What is Business Management?

A
Using information about organization in business environment to reinforce expectations,
influence decision making, and avoid risks.

What is a Vision Statement?

A
● Inspirational & aspirational

● Future-focused on organization

Ex) Company’s vision is to invent an innovative product & launch it globally in 5 years

What is a Mission Statement?

A
The present, processes, and customers

Ex) Company’s mission is to open an office in NYC before the end of year.

Strategy - Combination of Short & Long-Term goals to achieve mission.

● Policies & Procedures for company

● Contract with client

Must be balanced with business needs and legal requirements

Company’s Strategic Plan

ARoadmap for company to achieve its mission and vision

What are Values?

A
 ● Define Ethics

● Code of Conduct (Behavior)

● What’s important to your company & what sets you apart

Ex) Think about your own life & what’s important - honesty, integrity, compassion, and

kindness

1) Mission: Create policies & procedures for the company

If you misunderstand the mission, you might create something that is misaligned.

Ex) You were entered into a contract with a client to complete work at a specific time

so you hired 30 people in 30 days. Job requirement is to post jobs internally 10 days

before recruiting externally. There needs to be a balance between legal requirements

& business needs.

2) Company Strategy: HR helps organization achieve its strategies through its people.

Ex) When HR creates strategy, it’s critical that it needs to be aligned with overall

company strategy and buy in of leadership.

3) Work in HR is to bring company’s value to life.

Ex) Ethics is doing the right thing when no one is watching. Ethics & global

compliance training is assigned every year so values kept top of mind. HR is a safe

place to share concerns and values not just conversational, they are the fabric of our

organization.
What is Ethics?

HR ensure policies and procedures also include compliance. We understand policies,

write them, and must always hold ourselves to the highest standards of ethical behavior.

Phrase - “Walk the Talk”

We can’t credibility ask people to comply if we are not willing to consistently model what

that means.

The most important investment you can make is yourself - Warren Buffett

What is an Organization?

A group of individuals united around a specific purpose, engaged in the pursuit of

achieving a set of common goals

What is Human Capital?

The value added to an organization by skills, knowledge, and talent of its employees

What is the role of Human Resources?HR maximizes the value added to the

organization by its employees

How does HR fulfill its role?Through staffing, they are responsible for ensuring positions

are filled in a timely manner and people are a good fit for the organization.

What are some of HR’s functions?1) HR must have a thorough understanding of the

organization’s vision, mission, goals, and objectives

2) HR functions include compensation and benefits, compliance, employee relations,

recruitment, and safety.

3) HR could be responsible for the acquisition of new technology, design and

implementation of rewards programs, employee development opportunities, as well as

increasing employee engagement and innovation

what is the Adamson Act 1916?US Federal Law passed in 1916 that established an 8

hour workday with additional pay for overtime for interstate railroad workers.Enacted by

the 64th US Congress

What is the Scientific Management Theory of 1911?Fredrick Taylor believed efficiency

is achieved by matching a motivated worker with a job that utilized his or her individual

capabilities.The best way to motivate employees was through money.

Who was known for the Scientific Management Theory?Fredrick Taylor

QWhat is the Fair Labor Standards Act (FLSA) 1938?US Labor Law that created the

right to a minimum wage, and “time-and-a-half” overtime pay when people worked over

40 hours a week.

FLSA also prohibits child labor.

What was the Equal Pay Act of 1963?

Required organizations to ensure all employees were treated equally.

US Labor Law amending the Fair Labor Standards Act, aimed at abolishing wage

disparity based on sex. It was signed into law on June 10, 1963, by John F. Kennedy as

part of his New Frontier Program.

What was the Civil Rights Act of 1964?

US civil rights and labor law that outlaws discrimination based on race, color, religion,

sex, national origin, sexual orientation and gender identity.

What is the Internal Revenue Service (IRS)?Defines business entities based on who

owns and is legally responsible for a business.

Ex) How taxes are paid, how business losses are deducted, and who is liable for the

business’ actions and debts

What is a Sole Proprietorship?

Businesses with a single owner who is solely accountable for the business.Income is

reported as personal income and subject to self-employment taxes.

What is a Partnership?When two or more people share ownership of a business

entity.The business itself is not subject to income tax. Income as personal income tax

and are responsible for self-employment taxes.

What is a Corporation?A corporation is owned and funded by shareholders through the

sale of stocks.Corporation is responsible for taxes, debts, and its actions. They are also

subject to taxes on profits andincome taxes on their distributed shares of profits.

What is a Limited Liability Corporation (LLC)?LLC offers owners the liability protection of

a corporation without requiring the sale of stocks.Report share of earnings as personal

income tax and are subject to self-employment taxes.A few states require at least two

members to grant an LLC designation.

What is an S-Corporation?

AS-Corporation is owned by shareholders who have individual tax liability for the

business, akin to a partnership.

Report their share of the corporation’s profits and losses on their personal income

taxes. Business itself is not taxed on profits.

25What is a Business Element?Key components of an organization

What are the 5 key components of an organization?

A1) Products/Services

2) Competitors

3) Customers/Clients

4) Technology Use

5) Organizational Culture

What is an Organizational Culture?An organization’s culture is formed by its values,

beliefs, and actions.An organization that identifies giving back as a core value and

provides opportunities for employees to volunteer or matches donations, is creating a

culture of giving.

34What is Technology Use?

AThe way an organization chooses to incorporate technology impacts everything from

product fulfillment and customer experience to employee development and payroll.As

technology continues to advance, organizations must adapt and evolve with it.

35What are the organization’s Internal Functions and Departments?

A

1) Production (Operations)

2) Information Technology (IT)

3) Marketing

4) Accounting

5) Research & Development (R&D)

36What is the role of Production?

AAlso known as Operations or Supply Chain Management makes the organization’s

product.Production involves understanding organizational capacity, monitoring

inventory, creating a production schedule based on peak times or seasons, ensuring

quality, and controlling the cost of production.

How can HR motivate collaboration with cross-functional stakeholders?

AThrough rewards such as acknowledgement, bonuses, and wages

What is an Organizational Chart?

A chart that shows 4 distinct dimensions of the organizational structure.

1) Reporting Hierarchy

2) Labor Division

3) Control Span

4) Line and staff positions

QWhat is the role of a Labor Division?

ADepicts who is responsible for different tasks within an organization. It clarifies which

teams or employees are accountable for which processes.

Ex) New employee orientation is the responsibility of HR while in others there is a

training department that may handle it instead.

What is the role of a Control Span?AEstablishes how many employees are supervised

by a single manager.

What are Staff Positions?

Responsible for advisory or support functions, including HR, IT, and Accounting. They

are depicted using a dotted line.

Positions that support the organization directly by generating revenue, such as sales,

production, and marketing positions are represented by a solid line on an organizational

chart.

What is a Clear Line of Authority?

Referred to as a traditional structure

What are the 4 Traditional Structures?

The most common traditional structures are functional, divisional, matrix, and hybrid

structures.

What is a Functional Structure?The most common organizational structure is a

functional structure which facilitates specialization.

Ex) HR, Finance, Marketing, Sales, Production

What is a Divisional Structure?Departments or divisions are based on product market or

industry.This structure benefits organizations with multiple products or services that

require distinct support.AKA Geographic Structure

What is a Matrix Structure?

A combination of functional and divisional structures, a matrix structure facilitates cross-

functional resource sharing and collaboration.In a matrix structure, employees typically

report to a functional as well as a division manager.

What is a Hybrid Structure?

AA hybrid structure combines specific components from other structures into a unique

organizational design.An organization with a hybrid structure may utilize a functional

structure for HR and finance, while also having divisional product specific departments.

What is Human Capital Management?Strategies for recruiting, developing, managing,

and retaining employees.

What is an Organization’s Philosophy?

ASet of beliefs or attitudes that act as guiding principles for an organization

Who are the 4 well-known business theorists?

A
1) Michael Porter

2) Henry Mintzberg

3) Edgar Schein

4) Geert Hofstede

What was Henry Mintzberg known for?

Thought leader who proposed that there are 5 distinct types of management strategy:

plan, pattern, position, perspective, and ploy.

Business strategy needs to allow for change & fluidity to succeed.

What was Edgar Schein known for?

A

Organizational Development expert who created an organizational culture model that

identifies 3 distinct layers to the culture within an organization: behaviors & artifacts,

stated or espoused values, and basic underlying assumptions.

The values in an organization that exert the greatest influence over its culture may be

subconscious.

What was Geert Hofstede known for?

Social psychologist whose model of dimensions of national culture can be used to

illuminate organizational culture: dimensions are distribution of power, tolerance for

uncertainty, individual versus collective, long-term orientation, and restraint versus

indulgence.
Organizational culture is best understood by evaluation of its practices, values, and

preferences.

What was Michael Porter known for?

Porter’s 5 Forces - framework for understanding level of competition within a given

industry.

The greater the intensity of a force, the more competitive the industry.

An effective business strategy must address 5 forces that influence industry

competition.

What are Porter’s Five Forces?

A

1. Potential for New Competitors

2. Supplier Power

3. Customer Power

4. Substitute Product Threat

5. Industry Rivalry/Competition

What is the Potential for New Competitors?

Aka Threat of New Entrants.

This force refers to the potential for new businesses to join the industry.

The intensity of this threat is determined by how easy or hard it is to enter the industry.
Relevant factors include the amount of up-front capital necessary, the need to create a

unique product, the cost of switching industries, as well as the distribution channel and

supply access.

What is Supplier Power?

Refers to the bargaining power of industry suppliers or vendors.

Determined by whether an organization has the option to obtain supplies from multiple

vendors.

In industries with few suppliers, those suppliers have greater bargaining power because

organizations have limited options.

10

Q
What is Customer Power?

Refers to the bargaining power of industry customers.

The intensity of this force is determined by how easy or difficult it is for a customer to

purchase a similar product across the industry.

Customers wield significant bargaining power and competition increases.

11

What is Substitute Product Threat?

Refers to the availability of alternate products that are capable of fulfilling the same

customer need.
Substitute product may be from a different industry entirely. Ex) Online news substitute

for physical newspaper.

When the intensity of this threat is high, the existing product may become obsolete.

12

What is Industry Rivalry/Competition?

Refers to the intensity of competition or rivalry among organizations within the same

industry.

Common tactics for attracting customers involve promotions, introduction of new

products & services, and lowering prices.

When the intensity of this force is high, organizations that focus entirely on “beating”

their competition may decrease profits by excessively lowering prices.

13
Q

What are the 5 distinct types of management strategy?

1. Plan - Closest to the strategic planning process, this strategy involves

outlining and following specific steps to accomplish a set of predetermined

goals.

2. Pattern - This strategy occurs when past actions and behaviors are viewed

retrospectively and a pattern emerges that varies from the stated intent.

3. Position - Involves locating an organization as it is situated in relation to

customers, stakeholders, and competitors.

Relies on external factors as the determining factors in strategy.

4. Perspective - This strategy relies on an underlying theory or ideology about

the organization that guides strategic decision making.

5. Ploy - Designed specifically to best the organization’s competition.

14

Q
What did Henry Mintzberg state about managers?

Importance of recognizing that managers are not inherently leaders and leaders are not

inherently managers.

Effective managers must be able to lead and effective leaders must be able to manage.

15

What are the 3 distinct layers to the culture within an organization? (Pyramid)

1. Behaviors & Artifacts

2. Stated Values

3. Basic Underlying Assumptions

These layers correlate to the behaviors and actions of an organization, the values an

organization espouses, and the values that are assumed but not formalized.
16

What are behaviors and artifacts?

Cultural artifacts comprise the observable characteristics of an organization’s culture.

“What they do”

Ex) Office décor, furniture, codes of conduct, and dress codes. Dress codes are

determined with heavy input from HR.

Behaviors and artifacts are not only visible to employees, but are also externally visible.

Most readily recognized.

17

What are stated values?

A

Formally codified values — what an organization says it believes and how it makes

those beliefs public.

“What they say”

They are usually expressed in a mission statement, vision statement, and organizational

goals. These values are intended to guide the decisions and behaviors of the

organization as well as the employees within it.

18

What are basic underlying assumptions?

Every organization has underlying assumptions about how the world is and how it ought

to be that largely manifest as unconscious behavior.

“What they believe”

Assumptions form the organization’s culture and drive management behaviors including

interpersonal relationships, what results in disciplinary action, and what garners

rewards.

19

What are the 5 dimensions of national culture?

1. Distribution of Power

2. Tolerance for Uncertainty

3. Individual vs. Collective

4. Long-Term Orientation

5. Restraint vs Indulgence

Geert Hofstede acknowledged that his dimensions of national culture can provide

insights to organizational culture. Culture change is a slow process influenced by

external and internal forces.

20
Q

What is Distribution of Power?

Aka power distance. Refers to the level of equality within a culture.

Organizations with a large power distance likely follow a hierarchal structure and have

significant disparities of responsibility and pay between entry level employees and

executive leadership.

21

What is Tolerance for Uncertainty?

Aka uncertainty avoidance. This dimension refers to how well a culture adapts to

ambiguity and uncertainty.

An organization that is highly structured with rigid rules and established standard

operating procedures has a low tolerance for uncertainty.

An organization that prioritizes creativity and innovation over structure and rule-following

has a high tolerance for uncertainty.

22

What is Individual vs. Collective?

This dimension refers to whether a culture values the group over the individual or the

individual over the group.

An organization that encourages employee autonomy and independence values

individualism.

An organization that is more collaborative in nature and encourages loyalty values

collectivism.
23

What is Long-Term Orientation?

An individual with short-term orientation values freedom and autonomy. They are

adaptable and work well in fast-paced environments.

Long-term-oriented individuals will make concessions and sacrifices in service of a long-

term goal. They often have significant self-discipline and work well in organizations with

multi-year plans.

24

What is Restraint vs Indulgence?

A
This dimension refers to the level of need for instantaneous results or rewards within a

culture.

Individuals with high restraint can suppress their desire for gratification.

Indulgence oriented individuals have a strong need for instant gratification.

25

Which of the following HR practices is likely to be used by an organization following a

differentiation strategy?

Knowledge-based pay.

Differentiation strategy relies on being able to set organization and its products apart

from the competition. More expertise employees have, more value they bring to an

organization.

26
Q

What are the 4 types of leadership?

1. Delegated

2. Authoritarian

3. Democratic

4. Transformational

27

Who identified 3 type of leadership styles?

Social Psychologist, Kurt Lewin

28

Q
Who later identified the 4th type of leadership style?

James Downton & Bernard Bass

29

What is a Delegated Leadership?

A leadership style that allows employees a high level of independence and autonomy

(freedom).

Ex) Managers use this style as “hands-off” and offer minimal guidance for employees.

Style works well with employees who are self-directed, creative and experienced.

30

Q
What is a Authoritarian Leadership?

Aka Autocratic leadership is effective when decisions must be made quickly with little

deliberation.

It is the least effective leadership style of the 4.

Ex) Managers hold all the decision-making power and rarely consults with their

employees.

31

What is a Democratic Leadership?

Opposite of delegated & authoritarian leadership.

Democratic leadership will consult with their employees about decisions and offer

guidance as needed.

Ex) This type of leadership style can make employees feel empowered and valued, but

can result in slow-decision making process.

32

What is a Transformational Leadership?

Transformational leadership focuses on helping employees reach their potential and

empowering them to take personal responsibility for the work they do.

Ex) Managers with this style are usually respected and trusted. They inspire employee

engagement and often increase productivity.

33

Q
What are the 4 functions of management?

1. Planning

2. Organizing

3. Directing

4. Controlling

34

What is Planning?

Planning begins with the determination of organizational goals.

Ex) An effective manager should be able to anticipate potential challenges and chart a

course of action with them in mind.

The course of action should include specific steps as well as milestones for review and

revision as needed.
35

What is Organizing?

Managers are responsible for organizing resources — human, financial, and physical —

to accomplish team and organizational goals.

Ex) This involves organizing tasks and responsibilities and then assigning them to

employees.

Managers need to be able to offer guidance and delegate authority.

36

What is Directing?

A
Directing or leading is the process of motivating employees. It requires strong

communication skills and may also necessitate using managerial authority.

Another function is supervision, observing employee performance and offering input for

improvement as needed.

37

What is Controlling?

Controlling can also be understood as evaluating.

Ex) It is the process of monitoring progress toward organizational goals. This involves

measuring actual performance against expected performance.

38

This involves the process of motivating employees.

A

Directing or Leading

39

The role of a manager is to support employee growth.

Transformational Leadership

40

Employees should have a significant amount of autonomy.

Delegated Leadership
41

This is the managerial responsibility of assigning tasks to employees or groups.

Organizing

42

What is Regrettable Attrition?

Voluntary turnover of high-performing or high-potential employees that negatively

impacts the organization.

43

Q
What is a Bias?

Bias refer to a pre-determined or underlying prejudiced in favor or one thing over

another. A preference or idea.

44

What are the 5 common biases?

1. Anchoring

2. Confirmation

3. Commitment

4. Framing

5. Overconfidence

45

Q
What is Anchoring Bias?

The tendency to give more credence to initial information and jump to conclusions.

The first piece of data received can make it very difficult to consider other data

accurately.

Ex) You never get a second chance to make a first impression.

The best way to combat anchoring bias is with a slow and intentional decision-making

process.

46

What is a Bias?

Bias refer to a pre-determined or underlying prejudiced in favor or one thing over

another. A preference or idea.

47

What is Commitment Bias?

When a decision has been made and evidence indicates it was a mistake, the tendency

to insist on continuing anyway.

Aka Escalation-of-Commitment

People often become more invested in the decision than they were initially with this

bias.

To combat this bias, you should have someone other than the decision maker evaluate

the decision.

48

What is Anchoring Bias?

A

The tendency to give more credence to initial information and jump to conclusions.

The first piece of data received can make it very difficult to consider other data

accurately.

Ex) You never get a second chance to make a first impression.

The best way to combat anchoring bias is with a slow and intentional decision-making

process.

49

What is Confirmation Bias?

Occurs when you have a predetermined idea and actively look for information that

supports and confirms your belief.

Contradictory data is ignored or rejected. It

can be extremely difficult to make unbiased decisions, however you can avoid

confirmation biases by actively seeking out opposing viewpoints and be open to the

possibility of changing your initial belief.

50

What is Commitment Bias?

When a decision has been made and evidence indicates it was a mistake, the tendency

to insist on continuing anyway.

Aka Escalation-of-Commitment

People often become more invested in the decision than they were initially with this

bias.

To combat this bias, you should have someone other than the decision maker evaluate

the decision.
51

What is Framing Bias?

This bias occurs when someone makes a decision based entirely on how something is

presented.

It is common with impulsive or hasty decisions when there has not been time to

consider relevant information.

Ex) Buying a particular brand of something because it’s advertised as the best without

trying other brands.

52

What is Over-Optimism Bias?

A
Aka overconfidence bias, occurs when you treat estimates, forecasts, or your own

predictions as inevitable.

Ex) You may miss early indicators of risk and neglect to plan for potential outcomes

beyond the one you anticipate.

To avoid this, you should review information sources with critical eye and considering

asking colleague to gather supplmentary data.

53

What is Evidence-Based Decision Making (EBDM)

A strategy to avoid decision-making biases

a process that can be learned.

Relies on objective facts and research-based data in the decision-making process.

Effective with day-to-day decisions and long-term strategy decisions.

54

What are the 4 step approach of the EBDM?

1. Define - Identify situation

Goal is to gain a clear understanding of the present concern and determine

what is known vs. what is unknown.

2. Research - Seek out information (evidence) from experts. May involve doing

research or speaking with internal/external sources. Information is gathered

and serve as the evidence in EBDM.

3. Review - Critically review evidence to determine relevance and reliability. Ask

stakeholders for feedback.

4. Aggregate & Integrate - evidence is weighed against itself to determine best

course of action.

5. Take Action - Make the decision not on opinion, perspective or bias, but on

evidence alone.

55

Q
What is Brainstorming?

The most commonly used strategy for group decision making.

Encourages ingenuity and innovation.

Establishing rules and guidelines can help ensure the brainstorming session is

productive and stays on track.

56

What is Delphi Technique?

Relies entirely on questionnaires and surveys administered online.

The data from these sources is aggregated by the group leader and distributed to

participants with follow-up comments and questions.

Process repeated until consensus is reached. Participants do not meet and can be

located anywhere in the world.

57

How can HR influence decision-making to leadership?

Tips for communicating the value of HR input with leadership include: establishing HR

support for its goals, utilizing evidence-based decision making, and acknowledging past

and current HR contributions.

1. Establishing HR support: Clearly stating HR support for executive goals

establishes that both groups are working toward the same outcome.

Reiterate support for long-term strategic goals and identify how current decision relates

to them.
 2. Utilizing Evidence-Based Decision Making: Relying on evidence-based

decision making helps to take emotions and biases out of the decision-

making process.

3. Acknowledging HR Contributions: Remind leadership of the many ways that

HR and human capital management have added value to the organization.

Explain any programs or processes HR has already established that may support goal.

58

What type of leadership is most effective where decisions are nonroutine and do not

need to be made rapidly?

Participative

59

Q
Redoubling efforts to continue a course of action that is not producing the desired

outcome is an example of:

Commitment Bias

What are the different factors that will require organizational change?

1. Size and maturity of the organization

2. Employee participation in strategic planning process

3. Impact of the change on employee’s daily work

The most significant factor is the organization’s overall change readiness.

What are Change Agents?

A
Any person or department within an organization that intentionally initiates change.

What was Kurt Lewin famous for?

Social psychologist who formulated a three-step model for implementing change.

His goal was to identify the process by which entities change.

What are the 3 stages of Lewin’s change model?

1. Unfreezing

2. Changing
 3. Refreezing

What is Lewin’s three-stage model?

A model for implementing change and explaining what compels an entity to change: 3

stages - unfreezing, changing, and refreezing.

What is Unfreezing?

The 1st stage of Lewin’s model. It involves preparing for change and influencing

conditions to favor change.

Intentional disruption of status quo. Identifying shortcoming of current condition

establishes need for change and encourages people to be open to new ways of doing

things and create incentive for change.

What is Changing?

The 2nd stage of Lewin’s model. When changes are made.

Ex) New programs may be adopted and employees receive necessary training on new

processes. Resistance to change may occur during this stage, making clear and

effective communication critical.

What is Refreezing?
A

The last stage of Lewin’s model. Consists of establishing a new status quo. There is a

risk of employees going back to doing things how they did them before in response to

any difficulty.

What is a systems?

Refer to the people, procedures, and ideas that co-exist within the organization and are

responsible for its functioning.

A systems approach to change management is a holistic approach that recognizes the

interconnected nature of various systems within an organization.

Any changes that occur anywhere within the system will cause a shift in other areas of

the system.
The approach is an attempt to predict and manage the inevitable changes that ripple

through the organization during the change process.

Utilizing systems approach can help reduce the number of unintended consequences of

new processes or procedures.

10

Who is Peter Senge?

A scientist and an esteemed thought leader in the field of systems thinking.

He believed that organizations are best understood as a single entity with numerous

interconnected components.

The most successful organizations are those who welcome and actively pursue change.

11

Q
What are Learning Organizations?

Continually gathering new knowledge and gaining new insights which drive and inform

changes.

They adapt and evolve in response to successes as well as failures.

12

Describe actions that occur during the change process. Arrange Kurt Lewin’s change

model.

1. Employee buy-in

2. New process trainings

3. Positive reinforcement

13
Q

What is McKinsey’s 7-S Model?

A model that demonstrates the interconnectedness of key organizational elements:

structure, strategy, systems, skills, staff, style, and shared values.

14

What are the Hard S elements?

1. Structure

2. Strategy

3. Systems

Tangible or organizational in nature.

15

What are the Soft S elements?

1. Skills

2. Staff

3. Style

4. Shared Values

All HR or derived from people within the organization.

16

What is Strategy?

A
Refers to organization’s the long-term plan to achieve strategic goals in alignment with

its stated mission, vision and values.

The strategy should be evaluated considering all seven elements.

17

What are Systems?

They are the daily and decision-making functions within an organization.

Element that defines how an organization functions.

18

What are Skills?

A
Encompasses the skills, competencies, abilities, and capabilities of the employees

within the organization.

When implementing change, current employee skills need to be evaluated against the

skills necessary for any new processes.

19

What are Skills?

Encompasses the skills, competencies, abilities, and capabilities of the employees

within the organization.

When implementing change, current employee skills need to be evaluated against the

skills necessary for any new processes.

20

Q
What is Staff?

Refers to labor needs such as the number and type of employees needed by the

organization.

Staff recruitment, training, motivation, and rewards are all components of the staff

element.

21

What is Style?

Specifically about the leadership style of managers and other leaders within the

organization.

Encompasses how organizational leaders interact with one another as well as the tone

they set for the organization through their actions and behaviors.
22

What are Shared Values?

Also referred to as core values, they are the standards and expectations of behavior as

well as organizational actions.

23

What was John Kotter known for?

Knotter’s 8 steps - expanded change model

24

Q
What are Kotter’s 8 steps?

1. Establish urgency: Identify and articulate the need for change within an

organization to establish buy-in from the employees.

2. Create the guiding team: Determine which organizational leaders and key

stakeholders possess the authority and influence to spearhead the change

effort. An ideal coalition will include diverse members from a variety of

organizational departments and levels.

3. Create a vision and develop a strategy: The vision articulates the reason

behind the change. The strategy delineates how the change will be

implemented.

4. Share the change vision:

A communication strategy is created to ensure employees understand and

become familiar with the vision.

5. Empower employees to act: All too often creative employees within an

organization face obstacles preventing them from acting. In this step,

challenges are removed and rewards may be introduced to motivate

innovation.

6. Make short-term wins possible: It’s hard to stay motivated to achieve a long-

term goal. Identifying milestones that can be used as targets or goals is a

great motivation tool.

 7. Build on change momentum: Leverage the short-term wins to rejuvenate

aspects of the change process than may have stalled. Short-term wins may

also encourage engagement from previously resistant employees.

8. Anchor the change: The purpose of this step is to establish the new

processes or behaviors continue. It can be helpful to make clear connections

between the change and recent successes.

Kotter’s model is one of the most popular change management theories.

25

What are the 5 change strategy?

1. Directive

2. Expert

3. Negotiating

4. Educating

5. Participative
26

What is Directive Change Strategy?

Similar to directive leadership style. The power resides with the manager. Insights

gained from diversity of perspectives are lost. Employees may become resentful their

voices are not being heard.

27

What is an Expert?

They will bring a new perspective to the change management process. An organization

may choose to hire an outside consultant with expertise in change strategy and

management.
Expert may miss or misunderstand organizational distinctions and nuances.

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What is Negotiating?

This change strategy involves individuals within the organization.

Negotiating change strategy is an option to consider when the new changes results in

resistance.

Offering incentives to accept and embrace change. Strategy may cause change

implementation to take longer than other strategies.

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What is Educating?
A

A change strategy based on education will likely take longer to gain buy-in than some of

the other strategies.

As employees are educated on the purpose for the change they can become more

committed than they would have been with a different strategy.

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What is Participative?

This change strategy involves all individuals who will be affected by the change. There

are many diverse views and perspectives are considered before making a final decision.

This approach tends to be the most effective change strategy.

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Q
The most successful change management strategy is one that emphasizes:

Shared authority

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All the following are items in the McKinsey 7-S model except:

Services

In transforming the focus of an organization from product to customer, the HR Director’s

primary role is to ensure that: Aemployee communications, training, performance
reviews, and rewards are properly aligned.