An organisation may decide that henceforth it will hire only college graduates for its management training program. Obsolescence occurs when an organisation’s products or services are replaced by more desirable products or services. A manager’s philosophy of change should encompass at least three elements — trust, organisational learning, and adaptiveness: Trust is defined as “an assured reliance on some person or thing, a confident dependence on the character, ability, strength, or truth of someone or something.”. For example, the development of a new set of expectations for job performance will influence the values and behaviours of the employees affected. Managing Change 4. In addition, people have selective perception of situations, which may inhibit change. Deals in numerous transactions. Reactions to change are usually of the following types: 1. Table 15.2 lists five major areas where technological change is likely to be experienced. Buying and Selling: The basic activity of any business is trading. Sophie Johnson is a freelance writer and editor of both print and film media. Various factors may cause decline and potential termination, but the real cause seems to be poor management, which may include anything from choosing a wrong location for a new business to over investing in capital equipment to being too generous with customer credit. What Are the Differences Between a Merchandising Company & a Manufacturing Company? Overcoming Resistance 8. They prefer to wait and watch. A change in work processes may require that employees be able to operate new kinds of equipment. If there is any residue (surplus) it is distributed among the shareholders. Without customers for its products or services, a company can't stay afloat, making marketing another crucial business activity. Business results into generation of employment opportunities thereby leading to growth of the economy. 3. Besides operations, marketing and finance activities, other types of business functions become important as a company grows. Copyright 10. For developing proper strategy the manager must have a philosophy about the dynamics of change. In a like manner, suppliers affect organisations by raising or lowering prices, changing product lines, or even snapping trade relations with a company. Economic conditions may also hurt specific businesses. Cafeteria benefits plan allow employees to choose the benefit package best suited to their own needs. In practice, numerous factors affect an organisation and most of these are continuously changing. Major alterations in an organisation’s overall design are also part of a structural approach to change.

• Businesses exist to satisfy the needs and wants of people, organizations, and governments. 4. The recent history of leading corporations indicates that introducing the change gradually can work wonders. 2. A change in work sequence may or may not accompany a change in equipment or a change in work processes. Activities to accomplish those aims include creating production schedules, taking inventory, equipment maintenance, measuring quality and efficiency, and designing workflows. Competitors obviously influence organisation via their price structures and product lines. 15.3 shows that there are two major ways of dealing with organisational change. Improved performance should be the source of reinforcement and thus should lead to a commitment to the change. Overcoming Resistance 8. © 2019 www.azcentral.com. Other Business Activities. ore refuses to give delivery of the goods until paid. Sunlight sent through raindrops is spread out to display its various colors (the different colors are just the way our eyes perceive radiation with slightly different energies). Finally, subsidiaries can spur change as they add to or drain from the resource base of the holding company. With employees comes the need to manage a company's human resources. Solutions are searched out by creatively developing new and plausible alternatives. Advertisement. Management, Organisation, Organisational Change. Business activities are any activity a business engages in for the primary purpose of making a profit, including operations, investing, and financing activities. explain the nature and spectrum of business activities. For example, a job enrichment programme could require the purchase of new machinery that might, in turn, affect other processes in the work system. It is quite obvious that managers seek to change those elements which stand in the way of maximum organisational effectiveness. This is very important, as most workers have a myopic vision about the organisation to which they belong. Important activities under the human resources umbrella include training and hiring. Business’s only purpose is profit, it is driven by it. Primary Classifications of Business Activities. As new raw materials and appropriate new production processes are developed, technological change will probably become more pervasive. A transformation is a change not just in the organisation structure but (very often) from one kind of business to another. In fact, resistance to change — for better or worse — is proposed. ways of doing things. In other words various forces inside the organisation may cause change. Due to changes in environmental conditions or management philosophy an organisation could move to become more or less decen­tralised. Businesses is a routine of school kind. Or, a behavioural problem may arise that cannot be solved by any other means. Organisational Decline and Termination. As socio-cultural values shift, for example, workers’ attitudes toward their jobs may also shift and they may demand a change in working hours or working conditions. Government policy relating to control and regulation of business may also result in decline or termination. As with most information-processing systems, computers play a major role in the upsurge of automation. 0000003734 00000 n 0000005260 00000 n It used information technology to create a cross-functional inter-enterprise (involving more than one organization) system called SCM information systems. Finally, financial cutbacks include reduction in operating budgets and freezes on hiring. 4. Table 15.5 lists the major causes of decline and termination and as also various ways in which the organisation may respond. Another way to exert control is to focus on minimising work-related accidents. The purpose of industry is to create form utility by converting raw materials into useful forms of finished products. If subordinates are encouraged to participate in the process, they will develop a sense of involvement and are likely to be more committed to the course of action finally chosen. The fact is that while some organisational change is planned well in advance, other changes come about as a reaction to unexpected events. Section 1.1 The Nature of Business Activity Unit 1 2. A structural change refers to “a change in any of the basic components of organisation structure or in the organisation’s overall design”. Economic conditions- such as recession, money supplies, inflation, and interest rates — are sources of change. Oxford University Press: The Functions of Business, Small Business Administration: Marketing 101, Purpose of a Board of Directors for Nonprofit Organizations, How to Link HR Strategies with Business Strategies, The Top Ten Benefits of Planning in Project Management, Privacy Notice/Your California Privacy Rights. His peers and subordinates may resist this change because they do not agree with the manager’s assessment or simply perceive the situation differently. The main thing in business is that you have to concentrate on the thing that you are selling. A change in work process or work activities may also be necessary if new equipment is introduced, or new products are manufactured. Firstly, there is a re-distribution of power within the organisational structure. 0000005016 00000 n 5. Changes tend to threaten habits and security. Pressures for change may also originate from within the organisation. Several different methods for dealing with “replaced” employees are available. However, these two sets of factors are not found in isolation. Changing the above three elements improves employee behaviour, leading to greater organisational effectiveness, as illustrated in Fig. After reading this article you will learn about:- 1. Divestiture involves selling complete divisions or units to other organisations. Another “person-focused” change strategy is selection, which takes a longer-term perspective than replacement. Gronroos defined a service as “an activity or series of activities of more or less intangible nature that normally, not necessarily, take place in interactions between the customer and service employees and/or physical resources or goods and/or systems of the service provider, which are provided as solution to customer problems”.

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