Category: Commerce Notes PPT

Place simply does not mean the physical movement of product from the manufacturers to the customers but this also means the ease of access to the products, the way the products are displayed, and in which environment that they are presented. The marketer then needs to adopt different channels of intermediaries to reach their end-user. The marketer then uses the choice of distribution channel which is affected by several factors.

We will further take notice of the distribution channel which suits the place mix of the marketing management. 

Channel of Distribution

The channel of distribution means the intermediaries that are involved in the process of how a product passes from the manufacturer to the end-users that are the consumers. This is quite important for the producers to engage the middlemen to reach the consumers. Foremostly, the middlemen reduce the problems of both the producers and the consumers. Then they help in distributing the products over a specific large area.

Different Channels of Distribution are as Follows:

Channel 0

This is called a direct marketing channel with no intermediary level. The producers sell the products directly to the consumers thus, this is called direct marketing. Apart from this, the remaining channels are indirect marketing channels.

Channel 1 

This channel includes only one intermediary which is generally a retailer. The retailers buy the products which come directly from the manufacturer and then sold to the consumers. Generally, electronic goods like televisions and computers are sold through this channel 1 level.

Channel 2 

Channel 2 contains two intermediary levels of a – wholesaler and a retailer. A wholesaler is one who typically buys and stores the large quantities of these several producers’ goods and then breaks them into bulk deliveries to supply to the retailers in smaller lots. 

Channel 3

This channel contains three middlemen levels. The jobbers usually come between the wholesalers and the retailers. Then they buy from the wholesalers, sell to the small retailers who are generally not served by the wholesalers. There can be even more levels in the distribution channel but from a producers’ point of view. 

Elements of Place and Place mix

Transportation:

Transportation is an important component of the physical distribution that is very essential for the firm as this increases the market length for the product. The decisions which relate to the transportation here include the choice of mode of transport that is to be used, whether to own the vehicles or to hire them, how the deliveries are scheduled, who will bear this transport cost and then the manufacturer to wholesaler and them to the retailer.

The different modes of transport are – Roadways, Railways, Waterways, Airways, and also Pipelines. Normally this combination of these modes is to be chosen by a business organization. This is important to note here that the choice of a particular mode of transport affects the condition of the goods and the pricing which ultimately affects the customer’s satisfaction.

Warehousing:

Warehousing provides the function of storage to the firm and thereby creates time utility. The long-time gap that is between the production and distribution, the seasonal production of certain commodities, and the continuous demand for the products, and such other factors have made it necessary for the firm to store their own products. The warehousing decisions include decisions that relate to the choice of public or private warehouse or the cold storages, and the number of places where the goods have to be stored which is to be released quickly when it is demanded.

Inventory Level:

This is very necessary for a firm to carry quite enough stock of goods to meet the demand as and when this is required, which involves the decisions as to how much the stock, who long to stock, and at how many places to stock the products.

Channel Level and Intermediaries:

The marketing channels are characterized by the variety of other channel levels, this depends upon the number of intermediaries, which can be of different channel levels – the direct marketing where the manufacturers sell directly to the consumers, one level channel where the goods that are sold through one intermediary and so on. The firm has even to decide the number and the type of intermediaries that are to be employed.

The preparation of trading account is an important concept for the commerce students. All the business accounts that exist need to follow the financial year for making monetary statements and then recording them in the form of documents. The preparation of a trading account is the first step that the businesses must execute to make a final record. It is important that the trading account should be made with great care as it is used for indicating the efficiency level of a business.

With the assistance of the trading account, business organizations are able to observe the exact profit or loss that was incurred in the specific financial year. The data helps the businesses to take the necessary steps or make corrections wherever necessary. This is why the data needs to be accurate and provide efficient reflections of the transactions in a financial year.

The Reasons for Making the Trading Account

When understanding why a trading account is needed, you must know that all the specifications related to costs are documented in this account. This helps with the correct and quick analysis costs, profit, and loss in the overall gross calculation. The management team is responsible for checking if the data matches with each other. If there is a case or situation of abnormality then the management can contact the specific department for rechecking and evaluating the relevant data.

The Features of the Trading Account

The features of the trading account are as follows. The trading account provides the record for total sales that are made by the organization or a business within the specific period of time and the total costs that were incurred. It gives a clear indication to the management or executives of the company on the prospective loss or profit.

The trading account serves as a statement which is important for the trading factors. All the organizations and businesses should be transparent about the trading accounts every year for maintaining a high level of credibility and consistency in the industry. The other trading companies can also check the status of any other business organization. The trading account is usually used by the companies for checking surplus balance. This balance is included in the profit-loss statement. 

The Elements of Trading Accounts

The various elements of trading accounts, based on its contents, includes opening stock, details of purchase, gross profit, direct expenses, gross loss, closing stock, and sales revenue. Each of these elements document important information related to the financial record of the organization that helps the businesses to analyze and make corrections wherever necessary. These elements provide a detailed summary of the entire transactions and serve as a valuable data point for the analysis of financial transactions.

Coordination is one of the prominent functions of management. It is an ongoing process that helps to smooth ongoing activities and communication between the employees, whether they are individuals or groups, or teams. It always aims to minimize friction and maximize collaborative efficiency. Let us explore more about the principles of coordination, techniques of coordination, etc.

Meaning of Coordination

Coordination is very important in management. The business has multiple functions. These functions are performed by different people. In addition, performing these functions requires division of labour and grouping activities and decision-making at different levels. These need to be coordinated to achieve the desired goals. Coordination involves synchronizing, integrating, or unifying the actions of all groups in the enterprise to achieve its goals. It is a process in which managers balance the activities of different individuals and individual groups, reconcile their differences in interests or methods, to achieve a common goal, achieving a harmonious group effort and unity of action.

Defined by Mcfarland, “Coordination is the process whereby an executive develops an orderly pattern of group efforts among his subordinates and secures the unity of actions in pursuing a common purpose.”

Principles of Effective Coordination

As coordination plays a vital role in the organization, every manager tries to maintain good collaboration with other executives which helps in the growth of the organization. That’s the reason managers need to understand and implement some principles to attain effective coordination. Mary Parker Follett has given a set of principles of effective coordination.

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They are,

1. Early Stage:- This is the most important principle of coordination, which specifies that the coordination should start at an early stage or initial stage of the organization. If proper coordination has been done before the planning system, we can provide effective plants that automatically develop the name and fame of the organization.

2. Personnel Contract:- Coordination itself is a process involved with human resources. If the direct contact of personnel is implemented, it eradicates Several conflicts and misunderstandings. Face-to-face communications, group discussions, grievances, and settlement methods come under this principle.

3. Continuity:- It is the most important principle of coordination. Because it is a continuous process and cannot be left or restricted to some activities. The entire organization requires coordination around the clock.

4. Reciprocal Relationship:- It is the best principle of effective coordination. Because the coordination will be in a two-way direction. If the purchasing department works with the sales department, the sales department again needs to work with the finance department. Similarly, the communication I’m the influence but also done in the same way. Every person needs to communicate with another person, and if one person influences the other, he might be influenced by any third person. So the coordination should be reciprocally also.

5. Dynamism:- The process, principles, and techniques of coordination should not be static. Based on the requirements and the scenarios, it keeps on changing according to the context spontaneously.

6. Simplified Organization:- This principle also achieves effective coordination. It is merely like a divide and rule policy. If the size of the organization is too large, it can be divided into several departments, and each department should have a coordinator or coordination head. He will look after all the collaborations, delegations, etc.

7. Self-Coordination:- This principle explains that expecting coordination from other departments is as essential as maintaining the same thing in our department. It is like giving respect and taking respect. Initially, if we are perfect, then we can expect the same thing from others. So self-coordination is the initial measure or principle of effective coordination.

8. Clear-Cut Objectives:- the objectives and standards were set by high-level management. These objectives should be properly facilitated and create awareness of all the departmental heads and other employees. All the employees have a clear idea of what they need to achieve; then they can work according to that.

9. Clear Definition of Authority and Responsibility:- The high cutter employees should explain and define the authorities and responsibilities to the respected person, and it should be explained to all the lower-level employees. Every employee needs to understand to whom he needs to report and what are his responsibilities. This kind of coordination is significant for a healthy organization.

10. Effective Communication:– Communication is the basic principle of coordination. Clear and proper communication avoids several problems and provides multiple solutions for a single problem. So proper communication should be I’m graduating within the staff, which helps to exhibit their skills.

11. Effective Supervision:- the high-end executives should monitor and supervise all subordinate’s works regularly. They should not neglect their responsibility and should not mislead their supervision. This helps to maintain effective coordination as well as reduce the chances of making mistakes.

These are the various principles formulated by Mary Parker Follett for the growth of the organization in terms of quality and quantity. As it is clear that Principles and techniques of coordination are dynamic, the techniques of coordination had formulated with different opinions. The generalized techniques of coordination are categorized as:

Features of Coordination

The features of coordination are: 

1. Coordination focuses on integrating collective efforts, not the integration of individual efforts.  

It involves arranging the activities of a group of people in an orderly manner. However, individual performance is related to collective performance.

2. Coordination is a concerted effort to give the necessary quality and quantity at the right time. 

Coordination means cooperation, that is, collective effort, plus time and direction.  According to Haimann: “Coordination is the orderly synchronization of efforts of the subordinates to provide the proper amount, timing and quality of execution so that their unified efforts lead to the stated objective, namely the common purpose of the enterprise.”

3. Coordination is a continuous and dynamic process. 

It is a continuous concept because it is realized through the execution of functions. It is dynamic because the function itself is dynamic and may change over time.

4.  Coordination has three important elements: balancing, timing and integrating

Different activities can only be coordinated when different responsibilities are performed at the right time and in the right amount.

5.  Coordination and cooperation tasks do not mean the same thing. 

Cooperation simply means that two or more people voluntarily participate in the execution of certain tasks through collective efforts. But it has nothing to do with the time, amount, and direction dimensions of the team’s efforts. In contrast, coordination means applying the necessary team effort in the right direction at the right time by deliberately executing actions.

6. Every manager is responsible for coordination.

Every manager in the organization is responsible for coordination because he aims to synchronize the efforts of his subordinates with others.

7. Coordination can be internal or external.

Coordination is to be used both inside and outside the company as a blending factor for all activities and endeavors. In another way, coordination can take place both internally and externally. Internal coordination refers to the coordination of actions between employees, departments, and supervisors at different levels inside a company. 

Outside the enterprise, coordination work is extended to create a harmonious relationship with the competitors, suppliers, and customers activities; technological and technical advances of the time, government regulatory measures, national and international interdependence, as well as the wishes and wants, likes and dislikes of consumers, employees, and owners.

8. Coordination can be horizontal or vertical.

Coordination between horizontal departments at the same level in the managerial hierarchy is known as horizontal coordination. For example, coordination between the sales manager, the work manager, the finance manager, and the buyer is necessary so that when the sales department is ready to sell the new product, the production department will be able to fill the orders; and financial arrangements are made so that the necessary funds are available to obtain the correct raw material and other factors.

Vertical coordination occurs between the multiple links of the different levels of the organization. Take the production department, for example, where the work manager is followed by the superintendent, then the foreman, and lastly, the workers.

Techniques of Coordination

1. Structural and Formal Techniques 

• Departmentalization 

• Centralization/Decentralization 

• Formalization and Standardization Planning 

• Output and Behavioural Control.

2. Informal and Subtle Techniques. 

These are the various principles and techniques of coordination which each principle and technique has its significance and strive for the growth of the company.

The Ratio determining the Share of Each Partner – Profit Sharing Ratio

‘Profit Sharing Ratio’ is a common term that is prevalent in a partnership type of business. This is simply the ratio at which the partners share their profit in the business. 

In this context, we have widely discussed the Profit Sharing Ratio. Its meaning, about the ‘new profit-sharing ratio’, the calculations which estimate the new profit-sharing ratio, ways to calculate the new profit-sharing ratio, a few solved problems based on Profit Sharing Ratio, and at the end of the chapter some FAQs related to the topic are also shared. Students are suggested to study each section with utmost concentration to gain knowledge. 

 

Meaning of New Profit-Sharing Ratio

The new profit-sharing ratio is the proportion in which the old partners, as well as the new partners of a firm, agree to distribute the future profit of that organisation. 

It is necessary to decide the new profit-sharing ratio when a new partner joins a business because, in the future, he/she will be entitled to share the profits. However, if this ratio is not agreed upon at the time of admission of a new partner, the profit will be distributed equally among all the partners, whether existing or new. 

Why is a New Ratio introduced in a Business?

There are different scenarios when there is a need for a new ratio in a business. The business can have its new ratio at the time of:

• If the partners want to revise their existing profit-sharing ratio without inclusion or exit of any member

• When a new partner joins a firm

• At the time of death or retirement of an old partner

However, the calculation of the new profit-sharing ratio in retirement is done simply by removing that retiring person’s share. In this scenario, the gaining ratio of the continuing members will be = retiring person’s share* Acquisition ratio. 

Instances of computing New Profit – Sharing Ratio

This ratio is calculated differently for different scenarios. A few profit-sharing examples are given below which links to different scenarios. They are as follows:

1. Case 1: The share of a new partner is given without mentioning the sacrifice made by existing or old partners. In this case, it can be assumed that the existing partners will sacrifice their old ratio. To calculate a partner’s sacrificing ratio, you need to deduct his/her new profit-sharing ratio from its older counterpart. Even though the new ratio will be different figuratively, the profit-sharing proportion might remain the same for former members. 

2. Case 2: When the new partner will buy a share from old associates in a particular ratio. In this instance, the existing partners do not make any sacrifice from their end. Therefore, firstly you only have to deduct the amount in which a new partner has purchased his/her share from existing members, and then the revised ratio will be calculated for everyone. 

3. Case 3: On retirement or death of a partner, a new profit-sharing ratio of remaining partners will be additions of old ratio and gaining ratio as the existing partners gain his/her share from the retired partner’s absence.  

4. Case 4: An incoming partner obtains his/her share from existing partners who have made a sacrifice to favour the new one, in a particular ratio. In this case, the shares sacrificed by old partners will be deducted from their share, and that would be added to a new member’s share. Then a new profit-sharing ratio will be calculated. 

5. Case 5: When a new partner draws his/her entire share from anyone partner of the business. In this respect, first, you have to compute the sacrificing share of that particular partner and have to deduct it from his/her current ratio and that share will be credited to the new partner’s share. However, the ratio will be unchanged for other existing members as they have not sacrificed their share.

What are the Factors of Profit-Sharing?

When a partnership business is being created, the partners can dictate their respective share of profit and loss by mentioning the same in their agreement. While, when there is no such agreement made the shares are being divided equally. 

So, in cases where agreement is being formed, the partners can share their profit and losses based on any factors, anyway, the two most prevalent factors are:

1. Responsibility shared by partners

The responsibility of the partners is one of the most important factors. Suppose, the responsibility in the daily functioning of the business is carried by A, while partner B makes rare visits to the business, hence profit is shared in the ratio of 80:20 among A and B respectively.

2. Capital Contribution by partners

In a partnership business, partners contribute to the capital. Some partners may contribute more while some less. Thus accordingly, the shares can get affected.

For example, Partner A contributed Rs. 30,00,000 and Partner B has contributed Rs. 75,00,000 in their partnership business. Thus accordingly, A and B’s profit-sharing ratio is fixed at 30:70 respectively. 

Apart from these two factors, there is another factor that might affect their profit-sharing decision. That factor is – Mixture of Factors 

A mixture of factors denotes that partners in the business can share their profit-sharing ratio after considering both the prior factors, that is responsibility shared by partners and Capital Contribution by partners. Suppose, A has contributed Rs. 20,00,000 in the business and taking all the major responsibilities in the business. Whereas, B has contributed Rs. 80,00,000 and only taking care of minor issues in the business. So, they reach a decision where A and B will be sharing profit in the ratio of 40:60. 

 

How to calculate New Profit-Sharing Ratio?

The formula where we calculate the new profit-sharing ratio can be different considering several circumstances, but the following illustration is one of the ways to calculate it. 

1. A, B, and C are partners sharing profits in the ratio of 3:3:2. C retires, and his share is taken up by A. Calculate the new profit-sharing ratio of A and B. 

Ans: Share gained by A = 2/8

Gaining ratio of A and B = 2/8:0 that is 1:0 Since B has not gained anything from C, therefore, share obtained by B=0

Since B has not gained anything from C, therefore, share obtained by B=0

New share of continuing partner= Old share + share gained

A = 3/8+ 2/8= ⅝

B = 3/8+0= ⅜

Hence, a new profit-sharing ratio of A and B is= 5/8: 3/8 that is 5:3. 

However, like a new ratio, there is no fixed profit-sharing formula that exists as the profit of an organization is distributed according to each partner’s varying contribution. 

Partnership Profit-Sharing Ratio Problems 

1. X and Y are two partners sharing profits in the ratio of 3:1. Z is admitted for 1/8th share of profits. Calculate the new profit-sharing ratio of X, Y, and Z. 

Ans: Since Z’s share is given without mentioning what Z obtains from X and Y, it is assumed that Z receives a share from X and Y in their old profit-sharing ratio. Hence, the sacrificing ratio by X and Y will be= 3:1. 

Firm’s share= 1

Remaining share= 1-1/8= ⅞

Now, 

X’s new share= 3/4* 7/8= 21/32

Y’s new share= 1/4* 7/8= 7/32

Z’s new share= 1/8* 7/8= 7/64

New profit-sharing ratio of X: Y: Z= 6:2:1. 

2. Manish, Kunal, and Vineet are partners sharing profits in the ratio of 5:3:2. Manish retires, and the new ratio between Kunal and Vineet is 2:1. Find the gaining ratio. 

Ans: 

Share gained = New share – Old share

Kunal = 2/3 – 3/10= (20 – 9)/30 = 11/30.

Vineet = 1/3 – 2/10= (10 – 6)/30= 4/30.

Therefore, the gaining ratio of Kunal and Vineet is = 11/30:4/30 that is 11:4. 

Try to memorize different new profit-sharing ratio formulas for various instances and practice as many problems as you can to score better in the final examination. 

For more such topics on partnership and solved maths, stay tuned to ’s website.

Lack of funding opportunities is a common phenomenon in social enterprises. The meaning of quasi-equity is the use of a business plan and worksheet by businesses to offer combinations of risks and return so that they can get investors. This way of attracting investors is only meant for conventional businesses. The ones who have to suffer are the social enterprises that find it difficult to attract investors that way. Instead, they use two innovative financial vehicles- Quasi-Equity Debt and Social Impact Bonds to enhance their funding opportunities from the investors.

What is Meant by Quasi Capital?

Quasi capital is also known as revenue participation investment. It helps in filling the space that lies in between debt and capital. It is the kind of investment where the investee’s future revenue stream is calculated based on the financial return. It is a useful source of finance.

When does a Quasi Loan Arise?

A quasi-equity loan arises when an enterprise suffers a liability at a situation when the director is under a compulsion to repay the company for the amount involved.

What is Quasi-Equity?

While understanding the quasi-equity meaning, one must know that there is a sheer lack of funding opportunities when it comes to social enterprises. Therefore to overcome this form of hindrances, the enterprises make use of a financial vehicle that has the association of properties of debt along with the equity. However, it is also important to understand that if it is a non-profit enterprise then it cannot acquire equity capital. This states the fundamental fact that Quasi-equity debt is more useful in terms of security. It is a form of debt and also it is important to consider that its returns are indexed against the financial performance of the enterprise. The debt also requires the holder of the security has no direct entitlement towards the ownership and power of the enterprise. 

Besides, the terms and the conditions offer loans to the enterprise so that they can carry out the operations of the enterprise smoothly. These forms of securities are purchased by social investors. The security opens the door for social enterprises so that they can offer other lenders and banks a competitive investment opportunity.

What is Quasi-Equity Meaning in Banking?

The revenue participation agreement or quasi-equity is a kind of financial tool that provides an opportunity for the investor and as well the investee to share the reward and risk of enterprise in a flexible manner that debt does not allow. This applies to a situation where equity financing is not possible. However, it is also important to understand that the characteristics of quasi-equity financing would involve either being an unsecured loan or it can also be a flexible loan repayment option. The common examples of this form of debt are mezzanine debt and junior debt as these two debts are both unsecured and flexible in terms of the repayment schedule of the loan. It is through this sort of financial loan that we can understand the meaning of quasi-equity.

What do We Understand by the Quasi-Equity Debt/ Equity Ratio?

Quasi-equity is regarded as a form of debt that some of its characteristics are quite similar to that of the equity. This type of debt includes flexible payment options that are unsecured or have no collateral. This debt is only used to calculate the ratio rather than the total debt. 

What is Meant by a Social Impact Bond?

This is the kind of bond that benefits the government fund infrastructure and also the service costs. Social impact bond plays a crucial role during cuts in the public budgets and hectic municipal markets. It was launched in the UK in the year 2010. Besides, this bond was only sold to the private investors who could enjoy the returns only if the public project succeeded. For instance, if a program like rehabilitation reduces the rate of involvement among newly released convicts, it is then when the investors can expect returns. Investors receive returns at this point because they get an occasion to take planned risks for profits. Also, in such cases, the government pays the investors a fixed return for any form of demonstrable results. The bond can potentially change the discussions about the expansion of social services when they shift the chances of failure of the program to the investors from the taxpayers.

Change is constant and unavoidable. However, human behaviour has repeatedly shown a resistance to change in the existing methods and ways of doing work. Organizations, for the advancement of business processes, require constant adaptation to changes. However, organizational resistance to change acts as a major hindrance in the path of development and success of an organization. Such resistance to organizational change brings in the need for defined change management.

Before we move on to discuss the resistance to change theory, the reasons for resistance to change and the ways of managing the resistance to change, let’s take a quick look at the main causes of change in an organization:

• Business strategy and structure change

• Mergers and acquisitions

• Product reaching the end of the life cycle

• Changes in government priorities

So, the influencing factors for organizational change can be both internal as well as external.

Resistance to Change Meaning in Organizational Context

The resistance to change meaning can be defined as a major obstacle in the way of development with new technology and methodologies. Change in the techniques and organizational structure comes at regular intervals. However, with pre-existing methods, individuals become reluctant to learn and implement the new techniques bringing in a resistance to change. Resistance can be in the form of protests and strikes by employees, or even in the form of implicit behaviour. The organization with its managers must take up initiatives in managing resistance to change and in the process develop a gradual adaptation to change ensuring productivity as well as efficiency at work. 

Reasons for Resistance to Change

The common causes of resistance to change in all organizations are stated below:

• People are not willing to go out of their comfort zones defined by some existing methods for learning something new.

• Changes in methods and techniques come with a change in power, responsibilities as well as influence. Organizational resistance to change comes in from people negatively affected by the changes implemented.

• Insecurity, laziness and lack of creative approach make people cling to the pre-existing customs there by resisting changes.

Types of Resistance to Change

The types of resistance to change are stated below:

1. Logical Resistance: Such resistances come in with the time genuinely required in adaptation and adjustment to changes. For example, with the advent of talkies, the movie production houses had to shift techniques in the change from silent movies to talkies. This, in a very logical sense, took time for the sound engineers and even the filmmakers to adapt.

2. Psychological Resistance: Often resistance to change in change management comes with the psychological factor of fear of embracing the unknown, or even from hatred for the management and other mental factors like intolerance to changes.

3. Sociological Resistance: Sometimes resistances come not for particular individuals but from a group of individuals. In such cases, individuals do not allow their acceptance with the fear of breaking ties with the group.  

Managing Resistance to Change

An organization’s effort in managing resistance to change should come with proper education and training of the employees of the changes implemented. For a smooth change to facilitate, the organization has to take care of the considerations stated below:

• Changes should come in stages. A one-time major change would straightaway put operations into a stop.

• Changes should not affect the security of workers.

• Leadership qualities in managers with initial adaptations would gradually encourage employees to do so.

• An opinion must be taken from the employees who will ultimately be subject to the changes.

• Educating the employees and training them with the new methodology will boost up their confidence and build their efficiency. 

The basic resistance to change theory defines the resistance to change meaning as the reluctance of people to adapt to the changes and to cling to the pre-existing customs and methods, mostly due to the fear of facing the unknown and its possible negative effects. The management of an organization must be well aware of the various aspects of resistance to organizational change and be trained if the need arises, in methods of managing resistance to change. This is crucial for a smooth transition and restoration of organizational harmony.

Overcoming Resistance

Although change will always come with opposition, it is certainly possible to overcome it. Managers should strive to help their employees adapt to changes and facilitate new variations in performance.

First, managers must be able to convince employees that the changes they propose are necessary. They should show how employees and the organization itself will benefit from these changes. 

Second, managers can keep the following in mind to make changes smoothly:

• Changes should not happen all at once because they are easy to apply in stages.

• Changes should never create safety issues for employees.

• Managers should consider the views of all employees who will influence the proposed change.

• If managers show leadership by first adapting to the changes themselves, the staff is less likely to resist.

• Adequate staff training in advance can help them to accept change with confidence.

The Importance of Participation

It is always a good idea to encourage employee participation when management plans for change. Since the changes are for employees, they should have a say in the planning process. Such participation will make them less likely to resist the implementation of the reforms.

Managers can arrange small informal meetings or conferences with staff on this. Managers must explain all the relevant details of the proposed changes. Employees should be encouraged to express their views as well.

How Resistance to Change Works

Resistance to change is reflected in actions such as:

If employees are not properly informed of changes in the way they work, especially if they do not see the need for change, they may become insensitive. They may also face opposition when they have not participated in the decision-making process.

Spotting Resistance

Note whether employees miss meetings related to change. Late assignments, forgotten obligations, and absenteeism may be signs of resistance to change.

Some employees will publicly challenge the change, its purpose, or how it happened. An employee with a high position and a senior officer may be strong in his or her resistance. Low-level workers may resist collective bargaining in ways such as downsizing, staying home from work, deliberately misunderstanding guidelines, and, in rare cases, planning to bring in a trade union.

Employees are also resilient to change by failing to take action to move to a new location, keeping quiet about their familiar and unfamiliar business, in the same way, withdrawing their interest and attention, and failing to add to interviews, negotiations, and application requests.