Question

Organisations as open systems are in continuous interaction with their environments. Variables in their business environment are forcing organisations worldwide to change on an unprecedented scale in order to remain competitive. These variables will converge and in future become even more powerful and exert even more pressure on organisations to change.
Discuss the following variables: Globalisation and the global economy; Technological advances; Radical transformation of the world of work; Increased power and demands of the customer, and the growing importance of intellectual capital and learning.

Answer 1

Globalisation has lead to the integration of economies and eliminated all the barriers for trade, which no doubt has brought so many opportunities to business but at the same time has also made the business environment extremely competitive to operate in and has made the survival very strenuous and complex. The cut throat competition makes it essential for business to change and adapt to the latest trends so as to survive. . The global market has resulted in big reputable industries spreading their reach all over the world while the small and medium businesses are struggling to grow.The business due to globalisation is now more exposed to facing regulations and legal and ethical consequences with the increased transparency forcing the organisation to change and accommodate to the latest trends taking place in the market.

The Technological advancements have put intense pressure on the businesses to change because maintaining a status quo makes business redundant and mundane thus resulting in its failure to attract customers. The business will not be able to adapt the latest methods and techniques and retaining old practices might become Obsolete and ineffective. The business will fall behind of its competitors and face difficulty in surviving in the competition. A business today can survive and grow only if it is able to change with the changes taking place in the technological environment which make it more effective and efficient. If the organization does not keep up with such advancements, it will not be able to fulfill its customer's needs and not be able to cope up with the competitor's strategies resulting in its failure.

The Radical transformation in the world of work has changed the way a business operates and the way a customer performs a transaction or interacts with business. The change in the world of work such as transformation of business from brick and mortal stores to online stores and digital presence of business has increased the reach of businesses and all those staying open and flexible to these changes are able to sustain in the market. The scope and viability of physically operating supermarket has minimised with the online stores selling everything from appliances to electronics. The social media trend , work from home structure, virtual teams and all such methods have made it necessary for businesses to widen their scope and formulate strategies to cope up with such transformations.

Customer today is the kind of market and their power over businesses cannot be overlooked by the business. The customer needs, desires and expectations today are at the forefront of each business organization. With the increase in the business operations and entry of new budding businesses, there are so many options available for customers to choose from, which gives them sufficient bargaining power over the firm. The low switching cost of customer makes it difficult for businesses to retain them if they do not put their interests and satisfaction at maximum. Therefore business organisation's are constantly trying to formulate strategies to understand customer desires and wants to fulfill them which will in turn lead to customer loyalty and commitment.

Forces such as creativity and innovation has put growing importance on the intellectual capital and learning as it results in new inventions and discoveries which aud the various different aspects of business. The new ideas and inventions have grown rise to the intellectual property laws such as copyright, patenting, trade secret act etc so that the innovation is protected against the imitators. With the growing importance of Research and Development, these two areas receive a lot if attention lately.

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