organisation management

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Description

Assessment 1 Part A – Cost-Benefit Analysis

Instructions

Analysis for a change project that is being considered reveals that it will cost $70,000 to establish (in year 0), and that the recurring costs for the next 3 years will be $25,000 (in years 1, 2 & 3). There will be no benefits in year 0, but there will be $96,000 worth of benefits each year in years 1 through to 3. Using the formula above, calculate the payback period and the ROI. What is your recommendation?

Years

Bene ts

Costs

0

1

2

3

TOTAL BENEFITS

TOTAL COSTS

The payback period is _______________________________________ years. The Return on Investment (ROI) is __________________________%.
Would you recommend it as a good investment? Justify your answer.

Total part A: 10 marks

ADDENDUM | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE
BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ORGANISATION MANAGEMENT_V2.3

Assessment 1 Part C – Case Study

Scenario

Change at Asia/Pacific Manufacturing (APM)

19

Assessment 1 Part B – Risk Analysis

You are the HR director at a large Australian bank with a bureaucratic authoritarian culture and a highly unionised workforce. In response to competitive pressures, the bank aims to become the fastest growing, most profitable bank in Australia.

They are also looking at expanding their operations in Asia as part of their growth strategy. You realised that in order to bring the company to reach new heights, the bank needs to make changes to their organisational culture.

  1. How are you going to introduce cultural change in the entire organisation? (5 marks)
  2. What are the risks of introducing a cultural change in a bureaucratic authoritarian culture and a highly unionised workforce? For example, if the change will require retrenchment, what are the risks involve? What are the barriers to change? (5 marks)
  3. Perform a risk assessment for all the risks you identify including your recommended mitigation strategies. Use risk analysis forms similar to the one you used in Session 4. (10 marks)

The atmosphere in the boardroom was intense. Mon Ey, the nancial director for APM just concluded his presentation on the current situation of the Australian manufacturing division of APM. The following conclusions were made based on the presentation:

  • ƒ APM Australian factories not competitive
  • ƒ Benchmarked against international best practice, production costs of the Australian manufacturing operations are the highest in the world
  • ƒ The Australian factories have low productivity and high labour costs
  • ƒ Must cut losses and expand elsewhere OR make the Australian operations more competitive
  • ƒ At risks of being taken over by another major competitor. If this materialises, all Australian operations will be sold o and moved overseas
  • ƒ Share price dropped 20 percent from the past six months In view of the current problems of APM, they decided to hire the services of STegic, a strategic consultancy rm to make sense of the problem and possibly come up with a recommendation as to the best possible course of action. The study conducted by STegic reveals the following issues:
  • ƒ If the Australian factories could achieve 90 percent of best practice gures for productivity and labour costs, the Australian operations would be among the most pro table in the company
  • ƒ Machines are ok, problem are people performance ADDENDUM | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE
    BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ORGANISATION MANAGEMENT_V2.3

Part B total: 20 marks

20

  • ƒ Low production gures caused by lack of labour exibility
  • ƒ Excessive penalty rates makes it uneconomical to operate factories seven days a week
  • ƒ Workers are not motivated, thus absenteeism is high
  • ƒ Constant ght with unions over demarcation, workers show more loyalty to unions than to the company
  • ƒ Safety record of the Australian operations are worst in the company
  • ƒ Pay and conditions of employment are among the best in the world
  • ƒ Labour turnover is low
  • ƒ No clearly articulated HR strategy that is linked to the strategic business objectives
  • ƒ The Industrial Union of Manufacturing Workers (IUMW) is strong and dictates a lot of terms, for example: promotes the “last on, rst o ” policy, rewards based on seniority not on merit, everyone gets an across-the-board salary irrespective on their performance and the company’s pro tability After reading the case study:
  1. Identify change requirements/opportunities at APM (5 marks)
  2. Develop strategic objectives in the areas of recruitment and selection, training and development, and remuneration and benefits (10 marks)
  3. Identify the major stakeholder’s concern and potential problems that might hinder the implementation of your new change strategy. Suggest possible ways to overcome these challenges (10 marks)
  4. Develop a change management project plan for the implementation of your proposed change management strategy. Your plan should include the following elements:

f Budget
f Resources (people, equipment, and material needed) f methodology for change program
f objectives/outcomes
f Timetable

(5 marks) (5 marks) (5 marks) (5 marks) (5 marks)

5. Develop communication/education plan to promote the benefits of the change to the organisation, to minimise loss and to enable people to accept change positively, then prepare a report (10 marks)

Part C total: 60 marks Assessment 1 total: 90 marks

Assessment 2 Part A – Written or Oral Questions

  1. How can you encourage participation through your leadership? (6 marks)
  2. Give an example of a time you have used your communication and interpersonal skills to persuade others? (6 marks)
  3. What are some of the ways to create an innovative organisational culture?

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Leadership BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT Vision CHANGE onment Reinforcing Behaviours Accountability Resource Management Organisation Management BSBINN601 Lead and Manage Organisational Change BSBMGT615 Contribute to Organisation Development ii This workbook has been designed for use in conjunction with information and materials provided at lecture and tutorial sessions. Students should attend all timetabled sessions so they can obtain all subject information. Students should read and understand all materials provided. Information that is available in digital form is not included in this workbook in the interest of the environment. Publisher: Young Rabbit Pty Ltd (A.C.N. 003 381 182) trading as Australian Pacific College Ground Floor, 189 Kent Street Sydney NSW 2000 Australia Tel: (02) 9251 7000 Edition: 1st Edition Release date: February 2017 The publisher owns the copyright in this publication. All rights reserved. No part of this publication may be reproduced by any process without the prior written permission of Young Rabbit Pty Ltd. © 2018 Young Rabbit Pty Ltd Australian Pacific College Lower Ground, 189 Kent Street Kent St Campus (CBD) Sydney NSW 2000 P (61 2) 9251 7000 F (61 2) 9251 7575 Web: www.apc.edu.au CRICOS Provider: Young Rabbit Pty Ltd – 01331F ABN: 28 003 381 182 RTO PROVIDER: 90396 Front page cover: APC image WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ORGANISATION MANAGEMENT_V1.7 iii Contents Unit of Competency............................................................................................ v BSBINN601 Lead and Manage Organisational Change...................................... v BSBMGT615 Contribute to Organisation Development....................................... v Grading System................................................................................................. v Assessment 1................................................................................................... vi Assessment 2.................................................................................................. vii Legend............................................................................................................ viii 1. Introduction................................................................................................... 1 Activity 1.1..............................................................................................................2 Activity 1.2..............................................................................................................4 2. Identify Change Requirements/Opportunities............................................. 10 Activity 2.1............................................................................................................11 Activity 2.2............................................................................................................12 Activity 2.3............................................................................................................14 Activity 2.4............................................................................................................15 Activity 2.5............................................................................................................17 Activity 2.6............................................................................................................22 3. Identify Change Requirements/Opportunities (Continued).......................... 27 Activity 3.1............................................................................................................29 Activity 3.2............................................................................................................31 Activity 3.3............................................................................................................34 4. Develop Change Management Strategy....................................................... 39 Activity 4.1............................................................................................................41 Activity 4.2............................................................................................................45 Activity 4.3............................................................................................................50 5. Develop Change Management Strategy (Continued).................................... 57 Activity 5.1............................................................................................................60 Activity 5.2............................................................................................................61 6. Implement Change Management Strategy................................................... 67 Activity 6.1............................................................................................................70 Activity 6.2............................................................................................................76 7. Implement Change Management Strategy (Continued)............................... 81 Activity 7.1............................................................................................................83 Activity 7.2............................................................................................................86 Activity 7.3............................................................................................................88 8. Develop Organisation Development Plan..................................................... 90 Activity 8.1............................................................................................................92 Activity 8.2............................................................................................................97 Activity 8.3..........................................................................................................105 Activity 8.4..........................................................................................................109 WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ORGANISATION MANAGEMENT_V1.7 iv Activity 8.5..........................................................................................................115 Activity 8.6..........................................................................................................122 9. Implement Organisation Development Activities....................................... 123 Activity 9.1..........................................................................................................132 Activity 9.2..........................................................................................................136 Activity 9.3..........................................................................................................143 10. Maintain Organisation Development Program......................................... 144 Activity 10.1........................................................................................................147 Activity 10.2........................................................................................................152 Activity 10.3........................................................................................................158 Activity 10.4........................................................................................................162 Activity 10.5........................................................................................................167 Appendix 1. Glossary..................................................................................... 168 Appendix 2. References................................................................................. 170 WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ORGANISATION MANAGEMENT_V1.7 v UNIT OF COMPETENCY BSBINN601 Lead and Manage Organisational Change Elements 1. Identify change requirements and opportunities 2. Develop change management strategy 3. Implement change management strategy BSBMGT615 Contribute to Organisation Development Elements 1. Develop organisation development plan 2. Implement organisation development activities 3. Maintain organisation development program GRADING SYSTEM High Distinction (HD) 85% and above Distinction (D) 75-84% Credit (Cr) 65-74% Pass (P) 50-64% Not yet competent (NYC) Below 50% WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ORGANISATION MANAGEMENT_V1.7 vi ASSESSMENT 1 Course Name BSB61015 Advanced Diploma of Leadership and Management Subject/module Organisation Management Assessment method Part A – Cost-benefit Analysis Part B – Risk Analysis Part C – Case Study Weighting 50% Units of Competency BSBINN601 Lead and Manage Organisational Change BSBMGT615 Contribute to Organisation Development Instructions 1. Assessments should be completed as per your trainer’s instructions. 2. Assessments must be submitted by the due date to avoid a late submission penalty. 3. Plagiarism is copying someone else’s work and submitting it as your own. You must write your answers in your own words and include a reference list. A mark of zero will be given for any assessment or part of an assessment that has been plagiarised. 4. You may discuss your assessments with other students, but submitting identical answers to other students will result in a failing grade. Your answers must be yours alone. 5. Your trainer will advise whether the assessment should be digitally uploaded or submitted in hard copy. Assessments that are digitally uploaded should be saved in pdf format. 6. You must pass both assessments in the subject to pass the subject. 7. All assessments are to be completed in accordance with WHS regulatory requirements. WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ORGANISATION MANAGEMENT_V1.7 vii ASSESSMENT 2 Course Name BSB61015 Advanced Diploma of Leadership and Management Subject/module Organisation Management Assessment method Part A: Written or Oral Questions Part B: Written or Oral Questions Weighting 50% Units of Competency BSBINN601 Lead and Manage Organisational Change BSBMGT615 Contribute to Organisation Development Instructions 1. Assessments should be completed as per your trainer’s instructions. 2. Assessments must be submitted by the due date to avoid a late submission penalty. 3. Plagiarism is copying someone else’s work and submitting it as your own. You must write your answers in your own words and include a reference list. A mark of zero will be given for any assessment or part of an assessment that has been plagiarised. 4. You may discuss your assessments with other students, but submitting identical answers to other students will result in a failing grade. Your answers must be yours alone. 5. Your trainer will advise whether the assessment should be digitally uploaded or submitted in hard copy. Assessments that are digitally uploaded should be saved in pdf format. 6. You must pass both assessments in the subject to pass the subject. 7. All assessments are to be completed in accordance with WHS regulatory requirements. WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ORGANISATION MANAGEMENT_V1.7 viii LEGEND Not all ICONS are used in this workbook Research/Investigate This tells you to go and find out some information Activity/Provide notes This indicates that you need to take notes and/or complete an exercise/activity in this workbook Reference material/manuals This means you should look to sample of organisations’ policies and procedures or to some other learning material, resources to complete this exercise/activity. Think Take some time to think about the information and record your own ideas Talk Talk to your peers, colleagues – swap ideas. Reading Selected extra reading requirements. You Sydney Ferries Tube Youtube Selected Youtube requirements. WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ORGANISATION MANAGEMENT_V1.7 1 1. INTRODUCTION At the end of this training session, you should be able to: ff Explain why change is essential ff Define and describe change management ff Know and understand the steps in the change management process Important terms to remember: ff Change management ff Change management process Change is Essential “It must be considered that there is nothing more difficult to carry out, nor more doubtful of success, nor more dangerous to handle, than to initiate a new order of things. For the reformer has enemies in all those who profit by the old order, and only lukewarm defenders in all those who would profit by the new order, this lukewarmness arising partly from fear of their adversaries, who have the laws in their favour; and partly from the incredulity of mankind, who do not truly believe in anything new until they have had actual experience of it. Thus it arises that on every opportunity for attacking the reformer, his opponents do so with the zeal of partisans, the others only defend him half-heartedly, so that between them he runs great danger.” From his book – “The Prince” Change can be a natural and an essential part of life. It is a simple concept, yet deep within the veneer of its simplicity lies the complexity of its introduction, and consequently, its implementation. Initiating a new order of things is not easy, as statistics show that 70% of change initiatives in the organisation fail (Cole 2010). Yet we cannot underestimate its importance. Charles Darwin once wrote: “It is not the strongest species that survive, nor the most intelligent, but the ones most receptive to change.” Change is therefore essential to every organisation if they are to survive and thrive in a dynamic business environment where they operate. As Cole (2010) wrote, “Organisations must adapt, transform, or die.” To successfully introduce and manage change, the organisation must have an effective change management strategy. WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ORGANISATION MANAGEMENT_V1.7 2 Activity 1.1 Think and list all the changes you have experienced from the last 12 months. It could be personal and/or a career change. For example, you might have changed jobs, ended a personal relationship, changed your diet etc. After you have listed those changes, answer the following questions: 1. Which did you find easy to deal with? Which did you find difficult? 2. How did you respond to the challenge of change? 3. What did you do right? What did you do wrong? 4. If you are to do it all over again, how would you do it differently? WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ORGANISATION MANAGEMENT_V1.7 3 Definition of Change Management What is Change Management? Change management can be defined as ‘the coordination of a structured period of transition from situation A to situation B in order to achieve lasting change within an organisation’.1 Looking at the definition of change management above, the introduction and management of change in the organisation requires a coordinated approach and a structured methodology which will serve as a guide for the successful implementation of the required change. This approach is commonly called the change management process. 1 . (BNET Business Dictionary) WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ORGANISATION MANAGEMENT_V1.7 4 Activity 1.2 In a group of 2-3 or with a partner discuss ‘What is your personal definition of change management?’ and be prepared to present your ideas WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ORGANISATION MANAGEMENT_V1.7 5 The Change Management Process According to Stone (2008), the five steps of change are: ff Determining the need for change ff Determining the obstacles to change ff Introducing change ff Implementing change ff Evaluating change WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ORGANISATION MANAGEMENT_V1.7 6 Selected Reading 1a Read the following article to learn more about Change Management: SDNET. (2003). Six Steps to Change Management. Retrieved 15 June 2010, from http://www.sdnet.com.au/six-stepsto-change-management-120281524.htm Six Steps to Change Management By Change Tech Solutions Inc, TechRepublic on December 2nd, 2003 Change management deals with how changes to the system are managed so they don’t degrade system performance and availability. Change management is especially critical in today’s highly decentralised, network-based environment where users themselves may be applying many changes. A key cause of high cost of ownership is the application of changes by those who don’t fully understand their implications across the operating environment. In effective change management, all changes should be identified and planned for prior to implementation. Back-out procedures should be established in case changes create problems. Then, after changes are applied, they are thoroughly tested and evaluated. This article describes the process steps for change management and factors critical to its success. Step 1: Define Change Management Process and Practices As you would with other systems management disciplines, you must first craft a plan for handling changes. This plan should cover: ff Procedures for handling changes – how changes are requested, how they are processed and scheduled for implementation, how they are applied, and what the criteria are for backing out changes that cause problems ff Roles and responsibilities of the IT support staff – who receives the change request, who tracks all change requests, who schedules change implementations, and what each entity is supposed to do ff Measurements for change management – what will be tracked to monitor the efficiency of the change management discipline Tools to be used ff Type of changes to be handled and how to assign priorities – priority assignment methodology and escalation guidelines ff Back-out procedures – Actions to take if applied changes do not perform as expected or cause problems to other components of the system WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ORGANISATION MANAGEMENT_V1.7 7 Review Questions 1. Explain why change is essential in the workplace. 2. What is change management? 3. What are the steps in the change management process? References ff Cole, K. (2010). Management Theory and Practice. 4 edn. Pearson, Australia. WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ORGANISATION MANAGEMENT_V1.7 8 Step 2: Receive Change Requests Receive all requests for changes, ideally through a single change coordinator. Change requests can be submitted on a change request form that includes the date and time of the request. Step 3: Plan for Implementation of Changes Examine all change requests to determine: ff Change request prioritisation ff Resource requirements for implementing the change ff Impact to the system ff Back-out procedures ff Schedule of implementation Step 4: Implement and Monitor the Changes; Back out Changes if Necessary At this stage, apply the change and monitor the results. If the desired outcome is not achieved, or if other systems or applications are negatively affected, back out the changes. Step 5: Evaluate and Report on Changes Implemented Provide feedback on all changes to the change coordinator, whether they were successful or not. The change coordinator is responsible for examining trends in the application of changes, to see if: ff Change implementation planning was sufficient. ff Changes to certain resources are more prone to problems. When a change has been successfully made, it is crucial that the corresponding system information store be updated to reflect them. Step 6: Modify Change Management Plan if Necessary You may need to modify the entire change management process to make it more effective. Consider reexamining your change management discipline if: ff Changes are not being applied on time. ff Not enough changes are being processed. ff Too many changes are being backed out. ff Changes are affecting the system availability. ff Not all changes are being covered. WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ORGANISATION MANAGEMENT_V1.7 9 Other Process Issues Other process-related issues are also critical to the success of change management. Changes are evaluated and tested prior to implementation. It is practically impossible to predict the outcome of all changes, especially in a complex, interrelated system architecture. You must carry out a thorough evaluation of all changes, especially those dealing with critical system resources. We also highly recommend that you test all changes prior to fullscale deployment. For minimum impact on the system, test with a user not on the critical path, with test data, during off hours, and on a test system. All changes, big and small, should be covered. Minor changes can have major effects on system performance and availability. A simple change in a shared database’s file name could cause all applications that use it to fail. An additional software utility installed in the user’s workstation could cause the user’s system to become unstable. Or a move of a user’s workstation from one department to another could prevent it from properly accessing the network. You might occasionally need to bypass certain change management processes, like emergency changes required to recover from a fault condition. But, even in these cases, document the change thoroughly, and have it approved after implementation, to ensure that system records are updated. Document all changes. Perhaps the hardest part of change management is documenting all actions performed before, during, and after the change has been applied. Technical people often fail to document changes, and we have seen many problems caused because not everyone knew about earlier changes. Many IT organisations are familiar with the Monday Morning Crisis—that most problems occur on Monday mornings because someone implemented a change over the weekend without following correct change management procedures. Communicate the Benefit Many people mistakenly view change management as more IT red tape. They fail to realise that good change management acts like a traffic light that regulates the smooth flow of changes and does not stop all change from happening. With a well-planned and well-deployed process, you can ensure that changes do not negatively affect system performance as a whole.2 2. Harris Kern’s Enterprise Computing Institute and Change Technology Solutions, Inc. represent the industry’s leading minds behind the design and implementation of world-class IT organisations. TechRepublic is the online community and information resource for all IT professionals, from support staff to executives. We offer in-depth technical articles written for IT professionals by IT professionals. In addition to articles on everything from Windows to e-mail to firewalls, we offer IT industry analysis, downloads, management tips, discussion forums, and e-newsletters. ©2003 TechRepublic, Inc. WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ORGANISATION MANAGEMENT_V1.7 10 2. IDENTIFY CHANGE REQUIREMENTS/ OPPORTUNITIES At the end of this training session, you should be able to: ff Identify strategic change needs through an analysis of strategic plans ff Review existing policies and practices against strategic objectives to identify change requirements Monitor trends in the external environment to identify events or trends which impact on the achievement of organisation’s objectives ff Important terms to remember: ff Strategic change needs ff Strategic planning ff Strategic plan ff PEST analysis Identify Strategic Change Needs through an Analysis of Strategic Plans Strategic change needs are actions arising from strategic planning activities to bring about major change in the organisation (they may relate to people, processes, technology or structure). What is strategic planning? Strategic planning can be defined as ‘a systematic process of envisioning a desired future, and translating this vision into broadly defined goals or objectives and a sequence of steps to achieve them. The decisions made in the strategic planning process will have a major impact in the organisation’s destiny for years in the future. It could result in substantially different organisational structure, competitive position, or strategic partners of the organisation. Strategic change needs can be identified through an analysis of strategic plans. A strategic plan is a set of statements made up of specific strategies aimed at achieving set targets. The strategic planning process results in the production of a strategic plan. WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ORGANISATION MANAGEMENT_V1.7 11 Activity 2.1 In a group of 2-3 or with a partner discuss the following scenario and be prepared to present your ideas You are the CEO of Lemonade King, a lemonade stand business located in front of a primary school complex. The school has three gates, the main, side and the back entrance gates. Your stand is positioned right in front of the main entrance gate. You recently obtained funding from an investor that will enable you to open stands in both the side and back entrance gates. What strategic change need can you identify to successfully implement your plan in this scenario? Your lemonade stand business has grown rapidly and you find yourself overwhelmed with work to maintain the smooth running of your business. You are so busy taking care of the day-to-day operations that you are neglecting the strategic aspects of your business. What strategic change need can you identify to successfully implement your plan in this scenario? Your business has a seasonal demand as lemonade is only popular during summer months. You realised that if you expand the product range to include hot soup, you should be able to resume business even during the winter months. The only challenge you face is the absence of cooking utensils and stoves required to cook soups, including the lack of expertise in soup preparation. You heard that a soup business is currently operating near a busy playground on an adjacent street. What strategic change need can you identify to successfully implement your plan in this scenario? WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ORGANISATION MANAGEMENT_V1.7 12 Activity 2.2 In a group of 2-3 people, analyse the following excerpts from Healthy Salad’s Strategic Plan below: 1. Healthy Salad is a successful, multinational business with various stores and franchises conveniently located in street corners, malls and arcades of major cities in Australia and overseas. 2. The founder started the first store with $200,000 and raised $1.5 million to realise a franchising opportunity. 3. The main target market of Healthy Salad are busy city workers looking for a quick healthy alternative to fast food. 4. Strong, powerful and fun brand. 5. Markets salads as main meals with a distinct Asian flavour. 6. Does not spend any money marketing, relies on word-of-mouth. 7. $25 million in turnover for the year. 8. More than 30 franchises. 9. 25 direct employees (the founder’s mother works as the office manager although she does not have much management experience, she always voices her ideas on which direction the company should take), may need to hire more staff especially in accounts. 10. May need partners from overseas countries to establish operations there. 11. Targeting to establish 180 stores in Australia by 2012. 12. Current challenges include finding franchisees with a suitable cultural fit with the business, improve the supply chain and create win-win situations with suppliers, cultivating long-term relationships with customers by providing strong value proposition to them. Recently, a competitor installed a franchise management intranet, an online system which franchisees can access to manage their business and analyse trends. HealthySalad does not have that level of technology sophistication. After analysing the strategic plan, identify strategic change needs that may relate to people, processes, technology or structure of HealthySalad. WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ORGANISATION MANAGEMENT_V1.7 13 Review Existing Policies and Practices against Strategic Objectives to Identify Change Requirements A policy is designed to influence decisions and actions that the business makes. It is usually a written document that outlines a required process or procedure within the business. Good policies are important because they demonstrate that the business is being operated in an efficient manner, informs everyone as to what approach to take when dealing with certain business issues, and ensure that there will be uniformity and consistency in decisions and in how the business operates. Policies are established to achieve some purpose which reflects a set of beliefs or values on the issue concerned. For example, the business might formulate a professional development policy which expresses the company commitment to staff continuous improvement. Existing policies and practices may provide insights as to what changes are required in the business to achieve their strategic objectives. WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ORGANISATION MANAGEMENT_V1.7 14 Activity 2.3 In a group of 2-3 people or with a partner discuss ‘What is your personal definition of change management?’ and be prepared to present your ideas ff Fair Trade is an organised social movement and market-based approach that aims to help producers in developing countries obtain better trading conditions and promote sustainability. ff You wanted your lemonade business to build a reputation as an ethical company. ff You believe that having ethical credentials will give your business strategic advantage against your competitors. ff You currently do not have a fair trade policy and only deals with suppliers who can trade with the cheapest price. ff What changes are required in the business in order for you to achieve your strategic objectives? WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ORGANISATION MANAGEMENT_V1.7 15 Activity 2.4 In a group of 2-3 people, analyse and discuss the following scenario and be prepared to present your ideas Healthy Salad does not have a franchise management intranet which will allow their franchisees to go online, make orders, and easily see and analyse trends. 1. Is this a strategic issue for the business? 2. How will this affect their strategic objective of improving the supply chain and create win-win situations with their suppliers? 3. What changes are required in order for the business to achieve their strategic objective? WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ORGANISATION MANAGEMENT_V1.7 16 Monitor trends in the external environment to identify events or trends which impact on the achievement of the organisation’s objectives What is PEST Analysis? PEST stands for political, economic, social and technological analysis. PEST analysis is a scan of the macro environment in which the firm operates (QuickMBA 2010). It looks at the internal and external factors that could affect the strategic development of a business. For example, political factors include government regulations and legal issues and define both formal and informal rules under which the firm must operate. Economic factors affect the purchasing power of potential customers and the firm’s cost of capital. Social factors include the demographic and cultural aspects of the external macro environment. And finally, technological factors can lower barriers to entry, reduce minimum efficient production levels, and influence outsourcing decisions (QuickMBA 2010). WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ORGANISATION MANAGEMENT_V1.7 17 Activity 2.5 With the same group, perform the following task: Your firm is trying to enter the Malaysian market. Conduct a PEST analysis on Malaysia using the data below: PEST Analysis – Malaysia Source: Wiki commons People and Society: MALAYSIA Nationality: Noun: Malaysian(s) adjective: Malaysian Ethnic groups: Malay 50.1%, Chinese 22.6%, indigenous 11.8%, Indian 6.7%, other 0.7%, noncitizens 8.2% (2010 est.) Languages: Bahasa Malaysia (official), English, Chinese (Cantonese, Mandarin, Hokkien, Hakka, Hainan, Foochow), Tamil, Telugu, Malayalam, Panjabi,Thai Note: in East Malaysia there are several indigenous languages; most widely spoken are lban and Kadazan Religions: Muslim (official) 61.3%, Buddhist 19.8%, Christian 9.2%, Hindu 6.3%, Confucianism, Taoism, other traditional Chinese religions 1.3%, other 0.4%, none 0.8%, unspecified 1% (2010 est.) Population: 30,073,353 (July 2014 est.) WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ORGANISATION MANAGEMENT_V1.7 18 Government Type: Constitutional Monarchy Note: nominally headed by paramount ruler (commonly referred to as the king) and a bicameral Parliament consisting of a nonelected upper house and an elected lower house; all Peninsular Malaysian states have hereditary rulers (commonly referred to as sultans) except Melaka (Malacca) and Pulau Pinang (Penang); those two states along with Sabah and Sarawak in East Malaysia have governors appointed by government; powers of state governments are limited by federal constitution; under terms of federation, Sabah and Sarawak retain certain constitutional prerogatives (e.g., right to maintain their own immigration controls) Capital: Name: Kuala Lumpur; note – Putrajaya is referred to as an administrative center not the capital; Parliament meets in Kuala Lumpur Legal system: Nixed legal system of English common law, Islamic law, and customary law; judicial review of legislative acts in the Supreme Court at request of supreme head of the federation Suffrage: 21 years of age; universal Economy – overview: Malaysia, a middle-income country, has transformed itself since the 1970s from a producer of raw materials into an emerging multi-sector economy. Under current Prime Minister NAJ IB, Malaysia is attempting to achieve highincome status by 2020 and to move farther up the value-added production chain by attracting investments in Islamic finance, high technology industries, biotechnology, and services. NAJIB’s Economic Transformation Program (ETP) is a series of projects and policy measures intended to accelerate the country’s economic growth. The government has also taken steps to liberalize some services sub­sectors. The NAJ IB administration also is continuing efforts to boost domestic demand and reduce the economy’s dependence on exports. Nevertheless, exports – particularly of electronics, oil and gas, palm oil and rubber – remain a significant driver of the economy. As an oil and gas exporter, Malaysia has profited from higher world energy prices, although the rising cost of domestic gasoline and diesel fuel, combined with sustained budget deficits, has forced Kuala Lumpur to begin to address fiscal shortfalls, through initial reductions in energy and sugar subsidies and the announcement of the 2015 implementation of a 6% goods and services tax. The government is also trying to lessen its dependence on state oil producer Petronas. The oil and gas sector supplies about 32% of government revenue in 2013. Bank Negara Malaysia (central bank) maintains healthy foreign exchange reserves, and a welldeveloped regulatory regime has limited Malaysia’s exposure to riskier financial instruments and the global. Financial crisis. Nevertheless, Malaysia could be vulnerable to a fall in commodity prices or a general slowdown in global economic activity because exports are a major component of GDP. In order to attract increased investment, NAJ IB earlier raised possible revisions to the special economic and social WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ORGANISATION MANAGEMENT_V1.7 19 preferences accorded to ethnic Malays under the New Economic Policy of 1970, but retreated in 2013 after he encountered significant opposition from Malay nationalists and other vested interests. In September. 2013 NAJ IB launched the new Bumiputra Economic Empowerment Program (BEEP). policies that favor and advance the economic condition of ethnic Malays. Agriculture – products: Peninsular Malaysia – palm oil, rubber, cocoa, rice; Sabah – palm oil, subsistence crops; rubber, timber; Sarawak – palm oil, rubber, timber; pepper Industries: Peninsular Malaysia – rubber and oil palm processing and manufacturing, petroleum and natural gas, light manufacturing, pharmaceuticals, medical technology, electronics and semi-conductors, timber processing; Sabah – logging, petroleum and natural gas production; Sarawak – agriculture processing, petroleum and natural gas production, logging Labor force: 13.19 million (2013 est.) country comparison to the world: il Unemployment rate: 3.1% (2013 est.) Literacy: Definition: age 15 and over can read and write Total population: 93.1% Male: 95.4% Female: 90.7% (2010 est.) Exports – commodities: semiconductors and electronic equipment, palm oil, petroleum and liquefied natural gas, wood and wood products, palm oil, rubber, textiles, chemicals, solar panels Exports – partners: Singapore 13.6%, China 12.6%, Japan 11.8%, US 8.7%, Thailand 5.4%, Hong Kong 4.3%, India 4.2%, Australia 4.1% (2012) Imports: $192.9 billion (2013 est.) Country comparison to the world: 27 $186.9 billion (2012 est.) Imports – commodities: Electronics, machinery, petroleum products, plastics, vehicles, iron and steel products, chemicals Imports – partners: China 15.1%, Singapore 13.3%, Japan 10.3%, US 8.1%, Thailand 6%, Indonesia 5.1%, South Korea 4. 1% (2012) WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ORGANISATION MANAGEMENT_V1.7 20 Exchange rates: Ringgits (MYR) per US dollar – 3.174 (2013 est.) 3.09 (2012 est.) 3.22 (2010 est.) 3.52 (2009) 3.33 (2008) Electricity – from fossil fuels: 91.7% of total installed capacity (2010 est.) country comparison to the world: 73 Electricity – from nuclear fuels: 0% of total installed capacity (2010 est.) country comparison to the world: 145 Electricity – from hydroelectric plants: 8.3% of total installed capacity (2010 est.) country comparison to the world: ill Electricity – from other renewable sources: 0% of total installed capacity (2010 est.) country comparison to the world: 205 Carbon dioxide emissions from consumption of energy: 191.4 million Mt (2011 est.) Communications – main lines In use: 4.589 million (2012) Country comparison to the world: 34 Telephones – mobile cellular: 41.325 million (2012) Country comparison to the world: 30 Telephone system: General assessment: modern system featuring good intercity service on Peninsular Malaysia provided mainly by microwave radio relay and an adequate intercity microwave radio relay network between Sabah and Sarawak via Brunei; international service excellent Domestic: domestic satellite system with 2 earth stations; combined fixed-line and mobile-cellular tele density roughly 140 per 100 persons international: country coda – 60; landing point for several major international submarine cable networks that provide connectivity to Asia, Middle East, and Europe; satellite earth stations – 2 Intelsat (1 Indian Ocean, 1 Pacific Ocean) (2011) Broadcast media: state-owned TV broadcaster operates 2 TV networks with relays throughout the country, and the leading private commercial media group operates 4 TV stations with numerous relays throughout the country; satellite TV subscription service is available; state­owned radio broadcaster operates multiple national networks as well as regional and local stations; many private commercial radio broadcasters and some subscription satellite radio services are available; about 55 radio stations overall (2012) WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ORGANISATION MANAGEMENT_V1.7 21 PEST Analysis Malaysia Political Factors e.g., Parliament and hereditary rulers Economic Factors e.g., High government spending Socio-cultural Factors e.g., Variety of religions Economic Factors e.g., Variety of TV and radio stations Conclusions: (Source: MarketingTeacher. (2010). PEST Analysis-Exercise. Retrieved 21 May 2010, from http://www.marketingteacher.com/exercise-pest-analysis/) WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ORGANISATION MANAGEMENT_V1.7 22 Activity 2.6 Watch the YouTube video “Problem Solving Techniques #6: PEST Analysis” http://www.youtube.com/watch?v=B7drEvHo7vA&feature=PlayList&p=D EEFBED6E72AEA31&playnext_from=PL&playnext=1&index=20 Review Questions 1. 2. 3. 4. What is strategic planning? What is a strategic plan? What are strategic change needs? What is PEST analysis? References ff QuickMBA, (2010). PEST analysis. Retrieved 21 May 2010, from http://www.quickmba.com/strategy/pest/ WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ORGANISATION MANAGEMENT_V1.7 23 Selected Reading 2a Institute of Community Directors. (n.d). Strategic Planning Overview. Retrieved 13 November 2016, from https://www.communitydirectors.com.au/icda/ tools/?articleId=1368 Strategic Planning: An Introduction Why Develop a Strategic Plan? Every day there seem to be more people in need. There are groups who work to help the poor, the disabled, those who suffer deprivation, the victims of violence or disaster and then there are those who work to build and, in some cases, change community. All Appeal to the Public for Support They all seem worthy, “good causes” but with so many choices and limited resources, people are asking probing questions such as, “Is this organisation making a difference, achieving results?” “In this competitive environment, is it worth taking time out of my increasingly hectic schedule to personally invest in this group? Is there a demonstrated social return?” Community organisations requesting community support are being increasingly pressured to clearly demonstrate their capacity to use resources responsibly and strategically. Just as importantly, they need to give clear indications of their results and how they have changed the lives of their target group. Public Accountability The strategic planning process is a way for organisations to ensure they are accountable and that their processes transparent. It enables organisations to think through and document what they are doing, for whom and why they are doing it. In mature organisations, the process encourages examination of established directions and strategies for contemporary relevance and results. In the past, this used to be called “long-range planning”. The term “strategic planning” is now used to express the analytic, comprehensive, thoughtful and tactical elements of this type of planning. During the process difficult questions are encouraged and discussed: ff Do we need to change our mission? ff Has our target community shifted its focus or needs? ff Should we abandon much loved programs that have outlived their usefulness and concentrate resources elsewhere? ff Is there enough capacity and commitment within our present staff and management team to achieve our goals? WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ORGANISATION MANAGEMENT_V1.7 24 Put simply, a strategic plan is used for one purpose only – to help an organisation do a better job. A successful strategic planning process will be genuinely inclusive, involving not just the Board but all of the organisation’s stakeholders – paid and volunteer staff, clients, funders, and the community. It aims to focus an organisation’s vision and priorities in response to a changing environment and to ensure that members of the organisation are working toward the same goals. The strategic plan documents for the organisation and its clients and supporters: 1. where they are going; 2. what they need to do to get there; 3. how they are progressing along the way; and 4. that a full account of the results achieved will be delivered at the appropriate time. The Process There is actually no perfect formula for planning but most organisations typically work through the following common set of activities or steps in the process Different organisations have different names for these major activities and might even conduct them in a different order. 1. Environmental Scan This activity reviews the organisation’s current relationship to the broader political, social and economic environments. New “hot spots” are identified and analysed. For example, a new competitor, a change of government policy or a shift in demographics may all impact on the organisation. At its conclusion, planners may then look at the way the organisation is placed to meet the challenges described in the environmental scan. Commonly this is through a SWOT analysis, an activity that identifies the organisation’s current strengths, weaknesses, opportunities and threats. 2. Plotting Direction After carefully investigating the territory in the environmental scan, the organisation must decide what it needs to do to respond to the major issues and opportunities it faces. It needs to make and commit to a set of strategic choices to go forward. WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ORGANISATION MANAGEMENT_V1.7 25 The Mission Statement The organisation must identify or review the reasons why it exists. This is documented in the organisation’s mission statement, which typically contains the basic, guiding principles that provide guidance and inspiration to the Board and staff. The mission statement is a succinct description of the organisation’s basic purpose, along with the activities or business it undertakes to achieve its purpose, and the basic values that the organisation holds in common and endeavours to put into practice. A mission statement for a children’s sporting association might be; The Bluehill’s Tennis Camp seeks to enhance the lives of all children in our municipality [purpose] by providing access to free or low cost training and facilities [business] supervised by staff and volunteers who are committed to the pursuit of excellence and equality of opportunity [values]. Undertaking a strategic planning process might also present the opportunity for a long-standing, well-respected organisation to question the rationale for its very purpose. For example an organisation that solely exists to support newly arrived refugees in a particular location might decide to close or significantly review its mission when the community’s migrant reception centre moves to another suburb. Setting the Goals (sometimes called “objectives” or “outcome statements”) This is the activity that assists the organisation to choose specific priorities – to be strategic about the ends that need to be accomplished for the organisation to achieve its mission. Goals or objectives should be designed and worded as much as possible to be specific and measurable, acceptable to those working to achieve the goals, realistic, timely, extending the capabilities and rewarding for those working to achieve the goals (an acronym for these criteria is “SMARTER”). They can be seen as milestones to achieving the organisation’s overall purpose. WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ORGANISATION MANAGEMENT_V1.7 26 3. Action Planning Activities These are the strategies or activities that have been prioritised and selected to help the organisation achieve its goals. They clearly reflect and respond to the findings of the research documented in the environmental scan, with a number of broad activities matched to each strategic goal. Action planning also includes specifying responsibilities and timelines for each objective, or who needs to do what and by when. It is also common for organisations to develop separate operational plans that include staff work plans for the coming year. Larger organisations will develop plans for each major function, division, department, etc. and call these work plans. Evaluation Your planning process should also include methods to honestly monitor and evaluate the plan and its results, including documenting how the organisation will know who has done what, to whom and by when. Budgets Usually budgets are included in the strategic and annual plan, and with work plans. Budgets specify the money needed to implement the annual plan. Budgets also describe the main items of expenditure, for example, for human resources, equipment, materials. Strategic Planning – a Process not a Monument The important thing to remember is that an organisation’s strategic plan is not a monument, or an end in itself, but rather a means of achieving its purpose. Many management experts have emphasised the need for the people implementing a strategic plan to have enough flexibility and authority to be creative and responsive to new developments. In reality this will normally mean changing the activities that have previously been selected to achieve the organisation’s mission in the light of new opportunities or challenges. The process is helpful only if it assists organisations to honestly test old assumptions in the light of new information about the present, and anticipate the environment in which the organisation will be working in the future. Finally, the process is about building commitment and embracing public accountability through engaging key stakeholders in the regular process of identifying priorities and evaluating strategies in the pursuit of changing people’s lives for the better. WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ORGANISATION MANAGEMENT_V1.7 27 3. IDENTIFY CHANGE REQUIREMENTS/ OPPORTUNITIES (Continued) At the end of this training session, you should be able to: ff Identify major operational change requirements due to performance gaps, business opportunities or threats, or management decisions ff Review and prioritise change requirements/opportunities with relevant managers ff Consult specialists and experts to assist in the identification of major change requirements/opportunities Important terms to remember ff Gap analysis ff SWOT analysis Identify Major Operational Change Requirements Due to Performance Gaps, Business Opportunities or Threats, or Management Decisions Major operational change requirements mean changes which need to be made to the organisation to maintain or improve performance and/or competitive position. Major operational change requirements are due to business opportunities and threats, management decisions and/or performance gaps identified as a result of gap analysis. Gap Analysis Also known as needs assessment, gap analysis is a technique for determining the steps to be taken in moving from a current state to a desired futurestate (BusinessDictionary.com). Gap analysis utilises comparative analysis techniques to identify the differences that exist between the current state and those required of the desired state. This will then help focus improvements on the worst performing areas in order to raise the overall competitiveness of the company. For example, a company might realise that the gap from achieving a desired future sales target is the lack of innovation in product development due to insufficient R&D funding. As a consequence, the company might decide to increase their R&D budget to come up with innovative products which will help achieve their strategic goals. Strengths, Weaknesses, Opportunities, and Threats (SWOT) analysis is a form of gap analysis used by management to gauge company operations. WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ORGANISATION MANAGEMENT_V1.7 28 SWOT Analysis An important part of strategic planning is the understanding of the firm’s internal and external environment. This can be done through an activity called environmental scanning. Environmental scanning looks at the internal and external forces that the firm needs to contend with during its existence Using tools such as SWOT analysis (Strengths, Weaknesses, Opportunities and Threats), we can identify the internal and external factors that may have an immediate and/or long-term effect on the company. Review and prioritise change requirements/opportunities with relevant managers After performing gap analysis and SWOT, change requirements and opportunities are reviewed and prioritised with relevant managers. Relevant managers are managers who: ff are affected by the change, ff are participating in the change project, and hold a leadership position in the organisation. Consult Specialists and Experts to Assist in the Identification of Major Change Requirements/Opportunities The help of specialists and experts may also be sought to assist in the identification of major change requirements/opportunities. For example, strategic change consultants may provide assistance in improving organisational performance, implementing the right change strategies for the organisation and recommending strategies for cultural change. WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ORGANISATION MANAGEMENT_V1.7 29 Activity 3.1 Read the following scenario and discuss with your partner Your lemonade stand is the oldest running business of its kind and has created an iconic image in the mind of the target market. It is a third generation family business and has built a loyal following of customers throughout the years. The business is strong financially from a positive cash flow, profitability and strong funding from investors. There is a huge demand for lemonade especially during the summer months. The negotiated joint venture with Soup Kitchen, a soup company is a good opportunity for both companies to bring in more sales during the winter season. However, bringing in two cultures and joining operations could be a real challenge for both companies once the joint venture materialises. A new branch that opened in front of the sports ground is also seen to provide extra revenue during weekends. Your products’ organic and fair trade labels are getting a favourable response from the consumers. You are recently featured and recommended by an influential food guide magazine due to your commitment to sustainability and ethical marketing. However, the lack of R&D initiative for the company was seen as a strategic opportunity by your competitors. Recently, a new entrant, Cool Drinks, began marketing flavoured lemonades with different colours and flavours in attractive packaging and containers. Cool Drinks also offers free toys for every drink purchased at an affordable price. Cool Drinks is becoming very popular among the younger demographics and is slowly becoming a strong competitor in the market. Identify the strengths, weaknesses, opportunities and threats of Lemonade King. 1. What are the worst performing areas in your business? 2. You are increasing funding on research and development (R&D) activities in order to come up with new and innovative products. Who are the relevant managers which may be involved in the change project? WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ORGANISATION MANAGEMENT_V1.7 30 3. When might you need the services of a strategic consultant? Explain. WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ORGANISATION MANAGEMENT_V1.7 31 Activity 3.2 In a group of 2-3 or people with a partner perform a SWOT analysis on the following case and be prepared to present your ideas. (You might like to use the template provided on the next page) SWOT Analysis Highly Brill Leisure Centre Highly Brill Leisure Centre has hired you to help them with their marketing decision making. Perform a SWOT analysis on Highly Brill Leisure Centre, based upon the following issues: ff The Centre is located within a two-minute walk of the main bus station, and is a fifteen-minute ride away from the local railway station. ff There is a competition standard swimming pool; although it has no wave machines or whirlpool equipment as do competing local facilities. ff It is located next to one of the largest shopping centres in Britain. ff It is one of the oldest centres in the area and needs some cosmetic attention. ff Due to an increase in disposable income over the last six years, local residents have more money to spend on leisure activities. ff There has been a substantial decrease in the birth rate over the last ten years. ff In general people are living longer and there are more local residents aged over fifty-five now than ever before. ff After a heated argument with the manager of a competing leisure centre, the leader of a respected local scuba club is looking for a new venue. ff The local authority is considering privatising all local leisure centres by the year 2000. ff Press releases have just been issued to confirm that Highly Brill Leisure Centre is the first centre in the area to be awarded quality assurance standard BS EN ISO 9002. ff A private joke between staff states that if you want a day-off from work then you should order a curry from the Centre’s canteen, which has never made a profit. ff The Centre has been offered the latest sporting craze. ff Highly Brill Leisure Centre has received a grant to fit special ramps and changing rooms to accommodate the local disabled. ff It is widely acknowledged that Highly Brill has the best-trained and most respected staff of all of the centres in the locality3 After performing the SWOT, create a list of priorities for all change requirements and opportunities identified. 3. Source: Marketing Teacher. (2010). SWOT Analysis-Exercise. Retrieved 14 June 2010, from http://www. marketingteacher.com/exercise-swot-analysis/ WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ORGANISATION MANAGEMENT_V1.7 32 SWOT Analysis Highly Brill Leisure Centre Strengths Weaknesses Opportunities Threats WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ORGANISATION MANAGEMENT_V1.7 33 Selected Reading 3a Read the following article to learn more about SWOT Analysis: Marketingteacher.com. SWOT Analysis. Retrieved 11 January 2017, from http://www.marketingteacher.com/swot-analysis/ WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ORGANISATION MANAGEMENT_V1.7 34 3.3 You Activity Watch the YouTube video “SWOT Analysis: How to perform one for Sydney Ferries Tube your organisation” http://www.youtube.com/watch?v=GNXYI10Po6A&feature=related Review Questions 1. What is gap analysis? 2. What is SWOT analysis? 3. How can outside expertise help in identifying change requirements and opportunities? Give an example. References ff Volery & Schaper. (2007). Entrepreneurship and Small Business. 2nd Edn. Brisbane: John Wiley & Sons WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ORGANISATION MANAGEMENT_V1.7 35 Selected Reading 3b Read the following article to learn more about SWOT Analysis: Thompson, AA, Strickland, AJ, & Gamble, J 2008, Crafting and executing strategy : the quest for competitive advantage : concepts and cases / Arthur A. Thompson, Jr., A.J. Strickland III, John E. Gamble, Boston : McGraw-Hill/Irwin, c2008. P.107-110 What to Look for in Identifying a Company’s Strengths, Weaknesses, Opportunities, and Threats Potential Resource Strength and Competitive Capabilities Potential Resource Weaknesses and Competitive Deficiencies ff ff ff ff ff No clear strategic direction ff Resources that are not well matched to industry key success factors ff No well-developed or proven core competencies ff A weak balance sheet; burdened with too much debt ff Higher overall unit costs relative to key competitors ff Weak or unproven product innovation capabilities ff A product/service with ho-hum attributes or features inferior to those of rivals ff Too narrow a product line relative to rivals ff Weak brand image or reputation ff Weaker dealer network than key rivals and/or lack of adequate global distribution capability ff Behind on product quality, R&D, and/or technological know-how ff In the wrong strategic group ff Losing market share because ... ff Lack _of management depth ff Inferior intellectual capital relative to leading rivals ff Subpar profitability because ... ff Plagued with internal operating problems or obsolete facilities ff Behind rivals in e-commerce capabilities ff Short on financial resources to grow the business and pursue promising initiatives ff Too much underutilized plant capacity ff ff ff ff ff ff ff ff ff ff ff ff ff ff ff ff ff A powerful strategy Core competencies in __ A distinctive competence in __ A product that is strongly differentiated from those of rivals Competencies and capabilities that are well matched to industry key success factors A strong financial condition; ample financial resources to grow the business Strong brand-name image/company reputation An attractive customer base Economy of scale and/or learning/ experience curve advantages over rivals Proprietary technology/superior technological skills/important patents Superior intellectual capital relative to key rivals Cost advantages over rivals Strong advertising and promotion Product innovation capabilities Proven capabilities in improving production processes Good supply chain management capabilities Good customer service capabilities Better product quality relative to rivals Wide geographic coverage and/or strong global distribution capability Alliances/joint ventures with other firms that provide access to valuable technology, competencies, and/or attractive geographic markets WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ORGANISATION MANAGEMENT_V1.7 36 Potential Market Opportunities Potential External Threats to a Potential Market Opportunities Company’s Future Prospects ff Openings to win market share from rivals ff Sharply rising buyer demand for the industry’s product ff Serving additional customer groups or market segments ff Expanding into new geographic markets ff Expanding the company’s product line to meet a broader range of customer needs ff Using existing company skills or technological know-how to enter new product lines or new businesses ff Online sales ff Integrating forward or backward ff Falling trade barriers in attractive foreign markets ff Acquiring rival firms or companies with attractive technological expertise or capabilities ff Entering into alliances or joint ventures to expand the firm’s market coverage or boost its competitive capability ff Openings to exploit emerging new technologies ff Increasing intensity of competition among industry rivals-may squeeze profit margins ff Slowdowns in market growth ff Likely entry of potent new competitors ff Loss of sales to substitute products ff Growing bargaining power of customers or suppliers ff A shift in buyer needs and tastes away from the industry’s product ff Adverse demographic changes that threaten to curtail demand for the industry’s product ff Vulnerability to unfavorable industry driving forces ff Restrictive trade policies on the part of foreign governments ff Costly new regulatory requirements What Do the SWOT Listings Reveal? SWOT analysis involves more than making four lists. The two most important parts of SWOT analysis are drawing conclusions from the SWOT listings about the company’s overall situation, and translating these conclusions into strategic actions to better match the company’s strategy to its resource strengths and market opportunities, to correct the important weaknesses, and to defend against external threats. Figure 4.2 shows the three steps of SWOT analysis. Simply making lists of a company’s strengths, weaknesses, opportunities, and threats is not enough; the payoff from SWOT analysis comes from the conclusions about a company’s situation and the implications for strategy improvement that flow from the four lists. Just what story the SWOT listings tell about the company’s overall situation is often revealed in the answers to the following sets of questions: ff Does the company have an attractive set of resource strengths? Does it have any strong core competencies or a distinctive competence? Are the company’s strengths and capabilities well matched to the industry key success factors? Do they add adequate power to the company’s strategy, or are more or different strengths needed? Will the company’s current strengths and capabilities matter in the future? ff How serious are the company’s weaknesses and competitive deficiencies? Are they mostly inconsequential and readily correctable, or could one or more prove fatal if not remedied soon? Are some of the company’s WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ORGANISATION MANAGEMENT_V1.7 37 weaknesses in areas that relate to the industry’s key success factors? Are there any weaknesses that if uncorrected, would keep the company from pursuing an otherwise attractive opportunity? Does the company have important resource gaps that need to be filled for it to move up in the industry rankings and/or boost its profitability? ff Do the company’s resource strengths and competitive capabilities (its competitive assets) outweigh its resource weaknesses and competitive deficiencies (its competitive liabilities) by an attractive margin? ff Does the company have attractive mar~et opportunities that are well suited to its resource strengths and competitive capabilities? Does the company lack the resources and capabilities to pursue any of the most attractive opportunities? ff Are the threats alarming, or are they something the company appears able to deal with and defend against? Figure 4.2: The Three Steps of SWOT Analysis: Identify, Draw Conclusions, Translate into Strategic Action What Can Be Gleaned from the SWOT Listings Identify company resource strengths and competitive capabilities Identify company resource weaknesses and competitive deficiencies Identify the company’s market opportunity Identify the company’s market opportunity Conclusions concerning the company’s overall business situation: ff Where on the scale from “alarmingly weak” to”exceptionally strong” does the attractiveness of the company’s situation rank? ff What are the attractive and unattractive aspects of the company’s situation? Actions for improving company strategy: ff Use company strengths and capabilities as cornerstones for strategy. ff Pursue those market opportunities best suited to company strengths and capabilities. ff Correct weaknesses and deficiencies that impair pursuit of important market opportunities or heighten vulnerability to external threats. ff Use company strengths to lessen the impact of important external threats. ff All things considered, how strong is the company’s overall situation? Where on a scale of 1 to 10 (1 being alarmingly weak and 10 exceptionally strong) should the firm’s position and overall situation be ranked? What aspects of the company’ situation are particularly attractive? What aspects are of the most concern? WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ORGANISATION MANAGEMENT_V1.7 38 The final piece of SWOT analysis is to translate the diagnosis of the company’s situation into actions for improving the company’s strategy and business prospects. The following questions point to implications the SWOT listings have for strategic action: ff Which competitive capabilities need to be strengthened immediately, so as to add greater power to the company’ s strategy and boost sales and profitability? Do new types of competitive capabilities need to be put in place to help the company better respond to emerging industry and competitive condition? Which resources and capabilities need to be given greater emphasis, and which merit less emphasis? Should the company emphasize leveraging its existing resource strengths and capabilities, or does it need to create new resource strengths and capabilities? ff What actions should be taken to reduce the company’s competitive liabilities? Which weaknesses or competitive deficiencies are in urgent need of correction? ff Which market opportunities should be top priority in future strategic initiatives (because they are good fits with the company’s resource strengths and competitive capabilities, present attractive growth and profit prospects , and/or offer the best potential for securing competitive advantage)? Which opportunities should be ignored, at least for the time being (because they offer less growth potential or are not suited to the company’s resources and capabilities)? ff What should the company be doing to guard against the threats to its wellbeing? A company’s resource strengths should generally form the cornerstones of strategy because they represent the company’s best chance for market success. As a rule, strategies that place heavy demands on areas where the company is weakest or has unproven ability are suspect and should be avoided. If a company doesn’t have the resources and competitive capabilities around which to craft an attractive strategy, managers need to take decisive remedial action either to upgrade existing organisational resources and capabilities and add others as needed or to acquire them through partnerships or strategic alliances with firms possessing the needed expertise. Plainly, managers have to look toward correcting competitive weaknesses that make the company vulnerable, hold down profitability, or disqualify it from pursuing an attractive opportunity. At the same time, sound strategy making requires sifting through the available market opportunities and aiming strategy at capturing those that are most attractive and suited to the company’s circumstances. Rarely does a company have the resource depth to pursue all available market opportunities simultaneously without spreading itself too thin. How much attention to devote to defending against external threats to the company’s market position and future performance hinges on how vulnerable the company is, whether there are attractive defensive moves that can be taken to lessen their impact, and whether the costs of undertaking such moves represent the best use of company resources. WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ORGANISATION MANAGEMENT_V1.7 39 4. DEVELOP CHANGE MANAGEMENT STRATEGY At the end of this training session, you should be able to: ff Undertake cost benefit analysis for high priority change requirements/ opportunities ff Undertake risk analysis, identify barriers to change, and agree and document mitigation strategies Important terms to remember ff Feasibility study ff Cost benefit analysis ff Return on Investment (ROI) ff Payback period ff Risk analysis ff Mitigation strategies Undertake Cost Benefit Analysis for High Priority Change Requirements/Opportunities After making a priority list for all change opportunities identified, the first step in the development of a change strategy is to decide on the viability of the investment through feasibility study. Feasibility study is an analysis and evaluation of a proposed project to determine if it (1) is technically feasible, (2) is feasible within the estimated cost, and (3) will be profitable. Feasibility studies are almost always conducted where large sums are at stake (BusinessDictionary.com). An effective way to decide whether an investment is financially viable is through cost-benefit analyses. Cost benefit analysis is a technique designed to determine the feasibility of a project or plan by quantifying its costs and benefits. Consider this example of a cost-benefit analysis: Analysis for the co-operative venture reveals that it will cost $95,000 to implement over a one-year period and will produce no savings during that year. After that, the company will save $40,000 during the first year of implementation. For the next four years, the savings will be $20,000 per year (see Table 1). WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ORGANISATION MANAGEMENT_V1.7 40 Payback period is approximately 3 years and nine months. Years Benefits Costs 0 $– $95,000.00 1 $ 40,000.00 $95,000.00 2 $ 60,000.00 $95,000.00 3 $ 80,000.00 $95,000.00 4 $ 100,000.00 $95,000.00 5 $ 120,000.00 $95,000.00 TOTAL BENEFITS TOTAL COSTS $120,000.00 $95,000.00 Table 1. Cost-benefit totals for the co-operative venture project Formula to calculate the Return on Investment (ROI) ROI = Total Benefits–Total Costs Total Costs ROI = 120,000-95,000 95,000 ROI = 26.32% Table 2. Payback period for the co-operative venture approx 3 years and 9 months Conclusion Stakeholders may decide that this project is not a good investment due to a very low return on investment (ROI) and long payback period. ROI is expressed usually as a percentage, it is a measure of the profitability which (while not taking the time value of money into account) indicates whether or not a firm is using its resources in an efficient manner. Payback period is the length of time required to recover the cost of an investment. WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ORGANISATION MANAGEMENT_V1.7 41 Activity 4.1 ff In a group of 2-3 people or with a partner consider the following situation and discuss. ff Analysis for a co-operative venture that is being considered reveals that it will cost $75000 to establish (in year 0), and that the recurring costs for the next 3 years will be $35000 (in years 1, 2 & 3). ff There will be no benefits in year 0, but there will be $85000 worth of benefits each year in years 1 through to 3. Using the formula above, calculate the payback period and the ROI. What is your recommendation? Years Benefits Costs 0 1 2 3 TOTAL BENEFITS TOTAL COSTS The payback period is ______________________ years. The Return on Investment (ROI) is ________________%. Would you recommend it as a good investment? Justify your answer. WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ORGANISATION MANAGEMENT_V1.7 42 Undertake Risk Analysis, Identify Barriers to Change, and Agree and Document Mitigation Strategies Risk Analysis A risk is a combination of the probability that a particular outcome will occur and the severity of the harm involved. Specifically, some types of risks include: ff commercial and legal relationships (including but not limited to contractual risk, product liability, professional liability and public liability) ff economic circumstances and scenarios (can include such sources as currency fluctuations, interest rate changes, taxation and changes in fiscal policy) ff human behaviour (such as riots, strikes, sabotage) ff individual activities (including, misappropriation of funds, fraud, vandalism, illegal entry, information misappropriation and human error) ff management activities and controls ff natural events (can include fire, water damage, earthquakes, vermin, disease and contamination) ff political circumstances (legislative changes or changes in government policy) ff technology – technological issues (include innovation, obsolescence and reliability) The process of identifying risk can be made simpler through the use of tools. Risk management tools may include: ff documentation to assist in process of identifying risk, and assessing impact and likelihood of occurrence ff standard instruments developed for the organisation and contextualised for sections of the workplace’s operations, such as checklists and testing procedures ff tools to prioritise risks, including where relevant, numerical scoring systems for risks Risk assessment is a component of risk analysis, it involves identification, evaluation, and estimation of the levels of risks involved in a situation, their comparison against benchmarks or standards, and determination of an acceptable level of risk. WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ORGANISATION MANAGEMENT_V1.7 43 Risk analysis is a component of risk management, it consists of (1) Identification of possible negative external and internal conditions, events, or situations, (2) Determination of cause-and-effect (causal) relationships between probable happenings, their magnitude, and likely outcomes, (3) Evaluation of various outcomes under different assumptions, and under different probabilities that each outcome will take place, (4) Application of qualitative and quantitative techniques to reduce uncertainty of the outcomes and associated costs, liabilities, or losses. Risk management are the policies, procedures, and practices involved in identification, analysis, assessment, control, and avoidance, minimisation, or elimination of unacceptable risks. To manage risk, a firm may use (or combination of) strategies such as risk retention, risk avoidance and/or risk transfer (BusinessDictionary 2010). Risk Management Context The context for risk management is the strategic and operational context against which the risk management process in the company will take place. Criteria against which risk will be evaluated and measured should be established and the structure of the risk analysis process defined. The strategic part of risk management includes identifying the direction the business is heading and the risks of not achieving business goals. For example, risk management may be applied on a particular project/s of the organisation. It could be applied to a certain investment, or marketing/growth strategy the business is planning. The operational aspect of risk management includes the daily operations of the business including human resources, product/service delivery, stakeholder and financial management (Small Business NSW n.d). For example, it could include assessing the risk of not providing training to staff. Managing risks both at the strategic and operational level gives the organisation a holistic view of the organisation’s risks. Thus risk management should be integral part of the ongoing management of the business and applied at all levels of the business. Identifying Barriers to Change Barriers to change may include: ff challenges to group norms/established roles ff existing organisational culture ff existing reward systems ff fear of loss of status, security, power, friends ff interdepartmental rivalry/conflict ff lack of involvement in the change ff low morale ff vested interests WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ORGANISATION MANAGEMENT_V1.7 44 Mitigation Strategies Strategies put in place or action taken to reduce or eliminate risk identified. Risk Documentation To manage risk, appropriate documentation is required. Who are accountable in documenting all identified risks? It is the responsibility primarily by the staff(s) conducting risk assessment. Risk assessment documentation is usually accepted, checked and reviewed by the manager and/ or supervisor. It can also be countersigned by some other relevant levels of the organisation such as when technical expertise is required. All identified risks go to the risk register. On the minimum, the risk register, treatment schedule and action plan will be maintained by the company for later review and auditing. A business needs to comply with a smorgasbord of statutory and regulatory obligations such as WHS, fair trading, anti-discrimination, environmental protection, industrial relations, taxation and any trading and license practices, legal contracts, such as those with a client, sub-contractor, insurer or supplier, insurance and financial reporting requirements (Small Business NSW n.d), including relevant policies, procedures and standards. One such relevant standard is the Standards Australia Risk Management Standard, AS/NSS 4360:1999 – Risk Management. In compliance to the standard, businesses are required to: ff establish a risk management context ff identify risks ff analyse risks ff evaluate risks ff treat risks ff monitor and review ff communication and consultation. Selected Reading 4a Read the following article to learn more about the risks of doing business in China: Austrade. (2008). Doing Business. Retrieved 14 June 2010, from http://www.austrade.gov.au/Australian/Export/Export-markets/ Countries/China/Doing-business WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ORGANISATION MANAGEMENT_V1.7 45 Activity 4.2 1. Form a group of 2-3 people. Read Selected Reading 4b. Perform a risk analysis on doing business in China. 2. Use the forms provided on the next page: WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ORGANISATION MANAGEMENT_V1.7 WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ORGANISATION MANAGEMENT_V1.7 Assets Revenue Cost People Community Performance Timing Environment Intangibles Organisational behaviour (Source: Murdoch University 2001, Risk Management Policy, viewed 19 April 2010, http://www.murdoch.edu.au/admin/policies/risk.html link not working) Individual activity Management activity & control Technology Political Natural events Human behaviour Economic Commercial and legal Source of risks Areas of Impact Activity: _______________________________________ RISK IDENTIFICATION FORM 46 Date of risk review: _______/_______/_____ WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ORGANISATION MANAGEMENT_V1.7 Risk Consequences Likelihood Adequacy of existing controls Consequence rating Likelihood rating Level of risk Risk priority (Source: Murdoch University 2001, Risk Management Policy, viewed 19 April 2010, http://www.murdoch.edu.au/admin/policies/risk.html link not working) Ref Consequences Reviewed by: ____________________ Date __/__/_____ Compiled by: ____________________ Date __/__/_____ Activity: _______________________________________ RISK REGISTER 47 WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ORGANISATION MANAGEMENT_V1.7 Possible treatment options Preferred options Risk rating after treatment Result of cost/ benefit analysis A: Accept B: Reject Person responsi- Timetable for imble for implemen- plementation tation of option How will this risk and the treatment options be monitored Reviewed by: ____________________ Date _____/____/_____ Compiled by: ____________________ Date _____/____/_____ Date of risk review: _______/_______/________ (Source: Murdoch University 2001, Risk Management Policy, viewed 19 April 2010, http://www.murdoch.edu.au/admin/policies/risk.html link not working) Risk priority order from the Risk Register Activity: _______________________________________ RISK TREATMENT SCHEDULE AND PLAN 48 49 RISK ACTION PLAN Item : Ref: Risk: Summary – Recommended Response and Impact Action Plan 1. Proposed Actions 2. Resource Requirements 3. Responsibilities 4. Timing 5. Reporting and Monitoring Required Compiler: Date: Reviewer: Date: (Source: Murdoch University 2001, Risk Management Policy, viewed 19 April 2010, http://www.murdoch.edu.au/admin/policies/risk.html link not working) WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ORGANISATION MANAGEMENT_V1.7 50 Activity 4.3 1. Watch the YouTube video to see an example of implementing change in the workplace: http://www.youtube.com/watch?v=bG5na7JD7rE 2. Watch the YouTube video regarding implementing a risk assessment framework http://www.youtube.com/watch?v=T5aPT-TSxCE Review Questions 1. What is a cost-benefit analysis? 2. What is ROI and payback period and explain why they are useful when performing cost-benefit analysis? 3. What is risk analysis? 4. Give some examples of change barriers. 5. Give examples of mitigation strategies. WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ORGANISATION MANAGEMENT_V1.7 51 Selected Reading 4c Small Business NSW n.d, Risk management, viewed 14 June 2010, http://www.smallbis.nsw.gov.au/start/legalcompliance/ riskmanagement/Pages/default.aspx Skip to main content Email page Print page Small Business NSW The New South Wales Government information website for people starting, running or growing a small business. Small Business Tool Kit Home Start a business RISK MANAGEMENT Home Run your business Start a business Ausinvent Contact Us Grow your business Legal & compliance Subscribe to e-newsletter Help with exporting Enter keywords Specific Initiatives About Us Risk management RESOURCES Early stages Finance & cashflow Legal & compliance Risk management Types of risk Why manage risk? Categories of risk Risk management NEWS Risk is a part of everyday life. In business, Risk can be defined as the chance of something happening that will impact upon objectives. There are many types of risk that will be encountered in business, and business owners choose to take risks every day. Some risks will have a minimal impact and are easily managed. Other risks can threaten the longevity of a business. Good governance practice Many business owners rely on experience and intuition to manage risk. However, the more complex the business, the more important it is to identify risks that may prevent a business from realising its potential. Human resources management Understanding the principles and processes of effective risk management will help a business owner make the decisions necessary to ensure the best possible outcomes for the business. Statutory and regulatory compliance What is risk management? Legal considerations ATO compliance ACCC compliance ASIC compliance Insurance HR & employee management Marketing & sales Glossary of business terms Risk management is the way that adverse effects are managed and potential opportunities realised. EVENTS Important Risk management should be integral to the ongoing management of a business and applied at all levels of a business. How do you do business online? Take our survey. Risk management involves: understanding what the risks are and the potential impacts minimising negative impacts identifying and harnessing activity that achieves the goals and objectives of the business. While it is impossible to predict all negative outcomes for a business, risk management can help an owner to prepare for adverse events. The limitations of risk management should be clearly recognized by the business owner and/or management team. Who should use risk management? Risk management is the responsibility of anyone operating a small business. Accountability for management of risk cannot be outsourced or delegated. Ultimately, the business owner will remain accountable for their risk decisions. So there should be a clear definition of the level of risk the business will accept and who makes that decision. The business owner should oversee the management of all risks, particularly those that are significant. Risk management should be integral to the ongoing management of a business and applied at all levels of a business. There are two levels in the management of a small business: strategic – including identifying business requirements and the direction the business is taking operational – daily running of the business including human resources, product/service delivery, stakeholder and financial management. Risk management should be applied at both levels. NSW Government Industry & Investment NSW business.nsw.gov.au Privacy Terms of use Site Map WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ORGANISATION MANAGEMENT_V1.7 52 Selected Reading 4d Austrade. (2008). Doing Business. Retrieved 14 June 2010, from http://www.austrade.gov.au/Doing-business-in-China/default. aspx About News Contact Log-in Join Site Search Find your nearest Austrade office Please select... Please select... You are here: Home Export Export Markets Countries China Doing business Doing Business Doing business China (Last updated: 4 Feb 2008) Austrade Market Monitors Current business situation Beyond the Financial Crisis: China, November 2009 Country overview business (LastDoing updated: 4 Feb 2008) Tariff and non-tariff barriers Current Business Situation Product certification, labelling and packaging Methods of quoting and payment The Department of Foreign Affairs and Trade (DFAT) provides advice for business travellers and tourists going to China. This is regularly updated, and should be Austrade’s global network has the expertise to monitor international business conditions and provide advice to business. This brief is one tool to help businesses manage risks and leverage opportunities. checked before planning travel. The Department of Foreign Affairs and Trade (DFAT) provides advice for Documentary requirements Current environment for foreign products imported into business travellers andmainland tourists going to China. This is regularly updated, and In-market representation China shouldTaxation be checked before planning travel. Recent incidents involving tainted food products in China has brought attention to Intellectual property both domestically produced and imported food products and food ingredients. As a result Chinese authorities are increasing the monitoring of safety and quality of both imports and exports, and rigidly enforcing requirements and regulations. Shanghai World Expo 2010 Current Environment for Foreign Products Imported into Mainland China Setting up in China Visiting China Multimedia News Exporters should expect increased inspection and testing by Chinese authorities of products imported into China, and a more inflexible approach to regulatory issues by the local authorities. Australia will have a significant national presence at the Shanghai World Expo 2010 from May to October 2010. Events Recent incidents involving tainted food products in China has brought attention The Australian pavilion will provide This applies to all imported product categories and is expected to continue well into Success stories a unique platform to help 2009. to both domestically produced and imported food products and foodbusiness, ingredients. strengthen cultural and Austrade contacts people to people links with China. Exporters of products are intended increasing for human consumption (adult and infant, final It host a 'business program' of As a result authorities the monitoring ofwill safety and Shanghai WorldChinese Expo 2010 over 200 events including targeted processed product as well as ingredients) are particularly encouraged to pay extra seminars, high-level official regulations on products/ product categories applicable to quality of both importsattention andto Chinese exports, and rigidly enforcing requirements andvisits, business networking events and products allowed for import into China and ensure that all documentary Profiled industries in trade and investment promotion requirements are met. regulations. activities. Read more. this market In the event of a market entry issue incident occurring, exporters are advised to seek Automotive to China assistance from their appointedinspection local importers to try resolve the issue with local Exporters should expect increased and testing by Chinese authorities authorities (i.e. CIQ) at the point (city/port) where the incident has occurred. Biotechnology to China Scams of products imported into China, and a more inflexible approach to regulatory Building materials to China Exporters are strongly advised to ensure that their local importer/representative has Australian companies need to be applied for and been granted all relevant approvals and import permits from the issues by the local authorities. Education to China aware of scams operating in some Environmental technologies to China relevant Chinese authorities prior to making any plans for product dispatch or order fulfilment for the China market. parts of China. Read more . This applies to all imported product categories and is expected to continue well Once all relevant approvals and import permits have been granted by the Chinese Food and beverage to China authorities, Australia exporters can work with their official shipping and logistics into 2009. Green building to China contractor on ensuring all documentation is prepared and accurate. Exporters can ICT to China seek advice from the relevant Australian government representatives on specific product requirements for specific export markets. Exporters of products intended for human consumption (adult and infant, Infrastructure and construction to China Advance manifesting to be enforced 1 January final processed product as well asrule ingredients) are2009 particularly encouraged Marine to China Exporters are advised to check with their logistics carriers regarding China Customs product categories to payMining extra attention to Chinese regulations on products/ to China upcoming introduction of a new rule on advance manifest reporting (Decree No. effective as of 1st January 2009. applicable allowed for import into China and ensure that all Music to Chinato products 172), Visual arts to China Decree No 172 has been published by China Customs on its official website documentary requirements are met. (Chinese language only) since March 2008. International shipping and logistics companies should have information available and be able to advise their customers on how to meet requirements new rule. In the event of a market entry issueof this incident occurring, exporters are advised The new measureappointed will require shippers and local carriers to fileimporters shipping manifests up toto try resolve the issue to seek assistance from their 24 hours prior to lading onto carriers departing and destined for China. This may entail significant changes to shipment process for all cargo that are loadedwhere on with local authorities (i.e. CIQ) at the point (city/port) the incident has vessels at foreign ports destined for ports in China, as well as cargo that are loaded at ports in China for exports. occurred. The rule requires that shippers and carriers, freight forwarding agencies and organisers to be responsible for manifest reporting process at both foreign Exporters are stronglylogistics advised to ensure that their local importer/representative has applied for and been granted all relevant approvals and import permits from the relevant Chinese authorities prior to making any plans for product dispatch or order fulfilment for the China market. WORKBOOK | © 2018 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE BSB61015 ADVANCED DIPLOMA OF LEADERSHIP AND MANAGEMENT | ORGANISATION MANAGEMENT_V1.7 53 Once all relevant approvals and import permits have been granted by the Chinese authorities, Australia exporters can work with their official shipping and logistics contractor on ensuring all documentation is prepared and accurate. Exporters can seek advice from the relevant Australian government representatives on specific product requirements for specific export markets. Advance Manifesting Rule to be Enforced 1 January 2009 Exporters are advised to check with their logistics carriers regarding China Customs upcoming introduction of a new rule on advance manifest reporting (Decree No. 172), effective as of 1st January 2009. Decree No 172 has been published by China Customs on its official website (Chinese language only) since March 2008. International shipping and logistics companies should have information available and be able to advise their customers on how to meet requirements of this new rule. The new measure will require shippers and carriers to file shipping manifests up to 24 hours prior to loading onto carriers departing and destined for China. This may entail significant changes to shipment process for all cargo that are loaded on vessels at foreign ports destined for ports in China, as well as cargo that are loaded at ports...
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