Chapter 11.3: Driving Forces for Change in a Business

DRIVING FORCES Reduction of Costs

- Change might be an option if the costs of production are proving to be too expensive especially if revenue or sales cannot be increased easily

DRIVING FORCES Technology

- Constant improvements to technology can drive a business to make changes to keep up - It is highly unusual for a retailer not to offer online sales today - Most make use of social media as a form of promotion

RESTRAINING FORCES Employees

- EMPLOYEES FEAR CHANGE: Fear of the unknown, including change, is a natural reaction and businesses need to ensure that they have developed strategies and tactics which will allow change to be successfully implemented - Like managers, they may have concerns about their job security and career prospects and may fear how it will affect the nature of their jobs

DRIVING FORCES Employees

- Employees may initiate changes that are advantageous to their employment - They are often critical to the success of a change as their support for it means that they will likely help to implement the change

RESTRAINING FORCES Time

- Even if all stakeholder groups want the change, sometimes there may not be enough time to take advantage of an opportunity - Businesses that have not planned or have not foreseen change in their industry, or in business conditions, may find that they are unable to respond quickly to any change

DRIVING FORCES Globalisation

- Globalisation is the process of increasing interdependence between countries. - This could entail making changes to the way business is conducted and making better use of the internet and e-commerce

DRIVING FORCES Competitors

- If competitors are proving to be more successful, then the business may introduce changes to keep up or to outperform them - A business must stay aware of what its competitors are doing and be able to respond to changes quickly (especially in highly competitive industries) in order to respond to any changes to ensure they do not lose customers or market share

DRIVING FORCES Legislation

- If the law changes, then businesses are obliged to introduce the required changes. This is a force that cannot be ignored. - It can have a negative or a positive impact

DRIIVING FORCES Innovation

- Innovation generally refers to changing or creating more effective processes, products and ideas, and can increase the likelihood of a business succeeding

RESTRAINING FORCES Organisational inertia

- Organisational inertia is the tendency of a mature and long-standing business to continue with current practices and not generally change -It is the lack of ability of a business to respond to pressures for change as it tends to continue on its well entrenched way - Organisational inertia may possibly be overcome by changing resources and routines

DRIVING FORCES Societal Attitude

- Society places a great deal of pressure on organization to implement changes

DRIVING FORCES Pursuit of Profits

- Successful businesses will often implement changes and improvements to increase sales, market share and profit (especially to grow) - If profit levels are not as high as the managers (or shareholders) would like, they may make changes to either generate more revenue

DRIVING FORCES Managers

- Usually initiate change The desire to introduce changes may come from senior managers or middle managers - Managers have influence on the business and will either provide strategic direction for the change or be involved in a "hands-on" role in ensuring that the change is implemented successfully

RESTRAINING FORCES Managers

- While usually the drivers, sometimes managers can also be resistant to change - Managers may resist change and feel scared of change if it as threatens their current position, power or role