Sources for Change From the Environments

Forces for Change

Organisations must keep changing and adapting to the never-ending pressure for change. Pressure can come from the internal environment and also the external environment

Internal Environment as a Source for Change

  • CRISIS – Responding to such unplanned events of crisis will require responsive decision making for change to be made from management in order to reduce the disruption to the organisation.
  • CORPORATE CULTUREIf corporate culture impedes success, it must be changed. Recognizing what culture is required in order to achieve success is crucial if change is to be successful.
  • POOR FINANCIAL PERFORMANCE is a powerful driving force for change. The Cost of production for an organisation may be too expensive, which requires changes to occur if the organisation wishes to be successful.

External Operating Environment as a Source for Change

  • COMPETITORSOrganisations need to monitor the activities of their competition and determine what effect they may be having in the marketplace. Knowledge of this enables an organisation to make modifications to its existing business activities and to plan new ones.
  • SUPPLIERSOrganisations should be constantly on the lookout for new or backup suppliers, even when their current needs are being met as this means they will be less vulnerable to supply difficulties. If current suppliers are not effective then changes should be made.
  • CUSTOMERSAn organisation needs to be responsive to changes in customers’ tastes and preferences so it can constantly satisfy the customer’s needs.
  • INTEREST GROUPS can directly influence the activities and behaviours of an organisation. For example Trade Unions can cause changes such as regarding wages and employee working conditions.

External Macro Environment as a Source for Change

  • ECONOMIC FORCESExamples of this include the rate of economic growth, level of total spending, level of unemployment, movement in exchange rates, booms, busts and recession. A business may need to alter their spending habits and prices dependent on what the market currently looks like.
  • POLITICAL AND LEGAL INFLUENCESOrganisations must comply with the new legislative requirements when they are passed.
  • TECHNOLOGICAL INFLUENCESOrganisations must seek to exploit appropriate technologies, as they become available as so to be locally, nationally and globally competitive. In regards to technology, change is necessary to remain competitive in the market.
  • SOCIAL FORCES – Organisations are constantly confronted by changes in society’s attitudes and beliefs. It is important for an organisation to aim to meet their values and beliefs so as to maintain a good reputation and satisfy customers