Business U4AOS1

Concept business change

¡Change: Any alteration in the internal or external environments

¡Business change: The alteration of behaviours, policies and practices of a business; resulting in a difference in the form or operation of a business over time.

Approaches to change

¡Proactive:

¡Initiating change rather than simply reacting to events

¡Change is planned

¡Reactive:

¡Waiting for a change to occur and then responding to it

¡Change is unplanned and takes place after the business has been affected by pressures from its environment

Managers role in change

¡Successful managers are often proactive rather than reactive.

¡Poorly managed changes can lead to a loss in productivity, employee resistance and ultimately, unmet objectives.

types of changes

¡Changes can be radical (major alteration due to critical circumstances) or incremental (part of natural development-change to stay competitive).

KPI’s

¡Key performance indicators

¡A way of measuring the success (efficiency, effectiveness and competitiveness), of a particular area of the business’s performance.

For KPI’S def, calculation and effect and why check paper

driving forces, internal driving forces

¡Driving forces are the forces affecting a situation that are pushing in a particular direction and are supporting the goal or proposed change.

Internal -The forces which the business has control over and are relevant to the internal environment

¡Owners and managers have influence on the business and will either provide the direction for the change or be involved in implementing the change ¡Supportive employees can lead to successful change

¡Employees are more likely to support the change if it is in line with their interests (i.e. high wages, good working conditions).

Pursuit of profit- ¡Opportunities to improve financial performance will often encourage a business to change.

Reduction of costs- ¡Costs and the pressure to reduce these can also lead to changes in a businesss.

External driving forces

external forces-¡Factors that exist outside of the business that encourage change to occur.

Competitors- ¡businesses always need to be ready to respond to any changes to ensure they do not lose customers or market share.

Legislation- ¡Businesses must be able to respond and change aspects of their operations in line with laws. (compulsory)

Globalistaion- ¡Businesses operating internationally need to find more efficient ways to operate in order to be internationally competitive

Tech- Advances in technology need to be accepted for a business to be competitive in the market.

innovation- ¡If a business fails to innovate then it is likely to be left behind. New ways of thinking and operating gives businesses a competitive edge.

Societal attitudes- ¡Pressure from society has forced businesses to implement change. For example, shift to online shopping, sustainability and CSR practices. Businesses need to keep up with societies values and trends.