Change can be caused by a huge array of different things and there occurrences depends what different externalities effect the business the most. Changes in trends and fashions have an effect on high end retailers but wont effect paper manufactures to such a great degree. Big trends however can effect all businesses, for example the current trend in cutting carbon emissions and tackling global warming is likely to effect almost every business in some way. Improvement in the quality of competition can also effect changes within a business. The economic situation of a country can mean that a business needs to reduce or increase production depending on whether the economy is reaching a peak or is in a trough. Government legislation banning certain production techniques or the use of certain substances in production can also cause change in a business. Furthermore, it might be a takeover that causes huge changes within a business.
Change affects all aspects of a business. Below is a list detailing what the effects are on a variety of different facets.
- Products – new technology needs to be incorporated into the product in order for it to remain attractive to customers and it needs to be updated so that it works with the most modern of equipment. Also, customers always want the most high tech products possible so it needs to meet their demands.
- Market Research – need to be constantly researching in order to find out what the current trends are and how best to meet them etc. The business needs this otherwise it wont be able to compete.
- R+D – needs to research into ways of meeting the demands found in the market research, could be that it needs t become more environmentally friendly or that new products will be more useful, up to date and desirable.
- Training – employees need to be trained so that they know how to use the new technology being incorporated into the business and also it needs to constantly change and improve so that customers receive the best service possible.
- Workforce – Change often means that the workforce needs expanding so that it can meet the new levels of demand or so that the business can grow as a whole. Conversely change ca also mean that redundancies need to be made in order to downsize the business, for instance in a depression.
- Quality – this needs to remain high at all times therefore constantly needs to change and improve so that customers as satisfied. Also it will and needs to improve along with technology.
Employees often resist change. They see it as a negative influence and that it is changing the routines that they have become used to. Also any change often instills in employees the fear that they will lose their jobs and therefore they tend to resent it. Changes to job numbers also demotivate the workforce due to the introduction of new unknown people or through the loss of friends.
Responses to change vary hugely depending on the given situation. Employees can go on strike if they feel very strongly about changes being implemented and, although it is not as common as it sued to be, the number of strikes being held has increased over recent years. Increases in absenteeism and decline in production are also often associated with change if it is unpopular with the staff. However, some change is good for the business and if employees realize and accept this they can become more motivated. The most extreme case would be people resigning and leaving the company over changes being implemented, not something that ultimately benefits either the individual or the company.
Change can be managed in a variety of different ways and the most useful one always depends on the situation to hand. Introducing change over a controlled time period is often more successful than instant change because it means that employees have time to get used to it and adapt to it rather than having to instantly change every facet of their job. Talking to and communicating effectively with the workforce about the change is also important as it allows for any queries or problems to be dealt with on a minor level before they become serious grievances. Training and adequate preparation of the workforce for the changes also helps because then they do not feel inadequate then they are required to deal with new procedures or machines or whatever the change may be. Negotiation is a critical part of change. If it is going to have a considerable impact it may be worth negotiating compensational settlements for those who are going to lose their jobs before the time comes so that there isn’t such a large backlash. Also, offering voluntary redundancies before enforced one often means that people who want to go are able to therefore leaving behind the most motivated and desirable workforce possible given the situation.
Read these other AQA A2 Business Studies Unit 4 revision notes:
- SWOT Analysis of the UK
- Balance Sheets
- Limitations of Accounts
- Profit and Loss Accounts
- Revenue and Capital Expenditure
- Market Analysis and Decision Making
- Marketing Maths
- Marketing Objectives and Decision Making
- Marketing Budgets
- Corporate Planning
- Management of Change
- Invention, Innovation and Design
- Network and Critical Path Analysis
- Business and the Law
- Employee Participation
- Human Resource Management
- Performance Measurement
These notes are aimed at people studying for AQA A2 Business Studies Unit 4, but will also be suitable for other courses and exam boards.
Originally submitted by eksman on TSR Forums.