Owing to globalization and rapid technological change over the past few decades, the major contemporary issues
in management lies in the need for efficient managers. More and more organizations today face a dynamic and
changing environment. This, in turn, makes these organizations either to change or perish. There are five (5)
specific forces that are acting as stimulants for change, state and explain them with relevant examples.
(20 marks)
Answers
Demographic. A changing work demographic might require an organizational change in culture. Social. Changing social trends can pressure organizations into making changes. Consumers are becoming more environmentally conscious, a trend which has pushed fast food restaurants to replace Styrofoam containers with paper. Political. Government restrictions often force change onto organizations. Technology. Still have your VHS player? The founder of Blockbuster wishes you did. Technological changes can make or break a business. Economic. During the 2008 recession, consumers lost their jobs and cut back on their spending. These economic downturns had a major impact on businesses.
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Organisation as a system relies on many interdependent influences that affect the operation of its everyday operations, strategic decisions and potential action plans to effectively meet competitive challenges. Such influences may be both internal and external and assess the ability of an company to adapt and its readiness for change.
Explanation:
Political Forces: With the rapidly evolving world politics scenario and the crises in global affairs, a rapid transformation is taking place in the world economy that presents many challenges in the form of regulatory changes, policy changes and even economic changes in globalisation and liberalisation form to the organisation. For example, when the Affordable Health Care Act was implemented, companies had to change their operations and implement steps to confirm that every staff member was covered by the new law.
Economic Forces: Economic forces impact the management of change strategy of the organization by presenting challenges or opportunities, or increasing competitive pressures or uncertainties . Specific factors such as market cycle adjustments, prevailing inflating or deflationary rates in the economy, interest rate volatility, economic contraction, reforms to fiscal policy or tax regimes, import/export tariffs, oil prices fluctuating internationally, the nation's financial stability as well as consumer trust in the economic circumstances of the nation are the critical factors.
Technological Forces: Technological advancements and developments in computer technology & communication have revolutionised organisation-based activity by promoting innovative approaches to functioning and introducing new products/services, thus providing a need for an effective and pro-active structure for handling changes in response to these technological changes. For example, when customers stop renting videos to enjoy cheaper, more convenient streaming services, such as Netflix, organisations have to change as per the technological change or face the consequences of not adapting to new technologies.
Socio-Cultural Forces: Changing social trends such as population, education level, health, lifestyles, etc can lead to changes in organizations. A business must use the external climate to adapt to it, otherwise it does not survive. An organization must be very mindful of the expectations in society in terms in its needs and wishes. These desires and expectations are shaped by the values, attitudes, lifestyle, age, and behaviors of a society. Consumers are become more environmentally aware, and this trend is replacing Styrofoam containers with paper in fast-food restaurants. Cleaning materials producers have modified product formulations to remove ammonia and other potentially harmful chemicals.
Legal & Environment Forces: Legal factors include-health and safety, equality of opportunity, publicity standards, consumer and laws and regulations, product labeling and product safety. It is obvious, in order to compete effectively, businesses must consider "what is and what is not legal". In the past 15 years or so these factors have really only become the forefront. They have become relevant because of the growing shortage of raw materials, environmental emissions targets, the company's ethical and sustainable practices and the carbon footprint goals set by governments. Consumers are constantly seeking products which are ethical and if possible from a sustainable source.