business
Business and Administration
Unit four: Principles of supporting change in a business environment
Session 1 Handout // Why change happens
Reasons for change
In business there are continuous pressures for change. It is helpful to consider reactive change when the business responds to external pressures and proactive change when the business changes due to internal demands.
Reactive change
Pressure to change
There are many factors that influence business organisations. These factors create pressure for change in those organisations.
One helpful way of thinking about the factors influencing change is to use the
PEST acronym. This highlights four of the main influences on the operation of a business. The acronym represents the following:
Political
Examples include:
Government (policies, regulations, grants, etc)
International (conflict, political change, pressure groups and trade policies) Legislation (domestic, European, future legislation, and international legislation) Economic
Examples include:
Domestic (competitors' behaviour, economic performance and trends, tax and interest rates)
International (competitors' behaviour, economy, economic trends, tax, interest rates, exchange rates and trade issues)
Social
Examples include:
Advertising and PR, brands and image, consumer attitudes, consumer buying preferences, demographics, ethical issues, events, media views
Technological
Examples include:
Ability to install new technology (and of competitors to do so)
Emerging new technologies
Funding for technological research, development and implementation
Intellectual property rights
Technology legislation and life cycle
© Creating Careers Ltd 2011
Page 1 of 2
Business and Administration
Unit four: Principles of supporting change in a business environment
These external changes will create pressures for an organisation to adapt and make internal changes.
Proactive change
Change from within
The other source of change
Unit four: Principles of supporting change in a business environment
Session 1 Handout // Why change happens
Reasons for change
In business there are continuous pressures for change. It is helpful to consider reactive change when the business responds to external pressures and proactive change when the business changes due to internal demands.
Reactive change
Pressure to change
There are many factors that influence business organisations. These factors create pressure for change in those organisations.
One helpful way of thinking about the factors influencing change is to use the
PEST acronym. This highlights four of the main influences on the operation of a business. The acronym represents the following:
Political
Examples include:
Government (policies, regulations, grants, etc)
International (conflict, political change, pressure groups and trade policies) Legislation (domestic, European, future legislation, and international legislation) Economic
Examples include:
Domestic (competitors' behaviour, economic performance and trends, tax and interest rates)
International (competitors' behaviour, economy, economic trends, tax, interest rates, exchange rates and trade issues)
Social
Examples include:
Advertising and PR, brands and image, consumer attitudes, consumer buying preferences, demographics, ethical issues, events, media views
Technological
Examples include:
Ability to install new technology (and of competitors to do so)
Emerging new technologies
Funding for technological research, development and implementation
Intellectual property rights
Technology legislation and life cycle
© Creating Careers Ltd 2011
Page 1 of 2
Business and Administration
Unit four: Principles of supporting change in a business environment
These external changes will create pressures for an organisation to adapt and make internal changes.
Proactive change
Change from within
The other source of change