In order to operate successfully, businesses today need to operate in rapidly changing markets and conditions, developing a culture which is prepared to respond to change.
They are no longer able to rely on a constant stream of customers, the same production press or indeed the same product over a long period of time.
They must remain aware of and prepared to respond to, a variety of changes from external factors. The impact and response to change can be managed successfully.
There are many changes that could potentially affect a business for better or worse, including developments in technology; market changes; consumer tastes; legislation; changes in the workforce and changes in the economy.
These changes can have a number of different effects on business:
• Product life cycles could become shorter and businesses must constantly be looking to develop new and more profitable goods and services
• The role of market research is likely to increase. A business simply cannot afford to be surprised by sudden changes in the market; instead, research and forecasting techniques should help to more accurately predict future situations
• Research and development (R&D) will be essential in industries in which rapid change is taking place. A business must respond to the needs of the market with new products as well as anticipate market changes
• Retraining of managers and shop-floor workers may be necessary in order to keep up with changes in technology or to develop skills to meet changes in consumer tastes
• Business must take account of changes in human resources (HR) planning, for example, employing a more flexible workforce to meet the needs of the business
• Businesses must be aware of their competitor’s actions in order to properly react to them and to new and emerging markets
• As consumer tastes and awareness develop, and competition increases, quality is likely to become increasingly important. Firms will need to consider the quality of their goods, their sales service and customer relations
• Rapid technological changes often make equipment redundant, resulting in high spending if a business does not want to become outdated
• Increased changes can sometimes lead to increased costs, resulting in many businesses outsourcing their production to low-cost countries. Other businesses, however, have simply changed the technology they use in order to lower costs.
Managing change has increasingly grown in importance in recent years, due to pressure from competitors, higher costs and economic conditions. Many UK firms have resorted to developing company-wide change programmes.
While some companies have made minor changes and remained successful (stressing the original features to attract customers) most companies that refuse to change will eventually go out of business.