11.2 Driving forces for change in a business

11 Driving forces

- Owners
- Managers
- Employees
- Competitors
- Legislation
- Pursuit of profit
- Reduction in costs
- Globalisation
- Technology
- Innovation
- Societal attitudes

How can owners be a driving force?

• The owners are directly responsible for the overall performance of their business
• They need to ensure that they have anticipated and acted upon any trends or developments that could directly impact on the business. If they are not able to do this, they may not be successful in the long term.
• All owners need to be proactive and anticipate possible changes, threats and opportunities.

How can managers be a DF

• Managers initiate change that helps to position the business for the future. They look at KPIs and develop strategies that will aim to improve the results of these indicators & help achieve objectives.
• Managers can initiate either incremental or radical change & they must ensure that levels of management across the business are clear about the changes required.
• If manager has good leadership qualities & is experienced in the change process by supporting employees; they will motivate & inspire employees to work towards a common goal towards new desired state.

How can employees be a DF

• Employees who provide constructive feedback, participate in training, help others and do their best to operate as required in the new environment all help to drive successful change
• Employees in an organisation with a positive corporate culture are more likely to be involved in change, and resistance is less likely.
• Employees who see the need for improvement in working conditions will drive change; but they can also develop new ideas & technologies that change the strategy for a business.

How can competitors be a DF

• Knowing how rivals are conducting their business is crucial, as it enables organisations to make modifications to existing business activities and to plan new ones to gain a competitive advantage.
• Better for business to be proactive & initiate change but businesses should keep an eye on what others are doing so they are able to implement strategies that will maintain a competitive advantage in an ongoing battle for market share.

How can legislations be a DF

• New laws can act as a driving force for change for businesses because they need to abide by it & implement it into their processes, otherwise business liable to be sanctioned/punished with fine or criminal/civil damages.
• E.g. Banning single use plastic straws; Covid-19 lockdown laws; Anti-discrimination laws and equal opportunity laws, country of origin food labelling laws, workplace manslaughter laws, wage theft laws can lead to changes in policies and procedures.

How can pursuit of profit be a DF

• Successful businesses will implement changes in effort to increase sales, market share and profit.
• Large businesses are under pressure to increase profit from shareholders.
• Strategies to increase profit: improve quality of products/ services, cut back on expenses and costs
by reducing number of employees, introducing technology.

How can reduction in costs be a DF

• The pressure to reduce costs is a main driver to implement change and one of the quickest ways to increase profits.
• Costs in areas such as purchasing, production, sales and marketing, finance and administration can impact a business.
• Cost cutting examples: employing staff part time rather than full time, outsourcing some tasks, ordering in bulk.

How can globalisation be a DF

- Globalisation drives change by opening up new markets around the world to increase revenue substantially but has also resulted in increased competition. It has provided the potential for faster business growth as companies can develop more trading relationships with other countries.

How can technology be a DF

• Technology is rapidly changing & businesses may need to implement technology to remain competitive and increase efficiency. Businesses can increase productivity and decrease the cost of production by implementing new technology.
• If technology is not introduced into a business it can cause the business to fall behind their competitors or even bankruptcy.
• E.g. Amazon Air introduced drones to deliver parcels and that may mean that other businesses such as Australia Post need to invest in that technology to remain competitive; QR codes; augmented reality

How can innovation be a DF

• Businesses will need to introduce new ideas/things or modify current business models to remain
competitive.
• Being able to innovate and develop new ways of thinking and doing business will give businesses a
competitive edge.

How can societal attitudes be a DF

• Societal attitudes drive change by altering community perspectives on work and on the goods and
services we consume (changes in opinions, values and lifestyles).
• These social attitudes can drive changes in businesses.
• E.g. ageing population has led to changes such as increased demand for health services leading to
the growth of new industries.
• E.g. increased participation of women in workforce has led to more women with children working.
This has created a need for childcare facilities, flexibility in work hours and increased demand of
cleaning and home help services.