Question

In this unit, we learned that organizations need to be able to adapt to thrive. External forces create increasing need for the organization to evolve to best take advantage of opportunities as well as meet the challenge of threats. What are the common forces of change? What are some examples of each?

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Answer 1

The top management of businesses have to learn to anticipate and implement changes effectively. Because how we manage the change decides the difference between the firm staying in business or becoming irrelevant to customers and markets.

So the first thing to manage the change effectively is to know the source of change and what is the change about. Organisations have to go through small changes all the time like, to improve productivity, due to changes in regulations, etc. The forces of these kinds of changes are mostly due to factors like,

• Demographic - With the changing demographics of the society, the working of the organization also needs to change. For example, a company selling cosmetic products, does door to door sales to mothers and ladies staying at home, but now as more women have entered the workforce and don't stay at home, this company will have to change their pattern of sales.
• Political - Organisations always have to change as per the changes in rules and regulations made by the government. For example, when the Affordable Health Care Act was made mandatory, the organizations had to change their operations pattern and had to take healthcare coverage for their employees.
• Social - These changes are based on the changes that regularly happen in the society. Customer's likes and preferences change from time to time. The business has to change as per what the customers want. For example, now as people are getting more fitness and health conscious, the fast food companies have brought new items to the menu which are more healthy. Tobacco companies on seeing the changes in the mindset if customers, have brought new products like eCigarette and other smoking alternatives.
• Technology - When technological changes happen in the feild of business, the business has to cope up with the new technology or can get out of date in no time. For example, the smartphone companies, they make technological changes all the time when a new product ia launches by them, all the new features available in the market needs to be added by them to the phone, or people won't prefer it. Similarly, streaming services like Netflix will have to make frequent updations to stay with the latest technology.
• Economic - When large economic changes like recession or inflation hits the economy, the businesses have to make necessary new strategies to stay in market. For example, in 2008 recession, when Lego suffered stagnation in US market, it took the opportunity to build markets in Asia and Europe. Similarly in 2008-09 recession, Netflix realised that people were cutting their entertainment budgets, so it provided in-home entertainment to all and grew by 3 million subscribers in just 2009.

Hence, changes happen all the time, the main thing is not to stay adamant and to use the change effectively. Make new strategies to explore with changes and that can help find opportunities in these changes sometimes.