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The business environment has been experiencing rapid change
in recent years: "There is only one constant in business and that is change".
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Managers need to respond to change to ensure the business's
long-term survival.
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Change is any alteration in the business and work
environment, including changes in people's perceptions.
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Successful managers anticipate and adjust to changes, as well
as initiating change themselves.
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All changes need to be evaluated to assess their overall
impact- poorly managed change results in employee resistance, tension, anxiety,
lost productivity and decreased profits.
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The changing nature of markets
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Businesses compete in markets for resources used in
production and for sales of finished products.
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Globalisation is turning the whole world into one single
market through hi-tech communications, lower transaction costs and unrestricted
trade and financial flows.
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Globalisation has led to many businesses needing to downsize-
reduce the workforce, and eliminate jobs and positions.
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Economic influences
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Fluctuations in economic activity makes it impossible to
achieve smooth, measured growth rates.
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Peaks and troughs, with recessions and recoveries make up the
business cycle.
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Large fluctuations cause substantial economic problems for
all society, as a result, governments try to stabilise the economy through
macroeconomic (fiscal policy, monetary policy and external policy) and
microeconomic (structural adjustment and microeconomic reform) policy.
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Financial influences
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Deregulation of Australia's financial system leading to a
more flexible, market-orientated approach
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New banking products and financial packages.
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Global financial markets are available to Australian
businesses.
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Geographical influences
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Australia will be effected by trends in the Asia-Pacific
region
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Demographic trends in Australia will result in further
changes to business activity- slow down of population growth and changes in
age-structure
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Social influences
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Changes in tastes, fashions and culture can lead to sales and
profit opportunities and business growth.
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Growing awareness of the environment.
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Legal influences
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Deregulation is the removal of government regulations from
industry in order to enable businesses to perform more efficiently, enhance
comnpetition and reduce restrictive practices.
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Regulation has increased in some areas such as fair trading,
environmental protection, consumer protection, OHS, industrial relations etc.
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Political influences
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Changes in Federal and State governments leads to changes in
policies.
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A recent political issue is the GST- requiring businesses to
keep and maintain more records and to pass on the 10% tax.
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ABN (Australian Business Number) was also recently
introduced.
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Recent governments have pursued policies of deregulation and
privatisation
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Technological developments
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Technology has revolutionised the workplace and daily living,
allowing increased productivity and efficiency through, for example, automation
and robotics, instantaneous global communication etc.
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Effects of accelerating technological change
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Technological change has influenced the internal environment
through e-mail & the internet, mobile phones, tele-commuting, etc.
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E-commerce
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Electronic commerce is the use of electronic communication to
do business, including fax and internet.
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E-commerce may be business-to-consumer, or
business-to-business.
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New systems and procedures
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E-commerce and the internet have forced businesses to
redesign internal systems and procedures such as:
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new tools for accessing and analysing information
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integrating the business into the global economy
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managers learning a new language of business
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business culture becoming more outward looking and export
orientated
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improved methods of processing vast amounts of information
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shift from trading in goods to trading in information
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innovation has become more important than ever
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automation of ordering and delivery processes
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being able to find the cheapest suppliers anywhere in the
world
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faster dissemination of ideas and information
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moving beyond national boundaries
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dramatic reduction in day-to-day costs
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New business cultures
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Research indicates a strong link between business culture and
long-term financial success and new technology and jobs often require a change
in business culture for a business to benefit fully.
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Business culture refers to the combination of assumptions
about how employees thank, feel and act. It can be a more important factor than
new technology and systems.
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Organisations need to continually respond to change is they
are going to survive and prosper. Structural change refers to changes in how the
business is organised, that is, the organisational structure. Recent structural
changes include:
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Outsourcing
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Outsourcing is the contracting of some business operations to
outside suppliers. It's popular because it minimises an organisation's full-time
staff, making it more flexible and often cheaper.
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Flat structures
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Middle-management positions are abolished, employees are
given greater responsibility and accountability, teamwork is encouraged, there
is a supportive learning environment.
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The contemporary workplace is seeing less formal, looser
structures, based on networked teams.
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Strategic alliances
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Two or more businesses join together and pool their
resources- this joint venture arrangement has become very popular in recent
years since it is a win-win situation. e.g. AOL-Time Warner
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Network structures
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In this structure the business does not actually produce what
it sells, is relies on another business to perform the engineering, production,
marketing functions under a contractual arrangement. A network structure only
provides administrative control of another business. E.g. Nike.
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