The ability of an organisation to adapt to change in its external environment is the key to its long-term success.
"The ability of an organisation to adapt to change in its external environment is the key to its long-term success."
Discuss. (40 marks)
Long-term success is the main objective of any business. In order to fulfil this objective a business must focus on its market (the 'external environment'), and the needs of its customers. This usually means adapting to change, especially if the business wishes to expand and open new stores and/or production facilities. The needs of customers are constantly changing. Before the internet became widely accessible, cassette tapes and CD's used to dominate the portable music market. Companies such as Sony, Ativa and numerous Chinese companies used to distribute cassettes to a mass market, until the more efficient storage method of the compact disk (CD) came along, which rendered cassettes obsolete. The introduction of the internet saw a decline in sales of traditional cassettes and tapes, because customers favoured the easier method of download straight from the internet. HMV didn't anticipate the move towards e-music and downloads, and has suffered an 11.4% decline in like-for-like sales since 20061. This is a prime example of when a business hasn't adapted to change and has suffered as a result.
However, a major factor that influences success in the long-run is the quality of management and workers. An organisation must be flexible when managing its labour force. If a firm wishes to maximise its profit, then consistent management techniques will not achieve long-term success. Consumer's tastes vary over time, as previously mentioned, and the business must respond by changing employees' skills and abilities in line with this to meet consumers' needs throughout training and external recruitment. If a business can manage its human capital then it is prone to survive in its long-term environment. For example, John Lewis provides regular training (both on and off the job) and social events for all its employees, which has been proved to be an effective non-financial method of motivation. Motivating employee's gains passive benefits, including less sick time and a higher level of productivity, both of these factors allow more efficient production which helps get the product onto shelves at a cheap price - exactly what customers want.
Discuss. (40 marks)
Long-term success is the main objective of any business. In order to fulfil this objective a business must focus on its market (the 'external environment'), and the needs of its customers. This usually means adapting to change, especially if the business wishes to expand and open new stores and/or production facilities. The needs of customers are constantly changing. Before the internet became widely accessible, cassette tapes and CD's used to dominate the portable music market. Companies such as Sony, Ativa and numerous Chinese companies used to distribute cassettes to a mass market, until the more efficient storage method of the compact disk (CD) came along, which rendered cassettes obsolete. The introduction of the internet saw a decline in sales of traditional cassettes and tapes, because customers favoured the easier method of download straight from the internet. HMV didn't anticipate the move towards e-music and downloads, and has suffered an 11.4% decline in like-for-like sales since 20061. This is a prime example of when a business hasn't adapted to change and has suffered as a result.
However, a major factor that influences success in the long-run is the quality of management and workers. An organisation must be flexible when managing its labour force. If a firm wishes to maximise its profit, then consistent management techniques will not achieve long-term success. Consumer's tastes vary over time, as previously mentioned, and the business must respond by changing employees' skills and abilities in line with this to meet consumers' needs throughout training and external recruitment. If a business can manage its human capital then it is prone to survive in its long-term environment. For example, John Lewis provides regular training (both on and off the job) and social events for all its employees, which has been proved to be an effective non-financial method of motivation. Motivating employee's gains passive benefits, including less sick time and a higher level of productivity, both of these factors allow more efficient production which helps get the product onto shelves at a cheap price - exactly what customers want.
