Sole Proprietorship and Partnership

Advantages of a Sole Proprietorship.

1) Freedom and easy to manage.

• Because they own their businesses, sole traders answer to no one but themselves.
• Easy to manage because the owner or proprietor can make decisions by himself.

2) Low start-up costs.

•  The sole trader provides the capital to run the business, enjoys the benefit of any profits and makes his own decisions.
• There are few legal formalities necessary in order to start business as a sole trader.

Advantages of a Partnership.

1) The ability to grow by adding new talent and money.

• Because banks prefer to make loans to enterprises that are not dependent on single individuals, partnerships find it easier to borrow than sole proprietorship. They can also invite new partners to join by investing money.

2) It can be recognized by meeting only a few legal requirements.

• All partnerships must begin with an agreement of some kind. Partners may also agree to bind themselves in ways no specified by law. In many cases, an agreement  should answer questions such as:  

i) Who invested what sums?
ii)Who will receive what share of the profits?
iii)How many the partnership be dissolve? In the event of dissolution, how will assets be distributed?
iv) How will surviving partners be protected from claims made by a deceased partner's heirs?

12 common reasons why people resist change in the workplace:

1. Loss of Job:  In an organizational setting, any process, technological advancement, systems, or product change will include streamlining, working smarter, cost reduction, efficiency, faster turn around times.  All these means staff and managers will resist the changes that result in their roles being eliminated or reduced. From their perspective, your change is harmful to their position in the organization! The satisfaction that employees have with their job determines a portion of their reactions during times of change. Employees who experience a high degree of job satisfaction are better able to weather periods of change. They are more positive in their approach to their work and can see change as an organizational necessity. Unhappy employees, on the other hand, view change as just another annoyance in a long list of complaints. Chances are, whatever the change, any disgruntled employees will view it as having a negative impact on both the organization and them personally.

              See Fear of Job Loss

2. Bad Communication Strategy: The way in which the change process is communicated to employees within the organization is a critical factor in determining their reactions. If you can’t communicate what, why, how, when, who and what success will look like or how success is going to be measured, then, expect resistance! If employees do not understand the need for change, why ask for a buy in? Especially from those who strongly believe the current way of doing things works well…and has done for the past twenty-five years! When upper management plans and communicates early and effectively with all employees and explains the reasoning behind the change, employees are much more likely to buy into it. Changes that are mandated with little or no communication, on the other hand, are often poorly received, since employees may feel that the change is being shoved down their throats. When it comes to change management there’s no such thing as too much communication. If there is no immediate information to communicate during change, telling employees that there is no update regarding the ongoing change is communication! Don’t just keep quiet; this is also the time to maintain an open door policy regardless of where you are placed in the organisation. Be present and available for questioning. Miscommunication is if you communicate insignificant or insensitive information. You can’t communicate too much significant, substantial information.

             See Effective Communication Tools

3. Shock and Fear of the Unknown: Employees’ responses to organizational change can range from fear and panic to enthusiastic support. During periods of change, some employees may feel the need to cling to the past because it was a more secure, predictable time. If what they did in the past worked well for them, they may resist changing their behaviour out of fear that they will not achieve as much in the future. The less the organization knows about the change and its impact on them, the more fearful they become. Leading change also requires not springing surprises on people! The organisation needs to be prepared for the change. In the absence of continuing a two-way communication with leadership, grapevine rumours will fill the void and sabotage any change effort.

             See the Challenge of Change- Fear of the Unknown or See Managing Change: Managing People’s Fear

4. Loss of Control: Familiar routines help employees develop a sense of control over their work environment. Being asked to change the way they operate may make employees feel powerless and confused. People are more likely to understand and implement changes when they feel they have some form of control. Keeping the doors of communication open and soliciting input, support and help from employees lets them know that their contributions matter. Involve them, elicit their feedback, let them volunteer for participatory roles in the change and all of these in turn, will help give them a sense of control during periods of change.

              See Fear of Losing Control

5. Lack of Competence:  This is a fear that is difficult for employees to admit openly. But sometimes, change in organizations necessitates changes in skills, and some people will feel that they won’t be able to make the transition well. Therefore, the only way for them to try and survive is to kick against the change. Some employees are just hesitant to try new routines, so they express an unwillingness to learn anything new. They say things like, “I already know all that I need to know to do the job,” or “I am good at what I do why rock the boat.” Resisting employees who have already made up their minds that the change won’t work or who are reluctant to learn something new will impede the organization’s growth and adaptation to change. Frankly, they also hinder their own personal growth and development.
6. Poor Timing: Change must be introduced when there are no other major initiatives going on. Sometimes it is not what a leader does, but it is how, when and why she or he does it that creates resistance to change! Undue resistance can occur because changes are introduced in an insensitive manner or at an awkward time. For any significant organizational change effort to be effective, organizational leadership must come out of their mahogany panelled air conditioned offices, roll up their sleeves, and prepare a comprehensive change strategy from the onset to address barriers. If they can’t do it, then, they should delegate or hire a change management agent to design an effective change management strategy with the help of some of the organisations managers.
7. Lack of Reward: There is a common business saying that managers get what they reward. Organizational employees will resist change when they do not see anything in it for them in terms of rewards. Without ‘WIIFM’ or a reward, there is no motivation to support the change over the long run. This often means that organizational reward systems must be altered to support the change that management wants to implement. The reward does not have to always be major or costly.
8. Office Politics: Every organisation has its own share of in-house politics. So, some employees resist change as a political strategy to “show or prove” that the change decision is wrong. They may also resist showing that the person leading the change is not up to the task. These employees are committed to seeing the change effort fail.
9. Loss of Support System: Employees already in their comfort zones, working with the managers they get along with, and who are operating within predictable routines know their support system will back them up during challenging times. Changing the organizational structures may shake their confidence in their support system. They may worry about working for a new supervisor, in a new team, or on unfamiliar projects because they fear that if they try and fail, there will be no one there to support them.
10. Former Change Experience: Our attitudes about change are partly determined by the way we have experienced change in the past. For instance, if in your organisation, you have handled change badly in the past, the employees will have good reasons for rebelling. Again, in personal lives, how employee’s families reacted to change during their early years is going to affect the way they view change. Employees, who live in the same house, shop at the same stores, visit the same social club, and drive the same routes daily throughout their formative years may have more difficulty dealing with change than people who grew up in several different neighbourhoods. In the same way, those who become accustomed to associating with people who have the same values and ethics may find it more difficult to appreciate the diversity of today’s work force. An employee who was raised in a family that viewed change as a challenge to be tackled will probably have a more optimistic outlook about change than a person who was raised in a home that considered change an unwanted experience that upset the predictable family routine.
11. Empathy and Peer Pressure: Whether we are introverted or extroverted, we are still social creatures. Organizational stakeholders will resist change to protect the interests of a group, team friends, and colleagues. It is normal for employees to resist change to protect their co-workers. This could be purely because they sympathise with their friends because of the change that has been thrusts at them.  Managers too will resist change to protect their work groups or friends. All these behaviours can sabotage the success of any change.
12. Lack of trust and support: Successful organizational change does not occur in a climate of mistrust. Trust, involves faith in the intentions and behaviour of others. In organizations where there is a high degree of trust and each individual employee is treated with respect and dignity, there is less resistance to change. Mutual mistrust will be the bane of an otherwise well planned change initiative. If an organisation is seen as being untrustworthy as demonstrated sometime in the past, so why would any employee trust such an organisation? Any sweeping changes on the job can cause employees to fear for their roles in the organisation. For this reason, a well planned outplacement support should be in place to mange and assist employees. Employees resist change because they are worried that they may not find another job easily and quickly.

Organizational change: Unfreezing, changing and refreezing

Posted on June 13, 2012 by keithpounds.com

 (The following is another excerpt from my 2008 book “The Psychology of Management.” This excerpt explores how to implement “change” in today’s organizations.  As with other articles in this series, it will help managers improve organizational performance).

Managers today should understand that one of the most efficient ways to handle change is to use three basic steps. These include the steps of unfreezing, changing and refreezing.

No human or organizational system will change unless the current way of doing things is first “unfrozen.” While this a very important process, it actually involves very simple implementation. It involves “unfreezing” the way employees think about current processes.

One way of doing this is by showing employees how your new idea or process will benefit them, their jobs and the organization. You should show them the negative aspects of their current ways of doing things. This is a very important step because it first addresses any “uncertainty avoidance” or “fear of the unknown” that employees may have.

If you can show them the benefits of your new ideas or processes, and the negative aspects of their current ideas and processes, it helps employees see that there is a benefit “to them.” So, the unfreezing process involves training and “heading off” restraining forces. The important part here is that restraining forces are addressed “before” they appear.

The next step is the actual “change” itself. This step should be self-explanatory as it involves the actual new way of doing things. This second step will also involve training, but it will be more aligned with the actual processes: that is, how to do the new things. Because employees were first taken through the “unfreezing” process, they will be much more willing and open to learn the new processes and will help to implement the change.

One of the main reasons so many change processes fail is because management goes straight to the change process itself without first taking employees through the unfreezing stage. As we discussed above, doing so produces increased tension in the organization.

While unfreezing is such an important (and easy) process, the time and energy spent on it is worthless unless we “refreeze” the organization into the new behavior. This refreezing is out 3^rd step in the change process.

It does us no good if we unfreeze the way our employees think about the way they do things, and then we implement changes in how they do those things, if we don’t help to make sure that they continue to do those things or perform those new processes.

Our concern here is that without support from management, there is a very good chance that the organization will go back to “the way we were.” By this we mean that employees will go back to using the old behaviors and discard the new processes and ideas.

One good way to avoid this is to make sure that you, as a manager, recognize and reward employees when they perform the new behaviors that were implemented during the change process. This is something that should be planned for even before the unfreezing stage.

Sahabat Selamanya_Sahabat SMKASs IV