Causes and Effects of Change
The causes of change in business: businesses today have to operate and rapidly changing markets and conditions. They can no longer rely on a constant stream of customers; the same production process was selling the same product over a long period of time. They must be aware of, and be prepared to, organisational change in a number of areas.
Changes in organisational size: the size of an organisation will naturally change as it seeks to grow. Growth is a key corporate objectives as allows a firm to satisfy shareholders and create security for stakeholders. What are the most significant drivers of change as a business grows is in the tree structure and policies and Processes to manage expansion.
Sometimes a business will look to grow externally by merging or taking over another business. This can bring very sudden change all aspects of the business. How an organisation manages proof can be the difference between success and failure. Most businesses are unable to operate as he wants to do it when they were small business. There are particular advantages to be a small business, which can be lost as companies grow.
Effects of change in organisational size:
- Competitiveness. There are significant advantages to growth in the form of economies of scale, brand recognition and financial security. Overall, business will grow to achieve these benefits
- Productivity. Firms are certainly more productive as a consequence. However, in to exploit this firms have to alter the scale and methods of production. For some organizations this may require investment in alternate production facilities and the loss of a highly skilled small workforce
- Financial performance. With growth company to invest. This investment could come from the reinvestment of profits, more often than not, a firm will finance crew through borrowing. A highly geared business is a Risky Business. Nevertheless, therefore growth often bring with it an increase profit in real terms in this is likely to please shareholders
- Stakeholders. Fortunately, growth brings with its new opportunities for employee’s bonuses and promotion prospects. It may also be necessary to recruit new employees, and this is another important change to a firm. Individual workers might be concerned that they will no longer work with friends or may be moved to a job that they don’t like. As a firm grows there is the danger of losing connection with its customers base. Larger organisations sometimes find it more difficult to offer a personal service. Trying to maintain a personal service has been the focus of many High Street banks for example, NatWest has looked at extending branch opening hours and, historically, HSBC strapline has been the world’s local bank the expansion of businesses can also create pressures on local Communities. For example, the increased traffic caused by a great factory can cause a negative externalities in the form of noise pollution, damage to roads and congestion
Poor business performance: the poor performance of an organisation will invariably bring with it a period of change as a company strives to regain customers, sales, profit or reputation. Often the change after period of poor performance will happen quickly as a business leaders try to turn the tide and prove The Fortunes of the company before failure and possibly closure period for this reason change will often be very quick and their focus on the corporate objective or change the corporate strategy. Sometimes when a large business has a period of poor performance, a change of Higher Management with a chief executive officer is made. New leadership usually bring significant change as new bosses’ asset themselves and strike a new course for the business. 2015 Deutsche Bank, the world’s largest lender, appointed Jon Cryer as CEO after years of reported scandals. His appointment had an immediate impact jumping share prices by 8% before he made any decisions