BUSINESS STUDIES
Grade 11
TERM 2
Business ventures and
Business roles
STRESS AND CRISIS
MANAGEMENT
INTRODUCTION

The fast pace at which we are living nowadays and
the fast rate at which change is occurring in the
business environment, are two major causes of
stress.

If we do not learn to manage stress, the results can
be disastrous for our physical and emotional wellbeing.
STRESS MANAGEMENT

Stress is our body’s response to difficult situations.

2 kinds of stress: positive stress and negative stress.
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Positive stress can spur us into action and motivate us to
perform.

Negative stress is bad for our health and can lead to
conditions such as:
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Sleeplessness
Loss of appetite
High blood pressure
Heart conditions
A weakened immune system
Ulcers
STRESS MANAGEMENT*
Categories of stress
Career development, status and
pay
• Having too much or too
little to do
• Working under time
pressure
Where the work is done
• Job security
• Lack of promotion
opportunities
• Under-promotion and overpromotion
• Work of ‘low social value’
• Piece rate payment schemes
• Unclear / unfair
performance-evaluation
systems
• Being over-skilled or underskilled for the job.
Role in the
organisation
Job content
• Boring and meaningless
tasks
• Lack of variety
• Unpleasant tasks
• Dangerous tasks
Workload and
work pace
How the work is done
• Unclear role in organogram
• Conflicting roles within the
same job
• Responsibility for people
• Always dealing with other
people and their problems
Categories of stress
Interpersonal
relationships
• Lack of
participation in
decision-making
• Lack of control
(for example over
work methods,
work pace and
working hours)
Where the work is done
• Weak and careless supervision
• Bad relations with co-workers
• Bullying (forcing someone to do
something against their will),
harassment and violence
• Isolated or solitary (done alone) work
• No process to deal with problems or
complaints
Home Organisational culture
versus
work
Working hours
• Strict working
schedules
• Long hours
working alone
• Unpredictable
working hours
• Badly designed
shift systems
Participa-tion and
control
How the work is done
• Poor communication
• Poor leadership
• Lack of clarity about the business’
objectives.
• Demands of work and home that
interfere
• No support for home problems at work
• No support for work problems at home
STRESS MANAGEMENT

Stress not only affects our bodies, it also affects our emotions.

Stressed people tend to be more emotional and less rational.

Means that stressed people sometimes have trouble making
good decisions.

We cannot eliminate stress from our lives, but we can learn
how to cope with it.

The following measures can be implemented in your life to
help you deal with stress:
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Prioritise
Do not procrastinate
Plan our time
Follow a balanced diet
Get enough sleep
STRESS MANAGEMENT

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Because the corporate environment is so stressful, business
enterprises are increasingly realising the importance of stress
management.
Stress management involves teaching employees to cope
with stress and providing facilities to employees to help them
reduce stress levels.

People who are capable of managing stress will be:
•
Absent less.
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More productive.
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Less irritable.
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Better able to control their emotions.
•
More rational.
STRESS MANAGEMENT*
Strategies to manage stress experienced at work
Work-based strategies
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Share the workload differently.
Select and train workers properly.
Consult workers about working practices.
Introduce flexitime.
Increase the support workers get.
Encourage cooperation and teamwork.
Arrange stress-management training
(time management, healthy lifestyle).
Improve the equipment used and the
physical working conditions.
Improve managers’ attitudes, knowledge
and skills towards dealing with work
stress.
Implement better work and management
systems.
Develop a friendly and more supportive
culture.
Personal strategies
• Develop your self-awareness
to recognise the signs of
stress and its causes.
• Create a balanced lifestyle
and minimise extreme
emotions and chaos.
• Exercise regularly and keep
fit.
• Follow a balanced diet.
• Get enough sleep and
relaxation.
• Replace negative self-talk
with positive thoughts.
• Stop worrying about things
that are beyond your control.
THE IMPORTANCE OF STRESS
MANAGEMENT IN WORK ENVIRONMENTS
 Absenteeism:
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Absenteeism is when workers stay away from
work.
Stressed employees are more likely to miss
work, both as a way to cope and due to healthrelated problems.
Lost productivity and replacement costs are a
consequence of absenteeism.
Stress has been identified as the cause of
heart attack, stroke and even cancer.
Premature death among workers increases
staff turnover and requires more regular
recruitment and training.
THE IMPORTANCE OF STRESS
MANAGEMENT IN WORK ENVIRONMENTS
 Poor
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judgement:
Workers who suffer from stress often display
poor judgement in crisis or emergency
situations.
This can lead to a high occurrence of
accidents on the factory floor.
THE IMPORTANCE OF STRESS
MANAGEMENT IN WORK ENVIRONMENTS
 Grievances or complaints that lead to staff turnover:
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When a business experiences many
complaints by workers, it is a sign that
something is wrong.
Workers who feel powerless and stressed
often will file complaints as an attempt to do
something about the situation.
Unresolved complaints can lead o resignation
and higher staff turnover.
When a worker resigns, a lot of productive
time is lost in the process of recruiting and
training new employees.
A high staff turnover is also not good for staff
morale.
THE IMPORTANCE OF STRESS
MANAGEMENT IN WORK ENVIRONMENTS
 Conflict
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and interpersonal problems:
Workers who are already under stress will find
it difficult and more stressful to work in teams.
Most business in South Africa have diverse
work forces and employees are expected to
work in teams.
The interpersonal demands due to working
with team members and supervisors are the
most significant cause of burnout.
THE IMPORTANCE OF STRESS
MANAGEMENT IN WORK ENVIRONMENTS
 Customer
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service problems:
Having stressed and tired employees serving
the public may lead to poor service and
unhappy customers.
This can have serious effects on turnover and
profit.
Therefore, even if a small number of
customers are not completely satisfied with a
business’ service, it can result in a huge loss in
profitability.
THE IMPORTANCE OF STRESS
MANAGEMENT IN WORK ENVIRONMENTS
 Resistance
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to change:
Many efforts to change and improve
businesses have failed because the
employees resisted the change.
As a person’s stress level increases, that
person is more likely to cling to the old ways of
doing things, even if they are no longer
effective.
Research shows that stress is also connected
with neophobia, the fear of new things.
As people become more stressed, the new
and the different set off fear.
CRISIS MANAGEMENT
 What
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is a crisis:
A crisis is a time of intense difficulty, trouble, or
danger.
A business-related crises is any event that
can, within a short period of time, harm the
business’ stakeholders, its property, finances
or its reputation.
Depending on a business’ specific
circumstances, there are many possible
events that might be considered a crises:
CRISIS MANAGEMENT
 Examples:
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Natural disasters such as earthquakes, wind damage and
flooding caused by heavy rain can prevent the business
form functioning properly.
Theft or vandalism to vital equipment can stop production.
The equipment will be costly to replace and its loss may
even pose health and safety risks.
Fire can be accidental (an electrical fault) or deliberate
(arson) and can destroy a business physically.
Power outages happen often in South Africa and many
businesses have experienced the impact of loss of power
on their information technology (IT) and communication
systems, key machinery and equipment.
IT system failures can happen when hackers, computer
viruses or equipment failures damage the system. These
failures could affect workers’ ability to work effectively.
CRISIS MANAGEMENT
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Examples:
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Restricted access to premises will prevent staff members form
getting to work. This can happen if the factory plant is closed
due to a gas leak, or when striking workers block entrances
while protesting.
Sudden loss or illness of staff is a crisis for all businesses.
Outbreak of a disease of infection among the staff could present
serious health and safety risks.
Crises affecting suppliers can impact severely on service
delivery if alternative suppliers cannot be found.
Fuel shortages happen when there are strikes in the oil and
petroleum industry or when there is a shortage of oil
internationally. These temporary shortages in fuel supply could
prevent staff from getting to work and could affect the business’
ability to make and receive deliveries.
When products and services are not being delivered to
consumers, they must be covered by insurance or customer
guarantees.
Crisis affecting the business’ reputation will require drastic
action to prevent long-term damage, for example in the event of
a product recall.
CRISIS MANAGEMENT*
A
crisis is a difficult situation.
Stages in a crises
Stage 1 Before the crisis
At this stage there are very few signs of the crisis.
Stage 2 Warning
There are clear indications that an event may
happen and cause harm to the business.
Stage 3 Crisis point
The event related to the crisis starts showing
harmful effects on the business.
Stage 4 Recovery
The serious stage of crises has passed and the
business is able to focus on a return to normal
operations.
Stage 5 Post crisis
Formally assess the damage caused by the event,
start repairing what was damaged and consider a
contingency plan to prevent or deal with a similar
crisis in the future.
CRISIS MANAGEMENT
 Tips
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on handling a crisis at work:
Do not get involved in other people’s crises.
Act promptly.
Remain calm.
If the crisis falls within your field of expertise,
act on it.
Discuss the crisis with a colleague you trust as
this will help you gain perspective.
CRISIS MANAGEMENT
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A crisis can take on many forms. Have a look at
ways of dealing with the following situations:
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Tight deadlines:
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A deadline is a point in time by which a particular task
has to be completed.
Careful planning is necessary to avoid a crisis due to
missing a deadline.
Many people make the mistake of first completing tasks
they like and leaving less enjoyable tasks for later.
Instead, a person should complete tasks that are due
soon first.
After these tasks have been completed, tasks with a
later due date should be completed.
Missing a deadline can make you appear incompetent
and unprofessional.
CRISIS MANAGEMENT
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Loss of property of fire:
 Losing property to fire results in financial losses.
 Business owners should check that their insurance
covers fire damages and that buildings are insured
at replacement value.
 Back-ups of important documents should be made
regularly.
 Stock records should be kept in a fire proof safe.
 This helps managers determine the exact number
of stock that is lost in a fire.
 These steps will help minimise financial losses and
enable business enterprises to recover form
damages sooner.
CRISIS MANAGEMENT

Illness:
 Each employee brings a unique set of
competencies and experience to his/her place of
work.
 If a person gets sick, it means that that person’s
tasks remain undone.
 This is not a crisis if a person is only absent from
work for a day or two.
 It can however become a crisis if a person is
seriously ill and has to stop working for a week or
more.
 This is one of the reasons why communication in
an enterprise is important, because communication
provides important information to colleagues and
enables them to temporarily take of over form a
sick employee if that becomes necessary.
CHANGE MANAGEMENT
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In a broad sense, change means a planned or unplanned
reaction to pressures and forces.
In modern times, change has become a powerful issue
because pressures happening at the same time are more
unpredictable and more extreme.
Successful change management is one of the most
important management survival skills or this century.
In the recent times, life in South Africa has seen much
change.
In the fast-moving, highly competitive global marketplace,
continuous change is required for businesses to remain
competitive.
Companies that want to be world-class have to adapt to
change, be flexible, take the needs of all stakeholders into
account, allow employees to be entrepreneurial and
reward them according to the contributions they make.
CHANGE MANAGEMENT
‘Managing change’ means making changes in a
planned and managed manner.
 These changes are then managed and controlled by
the business.
 A decision to change the management information
system (MIS) of the business may be a response to
events that happened in the micro or market
environments of that business.
 A second meaning of managing change is
responding to changes over which the business has
little or no control.
 External changes are changes beyond the control of
a business. These include how to deal with new
legislation, political upheaval, upward or downward
economic swings and the emergence of communitybased pressure groups.
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CHANGE MANAGEMENT
Change management is designed to bring new life,
creativity and innovation to a business.
 Change often leads to resistance, and employees
become pessimistic, cynical and distrusting.
 It is usually the function of the human resources
department to act as mediator, supporting the
management team and motivating employees.
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CHANGE MANAGEMENT
Types of change:
 Change can either be triggered by factors outside the
business enterprise (external change), or by factors
inside the business enterprise (internal change).
External change:
• Triggered by factors which are
outside the business enterprise’s
control.
• Usually takes place in reaction to
factors such as legislation, the
actions of competitors, changing
economic conditions or socioeconomic factors, such as
HIV/Aids.
Internal change:
• Aims to address the weaknesses
within a business enterprise.
CHANGE MANAGEMENT
Types of change:
Because business enterprises operate in a dynamic
environment, change will always be part of business.
 Business enterprises that resist change do not grow.
 It is therefore vitally important that business
enterprise recognise the need for change and
implement change.
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CHANGE MANAGEMENT
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Dealing with business-related crises:
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Dealing with, or managing, a crisis includes the decisions that
need to be taken to protect a business from the harmful effects
that a crisis may have.
This often needs to happen as the crisis is happening, while the
management is under stress and still lacks all the information
needed to deal with the crisis.
The key for managing a crisis is to do as much planning as
possible before a crisis starts.
This will position the business to respond appropriately and
lessen the effects of the crisis situation.
Crisis management involves:
 Identifying a crisis
 Planning a response to a sudden event that poses a significant
threat to the business
 Limiting the damage
 Selecting an individual or team to deal with the crisis
 Resolving the crisis
CHANGE MANAGEMENT
Theories of change management
Change initiates
growth
Most people have a
natural tendency to
resist change
Everyone should play
an active role in the
change management
process
• Business enterprises grow and develop
through change.
• A business enterprise will therefore
strengthen its position in the market through
effective change management.
• Because change is uncertain, it sometimes
causes people to feel insecure during the
change management process.
• Successful change management depends on
management’s ability to motivate the
employees to accept the proposed change.
• Change management is primarily top
management’s job, but all employees
contribute to successfully implementing
change.
• Employees are more likely to accept change if
they are given an active and important role in
the change management process.
CHANGE MANAGEMENT
Theories of change management
The change should
result in tangible and
visible benefits
• Employees are more likely to accept change if
the proposed change will benefit them.
• Management should therefore aim to achieve
short term results which will benefit
employees.
Change management is • The business environment changes
a continuous process
continuously.
• A business enterprise without an effective
change management policy will not survive
the demanding business environment.
CHANGE MANAGEMENT*
Theories of change management
Business process re-engineering (BPR):
 This theory argues that business processes need to
be improved in order to deal effectively with
change, even if individuals are motivated and
prepared to work hard and deal with change.
 Business process re-engineering is the concept
used to describe the change of processes in the
business.
 The theory proposes that re-engineering the
business processes is the key to changing how
people work.
 A small change in processes can have dramatic
effects on cash flow, service delivery and customer
satisfaction.
CHANGE MANAGEMENT
Theories of change management
Total quality management (TQM):
 The aim of this change-management theory is to
have long-term success of the business through
customer satisfaction.
 In a TQM effort, the management and employees of
a business work together to improve processes,
products, services and the culture that they work in.
 The theory is that if all the business processes are
done right the first time, it will minimize defects and
waste.
CHANGE MANAGEMENT
Theories of change management
Total quality management (TQM):
 Kaizen model:
The Kaizen model is Japanese and means “to become good
through change”.
 The model suggests that a business needs to restructure and reorganize.
 The Kaizen model is based on the following five elements:
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Quality groups meet to discuss levels of quality in their divisions.
 Strong morale among employees is an important principle. Managers
must keep in constant contact with employee morale.
 Teamwork is necessary.
 Personal discipline of each employee ensures that the team will stay
strong.
 Suggestions for improvement from all employees. This will allow
management to address problems before they become significant.

CHANGE MANAGEMENT
Theories of change management
Total quality management (TQM):
 John Kotter’s change model:
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John Kotter identified eight steps that need to be taken in order
to manage change successfully:
Establish a sense of urgency among employees to deal with the change.
 Management and employees must work together.
 Create a clear vision for the business.
 Communicate and explain the vision to all employees.
 Make it possible for all employees to respond to the vision.
 Plan and create short-term goals and successes.
 Combine all improvements and produce even more change.
 Make new approaches part of the business’ standard procedures.

CHANGE MANAGEMENT
Dealing with and adapting to change:
Resisting change:
Generally, people do not like change. It is human
nature to resist change. To implement change
successfully, managers must be aware of why people
resist change. It is important to know the techniques
that are available to minimise resistance.
CHANGE MANAGEMENT
Dealing with and adapting to change:
Resisting change:
Some reasons for resisting change include:
 Loss of security – Workers feel secure with what they know and a new
manager or new technology may frighten them.
 Fear of economic loss – Workers may disapprove of a new production
process because they feel that it will lead to retrenchments.
 Loss of power and control – When a business restructures, some
people may not have as much power as they had before.
 Reluctance to change old habits – People get into the habit of making
the same decisions. New processes require a different mode of
thinking.
 Awareness of weakness in the proposed change – When employees
resist change because they see that is may cause problems.
 Peer pressure – When groups of people pressurise others to resist
change.
 Timing and scope of change – Change should happen when people
are receptive and well prepared for it.
 Misunderstanding – Even when management proposes a change that
benefits everyone, people may resist because they do not fully
understand its purposes and how it will be implemented.
CHANGE MANAGEMENT
Reasons why people resist change:

Change removes people from their comfort zones.

People are afraid that they may not be able to
acquire the new skills required by the change.
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People are afraid that they might lose their jobs.
CHANGE MANAGEMENT
How to cope with change resistance:
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Keep employees informed.
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Do not deviate from the original plan.

Put employees at ease by explaining the reasons
for the change.
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Involve employees in the transformation process.
CHANGE MANAGEMENT
Adapting to change:
Different people react differently to change and therefore also
adapt differently. Typical reactions usually focus on emotions.
Most people go through seven stages of adaptation.
1 Immobilised
The person feels overwhelmed by change and
responds by becoming ‘frozen’ and unable to reason
or plan.
2 Denial
The person refuses to accept that something has
changed.
3 Self-doubt or
depression
The person realises that change has happened and
has doubts about dealing with the ‘new’ situation.
4 Accepting reality The person accepts that things have changed and
breaks all links with the past.
5 Testing self
The person has a lot of energy, but can become angry
when testing the ability to cope with change.
6 Seeking meaning The person things about what has happened and
tries to make sense of what the change has meant.
7 Internalising
The person makes the newly discovered meaning
part of routine behaviour.
CHANGE MANAGEMENT
Dealing with and adapting to different kinds of change:
Changes in the workplace:
a) Unemployment:
 Unemployment is a major social problem that is the result of
changes in the structure of the economy and in the demand for
goods and services.
 There are a number of reasons why people face
unemployment.
 Some people are unemployed because they are were fired;
some people are unemployed because they quit their jobs;
some people are unemployed because they were retrenched.
 Many matriculants and students are unemployed because they
simply cannot find employment.
 Being unemployed is a stressful situation.
 Unemployed people must remember that they are entitled to
compensation form the Unemployment Insurance Fund for the
duration of their unemployment, provided they made
contributions towards this fund when they were employed.
CHANGE MANAGEMENT
Dealing with and adapting to different kinds of change:
Changes in the workplace:
b)
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Retrenchment
Sometimes businesses are forced to downsize or reduce their
capacity, often in response to technological growth.
Involves cutting jobs, eliminating product lines or announcing
plant layoffs in an attempt to put a business enterprise in a better
financial position.
Many business enterprises consider retrenchment to relieve
financial pressure.
The first step most businesses take when they need to reduce
the staff is to ask employees to apply for voluntary retrenchment.
This usually includes a voluntary severance package.
If to few employees apply for voluntary retrenchment, the next
step is compulsory retrenchment, where the employer ends the
contracts of existing employees.
Government has introduced legislation that offers some
protection to employees who are made redundant.
According to the Labour Relations Act (66 of 1995), the business
must make a minimum retrenchment payment to the employee
based on the number of years worked for the business.
CHANGE MANAGEMENT
Dealing with and adapting to different kinds of change:
Changes in the workplace:
b) Retrenchment
 It is important to note that there is a difference between
getting fired and getting retrenched.
 A person usually gets fired for doing something wrong.
 Is an attempt to relieve financial pressure face by an
enterprise by cutting salary expenses.
 Is a traumatic experience with financial implications for
the people who are retrenched.
 Is an attempt to relieve financial pressure faced by an
enterprise by cutting salary expenses
 The business enterprise now has to do the same
amount of work with fewer employees.
 The remaining employees may become overworked and
disheartened by their circumstances.
CHANGE MANAGEMENT
Dealing with and adapting to different kinds of change:
Changes in the workplace:
Dismissal
 An employee may be dismissed for the following
reasons:
c)
Incapacity
The employee cannot do the job that he or she was
employed for due to lack of skills or ill health.
Misconduct
The employee has broken a rule in the workplace or
endangered other employee’s lives.
Operational reasons When an employee is not needed anymore.
The Labour Relations Act protects employees against
unfair dismissal and unfair labour practices.
 If employees feel that they have been unfairly dismissed,
they can appeal to the Commission for Conciliation,
Mediation and Arbitration (CCMA) for a fair hearing.
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CHANGE MANAGEMENT
Dealing with and adapting to different kinds of change:
Changes in the workplace:
d)
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Affirmative action and black economic empowerment (BEE)
Affirmative action aims to redress the disadvantages in
employment that were previously experienced by designated
groups, in order to ensure equal representation in the
workforce.
This means that an enterprise’s workforce must be
representative of the country’s demographics.
It has been a reality for several years now.
And most people accept affirmative action.
However, when affirmative action was first implemented, it was
greeted with resistance.
People were scared that they were going to lose their jobs and
that they would not be considered for promotion.
CHANGE MANAGEMENT
Dealing with and adapting to different kinds of change:
Changes in the workplace:
d)
Affirmative action and black economic empowerment (BEE)
South Africa will only be able to achieve high rates or
economic growth and long-term stability if everyone
participates actively in the economy.
 Government has legislated affirmative action and black
economic empowerment policies.
 These policies are aimed at changing the lives of
previously disadvantaged South Africans.
 The Employment Equity Act became law in 1998.
 The intention of this Act is to eliminate unfair
discrimination, ensure employment equity and achieve a
diverse workplace that is broadly representative of South
Africa’s population.

CHANGE MANAGEMENT
Dealing with and adapting to different kinds of change:
Changes in the workplace:
d)
Affirmative action and black economic empowerment (BEE)
It is government policy, via the BEE Act 53 of 2003, to
promote a more equal distribution of wealth, in a freemarket environment, by actively supporting and favouring
the economic empowerment of previously disadvantaged
individuals.
 This means that businesses that comply with the BEE
requirements are given preference when it comes to
issuing government tenders, procurement contracts and
licences (such as casino licences and cell phone
licences).
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CHANGE MANAGEMENT
Dealing with and adapting to different kinds of change:
Changes in the workplace:
e)
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Globalisation
Globalisation refers to the movement between countries
of more and more people, goods, capital and ideas.
Globalisation happens due to increased economic
integration.
Example of external change and refers to the free
exchange of money.
Due to globalisation, business enterprises are now
global players – this means that business enterprises
compete in an international market where there are
many more competitors.
Countries have always traded with each other, but in
recent hears the improvement in technology and a
reduction of barriers means the speed of exchange
between countries is much faster.
CHANGE MANAGEMENT
Dealing with and adapting to different kinds of change:
Changes in the workplace:
Globalisation
 Globalisation brings about many challenges:
e)
Bigger markets can mean bigger profits.
 Bigger profits lead to greater wealth.
 Greater wealth leads to the reduction of poverty in many
countries.
 Each country makes decisions and policies that position
it to maximise the benefits and minimise the challenges
presented by globalisation.

CHANGE MANAGEMENT
Dealing with and adapting to different kinds of change:
Changes in the workplace:
Globalisation
 Some of the changes that were necessitated by
globalisation include:
e)
Adapting the business enterprise’s marketing strategy.
• Complying with international standards of quality.
• Complying with international trade laws.
• Upgrading the business enterprise’s IT network to
enable online purchasing.
•