organisations need to be
ethical and socially responsible?
All stakeholders and the community expect
large-scale organisations to be socially
responsible and ethical in their business
practices.
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Why do organisations need to be
ethical and socially responsible?
(cont.)
Organisations differ in
their interpretation of
what it means to
behave ethically and in
a socially responsible
manner.
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Why do organisations need to be
ethical and socially responsible?
(cont.)
Adopting an ethical and socially responsible
approach has become one of the most
significant changes required by organisations.
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Ethical and socially responsible
management of the internal
environment
The internal environment is influenced by
ethics and social responsibility and its impacts
on objectives, structure, policy, culture,
management style and skills.
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Corporate social responsibility
Corporate social responsibility (CSR) impacts
on the operations management system
through quality, technology, materials
management, environmental management
system (EMS) and supply chain management.
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Ethical management of the human
resource management function
CSR impacts on Human
resource management
(HRM) through:
• recruitment methods
• selection
• induction
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Ethical management of the human
resource management function
(cont.)
•
•
•
•
•
policies
motivation
employment arrangements
training and development
performance management and exit
strategies.
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Ethical management in times of
When large-scale
change
organisations are going
through change, it is
important that the process
incorporates ethical
behaviours and is influenced
by CSR.
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The concept of organisational
change
In contemporary
organisations, change
is continuous and
sometimes
unpredictable.
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The concept of organisational
change (cont.)
Change is the process of taking the existing
organisation, altering it, then establishing a
new or altered form.
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Internal pressures as a source of
change
There are a number of pressures that can
influence an organisation, including: internal
pressures, such as corporate culture,
employees, managers and policies; operating
pressures, such as suppliers, competitors
and trade unions;….
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Internal pressures as a source of
change (cont.)
…macro pressures, which are external and
include economic, environmental,
technological, social and legal pressures;…
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Internal pressures as a source of
change (cont.)
…economic pressures, including the level of
economic activity, interest rates, the rate of
inflation, the value of the Australian dollar
and the rate of unemployment.
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Driving and restraining forces for
change
Kurt Lewin has developed a theory of ‘force
field’ analysis that is based on the driving and
restraining forces for change on organisations.
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The Kotter theory of change
management
John Kotter
introduced an eight
step change theory to
manage successful
change.
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Strategies for effective change
management
For change to be
successful, a number
of strategies must be
in place.
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Strategies for effective change
management
These include identifying change strategies,
communicating with employees, setting goals
for each stage of the implementation, focus
on training and development and
performance appraisal. Strategies can include
both low-risk and high risk practices.
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The role of leadership in change
management
Leaders and managers play a vital role in the
change process and must possess a number
of skills and qualities, including
communication, visionary skills, delegation
and decision making.
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The possible impact of change on
the internal environment
Change can impact on the internal
environment of an organisation, including
structure, activities, operations management
and human resource functions
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UNIT 4
MANAGING
PEOPLE AND
CHANGE
AREA OF STUDY 2
THE
MANAGEMENT
OF CHANGE
CORPORATE SOCIAL
RESPONSIBILTY AND
BUSINESS ETHICS
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Corporate social responsibility
Social responsibility
relates to the moral
and ethical decisions
made by
organisations.
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Corporate social responsibility (cont.)
These behaviours go beyond the objectives
of the organisation. Often these organisations
attempt to be good corporate citizens.
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Impacts of corporate social
responsibility
Social responsibility can impact on the
organisation in a number of ways:
• Production process – e.g. through recycling,
changing packaging and waste minimisation
practices
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Impacts of corporate social
responsibility (cont.)
• Community sponsorship – organisations
may target a cause or issue and work in
partnership with other organisations and
community groups
• Corporate philanthropy – develop public
policy and research.
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Pressures on organisation to
become socially responsible
It is advantageous for organisations to be
socially responsible, as many consumers and
investors judge an organisation in terms of its
commitment to the community.
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Advantages of CSR for large-scale
organisations
There are a number of advantages for an
organisation that is socially responsible:
• It enhances the organisation’s reputation.
• It strengthens the organisation’s position as
an ‘employer of choice’.
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Advantages of CSR for large-scale
organisations (cont.)
• It increases staff
productivity and
motivation.
• It allows and encourages
innovation and diversity.
• It contributes to longterm sustainability.
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Business ethics
Business ethics can be defined as individual,
community or organisational beliefs and values.
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Managerial ethics
Managerial ethics can be defined as the
values and standards of behaviour that guide
individual managers and organisations.
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Influences on ethics
There are a number of
influences on ethics:
life experiences,
individual values,
family and peer
influences and societal
norms.
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Organisational ethics
Ethics impact on the stakeholders of the
organisation. These stakeholders include
employees, customers, shareholders,
government bodies and agencies, the public,
suppliers and corporate culture
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Business ethics as a change
management issue
Ethics programs provide a number of benefits
to the organisation:
• Ethics have helped improve society.
• Morals and ethics can guide the organisation
through difficult times.
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Business ethics as a change
management issue (cont.)
• Ethics contribute to teamwork.
• Ethics ensure policies are legal.
• Ethics promote a strong public image.
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Business ethics as a change
management issue (cont.)
Managers have a
significant impact on
the behaviours and
ethics of the
workplace.
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UNIT 4
MANAGING
PEOPLE AND
CHANGE
AREA OF STUDY 2
THE
MANAGEMENT
OF CHANGE
GLOBALISATION
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What is globalisation?
Globalisation impacts
on countries,
organisations and
citizens across the
world.
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What is globalisation? (cont.)
Globalisation is the removal of economic
boundaries, which creates free international
trade and movement of capital between
nations. It also involves the integration of
businesses and economies with enterprises
competing with each other.
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Causes of globalisation
A number of factors are responsible for the
growth of globalisation, including people and
capital moving between countries, reduced
trade barriers, increased global media
influence, cheaper and faster telecommunication,
and technological advancements.
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Benefits of globalisation
There are many benefits associated with
globalisation, including gaining access to
markets around the world, improved standard
of living, increased rate of economic growth,
increased opportunities to take advantage of
economies of scale.
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Costs of globalisation
As well as benefits, there are also costs
associated with globalisation. Some of these are:
• Operation of the organisations may impact
on the environment.
• Domestic industries in poorer countries
may find it difficult to survive against the
competition.
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Costs of globalisation
• Domestic industries
in poorer countries
may find it difficult to
survive against the
competition.
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Costs of globalisation (cont.)
• Trade in goods with ‘cultural content’ may
be at the expense of local cultures and
traditions.
• Profits and wealth generated are taken out of
the country.
• Global cartels may be outside the control of
sovereign governments.
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Globalisation as a pressure for
change on organisations
Globalisation impacts on many organisational
stakeholders in the following ways:
• Suppliers – relationships may change.
• Customers – may allow consumers to access
a wider range of goods and services.
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Globalisation as a pressure for
change on organisations (cont.)
• Employees – employees may be transferred
to another country.
• Trade unions – unions may be concerned
about the impact of multinational companies
on pay and working conditions.
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Globalisation as a pressure for
change on organisations (cont.)
• Competitors – if a competitor expands into
the global market, the organisation may
have to develop similar strategies.
• Governments – policies may impact on trade
barriers and restrictions, taxation, exchange
rates and financial policies.
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Globalisation as a pressure for
change on organisations (cont.)
• Organisational human
resource management
(HRM) policies may need
to be developed to
take into account cultural
differences.
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Australian organisation and the
global economy
The impact on the Australian economy due to
globalisation has been:
• The economy has become more
internationalised.
• Productivity has increased.
• Living standards have improved.
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Australian organisation and the
global economy (cont.)
• Tariffs have been
lowered.
• New management
techniques and skills
have
emerged.
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Australian organisation and the
global economy (cont.)
• Outsourcing of non core business has
increased.
• Increased specialisation.
• Increased use of technology.
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The impact of globalisation on
organisations
The impacts of globalisation on the structure
and activities of the organisation include:
• a focus on core business
• the development of competitive advantage
areas
• the development of quality programs
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The impact of globalisation on
organisations (cont.)
• greater complexity of relationships with
suppliers
• more difficult financial management
• changes required in HRM
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The impact of globalisation on
organisations (cont.)
• global mergers,
takeovers and
horizontal and vertical
integration may
become necessary
• a number of social
responsibility
implications.
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UNIT 4
MANAGING
PEOPLE AND
CHANGE
AREA OF STUDY 2
THE
MANAGEMENT
OF CHANGE
TECHNOLOGICAL
DEVELOPMENT
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Emerging information and
communication technologies
Technology has become
increasingly common
and important for all
organisations and
individuals.
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Arguments for technological
development
Arguments for technological development are
that:
• it gives managers more time for people
management, decision making and being
creative in their work
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Arguments for technological
development
• organisations
become more
effective and
efficient in their dayto-day operations.
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Arguments against technological
development
Disadvantages for technological development
are that:
• it causes automation, which can lead to
deskilling and routine work
• privacy issues present a greater challenge
with new technology.
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Technological development as a
pressure for change
Technological development is a pressure on the
internal environment in the areas of corporate
culture, management styles, management skills,
management roles and policy development.
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The impact of technology on
organisations
Organisations have had to develop policies
and procedures for the use of technology; for
example, policies relating to harassment,
cyberbullying, privacy, and management of
threats such as computer viruses.
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