Managing Managing ChangeChange

Change in business is concerned Change in business is concerned with altering the way people do their with altering the way people do their work. It involves changing structures work. It involves changing structures and introducing new technology to and introducing new technology to produce different outcomes.produce different outcomes. Business must respond to change if Business must respond to change if they are to maintain a competitive they are to maintain a competitive advantage.advantage. Changes include: production, Changes include: production, marketing, the business plan, marketing, the business plan, objectives and goals.objectives and goals. Changes are external (outside the Changes are external (outside the business) or internal (inside the business) or internal (inside the business) business)

External InfluencesExternal Influences

The changing nature of marketsThe changing nature of marketsconstantly changing, reflecting constantly changing, reflecting

changing needs, wants, fashions, changing needs, wants, fashions, technology, population and technology, population and concepts of quality. Also other concepts of quality. Also other countries trade policies, patterns countries trade policies, patterns of demand, competition, of demand, competition, exchange rates and weather.exchange rates and weather.

Economic InfluencesEconomic Influences economic cycles, employment, economic cycles, employment,

inflation, consumption, investment.inflation, consumption, investment. the labour force, wages and pricesthe labour force, wages and prices govt policies, such as govt policies, such as

microeconomic reformmicroeconomic reform international economic environment, international economic environment,

infrustructure, transport and powerinfrustructure, transport and power

Financial Influences:Financial Influences:Deregulation of financial Deregulation of financial system: removal of Govt system: removal of Govt restrictionsrestrictions

Increasing range of Increasing range of financial products and financial products and increased competition of increased competition of financial institutions.financial institutions.

Geographic influences:Geographic influences: Population (movements, increases, Population (movements, increases,

decreases)decreases) Availability of natural resources, climate, Availability of natural resources, climate,

waterwater Aust’s geographic isolation, Aust businesses Aust’s geographic isolation, Aust businesses

expanding O/S expanding O/S proximity to suppliers, competitors, proximity to suppliers, competitors,

customerscustomers changes in landscape (new roads)changes in landscape (new roads) Industry clusters (businesses with linking Industry clusters (businesses with linking

relationships setting up in close proximity) – relationships setting up in close proximity) – outsourcing of duties in production process outsourcing of duties in production process to 3to 3rdrd parties. parties.

Act of God – Natural disastersAct of God – Natural disasters

Social InfluencesSocial Influences Ageing population (nursing homes, health Ageing population (nursing homes, health

services)services) Changing role of women in workplaceChanging role of women in workplace growth of leisure and health activities (day growth of leisure and health activities (day

spas, gyms)spas, gyms) > diversity in population, new > diversity in population, new

opportunities for retailers.opportunities for retailers. Trend towards retirementTrend towards retirement Unpopular business decisions, Unpopular business decisions,

environment recordenvironment record Revelations of exploitation or corruptionRevelations of exploitation or corruption Stereotyping, racism, sexismStereotyping, racism, sexism General changes in social attitudesGeneral changes in social attitudes

Legal Influences Legal Influences Govt legislation, Fed and state, regulatory Govt legislation, Fed and state, regulatory

bodies, govt bodies, GST, BAS, ACCCbodies, govt bodies, GST, BAS, ACCC Competition regulation, health and safety, Competition regulation, health and safety,

consumer protection, licensing, taxation, creditconsumer protection, licensing, taxation, credit Legal made by courts – precedents for other Legal made by courts – precedents for other

cases eg public liability costscases eg public liability costs

Political InfluencesPolitical Influences Each party has its own objectives for Each party has its own objectives for

businesses, they create legislation and policies businesses, they create legislation and policies that have impact.that have impact.

Managers need to plan for outcomes of change Managers need to plan for outcomes of change in governmentin government

Technological DevelopmentsTechnological Developments technology changes influencing:technology changes influencing:

production methodsproduction methods information exchanginginformation exchanging agriculture and miningagriculture and mining

Lowering costs of productionLowering costs of production reducing lead timereducing lead time reducing barriers of distance, suppliers reducing barriers of distance, suppliers

and customersand customers Creating competitive advantagesCreating competitive advantages

Internal InfluencesInternal Influences Effects of accelerating Technology:Effects of accelerating Technology:

E-commerce: Buying and selling of products, E-commerce: Buying and selling of products, funds transfer, electronic support for products / funds transfer, electronic support for products / services.services.

New systems and procedures:New systems and procedures: Reorganising employees into work teams to gain Reorganising employees into work teams to gain

productivity and creativity benefitsproductivity and creativity benefits Using Total Quality Management principles to Using Total Quality Management principles to

emphasise quality and continuous improvementemphasise quality and continuous improvement Worlds best practice, benchmarkingWorlds best practice, benchmarking Computer systems and techniques, CAD, CAM, Computer systems and techniques, CAD, CAM,

stock, POSstock, POS Changes to practices such as petty cash, rostering Changes to practices such as petty cash, rostering

New Business Cultures:New Business Cultures: Refers to shared attitudes, values, Refers to shared attitudes, values,

beliefs of people. The way people in a beliefs of people. The way people in a business behave.business behave.

Modern communication methods ie Modern communication methods ie emailemail

downsizing – reduce bureaucracydownsizing – reduce bureaucracy change in leadership, methods, visionchange in leadership, methods, vision rewards systemrewards system

Structural responses to changeStructural responses to change Outsourcing: Non core services ie marketing, Outsourcing: Non core services ie marketing,

accounting, partsaccounting, parts Save labour cost, rent,Save labour cost, rent, fulfil temporary demand for staff ie new IT network or fulfil temporary demand for staff ie new IT network or

hardware system. hardware system. Better quality, value for money, specialisationBetter quality, value for money, specialisation

Flat organisation structures: minimise Flat organisation structures: minimise bureaucracy, cut out middle management increase bureaucracy, cut out middle management increase flexibility, accountability, increasing workload.flexibility, accountability, increasing workload.

Strategic alliances and networks: Businesses and Strategic alliances and networks: Businesses and suppliers, Businesses and other businesses suppliers, Businesses and other businesses wanting to access a market so both can gain wanting to access a market so both can gain strategic advantage ie Qantas, BA, Cathay Pacific, strategic advantage ie Qantas, BA, Cathay Pacific, American Airlines in One World alliance.American Airlines in One World alliance.