Understand_Why_Change_Happens_in_a_Business_Environment.

Understand why change happens in a business environment. Explain why change happens in a business environment. You should include at least three reasons in your answer. Changes in business can happen for political, economic, social or technical reasons. These are all reasons outside of the business and are reactive. Political changes often occur due to changes that occur outside of the business and are therefore out of the direct control of the business. If there is a change in the law it may mean that the business has to change the way it does things. If it does not change and adapt to suit the new law this may cause the business to be prosecuted. There may also be political unrest in a country that the business deals with which may lead to the business having to change suppliers, if the business has suppliers in that country or they may have to stop exporting to that country. Economic changes may occur due to fluctuations in the exchange rate. It a business regularly imports from another country and the currency in that country changes it may no longer be possible to deal in imports and exports with the organisation within that country. The business may then have to change who it deals with. Another possible change could lead to loss of business if imports from competitors make it cheaper to buy elsewhere. A business may also have to change if they have a competitor who sells the same service or products moves near to them. An example would be if a large supermarket was to open near a smaller supermarket. Due to the buying power of the larger supermarket the smaller one may have to reduce its staff members, open for fewer hours, try to reduce the prices of their products to try to compete and could close. Social change occurs due to change in consumer attitude. An example would be in the mobile phone market Blackberries were the most popular smartphone and then a new smartphone the I-phone comes on the market and there is a big move towards the I-phone away from the Blackberry. Staff would have to possibly sell off the Blackberry phones at a cheaper price and retrained in the benefits and features of the I-phone. The above social example could also fall into the Technological changes that occur. Mobile phones are always advancing in technology and the staff that make them and sell them have to be retrained and be adaptable to the technological advances. All the above are examples of reactive change that occurs outside of the business. All of them will create pressure and will force the business to make changes within the organisation. Change that occurs within the business is called Proactive change.