Preview
IB DP Business Management — Unit 5: Operations Management | SL | 5.7 Management of Change
📋 What You Will Learn
- Identify the key internal and external drivers of change that organisations face
- Explain why employees and other stakeholders resist change, using recognised theoretical frameworks
- Analyse Lewin's Three-Step Model and Force Field Analysis (HL) as tools for planning and managing change
- Apply Kotter's Eight-Step Model to a real business change scenario
- Evaluate strategies managers use to overcome resistance to change and assess their effectiveness
- Discuss the ethical and sustainability dimensions of organisational change decisions
📊 Topic Importance
| Paper | Relevance | Common Question Types |
|---|---|---|
| Paper 1 | High | Apply change models to the pre-seen company; "Recommend" a change management strategy |
| Paper 2 | High | Section C: extended response linking change management to the concept of change or ethics |
| Paper 3 (HL) | High | Analyse resistance to change in a social enterprise; justify a recommended approach using Force Field Analysis |
🔍 Guiding Question When an organisation decides it must change — its structure, its technology, its strategy — why do people resist, and what can managers do to turn resistance into commitment?
🌍 Why This Matters In 2023, Disney's CEO Bob Iger ordered a sweeping restructuring — cutting 7,000 jobs, reorganising business units, and reversing several decisions made by his predecessor — all within months of returning to the role. The speed and scale of the changes triggered significant internal resistance, with senior executives publicly questioning priorities and employees uncertain about their futures. Disney's struggle illustrates a universal management truth: deciding to change is the easy part; making change stick is the real challenge.
1. Why Change Is Inevitable
Organisations do not change for the sake of it. Change is a response to pressures — some from inside the business, some from the environment outside it. Understanding the source of pressure helps managers choose the right response.
📘 Organisational Change Any significant alteration to an organisation's structure, processes, culture, technology, or strategy that requires people to work differently. Change may be planned (proactive) or forced (reactive).
Internal Drivers of Change
- New leadership or ownership — a new CEO or acquisition often triggers strategic realignment (e.g. Elon Musk's takeover of X/Twitter in 2022).
- Poor financial performance — declining profits or cash-flow crises force cost-cutting, restructuring, or pivoting the business model.
- Workforce issues — high staff turnover, skills gaps, or low morale can prompt changes to HR practices, culture, or organisational structure.
- Innovation and intrapreneurship — internal R&D or employee ideas generate new products or processes that require operational change.
- Growth — scaling up (internal or external growth) demands new systems, structures, and management approaches.
External Drivers of Change (STEEPLE)
- Social — shifting consumer values (e.g. demand for sustainable products) force firms to adapt their offerings and supply chains.
- Technological — automation, AI, and digital platforms disrupt existing business models and create urgency to upskill workforces.
- Economic — recessions, inflation, or exchange-rate movements alter cost structures and demand patterns.
- Environmental — tightening environmental regulations and climate commitments require operational and product changes.
- Political/Legal — new legislation (e.g. GDPR, minimum wage increases) compels compliance-driven change.
- Ethical — public scrutiny of labour practices or environmental impact can force businesses to change before legislation requires it.
💡 Proactive vs Reactive Change
- Proactive change — the organisation anticipates future pressures and acts before they become crises (e.g. a retailer investing in e-commerce before footfall declines).
- Reactive change — the organisation responds to a crisis or external shock after it has already occurred (e.g. a manufacturer cutting costs after losing a major contract).
- Proactive