Managing Managing ChangeChange• Syllabus points:• Nature and sources of

change• Internal and External• Structural responses to

change

If you If you stop stop moving moving you die!you die!

Managing Change

• Change is any alteration in the business and Change is any alteration in the business and work environment.work environment.

• For example;For example;• Change in consumer tasteChange in consumer taste• Change in production methodChange in production method• Change in markets or products soldChange in markets or products sold• Change in how employees perform their tasksChange in how employees perform their tasks

External v InternalExternal v Internal

• External are outside the control of the business

• Internal are within the control of the business• Sometimes there is overlap

Sources of ChangeSources of Change

External• Changing nature of markets• Economic• Financial• Geographic• Social• Legal• Political• Technological

Internal• Accelerating technology• E-commerce• New systems and

procedures• New business cultures

External Sources of External Sources of ChangeChange

The changing nature of The changing nature of marketsmarkets

• Globalisation: is the expansion of the market to the world stage.

• This more integrated global economic system has This more integrated global economic system has altered the shape of the world markets and the altered the shape of the world markets and the nature of businesses that compete in them.nature of businesses that compete in them.

How does Globalisation Affect Australian Businesses?

The changing nature of The changing nature of marketsmarkets• Downsizing• Casualisation of workforce• E-commerce• Dominant Retailers

External Influences – The External Influences – The EconomyEconomy

The Economic Cycle

External External Influences – Influences – The The EconomyEconomy• Information is key• Interest Rates• Inflation• Consumer Confidence• Unemployment Data• Balance of Payments

The picture shows a Zimbabwean carrying pile load of cash to buy something. Seems like a lot of money… but fact is the pile of cash is probably worth less than 100 US dollars.

Revision – Books closedRevision – Books closed

• What are 3 external influences causing change for business?

• What are 3 indicators of change in the economy?

• How does the government slow inflation?• How did the government stimulus package

affect the cost of borrowing money?

External Influences –External Influences –Financial MarketsFinancial Markets• Deregulation by government – market

oriented approach• New banks and financial institutions• International sources of finance• Technology allows for new products

• Australia’s geographic location in the Asia Pacific Region have provided challenging opportunities for business expansion, sales and profit.

• Further changes that are affecting Australian business originates from changing demographic factors.

• Ageing pop and lower birth rates

External Influences - External Influences - GeographicalGeographical

• Social Change can incorporate any one or a Social Change can incorporate any one or a combination of the following factors; changes combination of the following factors; changes in beliefs, business ethics, work attitude, in beliefs, business ethics, work attitude, cultural changes, spending habits and cultural changes, spending habits and population changes.population changes.

• Two social issues leading to significant change in business practice include:

-desire to have family-friendly workplace practices

-changing makeup of workplaces.

External Influences – External Influences – Social InfluencesSocial Influences

External Influences - External Influences - Legal InfluencesLegal Influences• Deregulation: is the removal or simplification

of government rules and regulations that constrain the operation of market forces.

• Why is this good for businesses?• What is the opposite of deregulation?• Regulation• Can you think of areas of business that have

seen increased regulation?

• Environmental• Consumer

protection• OH&S• Industrial Relations• Trade Practices

External External Influences - Influences - Legal Legal InfluencesInfluences

External Influences - External Influences - PoliticalPolitical• government

regulators – ACCC ASIC

• Political parties have different approaches to managing the economy

• Tax and areas of Law

• Floating of the Aus $ (Dec 1983)

• GST was a huge change in 2000

• Free trade – removal of protection

• Government plays a major role in having a stable economy

• Increased productivity• Improved quality and

range of goods• Reducing costs• Eliminating boring

repetitious jobs• Increases need for

highly skilled labour• Emphasis on training

External External influences- influences- Technological Technological DevelopmentsDevelopments

ActivitiesActivities

• Evaluate the accuracy of the following statement: ‘One of Australia’s main competitive advantages in terms of world trade is its geographic location within the Asia Pacific Region’

• Select two demographic influences on business and explain how they lead to opportunities and threats for businesses.

Internal InfluencesInternal Influences

• Internal Change springs from the desire to develop new and improved ways of doing things.

• It may be in response to employee requests or the result of constantly striving for higher levels of efficiency and productivity.

Internal Influence- Accelerating rate of Internal Influence- Accelerating rate of technological developmenttechnological development

• Many of the businesses operations and functions are affected from the advances in information and communications technology

Electronic commerce(e-Electronic commerce(e-commerce)commerce)

• Electronic commerce(e-commerce) is the use of electronic communications to do business.

• It covers all transactions made by electronic methods, including phone, facsimile, and the internet.

• E-commerce creates new ways of operating by introducing new systems and procedures.

New Systems and proceduresNew Systems and procedures

• Many changes to the existing systems and procedures have been brought about by technological development. Some of these include:

o New business tools that assist in accessing and analysing information from a variety of sources

o The integration of business into the global market.

o Improved methods of processing vast amounts of information etc.

New Business CultureNew Business Culture

• A business culture is a set of mostly unwritten or informal rules that spell out how people are to behave most of the time. These rules are based on values, ideas, expectations and beliefs shared by members of the organisation.

• Therefore, any new rules and processes of regulating employees, or by changing the structure of the organisation itself must be carefully managed.