Ollie Ross
Page 501 Case Study Management of Change
Changing the way a business is run is brought about by desires within the company to fulfil their objectives by the most effective and efficient way possible. Through internal forces for change, Optimal Business Solutions may have the motive to increase their profitability, increase their efficiency in their operations or improve their communication problems within the company. As the company is deciding to centralise and opt for a central office in London instead of their four regional offices, this can cause a dramatic change in the hierarchy of the business and result in an adverse effect on employee morale. However certain external factors may have forced the company to change location and culture as greater competition, legislation and taxes and technological changes all impact the business and without the correct implemented change, OBS will struggle financially and pay the price.
There are many reasons why a company would want to change and cutting costs is the main reason why OBS feel a need for change is necessary. Using Retrenchment, OBS are able to save costs by moving to a more centralised location getting rid of regional offices and ultimately trying to grow and gain a high market share. By reducing the size and scale of the business to begin with, OBS then have the chance to grow into a bigger business over time. OBS have both internal and external forces for change and both promote the need for change, as their outcome is a bigger more successful company if managed correctly. Internal forces include the desire to increased profit margins and efficiency, as this is the main cause of cash flow problems in the future. Ineffective communications can cause a need for change, as there is no cohesion between managerial staff and employees causing demotivation for employees who are angry as they do not feel part of the group and their opinions for the company are not listened to. External factors that promote change include the introduction of stronger competition as these companies can attract your customer base and consequently see your demand fall considerably. The introduction if new technology may also force a change in the business especially due to the nature of OBS. The employees may have to be trained to work with the new technology and relocation may have to be considered if the current location does not have the capacity to hold it. Furthermore, the introduction of new legislation and taxes may cause the company to change. During a crucial time in the current elections, a different leader would see companies see changes in the economy that they must adapt to or face going under.
