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Respond to Change in a Business Environment: Causes and Effects of Change

Updated on February 20, 2017
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Livingsta shares her positive experience in business administration, customer service and education.

Respond to change
Respond to change | Source

In a business environment changes can happen all the time for various reasons and mostly for positive outcomes. Not many of us like change. We do not wish to get out of that comfort zone, adapt to changes and go through all the sometimes traumatising effects change may create, but one needs to stop worrying and panicking about change, take it as a positive factor, and work towards accepting and adapting it.

What is change?
What is change? | Source

So what is change? Change is a transition from one state (current state) to another (desired state). Changes (in a business environment) are implemented when the existing practices are no longer profitable or beneficial.

The change process is:

Present state -> Transition state -> Desired state

Change pushes people out of their comfort zone. Change can be difficult initially, but with change, one learns a lot, gains experience and in the end creates positive results that one will appreciate; after all that is why the change was implemented. The results and benefits greatly depend on how well you take positive steps and resist any hurdles that work against the change.

Part 1 of Three

This is an NVQ unit at Level 2, with a credit value of 3. This is a three-part unit. In this article we will look at Part 1:

  • Understanding the causes and effects of change in a business environment

The second part of this series is Respond to Change in a Business Environment - Role in Supporting Change.

The third part of the series is Respond to Change in a Business Environment - Role in Supporting and Responding to Change.

1. Understand the causes and effects of change in a business environment

1.1 Give Examples of Changes in Working Practices in a Business Environment, and Explain Why They are Happening

Changes are implemented in a business environment for many reasons: for example, to contribute to better business performance, better ways in which employees work, and a better position for the organisation in a competitive industry. An organisation should undergo and accept changes in order to be successful. It should also upgrade products and services, improve technologies, and train employees to help them upgrade their skills so they can implement them in the new changed system.

Transformative change
Transformative change | Source

Some Examples of Changes in Working Practices in a Business Environment:

  • Changing the way of working, reducing or increasing the number of hours, increasing the number of trading hours per week, increasing working hours, reducing staff; these changes could be due to less work, a down turn in business, changed expectations from customers, seasonal trade, refurbishment of systems and installation of new systems. Such changes can be temporary.
  • Changing contracts of employment
  • Restructuring of teams, departments or the whole organisation: changing the way employees work to suit their business needs, or to improve performance within the team and organisation as a whole
  • Changing laws, policies, procedures, legislation

Reasons Why Change Can Happen in a Business Environment

  • Recession
  • Increasing market pressures
  • Reduced budget
  • Advances in technology
  • Improved customer service
  • Change in government legislations and regulations
  • Improved operations of the organisation
  • Increase in competition
  • Improved efficiency
  • Globalisation
  • Reduction in profit
  • Loss of finances
  • Expectations of customers
  • Decrease in performance
  • Change in departmental or organisational structuring

1.2 Describe the Possible Effects of Changes in Working Practices on People Within a Business Environment

Changes implemented in a business environment can have both positive and negative effects on the people working in that environment.

Possible Negative Effects of Change Can Include:

  • Employees have fears about job status; they wonder if hey will still have a job or not.
  • Too many changes or processes happening at once cause instability.
  • Skills built and trainings undertaken may become obsolete, no longer be needed for the changed working practices, which may create frustration and waste time and money.
  • Emotional stress and uncertainty may lead to decreased performance.
  • Employees may worry that they may be asked to work with people they don't get along with, or lose existing relationships with colleagues or teammates.
  • Employees may be afraid of having to learn new skills.
  • Employees may lose their self-confidence and become confused about the purpose of their duties, have low self-esteem, or lose their sense of belonging.
  • Employees may feel anger, resistance to change, and loss of motivation when changes are implemented.
  • Employees may leave, and as a result, the organisation will lose experienced candidates.
  • It can be expensive to implement changes.
  • Employees may feel threatened and insecure about their jobs and this can lead to low performance.
  • Employees may panic about having to learn new skills
  • People may lose their self-confidence and become confused about the purpose of their duties, have low self-esteem, lose their sense of belonging.
  • People may feel Anger, resistance to change, lack of motivation when changes are implemented.
  • Sometimes employees may leave, and as a result, the organisation will lose well experienced candidates.
  • It can be expensive to implement changes
  • Employees may feel threatened and insecure about their jobs and this can lead to low performance.

\

1.2 Explain How Change Can Benefit an Organisation, Team and Individual

While there are many negative effects due to change within an organisation, these diminish with time. Any change implemented for the right reasons using the correct methods will have huge benefits for the organisation, its departments, its teams and each individual working in the organisation.

Here are some ways change can benefit an organisation, its teams and individuals.

Benefits of change for an organisation:

  • The organisation gets rid of old technologies and old working methods and keeps up to date with the latest innovations
  • Changes in laws and legislations lower the risks involved
  • The organisation keeps pace with or outperforms its competitor.
  • New and successful procedures and models can be implemented.
  • New services and products are introduced and as a result new customers are gained
  • Risks are eliminated or at least reduced
  • Efficiency improves for the organisation and for individuals
  • The company's turnover improves thereby increasing net profit.
  • Customer feedback and reputation for quality improve.
  • Investors invest in the organisation with confidence.
  • Maintenance and other expenses decrease when quality machines and technologies are introduced.
  • The company's relationship with staff and customers improves.
  • Customer service improves and/or is faster
  • Employees' performance improves

Benefits of Change for a Team:

  • A team works better and builds new relationships.
  • People skills improve; the team feels motivated and is committed to its work.
  • Change improves communication between teams, departments and team members.
  • Efficient change management will decrease resistance to change.
  • Change improves cooperation between teams.
  • Teams are able to work up to their mark and feel supported.
  • Change can reduce negative outcomes and any disruptions in work or performance.

Benefits of Change for Individuals:

  • Individuals learn new techniques and skills and improve their efficiency.
  • New career opportunities and possibilities open up.
  • Better technologies improve employees' ways of working.
  • Improved employee benefits lead to improved quality of life.
  • Change is more exciting than an old stable process or way of working.
  • Change encourages creativity.
  • Change resolves issues.
  • Change gives employees skills and knowledge that can put them into the right places, teams, and departments.
  • Change helps people use their talents beneficially and effectively.

Parts 2 and 3

Please follow the link below for the next part of this unit:

Respond to Change in a Business Environment - Role in Supporting Change

Please follow the link below for the last part of this unit.

Respond to Change in a Business Environment - Role in Supporting and Responding to Change

I hope you found the information here useful and interesting. Please do not hesitate to feedback and share your thoughts and experiences.

Thank you for stopping by,

Livingsta

A Kind Note to NVQ Candidates:

This material is only for reference. Please do not reproduce. Also, please relate to your own business environment and job description while writing down your units. All the best!


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    • livingsta profile image
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      livingsta 16 months ago from United Kingdom

      Hello Suzanl,

      Wow, thank you so much for stopping by and sharing your thoughts and experience. It is very interesting and useful to hear others' thoughts and experiences. I hope the morale in the company improves as what you have mentioned will neither help the company nor its employees. We hear things like this a lot and hopefully there will come a time when the company looks into and rectifies the flaws. All the best. Sorry for not responding earlier. Have a great week ahead :-)

    • livingsta profile image
      Author

      livingsta 16 months ago from United Kingdom

      Hello Aviannovice, thank you for reading and sharing your thoughts. Sorry for the late response. Have a great week ahead! :-)

    • Suzanl profile image

      Suzanl 2 years ago

      You bring up many valid points regarding the “possible effects of change” in the workplace. Covering the positive and negative aspects that individuals may encounter is intriguing because people have different ideas, beliefs, habits and personalities.

      Several years ago when I was working with a fortune 500 company that was undergoing change in order maintain their profit margin, it became quite recognizable, to all employees, that there was a rather equal split between those onboard with the modifications and those that were not. This particular company was implementing Kaizen and Lean Manufacturing procedures. Ironically, most of the management team on the floor (plant manager, supervisor and employees (twenty to thirty year veterans) sabotaged the program.

      Corporate would make quarterly visits, and spend hundreds of thousands of dollars to retain on site Kaizen and Lean Manufacturing consultants. However, when corporate did visit we put on a show for them to encourage the corporate officers that everyone was onboard with this new technique of manufacturing.

      The security guard outside the plant would broadcast on the PA system, “corporate is in the house.” As soon as corporate left, it was business as usual. When leaders do not give clear objectives and do not provide the means to support attaining set goals, it causes poor morale. I enjoyed reading your article.

    • aviannovice profile image

      Deb Hirt 3 years ago from Stillwater, OK

      Change can be necessary in all aspects of life, though it tends to occur more in business, especially with a poor economy like we have now. Nice material.

    • livingsta profile image
      Author

      livingsta 3 years ago from United Kingdom

      Hi Teaches12345, thank you. Yes, I do agree with you and as a manager you would have had to deal with changes and provide support on many occasions. I am glad that you enjoyed reading this. Thank you for stopping by. Have a good weekend :-)

    • livingsta profile image
      Author

      livingsta 3 years ago from United Kingdom

      Hello Joedolphin88, thank you so much. I am pleased that you found the information here useful. Thank you for stopping by. Have a good weekend :-)

    • livingsta profile image
      Author

      livingsta 3 years ago from United Kingdom

      Hello FlourishAnyway, so true as change can be a haunting experience for many. Thank you for stopping by and sharing your thoughts. Have a good weekend.

    • livingsta profile image
      Author

      livingsta 3 years ago from United Kingdom

      Hi Torrilynn, thank you for stopping by. I do agree with your thoughts and I am glad that you found this useful. Thank you for stopping by. Have a good weekend :-)

    • teaches12345 profile image

      Dianna Mendez 3 years ago

      When I was a manager, one of the biggest obstacles to moving forward was the fear of change for staff members. It makes a big difference on how it presented. Great topic and well covered.

    • joedolphin88 profile image

      Joe 3 years ago from north miami FL

      Very important article for anyone without a business degree. I like how you tapped into economic information to get your point across without being confusing.

    • FlourishAnyway profile image

      FlourishAnyway 3 years ago from USA

      Although change is really the only constant, it can be difficult to adjust to. Some people unfortunately ave a strong prefence for routine.

    • torrilynn profile image

      torrilynn 3 years ago

      changes happen because adaption is needed in order for a company to grow and to become more efficient. your causes and effects are very thorough and accurate. thank you.

    • livingsta profile image
      Author

      livingsta 3 years ago from United Kingdom

      Aww, Bill, I'm glad to see your comment. Sorry, I've been caught up with so many things and haven't been here for ages. I know I have loads to catch up with here. I'll be visiting your page sometime soon as your hubs have always been an inspiration for me and many other people. Hope you are well. Sending you smiles and a hug :-)

      I am glad that you found the information useful. You too have a wonderful weekend.

    • billybuc profile image

      Bill Holland 3 years ago from Olympia, WA

      It is good to see you writing again my friend. Great information here...thank you and have a wonderful weekend.

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