Two main groups of changes affect managers’ jobs and are significant to an organization: external forces and internal forces. With external forces, the need for change comes from various sources outside the organization: marketplace, governmental laws and regulations, technology, labor markets, and economic changes. Internal forces originate from the internal operations of the organization or from the impact of external changes. They include redefining an organization’s strategy, workforce, new equipment, and employee attitudes. Both types of changes are critical to the success of a manager and his/her organization.
One external change managers will face is the marketplace. An organization must be proactive, reactive, and adaptive in order to successfully compete in their niche market. Becoming too comfortable in the status quo without taking the competition or consumer needs and desires into account is a recipe for failure. Search engine companies like Yahoo and Google are examples of organizations that continue to create new technology and applications to respond to evolving demands of consumers.
Governmental laws and regulations are another external force of change. For example, the Sarbanes-Oxley Act required U.S. companies to change the way they disclose financial information and enact corporate governance. Not complying with new and existing federal and state laws can be costly, result in a negative perception, and severe legal ramifications that could ultimately destroy an organization. A recent example of the first two consequences is Wal-Mart. The company has paid between $750 million and $1.5 billion in legal fines and judgments over the past decade alone, including numerous violations of the Fair Labor Standards Act of 1938 (Business Ethics 7th Ed., Ferrell Fraedrich). Managers can help ensure their organization is following the rules by instituting a strict code of ethics.
A third external force is technology, which is usually adapted to...
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