Global Environment Changes Within The Internal Environment example essay topic

Change is any alteration of the status quo. Organisational change is where the internal elements of an organisation - personal, structures, culture, technology, work processes, policy and procedure are subject to alteration on an on-going basis. Organisations need to change because of changes in the operating and macro-environment. As change is inevitable and continuous organisations must be proactive, respond to the pressures and introduce change in order to survive, achieve their objectives and maintain a competitive edge. The pressure for change comes from the macro-environment. The macro-environment is the broader factors which affect and organisation, some of which include political, social, geographic and technological factors.

These pressures come from outside the organisation and the organisation has no control over the macro-environment. The pressures cause the organisation to change and adapt so objectives can be achieved. In order for any change to be successful an effective change management process should be followed. An effective change management process that could be followed when implementing change is the one identified by Kurt Lewin. There are three phases in this theory, and it begins with the preparation for change. It involves changing individuals in the organisation.

Changing their attitudes towards the organisational change. This is called the unfreezing phases. Phase two is the movement phase. This phase involves changing the organisational structure - reporting relationships, work design. The third phase is the refreezing and evaluation of the change in operation and maintaining the momentum of change. Strategies that contribute to effective change management especially when there is resistance to change include support programs that retrain employees so adapting to the new change is not so daunting.

Another is employee feedback - two-way communication between the manager and employee to express concerns or ideas. Managers act as change agents, they initiate change or make change happen in a systematic process that can be broken down into steps, that allows workers to understand what is happening as each stage proceeds. Communication must be very good. These strategies are that they can all be successful as long as management itself promotes a positive attitude to change throughout the organisation especially when organisations are competing in a world of globalisation. Globalisation is the expansion of international trade and communication across countries generally as a result of the removal of trade restrictions within countries.

Globalisation is important because businesses entering new markets are being challenged by new competitors. Innovation and creativity are required to deal with changes in competitors, marketing strategies and in dealing with the development of new products more frequently. Global corporations have production operations in many countries around the world. Some of the largest corporations have operations so widely spread that they are virtually 'stateless'. An example on the growth of a global business is News Corp. It is a company that has thrived on globalisation. In less than a decade, this media group has grown from a domestic newspaper company (Herald Sun) into one of the most powerful media empires in the world.

Its newspapers, television stations, pay TV, books, movies and videos reach three-quarters of the world's population and its shares are traded around the world. Technological developments such as improved communication and changes in legislation have allowed world trade to occur and have assisted in the development of global businesses. There are numerous forms that a global business can take, two of which include the multinational and transnational strategies. The multinational strategy focuses on treating the domestic market of each host country differently. In each host country a separate foreign subsidiary is established and managed as an independent organisation as each develops its own strategies, which adapts to local market and environmental conditions. Examples of industries that adopt this strategy are laundry detergents, cosmetics and processed food products.

Another strategy is the transnational strategy. It is an overlap between multi domestic and globalisation strategies. McDonalds adopts the transnational strategy. Through international franchise arrangements, the business moves around international borders by duplicating the successful business formula. In this strategy activities are centralised by the applications are adapted to local conditions. Change agents can evaluate the effectiveness of introducing a business into a global environment by using key performance indicators.

Key performance indicators are quantifiable measures used to measure the progress of the work team or workplace towards the achievement of organisational goals or objectives. Two key performance indicators that would indicate how effective the change implemented has been while competing in a global environment are profitability and market share. Profitability is the capacity or potential of an organisation to make profit. Measures of profitability include return on capital employed, positive net cash flows and the ratio of net profit sales.

Market share is the share of the total sales of all brands or products competing in the same market that is expressed as a percentage. A business operating in a global environment can increase their market share by increasing their efficiency, which relates to the relationship between resource inputs and outputs. This therefore leads to the business lowering costs while at the same time maintaining quality and achieving a competitive edge. Profitability can be achieved if a business is achieving their target profit figure. The establishment of a global business impacts the internal environment. There are several ways globalisation can influence the internal environment of a business, one of which is structure - expanding the business.

This can be achieved by increasing employment in the business, purchasing of new capital equipment, venturing into new markets or new product lines and being involved with mergers and takeovers. Another impact on the internal environment of the business is the introduction of technological change. Technological change involves new capital equipment, new technology training and new production methods. When a business is competing in a global environment changes within the internal environment have to be made. An example of a business that had to employ change as a result of external pressures was Qantas.

Qantas is the world's oldest continually operating airline. It was founded in the Queensland outback in 1920 and is Australia's largest domestic and international airline. Qantas is also recognised as one of the world's leading long distance airlines, having pioneered services from Australia to North America and Europe. Qantas employs more than 33000 staff across a network, which spans 142-destinations in Australia, Africa, America, Asia, Europe and the Pacific. Qantas works in the global market place with its international flights operating in the countries mentioned above. International airlines also operate out of Australia such as Air New Zealand and British Airways.

The fall of the Australian dollar had a significant impact on Qantas together with increased competition and the cost of airfares. Qantas was forced to introduce changes to its operations. In response to the competitive pressures, Qantas introduced changes such as cutting their prices in the hope of putting competitors such as Impulse and Virgin Blue out of business. They also made business deals with Impulse Airlines for a takeover. There are several factors that indicate that the changes within the organisation Qantas have been effective.

Qantas in 2002 recorded a net profit of $A 631.0 million which was up 5.7% of the previous year. Another indicator is the increase in market share, which at present is approximately 80%. Qantas is an organisation that is a 'good practice' example because their change within the organisation has been successful. Managers showed leadership skills, followed an effective change process, acted as change agents by developing a strategy.

Managers gained employee acceptance and commitment to the changes and the key performance indicators reflected on how effective the change actually was. Qantas will continue to seek cost efficiencies, structural changes and actively manage its operations with a view to improving profitability. Strategies aimed at achieving these include a focus on market segmentation in both the domestic and international markets, invest in a new and more cost efficient fleet, a focus on improving the profitability of subsidiary businesses and continued investment in technology while competing in a global environment. Qantas is an example of an organisation that is surviving in a rapidly changing environment.