The drivers of change in business may be classified as:
• Market changes;
• Technological changes; and
• Organisational changes.
Let us discuss each one of these, in brief.
•Market Changes
In the era of economic liberalisation, market forces are destined to dictate the pace and nature of change. We observe competition for capturing the markets for both goods and services in all spheres by competing industries through joint ventures or subsidiaries. People’s expectations have undergone radical change. The companies that satisfy customers in terms of cost, service, and value for money forge ahead in the competition.Businesses may also have to face changes due to factors such as trade barriers, raw material shortages, change in political regimes, prices shooting up, etc.
While such changes are sure to improve quality and bring about customer satisfaction, small businesses may be affected adversely. It seems that even political will is succumbing to WTO led forces in developing countries and this could be detrimental to national interests, in the long run.
•Technological Changes
Technological changes can give rise to changes in the market and influence specific happenings in a company. Introduction of new and innovative technology is likely to lead to price advantage, quality pre-eminence and diversification into new products. One can also go to hitherto unexplored areas of the globe. However, the indigenous knowledge / industry / products may get a hit and struggle for survival.
•Organisational Changes
Organisational response to market changes can take the form of downsizing for cutting costs through retrenchment and reduction in the number of employees as well as in the levels of management. Technology may also force new styles of governance which require different skills. The number of operating sites may be reduced. People may find themselves performing totally new functions. The only way to stay in business may be a merger or to be the subject of takeover, friendly or hostile. With such ownership changes, other market, technological and organisational changes may follow.
You must be reading about such changes in national dailies; it has almost become a rule in the technologically developed economies and is now not an exception for developing countries. In the first quarter of the year 2007,Indian business houses have acquired offshore companies and vice versa.As such, this seems inevitable with little scope for escape but there is no need to perceive it as a threat; it could also be looked upon as an opportunity to compete and be a winner.
• Market changes;
• Technological changes; and
• Organisational changes.
Let us discuss each one of these, in brief.
•Market Changes
In the era of economic liberalisation, market forces are destined to dictate the pace and nature of change. We observe competition for capturing the markets for both goods and services in all spheres by competing industries through joint ventures or subsidiaries. People’s expectations have undergone radical change. The companies that satisfy customers in terms of cost, service, and value for money forge ahead in the competition.Businesses may also have to face changes due to factors such as trade barriers, raw material shortages, change in political regimes, prices shooting up, etc.
While such changes are sure to improve quality and bring about customer satisfaction, small businesses may be affected adversely. It seems that even political will is succumbing to WTO led forces in developing countries and this could be detrimental to national interests, in the long run.
•Technological Changes
Technological changes can give rise to changes in the market and influence specific happenings in a company. Introduction of new and innovative technology is likely to lead to price advantage, quality pre-eminence and diversification into new products. One can also go to hitherto unexplored areas of the globe. However, the indigenous knowledge / industry / products may get a hit and struggle for survival.
•Organisational Changes
Organisational response to market changes can take the form of downsizing for cutting costs through retrenchment and reduction in the number of employees as well as in the levels of management. Technology may also force new styles of governance which require different skills. The number of operating sites may be reduced. People may find themselves performing totally new functions. The only way to stay in business may be a merger or to be the subject of takeover, friendly or hostile. With such ownership changes, other market, technological and organisational changes may follow.
You must be reading about such changes in national dailies; it has almost become a rule in the technologically developed economies and is now not an exception for developing countries. In the first quarter of the year 2007,Indian business houses have acquired offshore companies and vice versa.As such, this seems inevitable with little scope for escape but there is no need to perceive it as a threat; it could also be looked upon as an opportunity to compete and be a winner.
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| Drivers of Change in Business |
Fig. Drivers of Change in BusinessSome visible and not so visible factors may also compel a business organisation to effect changes of various types. Other factors that bring about change are increased competition, price cuts, technology, laws, customer/user demand, etc. (Table).
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| Factors that Drive Change |
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