Change management is management for dealing with changes, both from the perspective of organizational and individual. Change management is a process which defines and implements procedures and/or technologies for dealing changes in a business environment and to gain profit changing opportunities. In other words change management is management to implement changes, control and to gain profit from that changes. It is a process of systematic approach to get on desire place from current place.
"it is easiest to ride a horse in the direction, it is going. In other words, do not struggle against change learn to use it to your advantage."Terry Paulson, the author of "Paulson on changes."
Every business either big or small have to introduce change in accordance to remain competitive. Now-a-days business market became global market. Almost every business affected by globalisation. Every organisation wants to be successful, wants to remains competitor and wants to gain profit; all these needs force them to introduce change. These changes may be internal or external. Internal change means to empower employees to deal with change in a business environment.
COMPONENTS OF BUSINESS ENVIRONMENT
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in response to managing environmental a manager must follow a change in rules, policies & strategies. There are two types of environments in which a firm exists.
1) Micro environment
2) Macro environment
1) Micro environment-: Internal and controllable factors which influence decision making and affect performance and strategy of a business. Micro environment involves internal structure, staff, culture and resources of the organisation. This is sometimes identified into the internal functional areas such as marketing, finance, human resource, production and research and development. All these components are able to control and manageable at managerial strategic level. These factors have direct impact on particular organizational structure. These factors are as follows:
Roll of employees: Employing the capable staff and keeping these staff motivated is the indispensible part of the strategic planning process of an organization. Training and development plays main role in every sector like in service, manufacture and marketing sector in-order to gain aÂ competitive edge.Â
Roll of suppliers: Increasing costs of raw-material, labour and transportation will have great impact on the marketing field in every business. As a result product prices may be forced up . The quality of product may also effect the relationship between suppliers and buyers because quality does matter in roll of supply.
Roll of shareholders: Every organization need liquid funds for the growth, which pressurise that particular organization to move from private ownership to public. Organization that do not put their emphasis on attracting and retaining talent may find them self entire consequences as their competitors may be outplaying them in strategic roll of shareholders. Satisfying shareholder needs may result in a change in tactics which is employed by an organization. Many internal companies who share prices rapidly growth in year 1999 and early 2000 have seen the share price rapidly fall as they face pressures from shareholders to turn in a profit.
Roll of competitive edge: Differentiation is the name of the game in marketing. What beneficial offers can an organization provide which is better than their competitors? Organisation need to keep up with new competition edge and must be aware with new technology. Technology changing day by day, every business effecting by new technology and being forced to adopt advanced source of technology for example computer and mobiles, resulting faster business activities. Competitor analysis and monitoring them is crucial if an organization is to maintain its position within the market.Â
Roll of manufacturer, distributors & retailers: All these people are very close to organizations. An organisation may largely affected by changes in the work policies of the manufacturer, distributors & retailers. That charges can result big difference in overall cost of the product.
2) Macro Environment:- These factors are out of control of management of business but still incredibly affects the business. These are external and uncontrollable factors. The organization has to fit into this environment to remain in existence in the competitive scenario. These factor also affects internal factors ( i.e factors of micro environment).
There are some factors in the macro-environment that will have affect on the decisions of the managers in any organization in the whole world. Changes in taxation, new laws, trade obstacles, demographic change and government policy, political changes are all examples of macro change. To analyze these factors managers can categories them using the PESTEL model. These factors are as follows:-
Always on Time
Marked to Standard
Political factors: Political factors refers government policies. For example: the degree of intervention in the economy. Up to what extent does it believe in subsidizing firms? What services and goods a government wants to provide. In terms of business support, What are its major priorities? These factors are uncontrollable by an organization. Decisions of political factors can impact on many vital areas of an organization like, the education of the workforce, the health of the nation and the quality of the infrastructure of the economy such as rail system and the road.
Economic factors: An economic factor includes taxation changes, interest rates, economic growth, exchange rates and inflation. For example:
Higher interest rate may deter the investment because it costs more to borrow.
Inflation may provoke the higher wage demands from employees and raise costs.
Higher national income growth may boost the demand for a firm's products.
Social factors: In social trends changes can impact on the demand for a firm's products. It can also impact on the availability and willingness of workers to work.
In the United Kingdom, the population has been ageing. As a result, increased the costs for firms, who are committed to pension payments for their workers because their staffs are living longer. The ageing population also has effects on the demand like demand for sheltered accommodation and medicines has increased whereas toys demand is failing.
Technological factors: New products and new processes being creating by New technological innovations. Advanced technology leading to new business markets like I-PHONES, MOBILES BUSINESS,E-COMMERCE and INTERNET . Some other improvements making business fast-forwarding for example- Online shopping, bar coding and computer aided design. These innovations making business more fast and secure. Technology helping to reduce costs; improvement in quality and leads to new innovation. These technological developments are beneficial for the businessman and customers as well.
Environmental factors: This factor includes the changes in the weather and climate. Many industries can have great impact because of change in temperature like farming, tourism and insurance. Due to global warming, major climate changes occurring and with greater environmental awareness these external factors are becoming a significant considerable issue for firms. Many industries having great impact by the growing desire to protect the environment like the travel and transportation industries. (For example: the success of hybrid cars and more taxes being opposed on air travel.) People are moving toward environment friendly products resulting more business opportunities.
Legal factors: These factors are legally environmental in which firm operates. In last few years in the United Kingdom there have been many beneficial legal changes like introduction of age discrimination and disability discrimination legislation. There are some other legal changes for example an increase in minimum wage (it was £5.75 few months before and now is about £5.80 an hour) and greater requirements for the firms to recycle, that affect organizational actions. These changes also can affect a firm's costs and demand.
Total-waste limited is a major Waste management services provider. It is located in west London in Northolt. Total waste was opened in 2006 by Mr. Jay patel, a businessman. He started this recycling business with two employees and a van in a small warehouse. He struggled a lot in his starting day facing big recycling nationwide companies like biffa, wastetech and greener world etc. But in one year, his dedication to work and positive thinking brought total waste into line of prominent waste management service providers within London. At starting total waste use to provide its customer only cardboard waste solution.
At the end of 2007 total waste's monthly income was 35,000. But that was not enough. Then total waste started to provide paper and plastic waste services. Within couple of months total waste got many customers. Most of them were offices because many companies generate office paper waste and being bound by government policies in UK they have to remove waste for recycling. Total waste provided free paper recycling services. With in some weeks it became first choice of many companies. It's rapidly expansion forced it to move to bigger warehouse as well as increase number of employees.
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But starting months of 2008 recession claimed worst situation in UK as well as in whole world. Many companies shut down because of low profitability and cut in costs. Total waste also could not remain unaffected. Because of loosing many customer total waste also forced to shut down.
In the early day of 2009 Mr. Jay again thought to reopen total waste with the help of aviation engineer Mr Dipesh. Who supported total waste by finance, which was needed at that time, Some old customer were also reopening, with in some weeks it's made great progress and achieved its repetitive place in the market. Now total waste had finance, so new baling machines and two Lorries bought caused large volume of cardboard and plastic collection. The paper waste was low as comparatively before.
A research done by management and discovered that some companies were feeling unsecure due to increase concern in data protection and increase no. of cases of identity fraud. Confidential destruction of documents became very important for all business. The security of not leaking secret document became important.
As a result total waste decided to provide paper shredding services. It was safest way to dispose off paper waste. Companies started to rely on total waste. As matter of fact customer feel secure about data protection. It changed total waste on high level. Some small recycling companies being overtaken by total waste, example-GB Recycling. This also forced total waste to move in big building with 36 employees. It's business spreading out of London. Now they have two more branches located in Birmingham and Luton. Its annual turnover is £1800 thousands and also targeting new markets in Europe and Asia.
Resistance to change
People often do not like changes because they use to with old methods of work. They like things predictable and stability in work. In organisation employees scared of change. Because of job security they are not secure their jobs are secure if they involves in change. Some also think that change does not make sense mean to say change is useless. Some of them afraid to learn new things and fear to lose something they value or they dislike manger. It might be their designation and reputation they have. Resistance to change is action taken by individuals and organisations when they got threat that what change is happening is threatening to them. There are multiple reasons to resist change or we can say there is wide range variety of reasons for resisting change.
There are multiple reasons to resist change but a manager and management always finds other ways to improve their business in order to remain competitive and also for the proper use of resources they have, to get maximum profit from them.
Approaches to reduce change
A manager reduce resistance up to a extent. Selection of capable people is big responsibility of the manager. As a manager, he needs to take various steps to reduce resistance to change. There are some approaches he can adopt in accordance to reduce resistance. These are as follows:-
1) Communication:- A manager should understand properly what changes going to happen and make the staff understanding what is it all about? The best way to explain what may happen is communication. Manager needs to communicate all aspects of change. There are few steps manager needs to take before change happens.
a) Meetings:- a manager should call meetings on early stages. Meeting on early stages is very important to end up rumour about change. Sometime employees make misconceptions in their mind. So it becomes necessary to get them aware about the forthcoming problem or planning.
b) Suggestions and feedback:- Other important thing is to know what people about what is explained. Some may have positive or other may have negative view about that particular change. So, suggestion of staff becomes necessary. If may have some question in their mind. This may become the reason of resistance. Feedback also play vital role in decision making.
2) Support:- As a manager, he needs to support staff at all the time. Some people hesitate to innovate; a manger can morally and physically support them. Some employees feel scare they do not prefer to do things. They do not like change because they use to with the old means of work so they resist change. Manager should support them and make sure they going to get proper training.
3) Motivation:- Motivation is fuel for all employees. The field of motivation is vital as a complete subject. Manager must know that how to motivate employees to resistance to change. First thing every employee wants is job security. They should be make sure that with the changes they will not loose their jobs. They must be aware that it is for the betterment of the business. At the time of expansion company seek new market consequently they need well trained employees. Manager can motivate employees to work on new place may offering better salary or commission and reward. Employees should also be motivated by praising their word. A manger should respond them and stimulate them they doing well.
So we can conclude as read above report that, it's clearly notified that change is very much vital important for every organization and as well as employees, because it does affect internal and external of of business, so change should be apply in every part of business sector as a time begin, And to make in organization is possible due to support given from employees. Micro and Macro is two main parts of every scale of business and minor change of these factor also affect whole organization rapidly. In micro its effect on internal part of business like material labour but in macro its part is very vital and it is affected several part of business like political, social, Technological and legal sector.
Change may be good if it is taken by planning or good resource otherwise its also can give negative response, in this case study we can see how change affected in business internal and external part. So businessman and decision maker is responsible for every sector of change in organization.