Economic, political, and global factors influence change, the North American Free Trade Agreement (NAFTA) and other economic unions, are significant enforcers of change. The European Union (EU) has increased to 27 countries. Production in an EU country eliminates tariffs, so Japan produces cars in England to escape foreign tariffs (Pham, 2009). However, organizations may need structural change to enter foreign markets and adapt to various different cultures.
Demographic and Social factors include an increasingly diverse workforce, changing, hiring and promotion. Many workers are eager to balance work, leisure and family (Pham, 2009). For example, companies need flexibility in scheduling to meet the childcare needs of employees with young children.
Ethical factors place greater demands on firms for honest, corporate behaviour, so some firms hire ethics officers to report offences or give ethical advice. This act ensures that the organization is protecting whistleblowers and foreign employees (Pham, 2009). For example, companies specialising in sports wear such as Nike, Reebok, Adidas and the Sweatshop, came under some scrutiny because the countries that they outsourced production to were paid very low wages and the workers had to work long hours in extremely poor working conditions. The public were disgusted to hear about this and this lead to the sportswear companies making some urgent changes to avoid experiencing a decline in the number of customers and fall in profit.
Technological advances can provide new products and perhaps change existing ones. Improving the reliability and quality of goods and services is an important capability as it makes an organization more competitive. However, organizations may need to restructure to achieve the full benefits of this new technology (Pham, 2009).
Environmental and legal regulations also cause organizations to restructure. For example the Kyoto Protocol was an international agreement linked to the United Nations Framework Convention on Climate Change (UNFCCC), aimed at fighting global warming (UNFCCC, n.d.). The Kyoto protocol is a legally binding agreement between industrialised countries who have signed-up, to meet emission reduction targets of all greenhouse gases by 2012 relative to 1990 levels (Climate Concern, n.d.). The Kyoto Protocol was adopted in Kyoto, Japan, on the 11th of December 1997 but was not officially implemented until the 16th of February 2005. However, although this new regulation was good for the environment, it drastically affected organizations as most had to review their current production process and make amendments, in order to avoid exceeding their given emission targets.
To conclude, there are a lot of uncontrollable factors both internal and external, that interrelate and cause organizations to restructure and thereby change the goods or services they provide. ‘Change’ is a process which a majority of organizations go through to ensure that they are operating at the highest possible level of output.
Bibliography:
Jones, G.R. (2007). Organizational Theory, Design, and Change (5th Ed.) New Jersey: Pearson Education, Inc.
Pham, H.H. (2009). Chapter 10 - Types and forms of organizational change. [Online] Available: [29 September 2010]
Tan, J. (2010). Trends in organizational change. [Online] Available: [29 September 2010]
BBC (2003). What is the Kyoto treaty? [Online] Available: [30 September 2010]
UNFCCC (No date). Kyoto Protocol. [Online] Available: [30 September 2010]
Climate Concern (No date). Kyoto Agreement, key points. [Online] Available: [30 September 2010]